Dáil Éireann debate -
Thursday, 25 Apr 1963

Vol. 202 No. 3

Committee on Finance. - Resolution No. 14—General (Resumed).

Debate resumed on the following motion:

That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.

Mr. Cosgrave

Before Question Time, I was saying that this Budget imposes additional burdens without providing any incentives and I asked the question: what does the Budget do to provide an incentive for industrial or agricultural expansion? The publication Economic Development published a little over four years ago expressed the view on page 24 that:

Hopes of reducing taxation are, however, being thwarted by the yearly increase in debt service and other charges. As a result, not only is the entry of foreign capital, enterprise and experience being discouraged but home industry and trade are being deprived, by high taxation, of the capital and incentive to pursue a vigorous programme of modernisation and expansion, a matter of particular concern because of the adjustments required by the prospects of freer trade in Europe.

That was all prior to the increase in taxation levied in this Budget.

The two factors which affect industry so far as taxation is concerned in this Budget are the increase in surtax and the limitless tax involved in the turnover tax in respect of an unnamed or an unnumbered variety of commodities and services. The Budget, instead of preparing the country to meet the new trading arrangements involved either in ultimate membership of the EEC or some other trading arrangement, has made no alteration in policy or no change to meet the situation, with the one exception that the introduction for the first time of the turnover tax introduces a tax similar to that which operates in continental countries. That surely is a doubtful advantage.

The approach of the Budget is negative and depressive and provides no incentive. Economic Development to which I have referred expressed the view that:

The positive objective of financial policy must be to arrive as quickly as possible at the point at which it will be possible to give the economy the tonic of significant reduction, above all, in direct taxes on incomes, profits and savings—

and it went on to say that it "should take precedence over any reduction in indirect taxes."

The total capital Budget this year shows a substantial rise, a rise of £14.56 million over last year. This substantial growth in capital expenditure, while welcome as an objective, will pose the serious problem of securing the necessary finance to undertake it, the necessary finance not only for the current year but for the continuing projects in the years ahead. The burden of the national debt and the finances necessary to meet it have increased at a staggering rate and now involve an estimated sum for the service of public debt, in the current financial year, of £38,289,000 compared with £22,900,000 in 1958. This increase is an inescapable burden of a permanent character and requires the closest scrutiny to ensure that capital expenditure is directed exclusively to essential productive needs and for socially necessary and other similar essential services. With the decline in population and the continued high rate of emigration, despite the spurious claims of Government spokesmen to the contrary, with the increased trend away from agricultural employment and the inability of industrial and other employment to absorb those leaving the land, the maintenance of the capital development programme is becoming a major problem.

The figures available would indicate that the number securing employment in non-agricultural occupations is not sufficient to absorb the number leaving agricultural employment. I have here the estimated number of persons at work in non-agricultural activity. The total for 1962 was 708,000. These figures, of course, are provisional. The figure for agricultural employment was 360.8 thousand, making a total of 1,068.8 thousand compared with—and this is a fact which should be borne in mind when claims are made for the success of the policy of the Government—a total number in employment in 1956 of 1,127.3 thousand. Compared with 1956, there is a drop in those in employment of over 58,000.

What I want to urge on the Government is the necessity to channel capital development into essential services, first of all, productive services and then socially desirable or necessary services such as housing, hospitals or similar categories. There is general agreement on the objective of developing our resources, developing the productive capacity, by expanding services such as electricity supply, providing better roads, improved drainage, and so on, but in the provision of socially desirable services such as housing there has been a very serious decline in the last few years. The figures show that the number of dwellings erected by local authorities fell from 4,000 in 1956 to 1,463 in 1961. So far as the provisional figures would indicate, there was some improvement last year. At the same time the number of dwellings erected by private persons with the aid of State grants under the Housing Acts fell from 5,300 in 1956 to 3,895 in 1961 and the number of dwellings erected by Dublin Corporation dropped from 1,564 in 1956-57 to 277 in 1960-61. Again, the provisional figures would indicate an improvement last year.

It has been announced that it is proposed to establish a National Advisory Council on building. This idea is generally welcomed. In fact, it was suggested a considerable time ago but nothing was done about it. Surely, however, in this matter the State and State bodies should set an example? There is, as the figures I have given would show, in Dublin, Dún Laoghaire and other urban centres, a long waiting list of families living in overcrowded, unsuitable and unhealthy dwellings. Many of these families have been many years on the waiting list for accommodation. At the same time, the State and State bodies are building expensive, elaborate emporia, many of them being constructed simultaneously, few of them providing an incentive for economic expansion or contributing to the development of the economy. These are merely staff buildings. Nobody could seriously suggest that they improve the efficiency of the undertakings. I yield to no one in my admiration of the efficiency of State bodies like the ESB, the Sugar Company or other organisations that have been established but there should be a rational approach to the building problem, a rational approach to the capital needs of the country, particularly when we relate that programme and the effect on the economy to the need for more houses in Dublin, Dún Laoghaire and other urban centres.

I speak more familiarly about my own constituency of Dún Laoghaire-Rathdown and the fact that I get representations from persons looking for houses in Dublin also means that I am reasonably familiar with the circumstances there. The need to channel essential supplies and to press on with the building programme so far as housing is concerned should take precedence and absolute priority over any of these other projects.

It is, therefore, essential that some rational approach should be made to the building of headoffices or other office accommodation by State and semi-State bodies. In that regard, it would not interfere greatly with the efficiency of the running of the Dáil if the programme for a new building were postponed or at least extended so that not all of these projects would proceed simultaneously because the situation is that capital is both scarce and difficult to secure. The dramatic drop in the number of houses being built has not merely aggravated the position but has extended by years the length of time each family and individual applicant will have to wait before being accommodated.

A definite social advantage would accrue by giving absolute priority to housing, hospitals and other necessary and urgent social requirements and by postponing and planning on a rational basis the building of new offices and other accommodation for State and semi-State bodies.

The Minister's speech made only a passing reference to trading arrangements and I want to enquire what plan, if any, the Government have decided upon for the future trading arrangements of this country. Is there any policy or is everything in the melting pot since the failure of the Brussels negotiations? References which the Minister made were vague and indefinite. What are the Government going to do about revising bilateral trading agreements? Will we make a direct approach to the countries with which we have bilateral trading agreements, the principal one, of course, being our trade agreements with Britain? In addition, we have a number of other trade agreements with Continental countries. All of these agreements have now been in operation for many years, in some cases without any modification and in others with only slight changes.

The phrase in the Minister's speech, "... the Government will do all in its power to secure, in bilateral or multilateral arrangements, improved openings for our exports, particularly agricultural exports," in effect, means little. Are we going to pursue our application to the GATT or are we going to consider further the question of EFTA, particularly the revised EFTA arrangements which may come into effect or, as I say, are we going to revise the bilateral agreements with Britain and the continental countries?

The recent announcements resulting from the EFTA discussions which took place in February would appear to indicate that the EFTA group are now considering, if not the inclusion, certainly the question of extending some of these advantages to agriculture. Comment was made in the March, 1963, Banking Review, and reference was made to EFTA membership. It is stated on page 19 of that review:

Nevertheless, it must be noted that Denmark, in particular, is pressing for wider exports to the United Kingdom. British Government spokesmen have already indicated that it might be possible to give additional concessions to Denmark without conflicting with the Commonwealth position in the British agricultural market.

