I am glad the Deputy has recognised it. The Labour Party, for their part, give me the impression of understanding the issues well enough but of not wishing to face up to their implications. They seem to believe it is possible to keep on saying "yes" to the economic and social aims of the Government and "no" to the means of realising them. The contradictions in their attitude are becoming increasingly clear and must be so even to themselves.
So far as the Government are concerned and the Fianna Fáil Party who support the Government, we have tried to define our economic and social purposes as clearly as possible. We have not attempted to evade or to conceal their financial consequences. We want the Dáil and the public to see them as a connected whole, not only the taxes but how the resulting revenue will be spent; not only the benefits but the obligations which must be accepted if these benefits are to be realised.
The question is: what kind of a community do we wish to become? Is it to be one based upon some fundamental principles of social justice, in which the equal right of all citizens to share in the benefits of economic growth is to be accepted, a community which is capable of combined effort to bring about that growth and to ensure equitable distribution of the benefits? Or is it to be a society where economic progress is left to chance, where social aims are undefined or kept vague or are left to be settled by a perpetual conflict between different sections and classes, each seeking to draw the maximum from the pool of national resources regardless either of the justice of the claims of other classes or the possibility of destroying the nation in their conflict?
It may be that the future is with the time-servers, the men of no fixed aims to whom politics is just a game of ins and outs. I do not want to believe this. It may be, as somebody has said recently, that the Irish people are against government and that a Party that gives them or promises them government is inviting rejection. I do not believe this either. It may be that, in committing the future of my Party to my conviction about the growing political maturity of the Irish people, I am reckoning on something that does not exist. I am sure that events will justify my conviction.
We cannot force other political Parties to set out, for comparison with the Government's policy, alternative policies equally detailed and clear. We have tried by every legitimate device of criticism and challenge to get them to do so but so far without success. I know they think it may involve them in some political risk. They believe that ambiguity and evasion are the means of winning votes, or, at least, of not losing them, but I believe they are wrong. I believe the future is always with the Party that attempts to give the country leadership, and not with those who seek to evade defining their position, or who desire to play only the role of destructive critics, whatever occasional minor victories they may win.
I believe the predominant position which Fianna Fáil have occupied in Irish political affairs for over 30 years is due to the fact that there never was ambiguity about our aims. The people may have been for them, or they may have been against them, but they always knew what they were. For our part, we are not in politics as a game of any kind, but to implement a decision which was taken long ago, a decision that the freedom we had won for this country should not fail to remedy all the adverse economic and social consequences of foreign rule; should not fail to yield opportunities for a better way of life for the Irish people. We knew that freedom was not an end in itself, that indeed it would create many new problems. We also knew it gave us opportunity, subject to our capacity to organise ourselves to use it, to elevate the economic, social and cultural conditions of our people.
We have not achieved all our aims —far from it. I wish we had. Progress in many directions has been disappointingly slow, but we do not intend to give up on that account, but rather to press more strongly ahead. I said here in a debate last year that no nation could expect to slide downhill into prosperity. There is no solution to Irish economic and social problems that does not require plan, work and sacrifice. I regard it as a real disservice to the Irish people to tell them otherwise. I know most of our people know this to be so, although some may be persuaded otherwise against their better judgment, by traders in discontent. It seems from Press reports I have seen that some irresponsible elements in farmers' organisations are talking about a campaign of illegalities to force more and bigger doles from the Exchequer, and that there are traders who, as they say, are refusing to be tax gatherers for the State, as if it were not their State, and as if they had no stake in its prosperity, and no obligation to help in its functioning and development.
We know there are various sections, big or small, which are always demanding that they should get more and more out of the national pool, while putting no more into it. I believe the spokesmen of all these sections— who seem to regard selfishness as the main motivating force of the Irish people, and patriotism a matter for fools — do not really represent the people for whom they speak. I believe our people are far more decent, understanding and patriotic than they represent them to be. What sort of nation do we want to become? If the political Parties or the sectional organisations would try to give us an honest answer to that question, we would know their real motives, and they, on their part, might find themselves compelled to reassess their attitudes so that their answers would appear reasonably respectable and responsible.
For the Government's part, we are telling the people, as we told the Dáil, that no programme of development can be completed without cost, and that there is no source from which that cost can be defrayed except their own production. We are telling them that there is no means by which people can become permanently better off unless their work becomes worth more through better organisation and higher productivity. We are telling them that the whole campaign for national development will founder unless there is a general acceptance of the ideas that all have a part in it and that it must be organised under the authority of the Government because there can be no substitute for that. We are telling them that the cost of Government administration is continuing to go up.
