Thursday, 27 January 1994
Dáil Éireann Debate
Mr. J. Bruton: This budget fails to address Ireland's long term social and economic failure. A country that disposes as much resources as we do, and which yet has no work for 300,000 people, is a social and economic failure.
It is obvious that neither of the Government parties recognises this national failure. To introduce a tinkering budget when it has so much leeway for radical reforms shows how mediocre the thinking of this Government really is. There is no sense of impatience or urgency, just a complacement feeling that it is sitting on a huge Dáil majority in good economic circumstances and it can coast along.
The Minister has £200 million to spend yesterday, for one reason and one reason only — the dramatic fall in interest rates that flowed from the devaluation of the pound, a devaluation which he opposed. The Tánaiste even inferred, when I called for the devaluation last year, that I was treasonable. Yet if the Government had not eventually followed Fine Gael's advice on devaluation last years, there would not have been £200 million to spend yesterday.
I strongly disagree with the political priorities of this budget. It will slash mortgage interest relief for all those who pay the top rate of tax, which is most full-time workers. In that way, it will discourage people from being self-reliant and from borrowing to provide their own homes. Instead, the Minister offers more money to build local authority houses.
The budget cut health insurance relief. In that way, it will discourage people from being self-reliant and taking out insurance to provide for their own health costs. Instead, they will be encouraged to rely on public waiting lists. In doing so, it runs directly counter to an all-party Dáil committee report produced by Deputy Liam Kavanagh of the Labour Party only last week.
The Minister failed to take Fine Gael's advice and reintroduce the tax allowance for children and introduce a tax allowance for spouses who look after children. This shows that the Government has no  respect for the International Year of the Family. It also shows that the Government does not understand the huge disincentive to work caused for parents of large families by the current tax and welfare codes. While the social welfare code give an allowance for children, the tax code for workers does not.
The budget is, quite rightly, providing financial support for marriage counselling, but it fails to recognise that the disincentives to work affecting large families, and the lack of any recognition in the tax code of the costs of rearing children are among the chief causes of the financial pressures that drive so many families apart. Many widows too who have a job will find, as a result of this budget, that they will have to give up their job if they are to keep up their pension. This is another curious way of marking the Interntional Year of the Family.
We are told that this budget is helpful to employment because it broadens the standard rate band for a married couple from £15,350 to £16,400. I would remind the Minister that the Fine Gael tax proposals for the 1994 budget, which were costed down to the last penny, provided for an increase in that band from £15,350 to £20,000. Fine Gael provided for a £5,000 widening of the standard rate band, the Government could only manage a £1,000 widening. That is the difference between serious tax reform and tinkering. Against a background in which, in 1993, tax receipts and spending increased at six times the rate of inflation, this Government could only manage an average income tax reduction of £3.41 per week for the PAYE worker.
The really dispiriting thing about this budget, about the National Development Plan and all the economic proposals of this Government is that there is no development philosophy. There is no coherent statement on the threats to, or the opportunities for, Ireland in the next ten years.
Many Members of this House have children between the ages of ten and 16, but very few of them will be able to say with honesty that this budget, in which  the Minister had more leeway than any Minister for almost 20 years, will improve the chances of those young people finding a job in Dublin or Cork rather than Los Angeles or Adelaide.
If they do get a job in the Civil Service after April 1995, they will be the subject of blatant age discrimination. After April 1995, young newly recruited civil servants will have to pay three times as much PRSI each week as older civil servants, even though they may be in the same grade and doing the same job in the same office. I have serious doubts about the constitutionality or the compliance with European Union Treaties of such age discrimination proposals in regard to PRSI for public servants. It is not equal pay for equal work.
Let me now outline what I believe should have been the developmental philosophy of this budget. The underlying premise of our developmental philosophy should be to keep the jobs we already have as well as creating new ones. Existing Irish jobs are in danger because of the increased skill and competitiveness of work forces elsewhere. Improving the knowledge and skills base of the Irish work force should therefore be the overriding economic and social priority of any Irish Government. That should be explicit. It should be more important than any other economic or social objective. The priority of saving jobs by increasing the training and educational capacity of one entire work force is not reflected anywhere in this budget.
In the past we could have ignored competition from places like Korea, Hungary and India, yet, today, American companies are moving highly sophisticated operations to those countries, operations that might previously have come to Ireland. For example, J.C. Penney's is now having its microwave cookers designed in Korea, General Electric is having its lighting fixtures designed in Hungary and Motorola is having its software programmes written in Madras in India. This is because the Korean, Hungarian and Indian work forces are rapidly catching up with Ireland's educational  and skill levels. With a little investment in education it is possible for many countries which were far behind us five years ago to catch up with us.
The clear focus of all governmental activity should be to preserve jobs by preserving our competitive edge in terms of skill and education. We now live in a world where we can no longer take for granted the advantage that OECD countries enjoyed over others for some time. Five or ten years ago there was no GATT deal and we were able to keep those countries out. They were way behind us in terms of access to technology. Now eastern European countries, India and other countries are rapidly catching up with our skill levels. Of course their wage costs are substantially lower. I do not argue for a reduction in wage costs here, but if we are to earn higher wage levels than those countries, we must have commensurately higher skill levels than those countries. If we are to maintain our income advantage we must constantly maintain a commensurate skill advantage over other countries with whom we compete for work because there is now an international market for work. Under the new GATT deal work that needs to be done can now be done anywhere in the world. There is relative freedom of investment worldwide. We are in an open competitive market for work. Therefore, the focus should be on making our work capacity competitive with other countries. I would regard that as the central developmental philosophy that should have been, but is not, contained in this budget.
I would like to make the following proposals which are consistent with that central developmental philosophy. Firms which invest in agreed programmes to upgrade the training of their work forces should qualify for a 50 per cent cut in their employer's PRSI. Why should a firm that conscientiously gives its  employees time off for training every year, and spends the firm's money on training, pay the same PRSI rate as a firm which does not bother to update its employees' skills and allows their skills to become, literally, redundant over time?
Firms which employ research staff in Ireland — and they are few in number — should have their employer's PRSI on those staff written off entirely. We need research to take place here if we are to generate extra jobs. Our current 10 per cent corporation profits tax actively discourages firms from conducting research here because the tax allowance they receive is lower than that which they can obtain in other countries worldwide. If we are not to have less research conducted in firms here than in firms elsewhere in the world we must take other action to encourage the carrying out of research here. I suggest employer's PRSI in respect of research employees should be written off. Lack of spending on research is the reason we have to rely on foreign, not home-grown investment for new jobs at present.
Firms in difficulty should be given a direct financial incentive to retain and retrain staff rather than make them redundant. It is ironic that we give an income tax relief on a redundancy lump sum but give no tax reliefs or incentives to firms or employees who agree to reduced working hours as the preferred means of cutting the wage bill to save jobs. In other words, we give no tax relief to a firm which decides to spread the pain among all its workforce and keep the jobs while we give tax relief to a firm which gets rid of a specific number of employees. That is wrong, it is something that can easily be changed and it is something this Government promised to change. On page 13 of the joint programme the Government parties committed themselves to devise a scheme “aimed at providing employers and employees with alternatives to redundancy where labour cost reduction programmes are sought”. Nothing has been done about this promise despite the redundancies in Digital, A. T. Cross and many smaller firms during the past 12 months.
 We must also remove the bureaucratic obstacles to the creation and the taking of part-time jobs. PRSI and income tax administration costs deter small businesses and homes from offering their first part-time job to a person outside the firm or the home. We should revert to the old idea of a daily stamp on the employee's card, which would be an easy and non-bureaucratic way for very small employers to cover income tax and PRSI obligations. The old system where an unemployed person could sign off for a day and only lose that day's benefit, no matter how much he earned on that day, should be restored also.
Individuals as well as firms should be given a direct cash incentive to invest throughout their lifetime in their own retraining and education. For instance, an early school leaver should be entitled to a pro-rata education voucher, calculated in proportion to the schooling he has missed by leaving school early. This voucher could be cashed in to cover the fees and maintenance for an improved training course at any stage later in life. This would encourage people to take courses as and when needed rather than artificially cram all education into the first 21 years of life.
This proposal, which I have made on many occasions, has been recommended by the European Commission in its White Paper on Growth, Competitiveness and Employment. It is worth nothing that a person who leaves school with only the junior certificate forgoes £15,000 of State spending on education which they would have received had they continued in the education system up to third level. It is only a matter of social justice to find a way to give them back that money in the form of a voucher they can cash for training and education at an appropriate time later in their lives. I was interested to note that that proposal has been taken up by the European Commission and recommended to governments in the White Paper.
We must maintain educational standards here as the best in the world. We must not slip into second place; we must not slip behind in the competitive educational  race, and there is a competitive educational race in the world at present, a race, through education, to preserve jobs. Irish 13 year olds have come out badly in recent international tests in science. Of 14 countries surveyed Irish 13 year olds were rated the lowest in terms of their knowledge of science. Their rating in mathematics has also been undistinguished. It is well known that our competence in foreign languages falls far behind that of our continental European competitors. Yet, there is no informed debate about this matter.
I skimmed through the recently published Report of the Convention on Education and I saw no reference to the issue of comparative standards of our education system at different stages with other countries. That issue does not exist for those debating education here at present. Yet if we accept the thesis that education is one of the ways in which we compete on the world stage to preserve jobs here — it is one of the most important educational issues we face — all the debate about education is concerned with is how much resources should be provided for education, who should control it, but none of it is about the choices we make about how to use the money we spend on education or about the results, compared internationally, we achieved for all we have spent.
For instance, the choice we have made to devote so much time — in the region of six hours out of a 24 teaching hour per week — to teaching Irish at primary schools has meant that less time is spent on other subjects. This makes no difference to more talented pupils, those who go on to third level, who can easily catch up on other subjects later which they may have missed out on at primary level, but I believe this priority has a significant adverse effect on pupils in the medium and lower ability ranges who leave school early. They are the students about whom I am concerned.
I would like to see an objective study on the impact of the distribution of time in regard to subjects at primary level on early school leavers. I agree Irish should  remain a compulsory subject for all students for at least the first nine years of schooling because it is the basic part of our culture. However, we need to ask whether primary school children must spend more time each week on Irish than they do on mathematics. We must also ask whether, as a result of this time distribution, it is right that there is no space at all in the primary school week for science or a continental language. We must ask whether the time spent on Irish is spent as well as it ought to be. If more time was spent on oral Irish, a higher level of competence could be achieved in a shorter time. It is my experience that the competence in oral Irish of six year olds in primary schools is as good as that of ten year olds. Competence does not improve and enthusiasm diminishes. One must therefore ask whether the methods of teaching Irish and the time devoted to it are appropriate.
Irish should be compulsory and everybody should be competent in the Irish language, but current policies are not working. They are shaped in such a way that primary school children are denied teaching in continental languages and science. That does not matter for the people who go on to third level, the elite in our society, because they can catch up. When we congratulate ourselves on our educational system we are thinking our PhDs, MScs and MAs; we are not thinking about junior certificate school leavers, the people who will become redundant and who will have to find jobs elsewhere. If their basic competence is not good enough. We have failed these people.
I want an objective international study of the comparative competence of Irish ten year olds, 13 year olds and 16 year olds, right across the ability range, to satisfy ourselves that our competence in mathematics, in science and in foreign languages is not falling behind the best in the world. We should also bring in external examiners each year to tell us how Irish standards in each subject in the leaving and junior certificate compare with those countries with whom we compete  for jobs and investment. I want to repeat that unless our education is the best in the world, there is a danger that a peripheral island like Ireland will continue to lose employment. Our overall aim must be to ensure that our education and facilities for retraining will be so good that firms will go out of their way to locate businesses here, in spite of the disadvantages of Ireland's peripheral location.
Mr. J. Bruton: The excitement derived from being in an unfamiliar place leads to a sort of tension that releases itself in hperactivity. I would advise the Deputy who makes a rather rare appearance in the House to restrain himself and listen to what is being said. He will, no doubt, have an opportunity to speak in this debate in due course.
We must remove the systematic discrimination against the service sector in the tax code. It is in private services that the majority of the new jobs can be created, not in manufacturing. To this  end, the corporation tax rate for services should be reduced from 40 per cent towards 27 per cent. It is wrong that the corporation tax rate on a services company should be four times as high as the corporation tax rate on a manufacturing company. The Minister did nothing about this discrimination in the budget. The VAT registration limits for small businesses should be increased. A personal income tax allowance should be granted to people who create jobs in their own homes, for example, child care and home nursing. Large numbers of jobs could, in this way, be brought from the black economy into the white economy.
We should introduce a charter of rights for small enterprises. This charter should require that all State agencies pay interest on debts overdue to small businesses. It should also provide for a strengthening of competition law in Ireland. Our present competition law looks fine on paper but it does not work and small businesses in competition with big businesses are the main losers, even though it is small businesses who create jobs and mainly big businesses who make people redundant.
The eight proposals I have outlined could form the basis of a genuine partnership to solve the jobs crisis on a long term basis. What we need are long term policies, not the patchwork that was presented in yesterday's budget.
Miss Harney: This budget does not appear to have any medium or long term strategy. It does not identify any priorities. It gives no indication of the Government's intentions in regard to employment and tax reform to the year 1997. The Government went in the right direction in some areas. It is very much a budget with a little for everybody in the audience, and I find that disappointing.
Last year, shortly after the Government took office, it presented to this House its first budget. It told us it was not an indication of its strategy or its overall approach to the economic issues of the day because it did not have sufficient time to set out such a strategy. It said it was very much a holding budget and that we would see as the year went  on what was its real thinking, approach and strategy. Since then we have had the National Development Plan and the pay talks which are currently under way and now we have what the Government would like us to think is its first budget. However, I do not see it as the Government's first budget. I very much see it as part of its approach to the issues of the day. The Government is clearly a high spending, high tax Government; let there be no doubt about that.
This morning on the Order of Business when Deputy Bruton raised the issue of funding for health boards the Minister for Health took great pleasure in shouting across the floor that he had achieved £100 million for the health boards. What exactly does that mean? It means that those health boards that were prudent, that did not run their activities with huge loans that could not be sustained, will be penalised and the health boards who were not so prudent will get an amnesty from the Government. I know that there are serious difficulties with health board funding, but I hope that before the money is allocated criteria are put in place to ensure that this never happens again. The fact that this money is amnesty money, money the Government would like us to think might never have been collected, does not mean it should be thrown away.