That, I believe, poses very serious problems for this country. A recent announcement of the revised British quota for butter indicated that the Danish quota is about eight times our quota. From recollection, the figures are that Denmark will be entitled to 96,000 tons this year compared with a quota for this country of 12,000 tons. There is little use in establishing bodies like Bord Bainne or any other State organisation unless we secure either from their direct intervention or from bilateral or, if possible, wider multilateral trading arrangements, a market for the commodities we have to sell. Deputy Norton said that increased butter production is now the enemy of the taxpayers because a heavy subsidy has to be provided. I believe we should be far more alert and far more active in our approach to this problem, and I believe we should have at least observer status at the EFTA discussions. The trading arrangements existing at the moment will not remain static indefinitely. While it may well be that ultimate membership of the EEC offers the best prospect for our economy, with Britain as a member also, nevertheless the very substantial change that has occurred in the EFTA discussions and the fact that we are committed to a policy of tariff reduction must be a consideration.

Here again I believe it is vital that we should consider most carefully proceeding unilaterally with tariff reductions without getting some quid pro quo in return. It may well be that it will enable us to become more competitive and efficient, but if we revise the tariff barriers either bilaterally, or better still, by some multi-lateral agreement, it may well happen that we will have given over some of the bargaining power we possess, although admittedly in some respects it is not particularly strong.

I believe we should think very seriously before we reduce our tariff arrangements unilaterally or consider them in conjunction with entering further bilateral discussions with countries with which we have agreements. Alternatively, we should endeavour to be associated in some way with another multilateral arrangement which may flow from EFTA or a combination of the EEC and EFTA countries. At any rate, the prospects for our trade are so serious and the prospects of the effect of those changes on our economy warrant that we should ensure that we at least have observer status at the discussions in order to be fully and accurately informed on whatever action may flow from those talks.

In the course of his remarks yesterday, the Taoiseach expressed satisfaction at the fact that it was possible to increase social services in the Budget. Everyone welcomes an increase in social services but the credit which the Taoiseach sought for the increase in social services would be more impressive if there had not been an equally steep rise—in fact, a very sharp rise— in the cost of living over the past six years. In 1957, the figure for the consumer price index was 135. The figure for March of this year showed that it has risen to 160. In addition, increased taxation has been imposed on a variety of commodities: petrol, oil, tobacco, transport charges, bus fares, and so on; so that a great number of people have to pay not merely for the increased cost of living but in addition, for many other charges as well.

I do not think anyone would claim that the increase in children's allowances and in non-contributory old age pensions will compensate for the rise in the cost of essential commodities and in the cost of living which will flow from the turnover tax. There is, however, a particular section of the community that I believe has been forgotten, not only in this Budget but in the past few Budgets. I refer in particular to retired personnel who will be severely hit by the turnover tax as well as by the rise which has already taken place in the cost of living.

Many of those people live on fixed incomes, either from pensions which have a diminishing value or from a pension and some income accumulated from past savings and at present invested. They have got no allowance in the Budget to alleviate the additional burden which will be placed upon them by the proposed turnover tax. Numerous cases are brought to my attention of persons in that category. Their pensions are treated for taxation purposes as earned income and they get the earned income relief, but many of them have accumulated some small savings and the income derived from the investment of those small savings is regarded as unearned income, and consequently the tax payable is higher.

In recent years in Britain, the unearned income allowance was brought up from £600 to £800 a year. I believe there is a very strong case for bringing up the limit here. It would not cost a great deal of money and it would alleviate real difficulties and, indeed, real hardship in some cases. We must remember that those persons are outside any social welfare benefits. In most cases, they are also outside voluntary health insurance because they were too advanced in years when it was introduced. Consequently, they are liable for tax as far as their income from earnings are concerned at the unearned rate. They are not entitled to social welfare benefits or to participate in the voluntary health scheme.

I believe there is a very strong case to be made in this connection. I have raised this matter on previous Budget discussions and on the Finance Bill, and if we compare the position of these pensioners with that of pensioners in Britain, we find that there is a still stronger case. Naturally, most of these people are elderly and are incapable of earning anything extra through any position they may obtain. They are beyond their capacity to work and few of them are able to undertake any part-time employment to supplement their pensions.

I want to advert to a remark made by the Taoiseach in yesterday's debate which has been the subject of such comment and which probably shook some of the more lethargic Deputies in their somnolence. The Taoiseach said that the economy should take a swing to the left. This statement was probably made for the purpose of making a verbal concession to socialist theoreticians who may find temporary consolation in it. It probably does not mean very much because, to satisfy the subscriber to the Party funds, he went on to say that it was not intended further to develop State intervention in industry.

Mr. Norton

It was only an oratorical pronouncement.

Mr. Cosgrave

As Deputy Norton has said, it was only an oratorical pronouncement. It was an attempt to get the best of both sides. It is well recognised that Governments, in order to retain support in a democracy, must keep to the left of centre. The strongest example of that we have had in recent years has been the case of the Conservative Government in Britain. Since the war, they have taken a decided left of centre approach. That was necessary because of the great change-over after the war, the advent of the Labour Government and increased nationalisation and the fact that it was essential to keep public support by not nullifying any of the schemes introduced by the Labour Government.

That was described in Britain during Mr. Butler's period as Chancellor of the Exchequer and when Mr. Gaitskell was alive as Butskell, which was regarded as a combination of Labour and Conservative policies. The Taoiseach made verbal concessions in that direction, probably with his eye on North-East Dublin, but I do not think that means anything. This country has operated for many decades a successful combination of private enterprise and State endeavour. I believe that is a sound and progressive programme which has returned the best dividends to the country. It might be described as a pragmatic approach to the matter but it is the way in which it works and how it works that matters. For that reason, I believe these verbal concessions mean very little.

What we want to see here is a progressive programme of development initiated and continued. I was interested to hear the Taoiseach speak yesterday on proposals with regard to education which the Minister for Education proposes to make in the near future. I have expressed the view that in the future this country must depend to a far greater extent on educated personnel, personnel technically trained, skilled personnel, personnel who have been trained to adapt themselves to meet the new situation. We have few natural resources here except the land and any natural resources we have such as hydro-electric possibilities have been developed or are in the course of development. Compared with other countries, we have no great resources of raw materials or minerals capable of exploitation.

We are, however, endowed with a people of high intelligence and considerable natural ability who are capable of being trained to a high degree of skill if they are afforded the opportunities. They are highly adaptable and, when provided with the opportunity of education. have distinguished themselves in many spheres at home and abroad. It is therefore right that compared with the subventions for other purposes, we should consider whether we have provided a comparable increase in the subventions for education. By any standard, it will be seen that the investment in education in this country is materially less. If we take the total sum provided for educational services in the year 1930-31, we find that it amounted to £4,697,000, or 21 per cent of the total Supply Estimates. Thirty years later, in 1961-62, the total amount for educational services was £19,500,000 or 30.4 per cent of the total Supply Estimates.

