Brendan Ryan (Labour)

The growth in the economy is inherently very good. The problems we have encountered, including those regarding which I take a very different view than the Government, are the problems of success and how we manage it. The success was achieved the hard way.

Given all the talk about how the country suddenly took off economically, it is intriguing to note the questions that were asked in this regard. Some asked if it took off because of the low level of tax. It probably did. Others asked if it was because of our unique geographical position or because Ireland was the only underdeveloped English-speaking country in the northern hemisphere. It was also asked whether our educational investment was responsible. However, I have never heard anyone suggest at any time during our economic growth that it might have been because of the vigorous enterprising nature of our private enterprise. Private enterprise in Ireland discovered enterprise after the boom, not before it. The State's investment and foreign direct investment drove the boom and private enterprise cashed in. Some discovered enterprise when it landed at their feet. I have not heard a single commentator suggest that there was a thrusting bunch of entrepreneurs of the kind one would find in places such as Hong Kong, China, Malaysia or Singapore. We did not have them. When our entrepreneurs whinge, I feel compelled to remind them of this fact. They are beneficiaries of a boom and not the creators thereof.

I am glad Senator Quinn implied that the question of unemployment should not be allowed to be abandoned. Unemployment levels are uneven throughout the country. In certain regions, the unemployment level, in percentage terms, is still not far from being in double figures. There are areas within those regions where unemployment levels are most assuredly in double figures. Why is this the case? That is a very good question. It is because of a combination of a lack of skills, a lack of confidence and a lack of willingness to intervene actively on behalf of the unemployed.

We should not allow a lack of skills to become an issue preventing any adult from getting work. To use arbitrary figures, anybody over 20 who is unemployed for more than six months should immediately be allowed to assume he or she can use unemployment benefit to fund his or her way through a training or education scheme of his or her choice. The last thing we want is to use a welfare system meant to enable people to become self-reliant to become a way of life for them. If we impose conditions regarding availability for work and the need to be seeking employment actively, which run contrary to people's opportunities to improve their skills, we are guaranteeing that those people will live a life of dependency. Most people believe a life of dependency is bad. No one should be on long-term unemployment anymore, particularly as there are no issues relating to unemployment or labour market flexibility to justify that being the case. Within the ranks of the long-term unemployed, there are people who will never manage in a competitive market economy. The community employment schemes were not designed for them but as a way of dealing with mass unemployment. They should now be used to ensure that no one will be idle in their adult years. Only daft left or right-wing ideologies would suggest it is good to prevent people from being trained. Training must be both continuous and unconditional. The Government's decision to cut back on the vocational training and opportunities scheme was disastrous.

It is worth considering the issue of taxation in this House, particularly as Members here are occasionally more detached from the crudities of politics. Taxation is a strange matter. The old libertarian view is that it is theft. During the 1980s, some of the more strident critics of the state of the country came close to this view. For example, a well-known individual appeared on "The Late Late Show" and ostentatiously folded his £20 note in two and then in four and asserted that what remained was all that was left of his freedom. He claimed that the State was taking 75% of GDP at the time. Like many other critics, he was exaggerating. The definition of freedom as being what one does not pay in tax may be a wonderful idea but is also a load of rubbish. One cannot have a civilised society without a reasonable level of taxation and we are at the bottom end of reasonableness in respect of this issue.

A serious debate is needed about where the balance lies. Under this Government, we charged off in a direction which produced all the features to which the Minister of State referred and with which the OECD and the IMF will be delighted. If Paul Wolfowitz becomes head of the World Bank, it will also be delighted with them. However, we have been left with issues of success rather than of failure in this area. Formulaic replies from the Department of Finance, which has been conditioned by 70 years of failure, do not represent a response to success.

I will not dwell on the huge gaps in the health service. However, I will specifically highlight the policy decision not to allow the income limit for medical cards to rise with wages and prosperity. A deliberate decision was taken that we would not measure eligibility for medical cards by the criteria of modern affluent Ireland. I will not debate with Senator Mansergh as to whether Ireland is the second, fifth or seventh wealthiest country in the world. There is no doubt, however, that it is extremely wealthy and that it has one of the highest incomes in the world. Wealth is a more complicated measure. A decision was taken, however, that our new wealth would not be used as an index, even though the price of services for those without medical cards increased in line with the economy's growth. Understandably, doctors do not wish their standard of living to be the same as that which obtained in the 1990s and we decided that people could afford that service.

We have made similar decisions in a number of areas. I refer here to the increase in registration fees for college and increases in service charges. These measures reflect the fact that we chose to have a wonderful low tax economy. In effect, if one is obliged to pay to dispose of one's refuse or to insure oneself against the need to deal with the vicissitudes of our public health services, one is paying a form of tax. However, in the ideological view of the Department of Finance, the OECD and the IMF, this is not the case so we are deemed to have a low tax economy. Many of these services are so essential that paying for them is nothing other than taxation.

We have decided to omit services and as a result are encountering crises. The health crisis is well-known and the crisis in education is becoming visible. I do not know how it was possible for individuals to stand back and watch the boom in house-building since the early 1990s without realising that people would live in those houses and that many of them would have children who would need to go to school. There are vast areas around Dublin where the need for schools and health services was left out of the equation. In my city, Cork, thousands of houses were built on estates around Douglas, the traffic from which feeds on to what, ten years ago, was a country lane. Nobody thought of putting in place either the public or private transport infrastructure to facilitate this development. Although we should be glad to have these problems of success, the fact that we never addressed, planned for or thought about them shows that we have failed.

The greatest issue of all is the question of family-friendly work. I am reluctant to speak about child care. The relationship between home and work was transformed by our prosperity. I am concerned about the huge numbers of couples, some of whom choose while others are compelled to go to work. The question arises as to whether we will ensure that they can have children if they so wish or if they must make dreadful choices such as paying a mortgage for ten years before they can think about starting a family. That is not what we want. The question of how we propose to integrate work and family in a way that provides quality supports for our young population is fundamental. We have danced around this issue for seven or eight years but there is no cheap way of doing it. It is simply a question of who should pay for it. At present, individuals pay enormous sums of money for child care and it is uncivilised to make young families on limited incomes do so. It makes a mockery of low taxation to say otherwise.

I draw the Minister of State's attention to a most extraordinary, if minor, anomaly in the tax code. We allow charitable donations to be claimed against tax so that if one makes a donation to a charity, the latter receives the tax one would have paid, in addition to one's donation. However, this is only true if one is exclusively on PAYE. If any of one's income is attributable to self-employment, the tax break goes not to the charity but to the taxpayer. Why is that the case? When someone who is self-employed pays €1,000 to the Simon Community, he or she, not the charity, gets the tax break. However, if someone on PAYE makes a donation in the same amount, the tax break goes to the charity. That makes no sense. I ask the Minister of State to establish, formally or informally, what rational basis exists to allow this situation to continue.