The introduction of the amnesty was the most disgraceful feature of last year's budget. Two-thirds of the money raised in that amnesty, as was outlined to Deputy Cox yesterday in reply to a parliamentary question, came in as a result of the 15 per cent tax being applied to money which the Revenue Commissioners already knew was owing. How much money has been brought back to be invested in this economy? The claim was made last year during the budget debate and the Finance Bill that the amnesty would bring in millions of pounds that were lost to the Irish economy, to be invested in employment creation. However, none of that money has been brought back. It was not even a requirement of the amnesty that the  money had to be reinvested in this economy. The amnesty was a disgrace and I hope we never see anything like it again. It has rightly annoyed complaint taxpayers throughout the country.
It is appropriate that the proceeds from the amnesty be spent on onece-off projects. There was concern that the Government would use the amnesty money in this year's budget as part of current expenditure and worry as we approach next year's budget as to where to find the money to fund the ongoing programmes. In so far as the amnesty is being applied on a once-off basis I welcome it.
I want to talk about the Progressive Democrats' approach to unemployment, the fundamental issue facing this country. As my colleague Deputy Cox said in the House yesterday in response to the Minister's Budget Statement, there are effectively 350,000 people unemployed. Just under 300,000 people are on the live register, approximately 18,000 people over 55 years of age are looking for work, approximately 6,500 people are engaged in part-time work who would prefer to have full-time jobs and 35,000 to 38,000 are working in various FÁS schemes, social employment schemes and programmes of that kind. Effectively 350,000 of our people are unemployed. In addition, 67,000 students will leave our educational system this year.
By any standards, we have one of the best educated populations in the world, and we certainly have the best educated English-speaking population in Europe. We have the best educated unemployed of any country. These people should be the priority, not only of the Government but of everyone in this House. Thousands of our people are being put into what my party has described as human set aside, where they have no alternative but to be unemployed and receive unemployment benefit. If they engage in any kind of work they will get no benefit of any kind. In order to receive unemployment assistance and unemployment benefit under our social welfare system they must sign on and be available for work.
We will spend approximately £1 billion  paying people to be unemployed. This is a scandal of such proportions that it has to be the priority for all of us. This is why last week my party published a community employment programme in which we propose that work should be offered to people who are unemployed in return for their unemployment assistance and that they should get an additional premium of £20. We believe that this should be compulsory for the 85,000 young people under 25 on the live register. Much play has been made of the fact that we would make this compulsory. Rather than looking at the negatives of making it compulsory, I believe the vast majority of young people — I have discussed it with many of them — want to be given worthwhile activity instead of being treated as people who have no contribution to make to the development of this country. Our programme would compel the State to provide them for three days per week with worthwhile activity in the community, voluntary and public sectors. We all know there is lots of work to be done and that there are thousands of people available to do it. It is up to us to match the people with the work. The Government said yesterday that it was committed to introducing a community employment programme and I welcome that, but it is not at all the kind of programme required or the kind of programme which can deal with the seriousness of our unemployment problem.
The Minister referred to the submission from the Conference of Major Religious Superiors. His only response to that submission is that he will have 1,000 people to work in the community by way of a pilot project for a one year period, along the lines suggested by the Conference of Major Religious Superiors. That is a token response. The problem is so serious that we cannot begin to tackle it in such a minor way.
The Labour Party has made great play about the difference it is making to Government and the fact that this is a partnership Government. The word “partnership” seems to be an excuse to avoid dealing with all the issues of the day. The greatest pleasure the Labour  Party seems to get is from spending money. Spending last year increased by 8.5 per cent at a time when inflation was 1.5 per cent. As Deputy Cox said, since the Progressive Democrats left Government current Government spending has increased by 17 per cent. I do not believe the Government has any strategic approach to deal with the fundamental problem affecting our economy.
Yesterday the Minister said that changing the tax wedge, making it more lucra-tive for employers to employ more people, was not the panacea for all our economic ills. I certainly agree that it is not the panacea for all our economic ills but, as Culliton said, it is the most potent force available to the Government to generate employment in this economy. Changing our anti-work tax system, making it more beneficial for individuals to work harder and for enterprising individuals to invest, is the way to generate employment. I could give many examples of the way our tax and welfare system discourage the creation of jobs.
Earlier this week I visited a small manufacturing concern in Drogheda, County Louth. It is interesting to note that in 1971 approximately 1,500 people were employed in the clothing and textile sectors in Drogheda and that today there are fewer than 100 people employed in those sectors in that town. I visited a small manufacturer who employs 60 of those people and asked for his views on the economy and what the Government should do in the budget. This man, who is very frustrated and is disillusioned, wondered if we in Dáil Éireann really understood what the problems were for small business people. He told me that if he moved across the Border, 50-60 miles up the road, and started the same operation with 60 employees he would save £250,000 in one year in pay roll costs. Can any of us imagine the effect of knowing that on an enterprising person who is providing opportunities for himself, his family and his mainly female workforce of 60 in Drogheda, a town which has an unemployment level in excess of 35 per cent? He is not the only person who feels like that. I recently met an employer from  Ballina who employes 300 people in the same sector. If he moved across the Border to Enniskillen, 40-45 mile away, he would save £750,000 a year in payroll costs.
These people wonder if we are really serious about the unemployment problem when we allow the high tax on employment in our economy. In Northern Ireland and Britain PRSI on the labour intensive textile sector is 5.6 per cent — it was reduced by a further percentage point in the recent British budget. Yesterday the Minister decreased employers' PRSI to 9 per cent and decreased PRSI by 3.2 per cent for everyone with a salary below £173 per week. In so far as this is a start I want to welcome it, but it is not enough. It will not make the Irish textile and clothing sectors compeitive vis-á-vis their Northern Ireland or British counterparts. Rather it will put further pressure on the 15,000 people employed in this sector — 8 per cent of all persons employed in manufacturing are employed in that sector.
I wonder if the Government is serious about trying to create jobs. Apparently during a recent “Questions and Answers” programme the Minister of State at the Department of Finance spoke about Third World kinds of jobs. She did not want any of these factory jobs in this economy. Maybe she was talking about jobs in the Irish textile sector. Perhaps this is the Government approach. Despite all the pressure from IBEC and much public comment, there was virtually nothing in the budget in this regard. This is very disappointing. Approximately 3,000 jobs have been lost in this sector in the past three years and I believe more jobs will be lost unless the Government reconsiders this issue.
Why is this sector so uncompetitive? The minimum wage in the textile sector in Ireland is approximately £131 per week while in Britain and Northern Ireland it is the equivalent of approximately IR£113 per week. Despite the £28 difference in gross pay costs, employees in Great Britain and Northern Ireland take home  £2.66 more than their counterpart in the Republic because of the PRSI tax systems which operate in this economy. I accept that removing the health and training levies from those on an income of £173 or below will certainly make a contribution towards allowing people in that sector to have increased take home pay but it is not enough and will not go any way towards dealing with the fundamental problems in that sector.
It has been estimated by independent consultants that every 1 per cent achieved in wage competitiveness creates 4,000 jobs. If the Government had chosen to make employment more attractive it could have provided another 28,000 jobs.
I wish to refer to the difference in the levies for the income earners below £9,000. I welcome this measure because it will help the low paid in particular but at £9,000 we will come to what I call a Beecher's Brook. We will face enormous difficulties because for everybody earning £175 or £180, just slightly above the limit, the full rate of PRSI will have to be paid by the employer on the whole income, not just on the margin above £173, in addition the levies will have to be paid on all that income by the employees. We will go back to a situation highlighted by my colleague, Deputy Cox, during the debate on the Finance Bill through the committee of this House in which we heard many examples of people being worse off on higher incomes. It is ridiculous that a married person with a dependent spouse living in local authority accommodation could be worse off earning £15,000 in terms of take home pay than they are when they earn £8,000. A person earning £12,000 loses £1,300 disposable income over and above what somebody on £8,000 would earn because of our differential rents and the way our social welfare system integrates with those on low pay. Those problems will be exacerbated by the manner in which the Minister removed the two levies and dealt with employers' PRSI. He will have to look again at how that affects people at the margins.
We should integrate the tax and PRSI  systems. After all, PRSI is a tax on work. The Progressive Democrats would have preferred if in this year's budget the Government had chosen to remove PRSI from the first £3,000 of income. That would have benefited the low paid workers but in particular it would not have allowed for the type of unemployment-poverty traps that will now exist at the margins as a result of the budget.
I said earlier that it was very much a budget with a little bit for everybody in the audience and I wish to refer to the manner in which it was delivered. A two hour budget speech is absolutely crazy and it is the most boring day in this House. We need to improve the way the budget is delivered. It does not have to be as long and much of what the Minister read out could have been distributed by way of briefing notes or included in the principal features of the budget. The fact that every Member of the House received a copy of the Minister's speech — and I welcome that — meant that virtually nobody listened to the speech. Everybody was able to read well ahead of the Minister. For next year I certainly hope that we will improve our procedures in this House and that we will not have the long, rambling, boring debate that we had yesterday simply for the sake of reading material into the record. I know when Deputy Bhamjee comes here he likes to sit and listen to everybody but he is probably the exception. Most people like to contribute rather than merely listen to a speech that they can read as it is being delivered.
I wish to turn now to the question of property tax. As the Minister knows, property values differ greatly from urban to rural areas. This tax will divide people between urban and rural areas and lead to a huge division in their attitude because of the Government approach. It is a tax based almost on the look of a house. It has to be determined who lives there, what their income is, the state of repair of the house and so on. It is a tax on middle income people, on those who have tried very hard to save money having worked extremely hard, who are  trying to educate their children and providing for health care and so on. The property tax in particular will be a further penal tax on them and, as Minister Woods in particular is aware, in the Dublin region, in Cork, Galway, Limerick and in the cities essentially, but particularly in Dublin, a £75,000 house is typical right across many of the middle class areas of this city, north and south.
Many people in Dublin who voted for the Labour Party and who thought they were voting for something different will now be heavily penalised because they are trying to provide a decent home for themselves and their families. If they are in the VHI they will be further penalised. Instead of the Government encouraging people to provide their own health care it is seeking to discourage them. VHI is very expensive, particularly on families. With high levels of tax on work people have used it, I accept, as an opportunity to give themselves some relief but until such time as we make a bigger effort and show a greater indication that we will decrease the level of tax on work, it is premature of the Government to indicate what it will do in relation to VHI and mortgage interest repayments and allow them only at the standard rate of tax. It is interesting that the Minister gave an indication of his thinking in relation to this matter. He was quite clear that these allowances will now only be allowed at the standard rate but we have been given no idea what the Minister or the Government intend to do in terms of tax rates or the level of PRSI in 1997, unlike the attitude to VHI and mortgage interest relief.
Many people may consider that £26,000 per year is a high income but I do not accept that. For a family with young children or perhaps with children in third level education, not receiving grant aid, paying a mortgage with VHI commitments and running a family car, it is a very low level of income indeed. The employer will have to pay £549 more in PRSI costs to keep that person in employment. The employee, according to the principal features, will benefit to the tune of £649 so there is a difference  of £100. I accept the employer will pay £549 and that the employee will gain the £649 but when the employee has paid the difference in the mortgage interest relief, the difference in VHI and the property tax, how much better off will he be? Given that we will be increasing substantially the costs for the employer, many people in that sector will be put out of work or will be much worse off.
The property tax on houses valued at £75,000 is only the beginning, I have no doubt about that. The last time the Labour Party was in Government it set the threshold at £60,000 for property and £20,000 for income. The £60,000 threshold was worth much more then and property values have escalated. Many more people will be included but I have no doubt that it is part of the Labour Party policy approach to this economy that those who are trying to help themselves, who want to be independent of the State will be penalised under this partnership Government. Many of the people who thought that there would be a change, that justice would be put into economics and trust put into politics, regret that they cast their vote on the last occasion for a party that will heavily penalise them simply because they are trying to help themselves.
I have said on many occasions that we need to encourage self-reliance, to encourage those from all incomes brackets who are trying hard to have a decent standard of living, who want to work and to get on with their lives, who do not want the Government to do things for them. They want the Government to provide the economic framework to allow them to get on with it. Whether they come from urban or rural areas the vast majority of the people I meet want to be allowed to become more self-reliant, more enterprising. Rather than encouraging them, the Government has sought to penalise them at every possible opportunity. I accept that radical, projobs tax reform will not generate all of the jobs we require in our economy but certainly, as Culliton said, it would be the most potent weapon in that regard. Therefore,  I regret very much that the Minister has not chosen to do so.
We have the highest level of tax on work of all of the OECD countries. We have the second highest unemployment level in the industrialised world. One would think that work was some kind of luxury here, that we really did not want people to work, that we wanted to put every obstacle in their way to prevent them from working.
Much play has been made in post-budget comment by Labour Party Deputies that this is a budget to help low income earners, that it is a budget that will tax the wealthy and help the low income earner. It surprises me that the Labour Party, with its recent new found support, would regard middle income earners in urban areas as the new wealthy.
It is interesting to note some facts in our economy. For example, for every ten people in the private, wealth-creating sector of our economy, they have to keep 22 others. The ten people investing their money in enterprises, generating employment, generating wealth here, are the people who are being really penalised by the policies of this Government. For example, their counterparts in Denmark have a different scenario where, for every nine people in the private sector creating wealth, they must keep ten others. Therefore, the Irish entrepreneur, the Irish wealth-creating person, must keep more than twice the number of dependants as his or her counterpart in Denmark. That is one of the reasons Irish goods are not competitive in certain markets. It is one of the reasons we, as a country, must begin radically to tackle that fact alone.
I have been surprised at the attitude adopted to the current round of pay negotiations. The attitude being adopted by the Government is one of, “we will have the social partners dictate the policy for us; whatever you can agree will be acceptable to us; all that is important is that we have agreement”. That comes before everything else. Behind closed doors, in an undemocratic fashion — as far as I can see — people who are not elected by  the general public are deciding pay and fiscal policy for our economy. Quite honestly, I do not consider it is appropriate. It is not the right strategy for a country with our economic ills. It seems extraordinary that employers, in particular, are prepared to accept that we can have an 8 per cent rise in wages over the next three of three and a quarter years, whatever may be the period. Since every reduction of 1 per cent in the cost of employment would generate an additional 4,000 jobs would it not have made more sense had the employers, in particular, and the unions concentrated on take-home pay and reducing the cost of employment? Would it not have made more sense had the pressure been put on the Government to reduce PRSI, which is a tax on work, to reduce the levels of tax on work, which would have had two effects? It would have kept down the cost of employment, could have reduced it substantially and increased workers' take-home pay, which would have been much more beneficial as an employment strategy on the part of this Government.