Admittedly, since the war there has been a far greater extension of expenditure in other spheres and the growth of State enterprise and State investment has meant a great increase in State expenditure. Nevertheless, we find that 30 years ago, we spent 21 per cent of the total Supply Estimates on education and last year we spent only 30.4 per cent of the total for that purpose. If we are to avail of our investments in the promotion of industry and exploit them to the full, we must depend for that exploitation on the competence and skill of the people who run these industries. We must ensure that we can exploit that to the full and the only way it can be done is to increase the expenditure on education. In France, the expenditure on education is expected to double over the next decade. In Britain, the Robbins Committee Report which is expected shortly will, according to anticipation, produce revolutionary changes and it is likely that vast sums will be spent in Britain on education in the years ahead.

I shall revert now to a point I made earlier, and it is here that we differ from the Taoiseach's view which is that as long as we are spending money, no matter in what direction we spend it, some of it will either return as taxation or will be brought back in some other form. I believe it is vital that because of the shortage of capital and the heavy burden being imposed on the State through the necessity to service the debt, we should plan out clearly and in defined channels the role which State expenditure is to play so that productive enterprises will have priority, so that housing, hospitals and other services, education and its ancillary services, will get priority.

Because of our limited national resources, we must train and equip our people to overcome the handicap of the lack of these resources so that we may exploit the skill, ability and adaptability of our people. Great stress has been laid in recent years on the need for competitive efficiency, on the application of technological and scientific knowledge, in order to meet the challenge of our competitors, so that this country may be enabled to export goods and produce competitively against the best offered elsewhere. This can be done only if those who leave our schools in the future are better educated, better trained and equipped to meet the competitive skill and efficiency which the country must meet from outside.

One matter I wish to refer to is the effect of the proposed turnover tax on betting. I have already asked the Minister what was the estimated yield last year from the betting tax and he replied it was not possible to give an estimate. I think it should have been possible to do so because ample records exist of betting transactions. Betting transactions, as far as the revenue authorities are concerned, should be available from two sources: they have available the turnover accounts of betting in so far as betting shops are concerned and also the course betting and the totalisator betting in returns by the Racing Board.

Therefore, it should have been possible at least to give an estimate of the amount secured from betting. Since there is not, I want to give the Minister what I believe to be reasonably accurate figures and to raise at this stage the wisdom, or indeed the equity, of the proposal to apply this turnover tax to betting. As I understand it, the total sum betted in betting shops is approximately £10 million. In respect of the sum betted with the totalisator and on the courses with bookmakers, that also reaches something like £10 million. The Racing Board impose a levy at present on course bets of 2½ per cent, and make a deduction also in respect of totalisator bets.

Those who are not familiar with the matter will consider that if anything is to bear a new tax, betting, which is non-essential, should surely do so. We must remember, however, that already there is a direct tax on bets in betting shops and a deduction by the Racing Board in respect of totalisator bets and a course levy in respect of course bets with bookmakers. I mention that so that those who are not familiar with it will understand the position. Bloodstock, both breeding and racing, is one of the most valuable industries in the country. It has a great many advantages. It provides a valuable export trade and gives considerable male employment, dispersed over a wide area—male employment, one might say, in many counties, spread over a number of establishments in a way that is most desirable and beneficial to the economy.

The Racing Board last year contributed a sum of £250,000 in stakes. In addition, a contribution of £50,000 was made in respect of the carriage of horses to race meetings. That, in round figures, is a total of £300,000. In addition, stakes were augmented by contributions from owners and from executives—the authorities who run the racecourses. All that was insufficient in the view of the racecourse executives to attract runners and to promote the welfare and expansion of the industry, which in recent years has been supplemented to a considerable extent by sponsored races. Last year, on the basis of the existing levy, made up of a deduction from the totalisator and a levy of 2½ per cent on racecourse betting, the Racing Board did not secure adequate revenue to meet the continued outgoings in respect of stakes and the carriage of horses.

I therefore urge the Minister to reconsider this aspect of the turnover tax. As I say, betting shops are taxed heavily already; the totalisator makes a deduction; and there is a 2½ per cent levy in respect of course bets. The existing revenue in the industry is inadequate to meet the necessity to keep stakes at their present levels, and with the rise in the cost of running and maintaining racehorses and keeping them in training, it is not possible for the industry to run itself at the level at which it should be run if it is to attract the world-wide reputation which our bloodstock is attracting, particularly with the advent last year of the Irish Sweeps Derby. Some years ago, during our term of office, when a discussion arose in respect of the sum levied on the Racing Board, it was stated the levy would be for a limited period only. There was considerable opposition to the levy and the present Minister dropped that deduction when he came into office.

This proposal will mean a permanent levy and in view of the figures I have quoted, which can be verified easily by the Minister, there is a great need to maintain this industry at the very highest level. Even without this extra imposition, it will be difficult to maintain the present level because of increased costs, bigger outgoings.

A development in recent years has been the expansion in the consumption of Scotch whisky in this country. I draw the Minister's attention to the need for expanding the output and encouraging our own domestic whiskey trade. In the publication Economic Development, reference was made to brewing and distilling and at page 170, it was remarked that in the post-war period, exports of whiskey grew steadily from 1948 to 1951 reaching a peak in the latter year of 438,000 gallons, valued at £558,000. It went on to say they declined steeply in the next three years but have since begun to recover. The decline, I believe, was due to very heavy taxes which Deputies may recollect were imposed in the 1952 Budget but what I want to direct the Minister's attention to is the increase which has occurred in recent years in the import of spirits from outside and the fact that this increase would indicate a very substantial trend in that direction, without any comparable expansion in home production. In 1957, the total quantity of whiskey imported was 65,390 gallons but in 1962, it had risen to 151,000 gallons, while at the same time home production had only increased from 561,370 to 601,800.

A great deal of attention and effort is devoted to encouraging enterprise and industry and in assisting in its promotion. This is an old-established industry which provides, like the bloodstock and breeding industry, male employment. It draws its raw material from home sources. It is eminently suited to the country and it has achieved a very good reputation for quality. I believe we should examine the situation to see what measures are necessary or what steps can be taken to promote expansion of exports of our whiskey and to see what other factors contribute to the increased import of foreign-distilled spirits.

The last comment I want to make is on the proposal in the Budget to tax conacre. This should provide for the exclusion of widows. Many widows, with or without families, but particularly those with young families, are unable to run farms and the only source of income they have is to let the land. The Finance Bill should expressly provide that these people will be excluded. They should be allowed to let land in conacre if they have no alternative source of income and it would be a definite hardship to make such a letting subject to tax.

These are details that will be discussed between now and the Finance Bill but they certainly warrant serious and sympathetic consideration.

Mr. Dolan

Ba mhaith liom cúpla focal a rá ar an ádhbhar seo. Every sane, thinking person realises that a Government is expected to pay its way. There is only one method of doing that and it is the traditional one of imposing taxation to ensure that sufficient money goes into the fund to provide for the various schemes a progressive Government would undertake. This year is no exception and the Minister for Finance was faced with the need to find some means of providing sufficient money to ensure that at the end of the year many worthwhile schemes could be pushed forward and, what is also very important, that they could be paid for.

He is providing up to £40,000,000 for the farmers. Over 30 per cent of the people are engaged in that very important industry and I am sure nobody will say he is outstepping himself in that respect. Farming is a very difficult occupation which depends even at home on weather conditions and abroad on fluctuating prices for farm produce. We must sell in highly-competitive markets abroad any surplus produce. we have and we must sell most of our farm produce in the cheapest market abroad in England. Consequently, we have to subsidise some farm products and therefore for the present at least farming is a rather difficult occupation and must be helped by the taxpayer.

However, from this Government down the years, farmers received many concrete forms of encouragement. In this way, they are given subsidies on fertilisers and every encouragement possible to improve the buildings on their land, improve methods of production and in general increase their output so that they will measure up to the high standard of efficiency required on the modern farm. One of the most recent features of this is that the encouragement goes to the good farmer rather than to the lazy, indifferent or careless one. As in other professions, we have some of those among the farming community and as a rule it is not among the smaller farmers they exist. Nobody could question the wisdom of providing this amount of money for that very important section of the community.

Money is needed for education too. The previous speaker made some reference to it. We know that any community, in order to survive and push ahead, must have education and money must be provided to ensure that those wishing to avail of education in wider fields will have an opportunity of doing so. Many of the old, dilapidated schools handed down to us must be replaced. New national, vocational and secondary schools are springing up and they all expect grants. The Government have no way of getting that money but by taxation.

I am glad the Minister for Education will very soon make a statement on this subject because I believe there is some overlapping in what we might consider as three watertight compartments in education in this country.

The Government should be very much concerned about the housing or the people and this Government has at all times put housing as one of the principal planks in its platform. We know that a people well housed are, in the main, a contented people. Good housing contributes much to the good health and wellbeing not alone of the individual but of the community as a whole. Very often it cuts down expenditure on medical services, hospitals and such institutions.

I should not like to see any cutting down whatever, despite what other people might suggest, on this housing programme. It should be the aim of the Government to continue steadily and progressively whatever building programme is in hands until every family in this country is housed in a reasonably healthy home. To do that, money is required. I should hate to see the people in my constituency return to the state of affairs which existed in 1956 and 1957 when the housing programme there, and indeed all over the country, collapsed for want of funds.

I have been in close contact with many merchants who were owed as much as £3,000 because no money was available to pay the grants. In my constituency, by a majority vote of the then county council, on which the Coalition Parties had the majority, overnight, in the middle of winter, the housing programme was scrapped. Many families were caught out badly at that time. Either they had to abandon hope of a new dwelling or they had to proceed with its construction although they had not the money——

Mr. P. O'Donnell

The Deputy should not talk a lot of nonsense.

Mr. Dolan

I am glad Deputy O'Donnell is present. He was responsible for bringing the county managers of Ireland to Dublin and for the issue of a document, the effect of which was to clamp down on all building.

Mr. P. O'Donnell

Produce the document.

Mr. Dolan

I will not.

Mr. P. O'Donnell

Deputy Dolan was not a member of this House at the time. He does not know what was going on.

Mr. Dolan

Deputy O'Donnell should produce the document. On his instructions, the county managers were told——

Mr. P. O'Donnell

You built no houses last year in Cavan.

Mr. Dolan

At the time I am speaking of, under the Coalition Government, all building had stopped completely because money was not available.

An Leas-Cheann Comhairle

The Deputy should be allowed to speak.

Mr. Dolan

I do not wish to labour this point. I am well aware of the thinking at that time in my constituency about housing. Even some people who were good supporters of the then Coalition Government were utterly disgusted. It is not very edifying for me to have to come here and to say these things. Even yet, Cavan County Council are trying to pay some of the backlog of those grants. There are still 146 people in our county who have not got any new housing grants whatever because of that disastrous decision by the then Coalition Government.

Mr. P. O'Donnell

You did not build one house in Cavan last year.

Mr. Dolan

That might be correct, but not for private housing.

Dr. Ryan

They were only obeying Deputy O'Donnell's order.

Mr. Tully

His influence still prevails.

Mr. Dolan

Deputy O'Donnell perhaps thinks some people in this House and in other parts of the country will fall for what he says but he cleverly omits to state that no local contribution was made towards housing during that period——

Mr. P. O'Donnell

It is difficult to listen to a lot of nonsense like that.

Mr. Dolan

I am glad the Deputy is running away rather than face the facts. He will get them, if he is interested, in the report of my speech or I can supply them to him.

Acting Chairman (Mr. P. O'Donnell)

The Deputy will have to behave himself now.

Mr. Dolan

I always do. It is true, then, that during that period not alone was there a slowing down but there was a complete close down on housing in my constituency.

Mr. Coogan

Deputy Dolan is taking advantage of the Acting Chairman.

Mr. Dolan

It is perfectly true that there was a complete slowing down and close down on housing not alone in my constituency but all over the country during that period. Nobody, I am sure, would like to return to that position. Those who have eyes to see and who wish to see the progress made since the return to office of Fianna Fáil can now travel the length and breadth of Ireland and observe the new houses being erected everywhere for which grants are being paid and sent out in time. That applies not alone to local authority housing but also to private individuals who build houses. The Government grants and the local authority grants are available. That is why it is practically impossible at present in most parts of the country to get sufficient tradesmen or sufficient skilled men to carry out that work.

Mr. Coogan

They have all emigrated.

Mr. Dolan

Indeed, they have not. They are back—and Deputy Coogan should know it in his own city.

Mr. Coogan

They are not.

Mr. Dolan

They are. In Dublin, in 1956-57 there were 1,800 houses vacant. Today, there is hardly a house vacant but there is an outcry for more houses.

Acting Chairman

The Deputy should be allowed to speak without interruption.

Mr. Dolan

I want to refer to the demand for more and better telephone services. In most parts of the country today we can see roads being torn up to ensure that underground cables and sufficient lines will be installed to cope with the demand. The Minister for Posts and Telegraphs is tackling that backlog of applications in a very efficient manner. So much for houses, for education and for telephones.

I could also refer, if I so desired, to the amount of money made available for land acquisition, for forestry development and to forestry development itself. I could refer to the various schemes this Government have in mind and intend to carry out, such as better roads, fishery development, mining and industry but this may not be the occasion.

This Budget provides many increases for the less fortunate citizens of this country—the old, the infirm and the very young. In the past four years, on the occasion of every Budget, Fianna Fáil increased the old age pension. This time, they have gone a step further. Whereas hitherto there was no allowance for the first child, now 10/- a month is provided under the Children's Allowances Scheme. For the second child 15/6 is provided; for the third child 22/6—an increase of 4/6—is provided; for the fourth child 26/6 is provided and for the fifth child 26/6 is provided. Nobody can argue that these are not very substantial and important increases and that to give them it is not necessary to find the money.

Very often we hear complaints from the Opposition—"Why not do something for the old age pensioners? Why not do something for the disabled?" and so on. This is a practical way of doing it. It is the way the old age pensioner will appreciate better than quite a lot of political lip service at chapel gates, and so on, bemoaning that nothing has been done for them. This is the place to do it and this Government, through a wise system of taxation, are providing the funds necessary to do it.