It is the case that those who are in jobs seem to believe that, once their individual circumstances are being catered for, the overall macro view of what is required can be left aside. That may be the attitude of the social partners but they are not elected to run this country. The Government is responsible for the country's economic strategy. The Government is responsible for the budget presented yesterday. I know some blame was being put on the poor civil servants; they are in a no-win position in that they are blamed if it is the wrong thing whereas the Minister gets the credit if it turns out to be the right thing. They were not the civil servants who gave us this budget. Rather the Minister and his Government presented this budget, the Fianna Fáil-Labour Party Coalition Government, with its 35 seat majority, presented us with this budget. Despite the euphoria — and there is a lot of euphoria in the media this morning — I have yet to see a budget that has not been well received initially by media commentators. I do not believe this is the  right budget; I do not believe it will be well received; I do not believe it will help employment. On the contrary, it will put further pressure particularly on some of the vulnerable sectors in our community.
Miss Harney: In my remaining minute I want to briefly summarise what I believe should be Government strategy. Deputy Cox spoke about the Olympics strategy for the Community Games performance. I agree with him when he said that when one looks at the fundamentals, one would think this economy was top of the league with a 3.5 per cent growth rate whereas the European Union average was 0.5 per cent and Britain with a negative growth rate. One would think that our economy was doing extremely well whereas the reverse is the case. On the ground ordinary individuals are experiencing extreme difficulty in making ends meet.
This budget, with a little bit for everybody in the audience, is one that did not integrate the National Development Plan, the pay talks and the budget strategy. It is very much a piecemeal budget, one that throws a little bit of money here, a little bit there, the kind of politics the Labour Party really enjoy. Indeed we saw evidence of that this morning when the Minister for Health made great play of the £100 million that will be given to the various health boards. It is a lost opportunity. The only thing I can say in favour of the Government is that it availed of the opportunity in this budget to reverse its policies of last year, to eliminate the requirement of spouses paying probate tax, a tax that should never have been imposed in the first place, and to abolish the 1 per cent income levy. They were the only two budgetary proposals that got a cheer from Government backbenchers yesterday. They cheered the reversal of their policies of last year. I ask the House: is that the kind of Government in which one could have confidence to give employment to the thousands of our people unemployed, to give more incentive to  those at work, to create a more self-reliant society and encourage enterprise and initiative? It is not; it is a failed and missed opportunity which I regret very much.
Mr. Blaney: I shall begin by commenting on the staggeringly high unemployment rate prevailing here and demonstrate that that is not the true story, not all of the bad story, in that we have, give or take a few, 300,000 people now unemployed, near enough to 20 per cent of the working population. Were we even conservatively to take into account how many more people would be without employment here were it not for many having emigrated over the past ten years, then we would be talking not about 20 per cent but about a 30 per cent underprovision of jobs for our young people continuing apace at present.
Against a background that undoubtedly contains all of the ingredients for providing a proper climate for job creation and development, when interest rates have been reduced drastically, inflation brought well under control, with GNP and exports rising one might well ask: what is wrong since they constituted the formula for development recognised worldwide? We must now stop, think and ask ourselves, against a background of developing technology, mechanisation, why these ingredients do not necessarily work any more. We find ourselves with this wonderful background, high reputation internationally, as bringing our overall economy and financial structures right into line but to what avail?
Unemployment is rampant with no sign of the numbers decreasing despite the fine tuning touches heading in the right direction. In other words, one could apply almost wishful thinking to the various little touches contained in the budget in the direction of helping to relieve the  hostile tax climate that forces, and has done for years past, every ambitious businessman, every person who employs people, to endeavour to ascertain how they can reduce the numbers of employees rather than what would be much more pleasurable to them and of benefit to the country, to be encouraged to take on more workers. That is the sad picture.
In any business, big or small, employers try to avoid taking on further employees because of the burden of the levies and PRSI and having to deal with bureaucracy. The outlook has been improving but we flittered away the opportunities presented by the budget in various ways that will have little impact on the number unemployed. Many of the changes will work against creating employment. How can anybody suggest it is fair or reasonable to lower the income and property value thresholds of residential property tax? How does the reduction in the income threshold and the property value threshold tally with the very severe shortage of housing? Is this the way to encourage people to buy their own home against all the odds?
I have witnessed several recessions since I became a Member. It is a well established phenomenon that when the construction industry is in difficulties, we are in recession. I am not suggesting that we start building, as we did in the past, merely to give people work and to keep them from being idle, but we need the construction industry's products. We need more houses and we need to encourage building by reintroducing grants for repair and maintenance of the existing housing stock. We have not been adding to the housing stock at the requisite levels during the past ten to 12 years. We need to carry out a serious investigation of the benefits that could accrue from giving incentives to people to undertake to build a house or to repair and maintain existing houses. When we were less well off we encouraged people to embark on building new houses where possible but above all to repair and maintain the existing houses. I suggest that properly pitched grants for housing, far from being a  burden on the Exchequer, would benefit it when account is taken of the numbers who would come off the live register and the taxes paid by persons employed directly or indirectly in the construction industry. Our economy would benefit. One cannot hope that the Government will have a change of mind because we have thrown away the opportunity presented by the favourable financial situation in which the Minister for Finance found himself.
I believe we could create jobs by paying those who stay at home. By paying people an attractive amount of money to stay at home to rear their children we would be meeting the needs of those who feel impelled to go out to work because of necessity and offering them the opportunity to be more happily employed looking after their families. By so doing their jobs would be freed for younger people who are unemployed. Lest that be regarded as a straight handout, it should be treated as taxable income and in those households where the additional money was not needed, part of the wife's income could be clawed back in taxation. This idea has been kicked around for a number of years. At one stage Fine Gael publicly proposed that housewives be paid £9 per week. I remember suggesting in the early eighties that the figure should be £30 per week. Taking account of inflation we should be thinking in terms of £100 per week now.
One of the things in our taxation code that irks me is that the dead are taxed. This is scandalous. Nobody can say that those who have paid their due share throughout their lifetime have not paid their way. The money they have saved as a result of their diligence should not be taxed after their death. It is morally wrong that this should obtain.
Back in the early eighties a Fine Gael led Government, in which Deputy Dukes was Minister for Finance, decided to hike substantially the price of petrol. The newspapers carried the story just as yesterday a morning's newspapers reported many of the things that were contained in yesterday's budget. The  same old sieve is leaking but that is nothing new. A delegation from the Hotels Federation and some other interest groups want to meet the Minister and I accompanied it. We implored the Minister not to put additional taxes on petrol because of its impact on tourism. We were then largely dependent on tourism but according to the Government we will be more dependent on it in the future. The impact of this measure has devastated the counties south of the Border. Despite pleas to various Ministers since then, the tax on petrol has never been lowered. Lest we might retrieve some of the ground we lost as a result of people going to shop across the Border, the Minister decided to put an extra tax on petrol. This will ensure that those devasted Border counties cannot make up lost ground. If one drives along the Border roads one will see derelict filling stations. We have enough problems on the southern rim with only one road in four available to our people to traverse the Border. We depend on the inflow from the Six Counties, and this is especially important in my county. In recent weeks, since the British Government increased the price of petrol it had come to the stage where we could retrieve some of the ground we had lost and this would have given some hope to the forgotten people on the southern rim of the Border who have never received consideration from this House since partition. The six counties north of the Border have their problems but we have problems, too. We have been deprived and instead of helping the Minister for Finance sees an opportunity to level up the prices of petrol again and forget about the past, to the detriment not only of those counties but of the tourism trade as a whole.
The price increases in beer, spirits and wine are a detriment to tourism. There is no point in the Minister saying the publicans have been bad boys and that the brewers have increased prices way beyond inflation. Surely that should not be the approach. If he is so concerned, why not ensure that the Government introduce price control? One must  remember that pubs and restaurants are as much part of the tourism scene as are the hotels which have been helped over the years. The services provided by pubs and restaurants have never been recognised as part and parcel of what we have to offer. Without them we would have little to offer when it rains.
These latest increases will discourage further tourism from North to South. We have lost the opportunity, in very favourable circumstances, to grasp the nettle and do something to create employment and wealth. I ask the Government to have a further look at the Structural Funds and not to fritter them away. Much has been frittered away already, leaving nothing of any real permanence in its place. We missed the boat yesterday, but perhaps that will teach us to ensure we do not miss the next one.
Mr. Sargent: I wish to clarify at the outset that the Green Party, Comhaontas Glas, is a registered political party and that I am spokesperson for that party. I find it very strange in this House that the country outside these four walls knows of the Green Party as a party but in Dáil Éireann, on budget day, I am not a party. When the two H Block people were elected they could have got together and could have spoken here for an hour yesterday as a party. There lies the complete lack of logic which I find time and again in this House and which has been highlighted by this budget debate.
A lack of reality permeates a number of aspects of the budget. We hear glowing references to GNP, GDP and healthy economic indicators. If one looks closely at what GNP comprises, one will see that the more dependent we are on services the more use we make of hospitals; the more car crashes we have the more we use garages, resulting in higher VAT charges, all of which is helping GNP. We assume that the Government, by welcoming such a healthy situation, is welcoming this type of calamity. When the Opposition parties believe the nonsense of these absurd indicators I ask what type  of Dáil Éireann this is meant to be when 300,000 people are unemployed?
Deputy Cox asked whether it is time to review the indicators which underline this budget. In spite of economic growth — as we call it — unemployment is up 40 per cent since 1990. I presume Deputy Cox is unhappy about the Progressive Democrats policy in that regard, considering that the Progressive Democrats were part of the Government for most of that time. Others, including Democratic Left, admit it is difficult to turn growth into jobs. Of course it is difficult. This is 1994. Technology does most of the boring work and makes most of the profit. The old song sung in the pubs — if anybody is in them —“MacAlpine's Fusiliers” would, in a modern form, probably be called MacAlpine's computer and earth moving operators. The idea of many people being required to do heavy work is no longer part of the society in which we live.
Why are we still playing this economic game by rules invented by landlords at the start of the Industrial Revolution in the 18th century? It was they who decided what was good and what you paid for. By and large good work meant working for them in their factories. Most of that work was boring and soul destroying, although one may have got two weeks' holidays and after long years of service a gold watch on retirement. Not so valued was work such as raising a family, caring for people in the community and craft work which made one independent. Growing food for your family was not even considered work; that was called “staying at home”, as Deputy Blaney said. Even today if people do not leave the house at 8.30 a.m. or 9 a.m. the perception is that they do not work. That was accepted by politicians so long as machines needed people and so long as women were not involved.
The whole system breaks down when machines do not need people and when women want to get involved. We than have chaos because the rules do not follow the conditions. Why are these rules still accepted? Automation ought to be a way of releasing people from soul  destroying work. There is no point in being a Luddite. Boring work is not good for you. One can see what boredom does to the animals in Dublin Zoo; it is a warning for us all. Economists ought to be able to tell us that when there is less work we should develop systems of sharing it more evenly. When machines are making most of the money we ought to concentrate our efforts in distributing those profits and resources fairly to the people they have displaced. What have we got?
The Minister with £200 million at his disposal has lost the opportunity to make a break from the failed out of date rule book. Instead of making a break the Minister has used pounds like drops of glue to try to patch the cracks and mend a failed system. This is creating greater feelings of alienation. The Minister has said this budget is about creating sufficient employment, not 300,000 jobs. Perhaps it will be enough for Dublin Central or for sensitive areas where people are outspoken enough to make their cases. Is the Minister saying that anybody who is left without a job is useless? What will the Minister say to those who cannot find work even though he has provided sufficient employment?
I do not have time to outline the alternatives but I would encourage people to acquire the Greens economic policy — Communism, Socialism and Capitalism, One Down and Two to Go Towards a Sane Economy — and read it. It is radically different from this budget and would need to be.
The Minister should look at France, for instance, a developed country where the working week is being reduced. They have recognised that work is not available to require people to work the old hours of the industrial revolution. They have reduced the working week and encouraged work sharing to spread the work in a sensible way. The Government seems to be hung up on what can only be described as the economics of the cancer cell — the more one grows the better off one will be. Unfortunately we are proving to ourselves that that is failing abysmally. We are living on a planet with  finite resources. If we shared work, people would have the opportunity to be creative.
I welcome the help given to Tailors Hall. The guild which built Tailors Hall operated under a different rule to the one under which the Minister operates. It did not operate through competition which is considered a sacred cow in economic progress. It operated through co-operation. When a tailor got a length of cloth at a bargain price he did not try to make a bigger profit and put his colleagues out of business, he shared it. It was not quantity which was the deciding factor or the yard stick, it was quality. Tailors were not allowed to work outside of natural light, not because they were trying to curtail their working hours but because the quality of their work would be affected. Instead of operating on current indicators of competition and quantity they operated through co-operation and quality. We have come to the time when we need to re-examine many of the indicators that have landed us in the mess in which we are.
From what the Minister said I would expect him to be favourably disposed towards enterprise which is sustainable, but it should also be ecological. The proposed expenditure of £1.5 million to monitor meat production shows that the Minister is aware of the dangers of contamination. The most labour intensive sector of agriculture which does not use imported chemicals and fertilisers, the organic sector, has been completely ignored. The £1 million announced by the Minister for Agriculture, Food and Forestry some weeks ago for those involved in horticulture who suffered from the spring floods is an absolute disgrace. It will not even help people with their bank loans and they will be put out of business. People involved in horticulture will have to sell out in order to pay the banks who are getting away with profiteering. The result will be that more land will be put up for rezoning. That will cause problems in Dublin North and where is the claw back on the profits from rezoning? It is not there. I wonder who is calling the shots in this budget which  certainly is not related to the need of the people.
Due to the time constraint I have to curtail my contribution but I would ask that ecological taxation be brought in to replace income tax because if we continue to squander our finite resources the price will rise and in the next generation we will be unable to afford the type of energy consumption to which we have grown accustomed.
Minister for Social Welfare (Dr. Woods): This partnership Government is serving people, their families and the communities in which they live. This is a budget for people and for jobs, for tackling unemployment and increasing the numbers at work. Pensioners, people who depend on social welfare, and families at work will all be better off as a result. We are providing an extra £157 million to improve the incomes of those who depend on social welfare, to support families and jobs, and to strengthen voluntary and community services. In a major development in social insurance cover, widowers will be able, for the first time, to claim a contributory pension.