It is almost certain that there will be an increase probably of 5/- in the contributory pensions. We are not prone to boast about our accomplishments. We look towards the future. Nevertheless we must be pardoned if we refer, for a moment, at any rate, to some of the records which some of the others have created during their time in office. The last speaker mentioned betting, horses and so on. It is not so long since there were catcalls arising out of the purchase of Tulyar, something that was intended to help the bloodstock industry.

It is true in regard to both occasions but especially after the last occasion when the Coalition were in government, that they left the country in a deplorable state financially and not alone that, but the confidence of the people was gone and they were leaving by day and night. Fairminded people will admit that there has been a vast change. People can see everywhere new buildings being erected, new roads being made, more telephone services being provided, new schools, new factories, new houses being built, more forestry on our barren hillsides, more land being divided and progress being made in all sectors of the economy. That is the acid test of progress, the benefits which can flow to any community from having in office a Government who know where they are going, a Government united in their approach to the various problems which arise and a Government who are not ashamed or afraid to make unpopular decisions and to impose taxation so as to ensure continuation of the various services which are in existence and so as to enable the creation of greater employment and more opportunities for our people.

I congratulate the Minister for Finance on his new turnover tax. He has departed from traditional methods of taxation and it was a brave and bold step for him to take. Had he been selfish, he might have taken another line. However, one thing is certain, regardless of what Government are in office, the man who has charge of presenting the Budget in future will find that, due to the action of the Minister, there will be no unbalanced Budgets. This new method should bring in the necessary revenue and enable this Government to continue the many worthwhile schemes which they have promised and have been carrying out down through the years and which will lead to a better standard of living for all our people.

Mr. Pattison

To anyone who looks back on the last few Fianna Fáil Budgets, this Budget comes as no surprise. It follows the usual pattern of asking for substantial increases in taxation, giving very slight relief by way of social welfare benefits. At Budget time, we have to listen to Government speakers referring to prosperity and the improved times in which we are living and which are the result of their term of office. The previous speaker was an example of that but it is our job here in the Opposition to bring the Government spokesmen down to earth at least once a year.

We must face the facts and the record of the Government. There are 60,000 fewer in employment today than there were when Fianna Fáil took office in 1957, and we heard from a speech on Tuesday that 19,000 fewer were employed in agriculture in the past 12 months. Therefore, we can see what effect the Government's policy has had on employment.

I should add that we in the Labour Party in the autumn of last year introduced a measure to the Dáil to make work on the land more attractive. We got no support at all for that measure. Its purpose was to abolish the Agricultural Wages Board and give to the agricultural worker the protection of the Labour Court. If that measure had succeeded, I believe the decline in agricultural employment which is going on at present would be lessened considerably. Even though there was an increase of 7,000 in nonagricultural employment in the past year, the fact remains that there has been a net decrease of 12,000 in employment and it is no excuse, as the Minister has tried to say during the Budget speech, to say that the bad weather had a lot to do with it over the past few months. The figures show that there are over 4,000 fewer in employment in April this year than there were in April last year and over 5,000 fewer in April this year than in April, 1961. There is no justification for any complacency in that respect. The figures show that 5.7 per cent of the insured population was unemployed. It was suggested that that percentage was nothing to be alarmed about but when the figure in Great Britain reached four per cent, it was considered most alarming.

As well as the unemployment record of the Government, there is also the emigration problem. When the Minister stated in his Budget speech that emigration last year was down to 20,000 people, he sounded happy about the position but I cannot see how anyone can be happy when there are still over 400 people per week leaving this country. There are no really worthwhile plans by the Government to solve these problems of unemployment and emigration. In my constituency, two flour mills were closed during the past 12 months and there was no provision by the Government of some other source of employment for these redundant workers. The Government and the Minister for Industry and Commerce just said people were not eating enough flour and that was that. We feel that some action should be taken as a result of closures such as that of flourmills in rural districts. Ignoring such developments will only result in a continuation of the flight from the land and the general emigration trend.

We had the Government's White Paper on incomes. Sufficient has been said about that already in a previous debate, but it is well to mention that, while that document was concerned with the effect on the economy of high wages, there was no reference whatever to the tens of thousands of underpaid workers throughout the country. They are no concern of the Government whatever.

Another record as a result of Fianna Fáil's Budgets has been the record increase in prices over the past few years. The consumer price index rose by at least 4½ per cent last year. Therefore, the benefits which last year's Budget gave to the old age pensioners and other social welfare recipients was more than swallowed up after a few months. We have also the difficulty of being unable to obtain a steady increase in exports, even though our labour costs are very small compared with those of other countries. Lack of Government policy in this respect caused this drop. The Government are calling on the workers to close the gap which the Government themselves, in pursuit of their own policy, have widened.

The previous speaker referred to the steady increase in social welfare benefits over the past few years, but ignored the more than steady increase in taxation over the same period. The relief granted in social welfare benefits is a very small fraction of the increase in taxation imposed on the public. Since 1958, tax revenue has increased by about £35 million. The amount of that increase devoted to increased social welfare benefits has only been about £2 million.

The most striking feature of the Budget is the proposed turnover tax. Already we have a high percentage of indirect taxation. This measure has been welcomed by all the Government speakers. It has been said that Labour Governments in other countries favour indirect taxation and that the Labour Party in England favour this form of taxation. That is completely wrong and misleading. The position in Britain is that about 40 per cent of taxation is derived from indirect taxes. The Labour Party have always opposed taxation on essential foodstuffs, clothing, fuel and shelter. They pioneered the present system of agricultural subsidies in Great Britain which has the effect of making foodstuffs cheaper to the consumer than they would otherwise be.

Notice taken that 20 Members were not present; House counted, and 20 Members being present,

Mr. Pattison

The Labour Party strongly oppose this imposition of a 2½ per cent turnover tax because it will definitely penalise the lower income groups. It is no harm to recall the effect this tax will have on the everyday commodities people must buy. It will mean about 2½d. extra on a stone of flour; 1½d. on a 1b. of butter; 1d. on a 1b. of sausages; 2d. on a 1b. of tea; 1d. on cigarettes—I could go on and on. It will mean a higher cost of medicines and nourishment for the sick and poor. It will mean increased fuel costs. The application of the tax might also mean that many shop assistants could become redundant, because some of the larger shops are going to get this money by cutting down on staff.

The Minister stated the tax would increase competitiveness among shopkeepers, but competitiveness now means cutting down on staff and saving in every direction, usually to the detriment of the workers. That aspect of it is therefore very serious and shops which at present employ large numbers of married men, and which already have serious difficulty in competing with shops who do not employ help, will be seriously affected by this tax, as will their employees.

The administrative cost of the tax is said to be less than one per cent, which is not surprising because it will be the shopkeepers who will do most of the administrative work. One of the brightest features of last year's Budget was the speech made by the Minister for Transport and Power in which he explained the provision in that Budget for the reduction of ESB charges. We all listened quite happily to him and went back to our constituents and told them that the special charges were being abolished and that the people in the rural areas would get supplies at a reasonable charge. Not alone did that fail to materialise but in a good many cases the charges were increased. As a result of this Budget, the charges will be increased again. The good effect of last year's Budget which the Minister for Transport and Power envisaged did not materialise and now the ESB charges will rise again because of this 2½ per cent tax.

Apart from the increases in this Budget, the old age pensioners were due at least an increase of 5/-. They were due 5/- last year but they got only 2/6. Possibly this 2/6 is the balance due to them so that, in effect, they should get at least 7/6 this year. Apart from the increases which the extra taxation is going to levy on the people, we must remember that, as I said, the price index figure has risen by over 4½ per cent during the past year. An old age pensioner must spend at the very least £3 to £4 per week just to keep himself in the bare necessaries so that this increase is more than swallowed up by the increase in the cost of living over the past 12 months.

The Minister for Finance spoke a great deal about savings but during the next five or six months, there is going to be a rush of buying. Savings are going to be raided and there is going to be stockpiling. People will raid their savings and buy whatever they think they will need in the next 12 months, before November 1st, so that there will be the opposite effect to what the Minister desired. In last year's Budget, the tax on dancehalls was abolished. I, for one, thought that this would result in a decrease in the admission prices to dances and that is why I did not oppose the measure in my speech on the Budget then. The result has not been a decrease in admission prices but in fact prices have risen considerably during the past 12 months. The people who go to dances, and they are people of all classes, have not benefited by the abolition of that tax. That tax should not have been taken away.

Mr. N. Lemass

It helped to secure the employment of those working in them.

Mr. Pattison

There is no need to fear for the employment of the people working in dancehalls. There was, I think, last year, and there was fear for those employed in the cinema industry. I agreed wholeheartedly, and still agree, with the relief for cinemas. With the greater competition from television, there was and still is danger of unemployment and redundancy in the cinema industry but nobody can say that there is this danger in the dancehall industry. I can safely say that over the past five years the number of dancehalls has nearly doubled.

Before I conclude, I should like to make this remark. When the result of the vote on Resolution No. 13—the Resolution giving effect to the 2½ per cent tax on everything, including food, clothing and so on—was announced the other day, there were clapping and shouts of glee from Fianna Fáil Deputies. I think the putting on of that tax was a very sad event, and not an occasion for clapping or shouts of joy.

Sir Anthony Esmonde

About three or four days before the Minister for Finance introduced his Budget, the Taoiseach made one of his rather long and woolly speeches in Dublin in which he said it would be necessary to increase the national income by £30 million to enable the people to enjoy the standard of living to which they were entitled. He was making that statement in defence of one of the numerous White Papers that have been issued by the Fianna Fáil Government, in defence of the White Paper Closing the Gap. It is worthy of note that if the Taoiseach intends to increase the national income by £30 million, one would have imagined that the Minister for Finance, when he came to make his Budget speech, would have given us some plans in regard to how the national income was to be increased.

I do not want to weary the House by quoting very much from the Minister's speech but at page 45 of the Budget Statement, the Minister for Finance said:

It would be indefensible in our circumstances to introduce a tax which might threaten the prospects of expansion of particular industries, or their very existence, and bring unemployment in its train.

The Taoiseach is going to expand the national income by £30 million. The Minister for Finance is on record as saying there will not be any taxation that will in any way affect expansion or create unemployment.

The first thing to consider is the corporation profits tax. The Minister for Finance looked surprised at the applause he got from those behind him when he finished his Budget speech. Does any reasonable Minister in the Fianna Fáil Government or any reasonable Deputy of the Government Party think that the increase in corporation profits tax, an increase in taxation of 50 per cent on all corporations, will not affect employment or industry as a whole? It stands to reason that it will.

Deputy Dillon is a better fiscal expert than I am. He quoted figures to show that some corporations would be asked to pay tax to the extent of some £30,000 a year. Is it not reasonable to assume that if they were not paying that tax that money would be ploughed back into the industry for the benefit of the industry and employment therein? Despite that, the Minister says at page 45 that he will not do anything that would in any way interfere with expansion or employment.

Then we come to the turnover tax. Great play has been made by the Fianna Fáil Party both before and since the Budget to the effect that there is no extra taxation on anything. In effect they are going to collect from the corporation profits tax, which will be damaging to industry and trade as a whole, enough money to carry on pro tem and on 1st November they will tax the things in respect of which they themselves have said taxation had reached the point beyond which they cannot be taxed to produce a reasonable return—petrol, whiskey, beer, cigarettes—every conceivable article. It is a good thing that there is an Opposition in this House to speak up and make it clear to the public how they are being gulled in this matter. It is absolutely certain that from 1st November that taxation will be imposed, if this Dáil continues beyond that date. Many people begin to doubt that it will; they think that is the day on which the Government have decided to get out and leave the wreck they have created to their successors.

Mr. Colley

Are you getting worried?

Sir Anthony Esmonde

Deputy Colley is worried. If they remain in office, from that day on, every conceivable article will be taxed in spite of all the long and woolly speeches made by Ministers at chambers of commerce and so on to the effect that this is a Government that is making a drive to expand and increase exports, that we are living in a competitive age, that when the free trade area comes into being we must be competitive and face up to competition. By this Budget they are doing the best they can to prevent in every way the expansion of our trade and exports. That is the sorry record before the House. The taxation imposed in this Budget is the highest that has ever been levied by a Budget introduced in this House and that is saying a good deal because Fianna Fáil have blistered the people from time to time.

The Minister for Education must have studied these things more closely than I have. He must have discussed them in the Cabinet. I am sure he will agree with me that, if this tax were operative in a full year, £12½ million extra would be taken from the consumer. In a competitive age such as we are in at the moment what the country needs is remission of taxation and a reduction, if possible, in national expenditure.

It is all very fine for responsible Ministers to come in here and to say, as the Taoiseach said yesterday, "We have to get the money. Where else could we get the money?" What do we want all this money for? Why do we want to increase national expenditure? If a Government which professes to be an adherent of private enterprise, want to establish and assist private enterprise the right way to do it is to reduce taxaction, to reduce the burden on the people.

Yesterday evening the Taoiseach was quoted even in his own paper, the Irish Press, as saying that the Fianna Fáil Government are going to the left. What exactly that means, I do not know. Does it mean that we are going to have more State enterprise? Does it mean that the Minister for Industry and Commerce will be sent into this House with more Bills like the Irish Steel Holdings Bill, which he brought into this House the other day, asking for a further £2,000,000 capital expenditure on a firm which he could not give us any indication would be likely to produce a dividend or to compete in ordinary commercial circles? Are we going to have an influx of such Bills? This is a serious problem for the country.

I agree that we have to be competitive. I agree that we are living in a new age. We are living in the age of free trade. Even though the European Economic Community negotiations may be in abeyance for the time being, as certain as I am standing here, sooner or later we will have to face competition with other countries. The United States of America, the most heavily protected economy in the world, into which you could not get a bantam's egg without having to pay a tariff on it, have decided to re-orientate their policy in regard to tariffs. Trade discussions are shortly to take place under the Trade Expansion Act with a great many countries in respect of which the United States of America are dropping tariffs. They have done a volte face in regard to the tariff protection system behind which they have worked over the years. We have to work in free trade conditions and to do so our industries, private firms and even State industries must be put in a position of advantage vis-à-vis other countries.