The main features of the improvements we are providing in this year's budget are: a 3 per cent increase in all weekly social welfare and health board payments; an extra increase of 3 per cent or £1.60 a week, to bring all short term rates up to the priority rate recommended by the Commission on Social Welfare; a further increase of £2.10 a week to disability and unemployment benefits — this gives an overall increase  of 10 per cent in the personal rate and pay-related benefit payable with unemployment benefit is being discontinued for new claims from July; an increase in the rate of child benefit from £20 to £25 for the third child and from £23 to £25 for subsequent children; a new contributory pension for widowers subject to an earnings limit after one year's receipt of pension; improved earnings disregards with tapering arrangements for lone parents who take up work; a new earnings disregard of £100 for the carer's allowance where there is a spouse with earnings; a new scheme of adoptive benefit similar to maternity benefit; further improvements to the maternity benefit scheme; increase in the minimum payment of unemployment assistance where a beneficiary is living at home; widows between 60 and 65 will retain entitlement to free schemes available to their husbands prior to death; further easing of the social welfare measures introduced in 1992; and further support to the extent of £2.5 million to the voluntary and community sector.
A couple with four children on long term unemployment assistance will receive an increase of £6.12 or 3.7 per cent a week, including child benefit, bringing their total weekly payment to £171.17. A couple with three children on short term unemployment assistance or supplementary welfare allowance will receive a total of £150.10 a week, taking child benefit into account. They will be £6.75 or 4.7 per cent a week better off.
A widower or a deserted wife with four children on a contributory pension or payment will receive an increase of £5.52 or 3.7 per cent per week, including child benefit. This new payment will be £153.27 per week. An old age pensioner couple on a non-contributory pension will receive an increase of £3.60 a week bringing their weekly pension to £61 each. A couple with three children on unemployment benefit or disability benefit will receive an increase of £8.85 or  6.2 per cent bringing the new rate to £143.35 a week, including child benefit.
A general 3 per cent increase is being given in all weekly social welfare and health board payments with effect from July. This increase applies to personal rates, adult dependent and child dependant allowances. Over 822,000 people and their 627,000 dependants will benefit, including pensioners, widows, lone parents and families who are out of work because of illness of unemployment. The cost of this increase will be £97 million in a full year and some £43 million this year. This more than maintains the real income position of those who depend on social welfare, given the current very low rate of inflation and the anticipated rate for the year of 2.5 per cent. Once again, we are meeting a major commitment in the Programme for Government and in the Programme for Economic and Social Progress.
In addition to the general 3 per cent increase, a further increase of 3 per cent, or £1.60 a week, is being given to all short term weekly payments to bring them up to the Commission on Social Welfare's priority rates. The short term payments in question are disability benefit. Unemployment benefit, injury benefit, short term unemployment assistance, supplementary welfare allowance and unemployability supplement; 185,000 people benefit.
All long term payments — representing 80 per cent of all weekly recipients and including pensioners, widows, lone parents, deserted wives and the long term unemployed — reached the priority rates in July 1991. This special increase completes the picture in relation to achieving the priority rates for all weekly social welfare payments. All rates are now at least 90 per cent of the Commission on Social Welfare's main rate, £65.40. The cost of this special increase amounts to over £15 million in a fully year and almost £7 million in 1994.
The new widower's contributory pension is a huge breakthrough in the development of our social insurance system. It is by far the most significant measure to be introduced in social welfare  since I brought the self-employed into social insurance in 1988. It also marks a major step forward in providing support for families where the wife has died.
The new contributory pension for widowers will be introduced from October next. It will be available to widowers on the same terms and subject to the same contribution conditions as currently apply to widows in respect of claims arising from October next. Under the new arrangements, both widows and widowers will be entitled to a contributory pension for the first year after which a qualifying earnings limit will apply. I am conscious of the sense of loss and trauma experienced and the adjustment required in the immediate aftermath of bereavement. Existing recipients of widow's pensions will not be affected in any way by these new arrangements. They will continue to receive their pensions irrespective of their level of earnings.
The income limit proposed will be tapered between £12,000 and £16,000 per annum, that is, £230 to £310 in weekly terms. A reduced rate of pension will be payable above the £230 weekly earnings level while no pension will be payable where earnings are in excess of £16,000 per annum, which is well in excess of average industrial earnings. Where a reduced rate of pension is payable, the full amount in respect of child dependant increases will be paid. The requirement in relation to income will not apply at pension age which is 66 years of age. It is estimated that the number of widows claiming under the new scheme and affected by the earnings limit will be minimal.
I am also providing in the new scheme for transitional arrangements which will apply to men who became widowers within one year of the introduction of the new pension. In their case, they will also be entitled to the new pension for 12 months before the earnings requirement will apply. Widowers of more than one year's standing will be eligible to apply for the new pension subject to the earnings requirement.
This first-time scheme is being introduced  at a significant cost of some £16 million in a full year. I will be keeping the operation of the new pensions under close review to ensure that the position of widows with young children is safeguarded.
Further significant improvements are being introduced for child benefit in line with our overall approach of developing child benefit as the main element of child income support. Last year, the monthly rates for all children were increased to £20 for each of the first three children and £23 per child thereafter at a very substantial cost of £50 million in a full year. This year, the higher rate of £23 is being increased to £25 and, in addition, is being applied to the third and subsequent children. The new payments structure from next September will be £20 for each of the first two children and £25 for each thereafter. This improvement will cost almost £13 million in a full year and £4.5 million this year.
The family income supplement, more than ever, is providing much needed support to workers trying to bring up families on low pay. Take-up under the scheme has increased on this time last year with some 9,600 families currently getting FIS. Over 30,000 children benefit from this payment. The very substantial improvements brought into effect last year are beginning to have an impact on take-up under the scheme.
Building on last year's improvements, the weekly income thresholds are again being adjusted to take account of the tax measures announced in the budget. The eligibility thresholds are being increased by £10 and families will get an increase of £6 per week.
I have been concerned for some time about the need to encourage lone parents, especially single mothers, back into the workforce. To improve the position for young mothers who want to take up work, the means test is being eased. The current earnings disregard of £6 for each child is being replaced by a flat-rate disregard of £30 and a 50 per cent taper where earnings are above £30 a week. Where earnings exceed the new disregards,  the amount of lone parent's allowance payable will be reduced by £1 for each £2 earned, instead of the £1 for £1 arrangement currently applied.
I have been impressed by the case made in particular by the Irish Clothing Manufacturers' Federation that a reduction in the rate from its present level of 12.2 per cent would provide a boost to firms in the traditional, labour intensive manufacturing sectors such as clothing and footwear. Those sectors have suffered from the impact of lower-cost foreign competition, including competition from the UK where insurance contribution rates favour low-paid employment.
I have, of course, to weigh up the cost of any concession in terms of lost revenues to the social insurance fund from which workers and their families draw their social welfare entitlements. However, in view of the fact that revenues to the fund have been very healthy in recent years and in keeping with the pro-jobs thrust of the budget, I will, as announced yesterday, be introducing changes in the employer's PRSI rate effective from next April. The employer's rate will be reduced to 9 per cent in respect of employees earning up to £173 a week, that is, £9,000 per annum. Where earnings exceed that amount, the normal rate of 12.2 per cent will apply to all earnings up to £496 a week which is the PRSI ceiling for employers of £25,800 per annum.
My main concern in introducing this concession is to help employers in labour intensive industries to maintain and increase jobs. This concession, together with other budget measures in relation to the income levies, a moderate rate of pay rises in the new pay agreement plus low interest rates and the generally favourable climate for business, should allow for a more positive jobs outlook in these sectors. Indeed, I am very heartened by the news in the last two days that a  number of clothing firms will be creating new jobs in the near future.
This new lower contribution rate is not confined to manufacturing and will, of course, also apply in the services sector. Here I hope that the concession would have the effect of reinforcing and stimulating the upward trend in employment that is evident from the 1993 labour force survey published this week.
Employers will also benefit from the waiving of the levies on behalf of employees who are medical card holders. Again I expect that this will have a positive impact on employment and in particular enhance the job chances of those on the live register.
This year, the personal rates of disability benefit and unemployment benefit are being singled out for an increase of 10 per cent, £5.40 a week, which will put them on a par with the new long term rate of unemployment assistance, which is £61.00 a week. This special additional increase in the basic personal rates arises from the decision of the Government to discontinue pay-related benefit payable with unemployment benefit for new claimants with effect from next July. The savings from that measure are being devoted in full towards this special increase which will also apply to disability benefit from which pay-related benefit was discontinued in 1992.
This restructuring measure will ensure a more equitable and effective use of the overall resources available to those in receipt of short term benefits. Fewer than half those receiving unemployment benefit also receive pay-related benefit. The special additional increase of 4 per cent in weekly payments will mean that those getting disability or unemployment benefit will receive an overall increase of £5.40 per week, or nearly 10 per cent overall. In addition to utilising the available savings, this special additional increase will cost £2.7 million this year.
A significant improvement in the carer's allowance is being introduced this year. In addition to the general 13 per cent increase, changes are being introduced to the means test through provision of an earnings disregard of £100 in respect of  working spouses. Most criticism of the allowance has focused on the stringency of the means test, particularly where the spouse of a carer was working. I am pleased, therefore, to be able to ease the means test. An extra 500 carers will now qualify for the allowance and a further 350 existing carers will get increases.
For example, a carer whose spouse had earnings of £160 a week will now receive a payment of £34.00. They would not previously have been entitled to any payment. The respite care fund, which I established last year, will be provided with a further £500,000 this year to continue its valuable work.
I am pleased to be in a position to announce the following changes in the “free schemes”: a pensioner being cared for by a recipient of a carer's allowance will in future retain eligibility for the free telephone rental allowance. Previously, this was discontinued because the living alone condition ceased to be satisfied; similarly, pensioners aged 75 or over who no longer live alone will retain eligibility for the free telephone rental allowance. The age requirement of 80 which applies in the case of retaining the free electricity allowance will also be reduced to 75; widows between the age of 60 and 65 whose late husbands had entitlement to the free schemes will retain entitlement to them, notwithstanding their age.
The free electricity allowance scheme is being extended to include night storage electricity schemes. This extension will allow unused daytime units to be offset against the cost of night-time units and will enable pensioners with night storage heating to maximise their units under the scheme; the free travel companion pass is being extended to all wheelchair users currently entitled to avail of free travel under my Department's scheme.
I am pleased to announce the following adjustments: the earnings limit of £30,000 for entitlement to treatment (dental, optical and aural benefits) is being increased to £35,000 and to £70,000 where there is a dependent spouse; the level of redundancy payment at which unemployed people may be disqualified from receipt of unemployment benefit for up to nine weeks is being increased from £12,000 to £15,000; provision of £1 million has been made in the budget to allow me to implement changes in the rules governing entitlement to unemployment benefit in the case of part-time workers. The precise details of this measure will be announced in the forthcoming Social Welfare Bill.
A number of improvements are being introduced to the maternity benefit scheme, as follows: the provisions of the scheme will be extended to women who have a stillbirth after 24 weeks of pregnancy — the current duration is 28 weeks; husbands of women who claim maternity benefit, who are in receipt of social welfare payments will continue to receive full rate child dependent increases for the duration of the maternity benefit. This improvement will avoid a situation where families found themselves worse off financially for the duration of the maternity benefit claim because of the loss of the half rate child dependent increases.
Payment of the adult dependent allowance is being continued for six weeks after the death of an adult dependent in the case of retirement pension, old age (contributory) pension, old age (non-contributory) pension, pre-retirement allowance and invalidity pension. All  social welfare payments now provide this six weeks after death cover.
The Government has approved an additional £2.5 million in support of grants to voluntary and community organisations. This amount is in addition to the allocation of £4.73 million already provided for in the 1994 Estimates for my Department. It brings the total amount available this year to £7.23 million.
Details of the various allocations are as follows: an additional £100,000 is being provided for the scheme of once off grants to voluntary organisations, bringing the 1994 allocation to £850,000. The respite care fund scheme, which I introduced in 1993, has proved enormously successful. Over 90 separate projects to provide respite breaks for full-time carers were assisted from the fund in 1993. An allocation of £500,000 in 1994 is provided to continue this fund. Another initiative which I introduced in 1993 was the allocation of £100,000, to support voluntary projects to help lone parents return to the workforce or to second chance education. I am doubling the allocation for 1994 to £200,000.
Nineteen ninety-four is the International Year of the Family and the Government is providing a special grantin-aid of £400,000 to the steering committee for the year representing the non-governmental sector. This allocation will enable that committee to grant-aid family organisations who wish to host events or bring forward initiatives to celebrate the year. I am also providing a special allocation of £250,000 to assist the work of family resource centres.
I am increasing the allocation for the scheme of grants to locally-based women's groups to £700,000, an increase of £100,000 over the 1993 allocation. Since I introduced it in 1990, this scheme has seen an enormous growth in the number of local groups providing personal development and informal educational opportunities for women in disadvantaged areas. I want to ensure that the same opportunities are available for men and am providing an allocation of £100,000 for initiatives with men's  groups. Details of how this scheme will operate will be announced shortly.
Many of the groups funded under the women's grants scheme have developed to a stage where they reach out to a wider number of woman and provide a wide range of personal development and parenting courses, pre-vocational and educational opportunities and child-minding facilities. In recognition that more established and developed groups require more support and a longer term funding commitment, I am providing an additional allocation of £100,000 for a new scheme to provide enhanced funding for the more developed groups.
An additional allocation of £700,000 is being provided for my Department's Community Development Programme, bringing the total allocation to £2.2 million. This will allow for continued funding for existing projects and maintain the momentum of expansion of the programme into new areas.
An additional £250,000 is being provided for projects to combat the problems of moneylending, bringing the total allocation of £750,000. Thirteen local projects were funded in 1993 and my intention is to establish additional projects in 1994 in Galway, Sligo, Dundalk, Drogheda, the midlands, areas of Dublin not served by existing projects and in other centres around the country.
This programme has given real hope to many people on low incomes caught in a cycle of indebtedness. I intend to develop and expand debt advice and household budget management services as an integral part of the overall services offered by my Department to social welfare customers.
The household budgeting facility is proving to be very popular. More than 2,000 people in the greater Dublin area, Kilkenny, and Waterford are having deductions made from their weekly payments to meet bills such as rent, ESB and gas.