This Budget does not contribute towards that idea. It does the direct opposite. Therefore, it is reasonable to ask the Minister for Education, who is here now representing the Government, how do the Government propose to expand national income by £30 million? There is nothing in the Budget Statement to indicate that there is any plan good, bad or indifferent, to increase exports, to secure further trade, to expand agriculture, to expand industries, to secure new markets for exports. There are no funds available. There is no suggestion that ours is an expanding and increasing economy.

It is reasonable for Deputies on this side of the House to ask where are the Government going, what is their policy, have they any overall policy to meet the difficulties that every economy has to face today? There are potentials for increasing exports and trade but there is no indication in the Financial Statement or in anything that any Minister or Fianna Fáil Deputy has said so far that Fianna Fáil have any plan by which to expand the economy.

I should like to draw the attention of the House to the requirements necessary for expansion. One is a free inflow of capital. More important than that is the retention, by every possible encouragement, of the currency, the funds, available to us in this country. It has been the habit of the farming community to place sums of money on deposit in the banks. Everyone will agree with that. It is the usual policy of the farmer, if he has £1,000 or £2,000, or even a smaller sum, not to invest it but to place it on deposit in the bank from which he can withdraw it any time he wants it. He has hot money or fluid cash at his disposal. For that reason, the commercial banks have had considerable sums of money at their disposal and they have helped Government loans by producing the funds and credit necessary for the expansion of what is called the social infra-structure.

Recently, we have been told that it is necessary for the banks to disclose what money they have at their disposal and the rate of interest paid on it. That is a complete innovation and I assume the reason for it is that the Government are desperate for money and are looking around to see who else they can tax to get more money into Revenue to go on with what is called their policy.

Has it occurred to anyone that in introducing this complete innovation, they may frighten people away from putting money into the banks? It is a fact that since that statement was made, there has been a flight of capital out of the country because people do not want to run any risk. Heretofore, when that money was invested, it helped to build up our economy and now it may leave the country and the banks may find themselves short of fluid money, and if the banks are short of fluid money, everyone else will feel it. This is a disturbance of our capitalist system.

The Taoiseach may counteract that the next time he addresses a chamber of commerce by saying that we are swinging to the left and becoming a socialist economy, but so far as I know, we are still a private enterprise economy. The Taoiseach, having taken a little look to the left, jumped back to the right and said we were a private enterprise economy. The Government ought seriously to consider whether it is expedient to force people to reveal what funds they have on deposit in the banks. That will serve no purpose other than achieving a flight of capital out of the country.

Capital is one of the things we want here. The next thing we want is plenty of credit, so that we can fall back on the recognised sources of capital, which are the commercial banks, to enable us to carry on and expand and increase our economy. Much depends on our foreign policy. I know that what happened recently in regard to the European Economic Community was not the fault of the Government. It was not their fault that we did not get into the Common Market, but it was their fault that they did not know we might not get in.

Now that the Common Market negotiations have failed, it is necessary for the Government and the senior Ministers to formulate a foreign policy. When I speak of a foreign policy I am not talking of a political policy but a foreign economic policy to substitute for the set-back of our failure to join the European Economic Community. It seems to me that in trying to formulate such a policy to increase and expand our economy, the Government must look to the spheres in which we are most likely to be able to expand.

I want to direct the attention of the Government to the fact that we have a favourable trade balance with one outside Government, although it is within the confines of this country. We have a favourable trade balance with the Six Counties. They buy £21 million worth from us and we buy £11 million worth from them in return. Our balance with the United Kingdom, including the Six Counties, is that they buy £125 million worth from us and we buy £136 million worth from them. The deficit in our exports to the United Kingdom is offset by the remittances from our émigrés.

If the Government want to expand and increase our economy, that is one avenue for expansion. The Government should take their political courage in their hands and try to change the balance between the 26 Counties and the Six Counties from £21 million and £11 million to £30 million and £20 million. Admittedly, that might be difficult for them because they have expressed opinions to the contrary very forcibly in the past.

I want to direct the attention of the Government to other avenues of expansion which are open to them. We buy from the United States of America a considerable amount of goods. We buy from them something in the neighbourhood of £30 million or £40 million worth a year and we have increasing exports to them which are growing all the time and are now up to £15 million or £16 million a year. There is a considerable source of expansion there. That is one of the areas which should be tapped and developed in every way possible. I see nothing in the Budget Statement to suggest that the Minister and his advisers are aware of that fact.

We also have a considerable potential for exporting into the countries of the EEC. They buy from us £11 million worth a year and we buy from them £40 million worth a year. Our sales to the Six have been going up considerably and, with the increased economic prosperity within the Community, it is possible for us to increase them still more. Agricultural produce is in short supply and that is the very commodity we have to export. Those are facts the Government should take into consideration. I am being kind to them in telling them that there are some avenues to further improve our economy. It should be possible for the Government to have another outlook besides coming back every year and saying: "We want money. How will we get it unless we put on extra taxes?"

The Taoiseach was right when he said we should expand our economy by up to £30 million a year, but there is no doubt that these are all matters which should be considered in the policy adumbrated by the Government. They should be actively considered by the Government when formulating their policy. I do not know if we are to take part in any of the international discussions going on at the moment. As soon as the EEC discussions broke down, the United Kingdom started to try to negotiate fresh trade agreements with Italy and Spain and most other parts of the world. I do not know if this Government have any foreign policy at all. I do not know if they are doing anything about looking for export markets—they do not tell us. We have had the Minister for Agriculture from Holland here recently. We have Ministers going to London, I presume, to look for an expansion in our trade, but we have no information as to what happened unless the information has been given to Government supporters alone.

I learn with satisfaction that the French Minister for Agriculture has been invited to Ireland by the Government and that he will come here during the Horse Show. There are considerable opportunities for the expansion of agricultural exports to France, although France is herself an agricultural country, but I do not know if there are any negotiations in progress, or if there has been any attempt to revive the market for lamb that was there some years ago. That market was initiated when we were in office and it was unfortunately lost because France had difficulty in her balance of payments and was not able to pay for it. You see how fair we are on this side of the House. We do not accuse Fianna Fáil of having lost that market. We do not make political capital out of such things.

There are considerable opportunities for expansion of our exports and it would be helpful if the Minister would indicate if the Government are working along those lines, if they are alive to the fact that these are the things that must be done. It is my experience, having had the privilege of going abroad for a good many years as an Irish representative at the Council of Europe, to be cognisant of the fact that all trade negotiations in Europe, in North America and in the new emergent countries are carried on at the political level. We do not know if our Government are alive to that fact. We do not know if there are any negotiations in progress. We only know that three Ministers went to London but we do not know what happened there.

The Minister for Finance comes from the same constituency as I do and he must be aware, as I am aware, that there is a meat factory in that constituency. He probably knows that there is enough space under that factory to increase the production of dressed meat for export without the installation of any new machinery, but, like everybody else, they are limited in their markets. There is considerable scope for the export of processed meats to all parts of the world but these markets have to be found and prepared. When the Minister is replying, would he tell us if the Government have sought markets anywhere, if they have tried to sell to countries other than those in which we have our traditional markets and the exports to which are regulated under the 1948 Trade Agreement ? Have we tried to expand these ? Have we tried to go into new avenues of production ?