Over the past number of years, the opportunity is taken at budget time to announce a number of special grants to voluntary and community organisations;  they have become known as the budget specials.
This year I am making provision for the following grants, totalling £1,180,000. Women's Refuges — £100,000 — a special provision for new refuges and to assist existing refuges. Grants to assist organisations working with homeless boys will amount to £100,000. Action Inishowen will receive £20,000 towards the cost of constructing a community centre to serve the Inishowen area in Carndonagh. Aontas will receive £50,000 to allow it continue the work it has been engaged in with women. Bantry Community Industries will receive £35,000 towards the construction of a child and family centre to meet the needs of children with special needs. Barnardos will receive £40,000 for a special project working with particularly disadvantaged children to mark the International Year of the Family. Bawnogue Community Centre will receive £25,000 towards the construction of a community centre to serve the Bawnogue area. A sum of £25,000 will go to a community development bursary scheme to enable people working in the community to access relevant training in community development. The Capuchin Centre for Homeless Men will receive £25,000 and the Cheshire Foundation in Ireland will receive £25,000 to run a number of independent living training courses for people in their sheltered housing units. Community Action Network will receive £50,000 to assist the organisation with its personal development, community development and other courses and to allow CAN to undertake preliminary community development work in areas not served by the community development programme. Crosscare will receive £40,000 for a special project which deals with teenage problems in a family context. Energy Action will receive £50,000 to continue and extend its work of insulating homes of the elderly and other disadvantaged groups and to allow for extension of initiatives to rural areas. Forum, North West Connemara will be given £30,000 for a pilot rural transport project aimed at devising a new and co-ordinated  approach at meeting the transport needs of elderly people, women in the home and others in isolated rural areas.
A sum of £50,000 is to be given to Inisbofin Development Association towards the construction of a community centre on this offshore island. ICTU is to receive £40,000 to enable it employ two training officers to develop the social welfare advice role of its unemployed centres. Irish National Organisation of the Unemployed is to receive £24,000 towards the employment of a resource worker to co-ordinate the provision of advice and information to the unemployed and a research project. The Irish Red Cross will receive £50,000. The society has been running a pilot training programme for its volunteers on care for the elderly and infirm and to give some respite for carers. The grant will allow the programme to be expanded and run on a national level in co-operation with the health boards and public health nurses. The Irish Wheelchair Association will receive £50,000 towards the cost of a pilot peer counselling project to assist people with disabilities to become more independent. Loughboy Area Resource Centre will receive £10,000 and the Mountview Youth and Family Centre will receive £15,000. The Moyvalley Resources will receive £20,000 towards the establishment of a centre which will encourage the enterprise aspects of community development. The National League of the Blind of Ireland will receive £50,000.
The Order of Malta Ambulance Corps headquarters will receive £30,000 for the following units towards the purchase of ambulances: Greenhills, Walkintown; Mulranny, County Mayo; Newbridge, County Kildare; Portlaoise, County Laois; Castlebar, County Mayo, and Baldoyle. The order is helped in its purchase of ambulances with a grant of £5,000 per ambulance. Parentline will receive £25,000 to extend the group's helpline, extend this organisation's service outside Dublin and extend the network of parents' support groups. Poverty 3 will  deceive £16,000 to increase awareness of the poverty programme and a conference of rural projects. St. Francis Hospice Home Care Service will receive £25,000 towards the purchase of transport for the centre's users. St. Michael's House will receive £30,000, and the Schizophrenia Association of Ireland £20,000 to provide matching funding for the Association's WORKLINK project. The Shanty Educational Project will receive £20,000 towards the cost of establishing a centre to meet the need for pre-school education and child care while parents avail of second chance educational opportunities. The Tallaght Childcare Project will receive £20,000 and Threshold, £20,000 for the establishment of a housing debt policy unit. The Wallaroo Pre-school, Cork will receive £15,000 to enable the project to continue and Women's Aid will receive £35,000.
This is a good and progressive budget for social welfare. We are providing real improvements for all our customers at a cost of £157 million. We are now spending £3.8 billion on our social welfare services and we are doing it with increasing effectiveness.
We will continue to develop our services in an imaginative way and to invest in those people who look to us for support and protection. This is the commitment of this partnership Government and of the social partners with whom we can chart a better future for all our people.
Mr. Dukes: I will begin by telling the Minister for Social Welfare how pleased I am to hear some of the changes he has announced, particularly those relating to the retention of entitlements to widows aged between 60 and 65 years whose husbands had entitlements to free schemes. I have been advocating the introduction of that measure for some time and I hope next year the Minister will be able to  make that available to all widows of people entitled to those free schemes and that the age requirement will no longer exist. This is a progressive measure and will assist a small number of people, but people who are in a difficult position.
I welcome the extension of the free travel companion pass to all wheelchair users. That scheme deserves further attention. As there are a number of categories of people with a similar need, will the Minister consider extending the scheme next year? I welcome also the further provisions for the continuation of the after death payment. Those are all very constructive measures, but it is regrettable that more of what is being billed as a great give-away budget has not been put into such measures.
There are a number of aspects of the budget which I can only characterise as an admission by the Government of past errors, some of them very gross errors. My colleague, Deputy Yates, referred to some of them yesterday. It is clear that the abolition this year of the 1 per cent income levy imposed last year is a belated admission by the Government that there was never a need or justification for that measure and that it was introduced in a panic last year, similar to the probate tax, when the Government could not agree on a rational expenditure programme.
The probate tax is another case in point, but the Government has not had the decency to go the whole hog and abolish it. Changes have been made in relation to that tax but it is still badly framed. It is a tax which hits vulnerable people at a most vulnerable time in their lives. As my colleague, Deputy Yates, pointed out yesterday, people who might be able to pay that tax from the proceeds of an estate they were about to inherit could not do so because of not being in a position to derive income from the estate first.
In effect then, the probate tax forces people to borrow on the basis of the income they will eventually receive from their inheritance. A tax that has that result is self-defeating and unduly onerous and oppressive. In the light of the changes the Government made in the  area of probate tax this year it is obvious that it has accepted the proposition that this is a bad tax, that it does not form part of a rational tax reform programme and should be abolished.
This year the Government admitted to a serious error made some years ago when ACOT and An Foras Talúntais were merged to form Teagasc. At that time the new body was crippled because of a lack of funds. Its administrative budget was slashed and we have been living with the consequences of that ever since. Deputies who have any rural element in their constituencies know the problems Teagasc has had during the years to meet the demands being made on it. Because of the CAP reform to which this Government and its predecessor agreed, without putting up any fight, there are greater demands on Teagasc to help farmers, particularly small farmers in the west, to deal with the challenges that face them. Since the GATT package was announced at the end of last year, an arrangement with which the Government is happy, there will be even more pressure on Teagasc to give farmers the type of advice they need to reorient their production systems and the pattern of production on their farms to deal with lower prices worldwide, lower export refunds and greater quota restrictions. At the same time we will have to hand over a greater part of the European Union's market to our GATT competitors who have not accepted any restrictions on their production. That will mean a major change in the way we plan the composition of our farm output and how we go about pruning costs and making ourselves competitive. It will require a major input from Teagasc and all we have this year is a belated admission by the Government that the problem exists. We should never have had to make that extra provision. What is provided now is a little extra funding for Teagasc to make up for it having been spanceled  since it was set up. The Government is taking credit for allocating £2 million last year and this year to the small farm development programme. Does it know what is happening on the ground?
Recently I visited a Teagasc centre in Ballinamore, County Leitrim, an area where farmers need the advice to which I refer. The staff in that centre do not know if it will be open in a few months' time. They do not have funds to carry out the necessary research work. There is no researcher in that centre and no one there, apart from a development officer, has any role in trying to relate the work of a Teagasc centre to the needs of farmers. The £2 million made available will not resolve the problem on the scale needed.
The Minister for Finance — and probably the Minister for Agriculture — are taking credit for allocating £2 million to the administrative budget of the Department of Agriculture to help it deal with delays in payments under premium schemes now in operation. That allocation should have been made a long time ago. Since we resumed after the summer recess on 6 October last year I have sought to draw the Minister's attention to the criminal delays in payments under many of those schemes. The only answer I have received from the Department of Agriculture — not from the Minister because he never seems to be here — but from his hapless Ministers of State, indicates how much money has been paid out. Do they know that people are still waiting for the payment of the special beef premium for which they applied in February last year, payments which should have been made in June? They have been told in the last few weeks that because of a problem with the computers in the Department of Agriculture they will now have to resubmit the identity numbers of the cattle for which they applied for grants. That has caused chaos among farm families. There has been a belated admission that there is a problem and £2 million will be made available this year for the administrative budget. However, I am not sure it will be enough.
The Minister for Finance yesterday  told us, with a smile on his face that he would allocate £1 million to deal with the problem of potato and vegetable producers who were wiped out last summer. If the sum of £1 million was allocated solely to the potato and vegetable producers, it would go nowhere near meeting their problems. They cannot pay their bills for last summer's production. No reference has been made, as Deputy Lenihan would say, “good, bad or indifferent”, to the difficulties experienced in that same wet summer by tillage producers down a strip of the east coast in Counties Wicklow and Wexford. The problem is particularly bad in County Wexford and no provision has been made for those tillage producers. The allocation of £1 million to potato and vegetable producers will not begin to deal with that problem. The producers are not looking for assistance, a replacement of their income, they are looking for a minimal form of assistance that will allow them to plant for another crop season. Although the Minister for Agriculture promised the then President of the IFA, Alan Gillis at a meeting to discuss a new national pay agreement last monday week that he would meet representatives of those groups so far he has not done so. He does not seem to want to know about them, but he will hear about them. They cancelled a picket outside this House a week or two ago on the understanding that the Minister for Agriculture would meet them to discuss their problem. the Minister for Agriculture does not like getting into discussion with those people. Now we find that £1 million, which had been announced previously, will be allocated to those producers, but that is not a real contribution to deal with this problem.
I wish to refer to the provisions for the farm retirement scheme, that much delayed scheme promised in spring, early summer and late summer of last year and on which final agreement was reached only ten days ago.
Five million pounds was provided in the Estimates this year for that scheme, An extra £2.5 million is provided for in the budget, but there is no thanks to the  Minister for that. It was clear that if the scheme came into operation £5 million would not cover it. The Minister is simply anticipating the fact that he will have to provide more money for the scheme in 1994 and, instead of having to come in later in the year with the inevitable Supplementary Estimate, he is trying to gain brownie points by telling us he is making a much bigger allocation for the scheme. It should not have taken so long to get this scheme into operation. It should have been worked out long before now, and nobody will be impressed by the gesture of the Minister in providing an extra £2.5 million.
The budget makes an additional provision for county roads. In the Budget Statement the Government claims great credit for a provision which is 113 per cent of the provision for last year. The amount is being increased by £15 million over and above the Estimates and will amount to the enormous sum of £28.3 million for county roads. Who does the Minister think he is kidding? That amount of money would not be sufficient to deal with the problem in my county alone. It would not be sufficient to deal with the problems in County Cavan about which my colleague, Deputy Boylan, has been talking for a long time. I assure Deputy Bhamjee that it will do nothing for County Clare. Many counties experience the problem whereby county roads are literally falling apart.
In parts of my county farmers have to plan the route to transport silage from their fields to their farmyards. They cannot take the shortest route because the roads simply will not support the silage wagons, or the potholes are so big that they would break them. Dairies refuse to send milk lorries to many areas because the potholes would banjax the springs of the milk lorries. Every rural Deputy knows that school bus operators do not want to send their buses through roads all over the country because they are afraid that the cost of repair of the buses would be huge. Every Deputy is aware of the damage done to cars of ordinary citizens from travelling on  county roads, although some of us do not seem to be affected by it. I heard recently that Deputy Bhamjee had a meeting with SIMI representatives in his constituency, told them quite blandly that more tax would be imposed on cars and they would have to put up with it. That showed the sympathy he had for motorists and road users.
Mr. Dukes: That society is trying to sell cars to people who know perfectly well that after three or four months they will have to replace the shock absorbers as a result of the bad conditions of the roads.
I heard the Minister for Finance this morning on “The Pat Kenny Show” modestly disclaiming any suggestion that the spin doctors could have anything to do with this budget. He said that so many people are interested in the budget that the spin doctoring cannot work. Who does he think he is kidding? The whole layout of the budget shows the involvement of the spin doctors, as do the headlines in the newspapers today. They say that this is a give-away budget. I have examined the figures in the Principal Features of the Budget and as a result of the tax changes, the Government is raising extra revenue of £110.9 million. If you look at the give-aways, the Government is giving out £303.05 million. Therefore, there is a net give-away — that is what you would call it — of £192 million. That will not appear in any of the newspapers because they are looking at the changes in income tax, the £83 million given back by way of the levy and so on.
If the figures are further examined one finds that the Government is taking credit for the £83 million it is giving back in the 1 per cent levy which should never have been introduced in the first place, and for the fact that the PRSI allowance is again being maintained this year. It says that constitutes a give-away of £37 million. Neither of those is a give-away. The two figures together amount to £120 million. We find that 60 per cent of what is presented as a give-away in this budget  is accounted for by money that never should have been taken from people in the first place. Therefore, this is not a give-away budget — I compliment the spin doctors on their success in presenting it as such. When the next tax give-away of £192.2 million is compared with the figure for income tax——
Mr. Dukes: Accepting that there is £192 million of a give-away, what could have been done with that money other than the plethora of things that appear in the budget? The changes in the marginal relief rate, child additions and personal allowances in the income tax code will cost £89.9 million in 1994, and they are small changes. What could the Government have done if it had concentrated a full £192 million in these areas alone without doing any of the other little things? If the Government had concentrated on those areas it would have been able to make a far bigger change in the marginal relief rate, child additions and personal allowances, at one stroke it would have done more to increase the prospects of employment for a great many people by reducing the poverty traps than it has done with all this plethora of things that took the Minister for Finance an historic and mind-numbingly boring two hours to read yesterday.
This budget is another giving in, and I know how it happens because I know the Labour Party quite intimately of old and I know Fianna Fáil's penchant for the appearance rather than the substance. The Government has made a bags of this budget by trying to do so many of the right things, nothing will amount to very much. It has spread the jam so thinly that people can hardly get the taste of the raspberries, and raspberries therefore are what the Government deserve for this budget.
Mr. Browne: (Carlow-Kilkenny): Cuireann sé ionadh orm i gcónaí go bhfuil  nósanna anseo ó bunaíodh an Dáil don chéad uair agus ba chóir go mbeadh deireadh leo in thuairimse. Bhí cáinaisnéis againn inné agus lean an tAire ag caint ar feadh dhá uair — ag caint go leadránach i dtreo is go raibh daoine eile ag caint anseo sa Dáil agus bhí lucht féachana na teilifíse ar buile. Dúirt duine éigin liom go raibh glaoanna curtha isteach go RTE chun an díospóireacht ar fad ar an teilifís a chur ar ceal. Bhí siad bored stiff leis an rud go léir. Tá súil agam go mbeidh athrú an bhliain seo chugainn nuair a thiocfaidh Aire Airgeadais isteach chun an cháinaisnéis a chur os ar gcomhair. B'fhéidir go mbeidh Alan Dukes nó duine mar sin i gceannas ag an am sin — fear go mbeadh ciall aige.
Mr. Browne: (Carlow-Kilkenny): Féach ar an bhfear atá ag éisteacht liom — fear atá anseo dhá lá i ndiaidh a chéile. Sin record. Ní féidir leis fannúint anseo dhá lá i ndiaidh a chéile gan a bheith ag cur isteach ar gach éinne. Ach is cuma faoi sin.
Prior to the introduction of the budget there was great hype about the amount of money available to the Minister for Finance to spend. A graveyard in my constituency was severely flooded for the second time in nine months — some graves had sunk approximately six inches — yet despite several phone calls to the Department there was only a promise that money might be made available to deal with this problem. The county council had no money to deal with it. If the Government properly looked after the welfare of the country at large there would be no question of the Minister for Finance having a bonanza at his disposal. Councils have been starved of funding:  they have no money to build houses, repair roads or deal with emergencies. Health boards will be given an injection of £100 million from the amnesty to help them keep going. They will not be able to provide a luxury service with this funding: once the debts have been paid they will only be able to provide a basic service.
I wonder what the budget would have been like if the money from the tax amnesty had not been available to the Government — most of that money being given out is based on the yield from the tax amnesty. Despite all the good fundamentals in our economy, I wonder how well it would stand up if we did not receive funding from the EU. I should point out that Teagasc had to sell 77 acres of land in Oakpark in my constituency to pay debts for which the Minister would not provide funding. Another burning issue is funding for schools. It is almost impossible to get the Department to agree on final figures.
The abolition of the 1 per cent levy has been hailed as a major achievement. I think the Minister is lucky that no criminal charges were brought against him for the introduction of this levy last year. He should be glad no charges were brought against him in court. The effect of the probate tax has been lightened by the exemption of spouses. Nevertheless, this tax, which ought to be a source of embarrasssment for any Government, should be abolished completely.
I am completely in favour of helping those people who need hip replacements but I am appalled that no priority has been given to those on the waiting list for heart operations. After all, if a person's heart stops beating, they die. People can endure an extra few months suffering while waiting for a hip replacement or  eye surgery — it is wrong they should have to wait — but people cannot afford to wait a few months for a heart operation; it is a matter of life and death. The number of people on the waiting list for heart operations is unbelievable, and I am amazed that these people together with people waiting for hip replacements and eye surgery have not been made a priority. I hope the Minister for Health will deal with this issue in his own way.
Our roads are beginning to crumble. The number of potholes used to be a joke but now people are complaining about potholes which cover a stretch of road. People coming around corners drive into these potholes, get punctures and almost wreck their cars. The budget is geared towards the European and local elections, but it should be remembered that if we have a wet summer and our roads are not repaired before these elections people will not be able to get to the polling stations to vote.
The allocation of £15 million from the tax amnesty, or an increase of 113 per cent brings to £28 million the amount of money available for our roads. Last year, the amount allocated for roads was £13 million. My local authority estimates it will cost £800,000 to upgrade the road from Carlow to Hacketstown and approximately £1 million to upgrade the road from New Ross to Carlow, giving a total of approximately £2 million. The authority would need approximately £3 million to upgrade the county roads, yet it will only receive a few hundred thousand pounds for this work. My colleague, Deputy Crawford has told me that it has been estimated it will cost £40 million to upgrade the roads in County Cavan and approximately £36 million is required to repair the roads in County Monaghan, giving a total of approximately £76 million for two counties. From where will this funding come and how will people travel in the meantime? I have met sensible people who are very irate about the state of the roads in their counties. The people of Carlow are lucky in so far as their roads are probably in a better condition than the roads in many other counties. I know we had a wet winter but the  roads in Carlow are beginning to crumble.
I welcome the improvements in the earner's allowance introduced by the Minister for Social Welfare. We have all been calling for this improvement for years. While the improvement may not be as great as we would wish, it is nevertheless a step in the right direction, and maybe next year we will see further improvements. I also welcome the changes in regard to widowers. We can bandy figures about but, to be blunt about it, a 3 per cent increase is not worth a tuppenny curse to anyone. Inflation is estimated at 2.5 per cent and 3 per cent of nothing is still nothing. This is the difficulty. Three per cent of £30,000 is one thing but 3 per cent of £55 is nothing.
With regard to the areas of agriculture and food, I was going to quote from the Minister's speech about research, etc., but I do not have time. The sale of land, as happened in the case of Oakpark, is not the way to fund research. Housing construction was non-existent but it has started to improve. The idea of hitting, so to speak, people who are paying VHI and mortgages with a property tax is totally unacceptable. These are the people who have to pay for higher education grants and provide the money for everybody else. This budget, which has a bit for everyone, might appeal to some people but it will do nothing for the economy in the long term.
Minister of State at the Department of Social Welfare (Ms Burton): This is a sharing budget founded on the twin pillars of economic growth and social justice. This budget takes a series of bold and imaginative leaps into the area of tax reform and the integration of tax and social welfare. I welcome the changes in relation to social welfare which seek to consolidate the concept of social protection, but for somebody who lives on a social welfare income the income element is only a part of the total services consumed by them.
Under this budget those on a low income, families who are poor, will benefit  not just from the changes in social welfare but from a whole series of carefully calculated social spending measures. These measures are designed to improve radically the quality of health care, education and access to housing and the environment. Running through this budget is a commitment to sustainable economic growth alongside a determination to improve not only the income but also the quality of life of those who depend on social welfare, and this is our twin commitment to economic growth and social justice.
It astonishes me that the Deputies opposite can so readily unite to dismiss the package of reforms announced yesterday. Year in, year out, they have called for reforms, but when they come, their sole response has been to run like scared rabbits from the implications. What a totally pathetic and dishonest posture is their repeated claim to be the champions of reform. This is now shown to be a totally shallow claim as all they present is their true colours in this Dáil. The protection of some extremely narrow vested interests, which have formed the basis of their pronouncements since yesterday, preclude them being able to support real steps towards reform when they are taken.
There is serious inequality in this society and it has devastating effects. It creates poverty, it denies incentives to employment and enterprise to many individuals and to very large communities. The approach in this budget has been to tackle that inequality on two levels — on the direct expenditure level by major improvements in social areas of expenditure, in housing, welfare, health and education, bringing the benefits of economic recovery to the most deprived sections of the community and it also tackles that inequality by commencing major steps in tax reform by the elimination of serious poverty traps, disincentives to employment and by the basic restructuring of the tax codes in the area of property tax and the discretionary nature of tax reliefs. These reforms are essential ingredients in modernising our tax system and indirect investment to job  creation and they also have an indirect, but vital, social component.
In the run up to this budget, as in the run up to many other budgets, a series of respected national and international organisations called for a fundamental tax reform which would essentially centre around the widening of the tax banks, increases in personal allowances and the gradual eroding and withering away of discretionary reliefs.
There has been, as the Minister for Finance pointed out yesterday, a whole series of reports recommending this approach. In newspaper articles and interviews many individuals on the Opposition Front Bench have called for the same kind of radical tax reform and have vehemently supported the recommendations of, for example, the Culliton report.
Yesterday saw the beginning of such a reform package on a phased basis with the increases in personal allowances allied with the beginning of the restructuring of discretionary reliefs. Yet, amazingly, when this measured package of reform on a phased basis is put into operation what do we get from the same Opposition? They scurry away, rubbishing progress towards their supposed policies and exposing the reality of their vested interests — the haves should have and the have nots can whistle in their self-imposed situation.
Tax reform is not an easy subject. Let us be honest about this. This Government has, in this budget, attempted to take the first steps in such a phased programme of tax reform. On the basis of yesterday's budget the average family will gain substantially by the widening of the tax bands even when set against the loss of part of the discretionary reliefs.
Did I really see last night left wing radicals of yesteryear tripping into the division lobbies to vote against modest increases in excise duties on cigarettes and alcohol to provide the resources needed for improvements in health, education and welfare? It was truly an astonishing sight — that some on the benches opposite who entered this House on a reputation for radical social policies  should now rise to resist the very taxation changes that, in the not too distant past, were the essential ingredients of the policy package they presented to the electorate. Like disciples of St. Augustine, their prayer is obviously “Lord let us have reform, but please not just yet.”
This budget contains a coherent package of social measures. These concern, in part, my Department but alongside them there are proposals in health, education and community employment. Together these represent vital new opportunities for deprived communities to come into the economic and social mainstream of our society. They form a radical package to improve the quality of life for people who are disadvantaged and poor, not just in terms of improving income but in improving the quality of services in education, housing, and all the essential areas. The clear bias in the social spending proposals in this budget is toward the disadvantaged, both as individuals and for communities, and I welcome that.
I can understand the difficulty of being in Opposition, the temptation to oppose everything for opposition sake, but the intellectual dishonesty of the left Opposition is staggering. The opposition of the right is a welcome reminder of their inability to grasp the fact that equity demands sharing and that tax reform is fundamental to achieving true equity. Tax reform means reform, genuine reform, and not just tax reduction.
Now, I want to specifically address the budget as it affects my Department. This budget contains a £157 million package for social welfare. The Government is determined to protect and improve the position of those of our citizens who depend on social welfare. A total of 1.5 million people will get an increase of 3 per cent in their weekly social welfare and health board payments; this more than matches the anticipated rate of inflation and meets the commitment in the Programme for Government.
A total of 185,000 people will get a special extra increase of 3 per cent — £1.60 a week — to bring them up to  the priority rate recommended by the Commission on Social Welfare and one of the commitments in the Programme for Government. This also has the effect of rationalising a number of social welfare payments. We hope to continue with a systematic programme of rationalisation and simplification of the system over the next few years.
Larger families will benefit from an increase in the higher rate of child benefit to £25 which will be payable for the third and subsequent children. The burden of poverty falls particularly heavily on women and this improvement is further recognition by the Government of the need to ensure that adequate resources go directly to women working in the home looking after their families. Again, all of the reputable agencies have indicated in numerous reports that child benefit is one of the best mechanisms of attacking poverty in families with children.
For the first time, widowers will get an entitlement to a contributory pension. This new pension is a significant advance in the protection given by the social welfare system to families where the wife has died. It also shows clearly this Government's commitment to equality of treatment between men and women across all areas of public policy.
There will be an improvement for carers with a new earnings disregard of £100 where there is a working spouse. This will mean an extra 500 carers can get access to the allowance and will increase the payments to a further 350 existing beneficiaries.
Widows and old people will benefit from improvements in the free schemes. Everyone agrees that the free schemes are very important to the recipients and I am very pleased that we have been able to remove some of the more unacceptable restrictions on these schemes. Widows aged 60-65 will now be able to retain these allowances if the couple were entitled to them. There are also important improvements for old people and wheelchair users. These all provide further evidence of the caring nature of  this budget. I was particularly struck by the representations made to me by Deputies from all parties, but particularly from the Labour Party, about how these type of restrictions affected many people in practice. I am pleased we have been able to significantly modify them.
Ms Burton: We are all aware that changes are taking place in the world of work — changes which have potentially profound implications for the future. We have, in the past, been accustomed to thinking of a traditional work pattern which was associated with predominantly male, full-time and permanent employment. Evidence of changes in these work patterns can be observed in the growth of part-time employment, increased participation by women in economic life and the increasing importance of self-employment. Some sectors of the economy are more amenable to changes — the growth in services sector employment which was confirmed in the recently published Labour Force Survey results for 1993 is an example of this. These trends show signs of vibrancy in the labour market and demonstrate that increasing flexibility in employment patterns can bring increased employment and incomes.
While increased flexibility in the labour market is welcome, it should not be achieved at the expense of the protection of the individual in employment. Our society is noteworthy for the extent to which we are prepared to pool the risks of sickness, unemployment and old age which are faced by individuals. The social insurance system has shown itself in the past capable of adapting to changed environments. The extension of social insurance to self-employed workers and part-time workers in the past few years demonstrates this ability to evolve and grow.
We, in the Department of Social Welfare, want to ensure that the evolution in working patterns does not damage the extent of social protection which is extended to individual workers. In this  connection, I have noted recent developments in a number of areas but particularly in the construction industry related to the increased use or, should I say, abuse of self-employment. I would be concerned if workers were being forced to accept working arrangements which deprived them of protection from loss of income through sickness or unemployment. I am initiating a review within my Department to look at this issue and to consider the implications of these developments for the social protection of the workers and for the social welfare system itself.
When appointed Minister of State I was given specific responsibility for the integration of the tax and social welfare systems. This is a complex and technical question, so I set up a working group of experts in this area to advise me and the Government how we should tackle integration. My intention is that the long acknowledged problems will be addressed in practice. I do not want simply more reports being added to the volume obtaining. While the expert group has to deal with creating a sustainable long term answer, I asked it to suggest some measures which could be undertaken in this budget to reduce disincentives to work. In the short time scale for their interim report, the group was able to look at a limited number of areas only and were conscious of the need to restrict their interim proposals to measures which would be implemented in the time frame of a single budget. However, the group did come up with three specific proposals: first, that the means test for lone parents allowance should be eased in order to make it more attractive for lone parents to take up work; second, that the arrangement whereby employers of medical card holders have to pay the employees' health contribution and employment and training levy should be abolished; the medical card holder would be exempt from these levies in the same way as widows/lone parents, and third, that measure should be taken to improve the take-up of the family income supplement scheme, popularly known as FIS. I am delighted that we have been  able to make progress on all three recommendations.