Unless the Government are prepared to do that, unless they are prepared to go out and fight for these markets, our economy will gradually fail. There is no use in Ministers going to chamber of commerce dinners and making long and woolly speeches about being competitive. The only way you can get markets is to go out and fight for them. Everybody else is doing it.

If this document here contains the considered policy of the Fianna Fáil Party, it means that they will be back in 12 months' time, if still in office, looking for more money. By looking for more money, they will be looking for what is not there to be got. They will have upset our economy to such an extent by these impositions that our national income will not have increased and our economy will not be buoyant and strong. I think it is time the Fianna Fáil Government woke up to that fact. We cannot make them do it because we have not the majority in the House, but the backbenchers of the Fianna Fáil Party should realise that many of their Ministers have held office for a long time and they should bring it home to those Ministers that they cannot go on drifting in this modern competitive age. If they do not do that, the best thing they can do is to get out as soon as they can.

Mr. N. Lemass

It is interesting to hear Deputy Esmonde tell the House that we will be needing more money as a result of our efforts in this Budget while all the previous speakers of Fine Gael told us that we were budgeting for a large surplus next year. It is a great pity that more Fine Gael Deputies did not come in and listen to Deputy Cosgrave who showed some understanding of the situation and put forward some ideas which showed that he had made a comprehensive study of the situation. What we find is that the Leader of the Fine Gael Party comes in here and makes a speech and the other members repeat that speech in different words.

One thing which Deputy Cosgrave said and with which I agree is that the building of houses for the working classes should take precedence over any other type of building. I have spoken in that regard on many occasions. I have quoted from the City Manager's report to the Housing Committee of Dublin Corporation his excuse for the fact that building has not been as rapid as we would like it in Dublin, in spite of the availability of money.

One feature that has been apparent since Dr. Ryan's first Budget has been the provision of ample money to devote to housebuilding as well as to other essential services. In that, and also in social services and in the matter of providing money for investment in industry and agriculture, there has been no neglect. It is all very well to sit on the fence as a number of Labour Deputies have done, approve of the accounts and say: "We approve of your spending this money but we do not approve of your raising it, or at least all of it." That line has been taken by the Labour Party for some considerable time.

One of the features of the Budget this year that struck me most was that it was a talking Budget, not a voting Budget. Last year, it was the other way round. A precedent was then created, mainly by Fine Gael, and a major debate was initiated immediately after the introduction of the Budget. For years, leaders of the main Parties made short speeches and then we went on to ordinary business, considered the full implications of the Budget and made our contributions to the Budget debate during the following days. Last year, we had seven divisions altogether. We voted on every little provision and I felt rather like a hobbyhorse going around the lobbies. The Opposition, of course, lost in every division, by a larger margin as the divisions proceeded.

Another matter I should like to refer to is that it has been the practice to distribute copies of the Budget Statement to the front benches on all sides of the House. This year, one Deputy did not sit on the front benches but on the second last row and he was surrounded by fellows on the back benches and turned immediately to the provisions for taxation. One of these Deputies having approached him, he went up to the very back seat and a man in the Press Gallery looked over, made a note, handed it to another man in the Press Gallery who immediately went outside. That was a most irresponsible act by Deputy T. F. O'Higgins. Unless he is sitting in the front bench next year, he should not be given a copy of the Statement.

Mr. Donegan

Is the Deputy going to make the law for the House?

Mr. N. Lemass

I am making a suggestion. It was irresponsible and the only reason I can think of for it is that it was either irresponsibility that prompted Deputy T. F. O'Higgins to go up there and apparently allow the statement to go to the Press before the provisions were announced in the House, or else there must be some smell in the front benches that he did not like, having been there himself once as Minister for Health. As I said before, the Labour Party approve of the amount of money we proposed to raise in the Estimates. They voted for the raising of that amount. The amount was subsequently increased by the provision of additional social services and it can be said that the one tax they voted against was that which provided the money for these services.

They have criticised one tax but they have not told us whether or not they approve of the corporation profits tax. They steer away from everything except this turnover tax which is expected to yield £3½ million in the current year. The social services will cost £700,000 more, pensions £120,000 more and the new children's allowances will take £1,200,000. This was expenditure that had to be faced and if we were to raise the money the Labour Party told us we should raise, naturally we must follow the Fianna Fáil policy as it has been followed over the years and see to it that the social service classes are not too badly hit by the raising of this money, the spending of which had the approval of the Labour Party.

There are a few other matters I should like to refer to and which the Minister might deal with when he comes to reply. One relates to the turnover tax and the list of exemptions. I do not know whether the Abbey Theatre is included under the heading of education or not. I have certain doubts as to whether it is, but I think it is quite obvious that the Abbey Theatre, which is subsidised by the State, should be exempt from this tax because if it is included, it will cost money first, to collect the tax and then to give it back again with the other hand. That is a matter the Minister might think about when considering the final draft of the Finance Bill.

A number of Deputies have been confused regarding the turnover tax. They are confusing it with the purchase tax as applied in Britain and say it will mean a penny on the lb. of butter. The price of butter cannot be increased by the retailer without the permission of the Minister for Industry and Commerce under the Prices Act of 1958, which includes four items including bread and butter. The retailer, if he wants to make up this 2½ per cent, will have to do so on sales other than the four items mentioned in the 1958 Act.

Mr. Donegan

What does the Deputy think the retailer will do?

Mr. N. Lemass

I am quite satisfied the traders have sufficient ingenuity to increase their turnover in such a way that the general public will not be aware of the existence of the tax in relation to any specific item. I am equally satisfied that by this time next year the Opposition will be wondering why they were so concerned.

Mr. S. Dunne

What about the publicans?

Mr. N. Lemass

I shall come to the publicans later. I am quite convinced that the traders in the grocery end of the retail business will have up notices saying: "No change in prices here". It is a day of impulse buying, or bulk buying as opposed to the type of sales we were used to and in which I was trained to in my apprenticeship days. The day of the supermarket and the self-service store is definitely on the way in, so speedily in fact that it is causing considerable concern in labour circles because of its effect on employment.

With regard to the licensed vintners, I have a small suggestion to offer. Naturally they can manipulate prices and put the 2½ per cent on everything. I suggest they should co-operate not only with efforts to correct the balance of payments but also to further sales of home produce by putting any increases necessary on imported spirits and beers. There would be no harm in charging, say, 2/6d. for a small Scotch, leaving Irish whiskey at 2/4d. I understand it is only 2/2d. in the country. The same applies to imported gin. Some of the finest gins in the world are made in Ireland. In fact, they are used throughout America in cocktail competitions and so forth. There are three brands of larger brewed in this country. The rest are only bottled here. I feel certain that the publicans would have the goodwill and co-operation of the public if they readjusted their prices in that way and I hope when their association get together to consider what steps they will take, they will pay some heed to my remarks.

Progress reported; Committee to sit again.