In relation to lone parents, the budget includes relaxation of the means test for lone parents allowance. Under the old rules, a lone parent was allowed to earn very little before the allowance was reduced, pound for pound. Under the new arrangements, the first £30 per week of earnings will be ignored. Above that the allowance will be reduced by £1 for each £2 of earnings. This is, in addition, recognition of child-minding and travel expenses for the lone parent. This will greatly reduce the poverty trap facing lone parents who want to take up work and recognises especially the child care costs involved for a lone parent to take up employment.
The proposal to remove the liability for the health contribution and employment and training levy from employers of medical card holders is also being implemented with effect from next April. This is only one of a number of measures which we are undertaking in order to reduce the level of PRSI paid by low paid employees and their employers. We have also reduced the rate of employer's PRSI in respect of lower paid employees and we have introduced an income threshold below which employees do not have to pay the health contribution and the employment and training levy.
Many Members will be aware that the level of take-up of FIS was far lower than the targeted levels would suggest. In relation to the recommendation on FIS take-up, it is envisaged that the Department will have the technological capacity, from end October 1994, to identify many potential FIS beneficiaries by drawing from data on its central records and child benefit computer systems. This will enable the Department to contact potential claimants directly to inform them of their entitlements under the scheme. Since the expert group began its work the FIS take-up has increased — as a result of special examinations undertaken in the Department — by 25 per cent and we anticipate an even greater take-up in the next year resulting from an advertising campaign.
 In the longer term, the working group is examining, or intends to examine, a range of basic income options, the possible restructuring of child income support, the appropriate unit of assessment, the financing of alternative structures and the role of non-cash benefits. I have asked the group to finalise its main report before the end of the year, and I look forward to receiving its final conclusions.
In 1987 the ESRI undertook a “Survey of Income Distribution, Poverty and Usage of State Services”, funded jointly by the EC, the Department of Social Welfare, the Combat Poverty Agency and the ESRI itself. This created an invaluable database of a kind which was not previously available in this country. For the first time, comprehensive information was available on the nature and extent of poverty and the relationship between poverty, the tax and social welfare systems and the labour market. A very substantial body of research has been undertaken on the basis of this data.
High quality research and analysis of this type is of critical importance in the formulation and assessment of anti-poverty policy. As Members know, there are many myths surrounding social welfare and poverty. However, the existing data is getting out-of-date, and no comparable survey has been undertaken since 1987. I have been aware for some time of the need for a similar survey to be undertaken in 1994. I am particularly pleased that the Government has agreed to providing the necessary funds in the budget to enable the survey to go ahead this year. My Department will work closely with the Combat Poverty Agency and the ESRI in the carrying out of this survey. It is my belief it will contribute substantially to our understanding of the real incomes of families on low incomes or social welfare incomes at present.
I particularly welcome the substantial increase in the budget in the Department of Social Welfare's allocation for support for voluntary and community activity in 1994. The budget provided an additional £2.5 million for support of voluntary activity in 1994. This brings the overall  allocation this year for support for voluntary and community activity to £7.23 million.
The primary role of the Department, of course, is one of income maintenance. However, in recent years the Department has engaged in a broader welfare role concerned with the well-being of its clients in the broadest sense and with facilitating communities to address the problems facing them. The Department has a number of programmes designed to encourage and facilitate persons in receipt of welfare payments to make the transition to employment or self-employment, or to foster personal and community development in disadvantaged areas thereby acting as a precursor to social and economic development, what is referred to by economists as “capacity building”.
The additional funds to be made available for support of voluntary and community organisation in 1994 include an additional £750,000 for the community development programme, £400,000 for grants to mark the International Year of the Family, an additional £250,000 for projects to combat the problems of moneylending, £250,000 for family resource centres, £100,000 for women's refuges and an additional £100,000 for the scheme of grants to locally based women's groups. An additional £700,000 is also being provided under the community development programme bringing the total allocation to £2.2 million. The programme provides financial assistance to projects towards the cost of equipping and staffing local resource centres. These centres provide a focal point for community development activities in the area. The 1994 allocation of £2.2 million will allow the programme to be extended to a number of new areas around the country and funding of projects already in the programme to be continued.
Funding will also be provided under this heading to groups who encourage start-up community development initiatives in areas not served by the Department's community development programme and who provide training and  support services for local community development groups.
The Second Commission on the Council for the Status of Women recommended that a minimum of £1 million should be available to fund grants to women's groups and that £100,000 should be allocated to similar work for men. We have not simply achieved these targets but, in this area of women's groups, the target has been exceeded.
This year an additional £100,000 is being allocated to the scheme of grants to locally based women's groups. A further sum of £100,000 is being provided which recognises the need for enhanced support and a longer-term funding commitment to the more developed and established women's groups. These groups provide invaluable personal development and community based education opportunities in disadvantaged areas. The scheme will provide multiannual funding to a selected number of groups in disadvantaged areas to employ a co-ordinator and plan ahead, making their work more effective and enabling them to reach out to a larger number of women. In particular, I wish to see such groups becoming participants of local development programmes to benefit from these developments.
The work of the large number of locally based women's groups that have grown up, particularly in disadvantaged areas, in recent years is extremely valuable in tackling the consequences of poverty and disadvantage. Increasingly their activities are recognised as being very relevant to the world of jobs and the economy. The groups are important in giving women the personal and social skills they need to access vocational training and to return to the labour market. While such groups typically start with a concern about personal development and what might be termed family skills, they have a very real and developing role and potential in encouraging involvement by women in wider social and economic issues that affect them and their local communities, and in facilitating those women who wish to return to training and employment.
I am determined that this work over  the years will be fully integrated into broad local and community enterprise development. Women have been the driving force in many of our most disadvantaged communities. When there were no resources they supported each other, set up information centres and provided basic training and education. With tiny amounts of funding they expanded their services and energised their communities. Now that there is recognition of the importance of community based local economic development and substantial resources for this purpose, I intend to ensure that women will be equal partners and beneficiaries. We cannot tolerate a situation where those who built the foundations are excluded from the construction of new hope and opportunity in their community. We have seen the quality of women's work, their creativity and innovation and this cannot be lost in the future.
I have been heavily involved in developing the concept of local development to take advantage of and spend the European Structural Funds. Quite honestly, I fear that as the larger agencies such as FÁS, the health boards and the trade unions become involved in local development what has been built up on a voluntary basis by the women's groups will be sidelined when greater sums of money are involved. This year we will be commencing a series of initiatives to ensure that women remain involved in the local development process and take their full share of available funding.
Training and education opportunities have been grasped by women, in particular and the grants to Aontas and Community Action Network — CAN — which the Minister mentioned earlier, recognise the invaluable work they do which has been particularly beneficial to women. In addition, organisations such as Aontas and CAN, which provide education are enabling people from disadvantaged communities to qualify for the jobs in community development as more funding becomes available. It is critical that people from disadvantaged areas get the jobs when funding is provided  for jobs in community development. In allocating grants for the existing schemes, priority will continue to be given to groups in disadvantaged areas, whether urban or rural. The range of activities which will be supported is extensive and will include personal development, assertiveness training, home management courses, literacy and numeracy courses, support services for parents with handicapped children and information and advice services. The new grant allocations will build on activities and provide the impetus for groups to access mainstream training in particular.
I am pleased to announce that the Department of Social Welfare is making a special allocation of £100,000 for women's refuges. I met with them before Christmas to establish their priorities and we will meet them again, in conjunction with the Department of Health, to discuss how these funds should be allocated but priority will be given to establishing refugees outside the Dublin area.
Women's Aid receives a special grant of £35,000 which will fund their interesting proposition to research the level of violence against women — information which will inform policy and support long term planning. While groups such as Women's Aid are now being recognised and receiving more funding it is essential that we support such organisations to retain their essentially voluntary ethos which has contributed to encouraging women to seek help and end the violence they faced in their homes.
Barnardos will receive a special grant of £40,000 to work with families, especially mothers who have not had access to women's groups and who are in particular need of support. This is based on a number of pilot projects. In this International Year of the Family I consider such projects invaluable.
We will be supporting a major seminar to be held sometime towards the end of April in Clifden that will look at the lessons that have been learned from the Proverty 3 programme, which looked at rural poverty.
An additional £250,000 will be allocated  to tackle the problems of money lending. In addition, I am pleased to announce that an additional allocation of £100,000 has been allocated to the Combat Poverty Agency for pilot work with marginalised young people in the 14 to 17 age group in disadvantaged areas. Young people in the age group are often missed. Taken in conjunction with the additional allocations made to my colleague in the Department of Health for grants to community based sporting organisations we can actually do a substantial amount for community groups working with young people in disadvantaged areas.
I will be discussing the programme in relation to 14 to 17 year olds with the Combat Poverty Agency and we hope to have a series of programmes working in a number of areas which have been identified already by the agency.
Mr. Finucane: The Minister stated that the Opposition like to attack the budget merely because they are in Opposition. Naturally there are certain elements of the budget that I am pleased with but I have reservations about others.
As Deputy Burton is the Minister who met a deputation of workers from the AIBP meat plant in Rathkeale, I trust she is aware that the work they are doing is of a casual nature and I hope the Minister will take an opportunity to address this matter in the proposed social welfare legislation next April. This is a serious cause for concern to the workers. Before I refer to roads, an issue which is pertinent to every public representative, I will deal with the county enterprise boards.
The Minister in his budget last February placed great emphasis on the  county enterprise boards. At that time he promised that £25 million would be set aside for those boards. He said also that commitments had been given which he anticipated would be honoured that £100 million would be provided by the financial institutions. There was a long gestation process before the county enterprise boards came to fruition but eventually, in September 1993, the boards were notified of its membership.
As a member of the Limerick County Enterprise Board I know that our board met immediately and initiated a process which had entrepreneurs from County Limerick applying for county enterprise grants. At that time I could see the spirit of true job creation being fulfilled. In the past, many of these people were precluded from grant aid, perhaps because they belonged to certain service type industries in a small community. There was great enthusiasm, evaluation committees met and the information was furnished to the Minister for Enterprise and Employment. I understand that at the end of last year a total of £3.4 million was earmarked for projects approved by the county enterprise boards. In this year's Estimates £9 million has been provided but I do not see it further extended in the budget. This funding is totally inadequate for the county enterprise boards. If one is serious about job creation, this is a classic example of where money could be invested wisely. So far county enterprise boards, with the exception of Galway city and county enterprise boards, have not taken up the funds because it is not possible for them to do so. What is going on? The Minister said in the budget last year the £25 million had been allocated and the Minister for Enterprise and Employment announced last September that he had allocated £9 million for the January to December period. A certain amount of financial manipulation appears to be taking place. I wish somebody would come clean so that county enterprise boards would know what funding they will have for the current year. From the evidence to date there will be much interest in the county enterprise boards  which I would not like to see stifled due to a lack of funding.
Another issue which concerns us is county roads. At a meeting of the council last week, lasting four hours, much debate took place on county roads. Contributors from all over the county explained their difficulties. I assured everybody at the meeting that the Minister, in his budget, would be extremely conscious of the need to provide adequate funding to enable national and county roads to be improved. While I welcome the provision of £15 million as a step in the right direction, when it is distributed counties will end up with approximately £500,000.
Limerick County Council has identified that about 39 per cent of the county roads are in a serious condition. In my electoral area 50 per cent of the roads are in a serious condition. We have an acute problem. I would have thought, in view of the imminence of the European elections when canvassers will use those roads, that adequate funding would be provided. I detect a level of public aggression owing to the condition of the roads. Many public representatives have experienced that aggression. People who pay road tax feel particularly aggrieved.
At a recent committee meeting when I asked the Minister for the Environment whether the road tax collected at national level should be pumped back into the roads, he smiled and said “It goes into the national cake”. His flippant response was to ask whether health, social welfare and other areas should be deprived of funds. People in certain parts of my constituency are talking about protests and withholding road tax. That is symptomatic of the frustration at local level. The sum of £15 million is not adequate. I had said to people that because of the success of the amnesty possibly a large amount of that funding, on a once off basis, would be pumped into country roads. I read recently that people in County Longford — the home at the Taoiseach — are talking about protesting and marching on Dublin because of their opposition to what is happening. County engineers estimate that it would take  approximately £22.5 million to restore our roads to their former glory. I am not optimistic when I hear this and I think pot-hole politics will continue into the future.
I recall attending a meeting of the Select Committee on Finance and General Affairs at which my party protested vigorously at the introduction of the probate tax. We were assured that a small amount of revenue would be collected but we pressed the Minister not to proceed with this tax. I am pleased that he has seen the wisdom of our advice and has responded to the pressure groups. I compliment the farming groups for insisting that the probate tax be amended or abolished altogether. My party believes it is a death tax. It is iniquitous and unjust. I compliment also the Irish Country Women's Association on their national campaign to ensure that all Deputies are familiar with this tax and their hostility to it. It is a step in the right direction that spouses are not affected directly by the probate tax. I ask the Minister to go all the way and to abolish it.
There are many towns in my constituency with a strong historical perspective and many old buildings. I would like to see the urban renewal scheme extended because it would enhance the character of those towns. I welcome the fact that the scheme has been extended in this budget to many towns throughout the country but I am disappointed that no town in County Limerick is included. It is an excellent mechanism for improving communities and giving encouragement to improve many old buildings.
We protested strongly last year at the imposition of the 1 per cent levy. We are pleased that it has been abolished. The Labour Party said it would only be in existence for a year. When you consider the income tax buoyancy of last year when the yield was £149 million in excess of that anticipated and the yield from the 1 per cent levy, which amounted to £79 million, I wonder whether all the pain and hostility was worthwhile. Its removal is a step in the right direction.
 We are often accused of opposition for opposition sake. I would like to think that on occasion we put forward constructive suggestions and that when the Government has made a mistake they recognise it and make an amendment as necessary. I recall an occasion in Private Members' time when we pointed out the folly of imposing VAT on the clothing and footwear industry. In the past year many clothing industries went to the wall, many of which were household names. That was regrettable.
There is much emphasis on training courses and developments to help people return to work. By getting involved in the communities and various training courses they enhance their employment prospects. Where we have labour intensive industries we should put mechanisms in place to alleviate the type of problems we have experienced, for instance in the clothing and footwear industries. If there had been a suitable response at the time of the Private Members' motion we could have saved jobs in the past year.
The problems we have in maintaining county roads are understandable. Since 1980, to effect economies, successive Governments have introduced rationalisation packages which resulted in the phasing out of road workers who opened up culverts to drain water of the roads although this problem is very evident as a result of recent heavy rainfall. The number of road workers on county roads has been halved and we are now paying the price.
If we want to create a mechanism for true job creation we should look at local authorities. In Limerick County Council there were over 300 road workers in 1980 and now there are 150 road workers. Was the rationalisation package worthwhile? Are we now paying the price as we cannot maintain many of our county roads, open culverts to let the water off, cut hedges or clean dykes? We are trying to sell Ireland as a green country which is environmentally friendly. I shudder to think what walkers will see on many of our county roads and the image of the country they would have. It would cost  marginally more to take a person from the social welfare system and provide him with a worthwhile job in a local authority. This is an area in which we could have innovation with regard to expanding the workforce and improving the environment.
Mr. Deenihan: The most pressing problem facing us is unemployment. We have almost 300,000 people unemployed, the greatest number of people ever unemployed in the history of the State. The budget does not address the problem in the short or medium terms although some provisions may affect employment in the long term. However, this time next year I fear that we will be looking at a scenario in which there will be 310,000 people unemployed.
The budget provided an opportunity to do something radical about unemployment, to remove barriers to employment in our taxation system. Apart from some welcome concessions in PRSI for lower paid workers, generally speaking there is little incentive to employers to employ people. The Minister missed a marvellous opportunity although he had something like £300 million with which to manoeuvre. He spread it across the Departments to keep people happy and to satisfy interest groups but he did not face up to the real problems.
In my role as spokesperson on tourism I am concerned about a number of things. The economist, Paul Tansey, said that about one in every 13 of those at work here owe their jobs directly or indirectly to tourism, that tourism employment which accounts for 13.4 per cent of all services employment increased by 31,000 to 87,000 between 1986 and 1991, providing 70 per cent of the increase in total employment in that period. He went on to say that tourism was a major source of foreign exchange earnings since the 1980s and that it has acted as a powerful stabilising force in the overall balance of payments. He said that between 1986 and 1992 tourism earned us almost £2.5 billion in foreign exchange and made significant inroads on the almost £4.7 million deficit returned by other services  sectors over the same period. Tourism is an unseen but powerful instrument of regional policy and assists in raising incomes and providing employment in the poorest regions.
Provisions in the budget will help tourism but they did not go far enough to help an industry that is targeted now with providing 35,000 jobs over the next five years. A great case can be made for more expenditure on tourism and we should have taken the opportunity in the budget to do that.
Tourism as we know it, serves as a stimulus to small business investment along the lines indicated in the recent Culliton report, in crafts, guesthouses and retail outlets which specialise for the tourism market. The small scale nature of these businesses facilitate ease of entry to business and serves as an encouragement to entrepreneurs to establish their own businesses, thereby creating employment. The extent to which tourism contributes to the various sectors of our economy can be illustrated by examples relating to its link with the agricultural sector. If 20 per cent of a total of three million visitors to this country eat one steak here, it would create a demand for approximately 21,000 beef cattle. That would be equivalent to almost 10 per cent of the beef herd slaughtered for domestic consumption. If such visitors consumed two rashers a day it would create a demand for over 100,000 pigs just to fill breakfast orders. These are just two simple examples of how the tourist industry impacts on other sectors of the economy. Several small projects submitted by county enterprise boards seem to be held up on the Minister's desk due to lack of finance.
If that is the case, I appeal to the Minister to ensure they are approved as soon as possible. I am a member of a county enterprise board — I do not want to make a big issue of this — and I supported the concept of such boards when others criticised it. They are democratic and, more than any other agency, have a great potential. Unless those who have been recommended for grant-aid receive confirmation shortly they will lose confidence  both in the board and in the system under which they applied for grants. Some very good projects have been submitted by individuals who believe they can exploit opportunities and fill a niche in the market. I appeal to the Minister to ensure that they are approved as soon as possible.
Mr. Deenihan: I thank the Minister. I now turn to the provisions in the budget relating to the tourism industry. There is a need to make additional funding available for marketing. In this regard I welcome the fact that £5 million has been allocated in the budget for this purpose. In 1985, £35 million was spent on marketing but last year only £22 million was spent. This has an effect on the American market where the numbers are declining. At this time, for example, we have no representative in California, north of Los Angeles, in places like Silicon Valley where there is goodwill towards Ireland and we are doing well in terms of industry, to promote and sell this country as a tourist destination. That is the feed back I am getting from travel agents.
The American market was always a good one for Ireland but because of a lack of funding we have no presence on the ground. I should also point out to the Minister that out of every $600 spent in America promoting foreign travel less than $1 is spent promoting Ireland. Is it any wonder therefore that Americans are not travelling here in the same numbers? Furthermore, our share of the number of American tourists who visit Europe has declined by 8 per cent. This has been a gradual process during the past few years. If we are to win back our share of the American market we will have to carry out an extensive marketing campaign in America. Before Christmas £3 million was allocated for this purpose. I hope that this money will be used wisely.
 It should not be forgotten that we have a market of 55 million people right on our doorstep, the British market which, traditionally, has been our best market. Admittedly, most of the visitors from Britain are returning emigrants but they are classified as tourists. Our share of the British market is only 4 per cent, the same as Portugal and Cyprus. I am convinced, particularly if progress is made in the peace process in Northern Ireland, that we could double this figure rather easily with a little bit of effort, from 1.3 million to 2.5 million. British visitors would find several of our attractions very interesting; they come from a similar climate, they are interested in culture and heritage and in a range of outdoor activities such as sea fishing, angling, boating, cruising, sailing and so on. Walking has also become very popular in England. We should exploit this market to the full if we are to create 35,000 jobs in this sector.
At this time our share of the German market is 1 per cent; in other words, 230,000 people out of the total of 26 million who leave Germany every summer on holidays visit this country. Traditionally, the German tourist has been a big spender. We should also target that country for a major marketing campaign.
The improvement in capital allowances for the hotel sector which will enable hotels to write off capital expenditure over a seven year period rather than ten years as is the case at present is most welcome. Between 1978 and 1989 hotels could avail of annual allowances of 100 per cent. This was a major incentive to invest and reinvest in the nation's accommodation stock and related plant. In the Finance Act, 1989 accelerated allowances were phased out. I hope yesterday's announcement will mark a return to the previous position which undoubtedly encouraged investment in hotels with consequential job creation. In addition, the reduction in employer's PRSI and in the amount of tax paid by employees will prove beneficial for hotels and guesthouses which employ part-time and seasonal employees.
The subsidised loans scheme for small  businesses should be welcomed. It is important to ensure that many tourism operators are eligible to avail of the scheme. On the question of gift and inheritance tax, the more favourable reliefs should greatly facilitate the transfer of family businesses. Again, this is important for the majority of Irish hotels which are family owned.
I am concerned about the increases in excise duties. Many people come to Ireland because they like to sample our drink, especially Guinness. It appears that we are pricing ourselves out of the market. Yesterday Deputy Yates emphasised forcibly that this will have an impact on our competitiveness vis-à-vis other destinations. We already have the highest rates of tax on drink in Europe, 50 times greater than the rate in France, 16 times greater than the rate in Germany and almost double the rate in the United Kingdom. In addition, the increase of 10p on a bottle of wine will not facilitate some of our restaurants. The increase on petrol will not help. While there are some positive features so far as the tourism industry is concerned the increases in excise duties will make us less competitive.
Before Christmas £3 million was allocated to the Department of Tourism and Trade for marketing. Yesterday a further £5 million was allocated to that Department for the same purpose. The Minister for Enterprise and Employment, Deputy Quinn, who is present, should tell us where Bord Fáilte fits into this equation. Does this represent a vote of no confidence in Bord Fáilte? Is it no longer responsible for marketing Ireland? Is the Department of Tourism and Trade now marketing this country? That question must be answered given that Bord Fáilte is demoralised because of a lack of funding. Recently I carried out a survey and Bord Fáilte did not come out of it very well but this was understandable given that it has not been allocated sufficient finance to fund a proper marketing programme. As a result it has had to bear the brunt of the criticism. This is unfair.
Yesterday £15 million was allocated for the county road network. While this  is welcome and will lead to some improvements there are for example 2,400 miles of county roads in County Kerry 50 per cent of which is about to disintegrate. Recently the county engineer estimated that it would cost up to £24 million to bring these roads up to standard. One can see just how derisory the sum of £15 million is. I should point out to the Minister that most tourists travel to our tourist attractions by way of the county road network. It is vital, therefore, in order to raise the morale of those involved in the tourism industry, that these roads are brought up to standard and that the problems are addressed.
Mr. Quinn: This budget is about enterprise and employment. It is about creating the framework within which we can stimulate economic growth so as to create wealth and produce jobs. The budget has been carefully designed. It is the product of considerable deliberation by the Government in the past couple of months. However, it is only a part of the Government's overall economic strategy. It has to be seen in the context of the Programme for a Partnership Government and the action that has been taken consistently in the year since this Government came into office.
Twelve months ago the European currency system was in turmoil and interest rates were out of control. Many Irish companies, particularly small firms, were in crisis. Jobs were being lost and businesses were being threatened with extinction. It is hard now to contrast the reality of last year with the position of today. The 1993 budget was designed to restore confidence and to provide stability within the public finances so as to ensure a base upon which economic growth and job creation could commence. The mission of last year's budget has been achieved with considerable success. The mark of that achievement is that the 1 per cent income levy, which was an income levy on employment and was introduced as a temporary measure in 1993, has now been removed. To the Deputies departing the Chamber who referred to the  difficulty and the pain that was caused by that levy I would say that the pain was worthwhile. The stability within the economy today would not have been possible without the framework of last year's budget, including the levy. We are now in a position to move forward and this budget gives us the instruments to ensure that real and substantial progress can be achieved.
Enterprises with fewer than 50 persons account for around half of the private sector workforce outside agriculture. Seventy-five per cent of all jobs created in the European Union between 1989 and 1992 were in small and medium-sized enterprises. Over this period job creation in small firms and particularly in very small enterprises with as few as ten employees exceeded their employment share in terms of the numbers of jobs created. By contrast large and medium-sized firms suffered a decline in their share of total employment.
Last year I spoke at the annual lunch of the Small Firms Association in the Burlington Hotel. In the previous two months I had identified with them many of the concerns which small Irish businesses had experienced during the currency crisis and the economic difficulties they had to endure at that time. They complained bitterly that nobody would listen to them. I said at that lunch that we would listen and I invited them to set down what they felt was needed for enterprise to thrive and prosper. In particular I wanted to hear what small businesses needed from Government in order to help them prosper, grow and create employment. The taskforce for small businesses, comprising actual business persons, practitioners at the coal face, grew out of that meeting and made a detailed presentation to the Minister for Finance through me before this budget was drawn up. Many of the things they asked for have now become a reality.
This is an enterprise budget which will specifically do the following things at the request of business in Ireland. There are too many to mention them all, but let me list some of them. Capital gains tax will  be reduced from 40 per cent to 27 per cent; risk is now being taxed at the same standard rate of income tax as employment and no distinction is being made. That is a clear signal to small businesses and to risk-takers in our society. Capital acquisitions tax has been modified to help family-owned businesses to survive and to enable families to transfer ownership from one generation to another and maintain the vibrancy of the enterprise.
Another change that was sought for many years relates to sons and daughters working in the family business. They were debarred from qualifying for the PAYE allowance. They will now be given the same tax allowances as other members of the staff working in the family business.
Compliance with VAT regulations will now be based on actual cash receipts rather than the invoices notified, considerably easing cashflow problems for many firms, particularly firms with incomes of less than £250,000. The VAT thresholds for small businesses have been significantly raised so that some businesses have been taken out of the system altogether. Finally, employer PRSI costs in labour-intensive industries such as clothing and footwear have been significantly reduced and a clear 3 per cent has been taken off the payroll cost.
All these changes were sought by people in the field who felt they had been wasting their time talking about it because nobody was listening. They have now got what they want. As my colleague, the Minister for Finance, said yesterday these changes have been made in the confidence that the small business sector will respond and that the community at large will benefit from enhanced wealth and enhanced employment prospects.
There is more for small businesses in this budget. The income tax changes will make employment a more attractive option for many people. These measures address many of the specific issues identified by the business community and they will go a long way towards addressing the problems which they have asked us to deal with.
 Another major factor identified by the taskforce was the need for access to working capital. This was identified repeatedly as perhaps the toughest barrier of all which prevented businesses from surviving and certainly from prospering and growing. This budget uniquely provides for an enterprise fund of £100 million which will be made available to small and medium-sized businesses on terms and conditions which never previously existed. I believe this measure will have a substantial effect on both the creation of new long term jobs and on the stabilisation of existing employment. As a measure of its importance we are making £100 million available in long term loans at low fixed interest rates to small businesses. I want to emphasise three elements that are of critical importance and which have been long sought after. First, the loans will be at low rates of interest. Second, those rates will be fixed for a ten-year duration. The rate at which loans will be available is 6.75 per cent. This rate will be guaranteed for the first £30 million borrowed and we expect, on the advice of both the ICC and the National Treasury Management Agency, that the rates available for the balance of the £70 million will not vary significantly from the figure of 6.75 per cent. With the introduction of these loans we are responding to the express needs of small businesses, as suggested in the preliminary proposals of the taskforce. This, in addition, is consistent with the recommendations of the Moriarty taskforce which looked at the recommendations of the famous Culliton Committee, particularly in relation to the area of commercial finance.
The duration of the scheme will be ten years. Loan repayments will be fixed at the outset of the loan and this will mean that small businesses will no longer be at the mercy of fluctuating interest rates. They will be able to plan with certainty a significant part of their business. This will provide encouragement for many small Irish businesses to develop. In addition, no repayments will be made in the first two years and this additional assistance will provide an opportunity for  projects to overcome the initial stages of development when they are at their most vulnerable.
The Exchequer's contribution is to subsidise the interest rate which is being made available. This subsidy will be 3 per cent of the loans outstanding and I have further ensured that there will be no personal guarantees attaching to these loans. This removes a major threat that has hung over the small business entrepreneur for many years. Deputies will be more than familiar with the reality that while people can get access to working capital from their banks the terms and conditions are simply unacceptable to them and their families. An additional benefit of this scheme is that no personal guarantee will be required from the borrower when doing business with ICC. The scheme will be administered by the Industrial Credit Corporation and operate within guidelines laid down by my Department. Funds for the loans will be raised by the Industrial Credit Corporation and all credit risks will be borne by the Industrial Credit Corporation.
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