Deputies are aware that there are some arbitration awards affecting categories of the public service which are awaiting decision by the Government, awards which would involve a substantial addition to the cost of these services. Every Deputy, even those who voted against the Budget, will press for the implementation of these awards, but I know very well that if they involve further tax additions, many of these same Deputies will also vote against providing the money.
I believe this is the year in which we must reorganise our forces and rearrange our plans if the four per cent per annum rate of growth for which we are planning, and which we hope to maintain, is to be achieved. This means reorganising our tax arrangements also. The feasibility of this rate of growth and what it requires from each sector of the nation's economic organisation, and from all the constituent elements of our national community, will be spelled out soon in the Government's Second Programme. I still believe that, notwithstanding all the difficulties, by the end of this year, we will be organised and geared to sustain this rate of growth.
This is the difficult year so far as our internal arrangements are concerned, and a main part of the difficulty is to secure widespread public understanding and acceptance of a tax structure which will make the whole plan work. No definition of possibilities or targets, and no plan, will work miracles. There are no miracles in this business unless the generation of united national effort in which every element of the community will be willing to subordinate its own sectional interests to the achievement of the national purposes should be regarded as a miracle. That is a miracle we can perform for ourselves.
The organised opposition to the turnover tax, which is the main feature of the Finance Bill, comes mainly— apart from political opposition in the Dáil—from a section of retail traders. Every increase in employment, every improvement in living standards, means more money passing over retail shop counters. The retail traders of the country stand to gain most directly from rising national prosperity and, as a class, there is nothing they have to do, unlike other classes, to get their share. In May, 1963, the value of retail sales in Irish shops was eight per cent higher than it was in May, 1962, and 13 per cent higher than it was in May, 1961. That was a direct consequence of the success of the Government's first Programme. We do not want any thanks from traders for that. We did not do it solely for their sake but for the sake of the whole community. Considerations of self-interest —assuming no higher motive would convince them—should suggest to the retail traders that they should support, more than any other element of the community, the measures which the Government are taking to maintain this economic improvement.
This organisation, RGDATA, have proposed as a solution of our tax problem reduced Government spending. They, no more than any others who put forward the same vague idea, have not attempted to define that solution more exactly. We must do it for them. They mean lower social welfare payments, lower farm subsidies, lower wages for State employees, the curtailment of expenditure upon education, health, housing services and so forth. If any Government adopted this course, the first and, indeed, the most direct effect would be experienced by retail traders. How it could be in their interest to curtail the volume of money in circulation, and to engineer a trade depression, only the executive of RGDATA could explain.
In the Government's view, the volume of business activity should be maintained at the highest level the volume of national production can support and the Government's plans should be devised with this purpose in view. No Deputy, irrespective of Party, fails to recognise that we require a considerable improvement and expansion of educational facilities particularly at the post primary and technical level. No Deputy but desires to see the residue of unfit housing finally cleared away and the standard of housing accommodation improved. All Deputies profess to desire the extension and improvement of social services, including the health services. Deputies are continually pressing for improvements in the telephone service, for the extension of road construction to meet the growing volume of traffic, or for a wider scale of activities in drainage and land improvement.
There are plans to be implemented, plans which all Deputies will welcome, in respect of land division, afforestation, fisheries and so forth. The many measures which have been adopted and which are now in operation to stimulate higher production and greater efficiency in agriculture and in industry, the cost of which must increase with their success, and on which all our future hopes are based, must be maintained and financed. There is no field of Government activity in which some desirable improvements are not possible, although many of them have still to be delayed, or completed at a slower rate than we would wish, for financial reasons.
All activities of Government require the provision of money and are not possible without money. I believe the Government are setting the rate of progress at a bearable level; Deputies who want a higher rate of development must argue for more spending and those who want less spending must argue for and accept a slower rate of progress. In their recent report the Central Bank expressed their concern about the continued rise of Government expenditure and indebtedness as factors affecting costs of production and, therefore, affecting also the competitiveness of the national economy with special reference to the expansion of exports which is essential for further economic growth.
This was a reasoned and reasonable statement which should not be lightly brushed aside. We know that we can run into serious difficulties if our production costs are inflated either by Government policy or because of incomes rising faster than output. The Central Bank said that the Government's spending on current account is increasing more rapidly than national income and that Government capital outlay is increasing faster still. This, in my view, is inevitable in a developing economy. In the highly developed countries the proportion of national income taken for public purposes is considerably greater than in this country and there is general public acceptance of this position and understanding of the need for it.
A reluctance to divert a higher proportion of national resources to the financing of national progress must involve a slowing down in the rate of progress and the same result is secured whether that reluctance is expressed in political opposition to tax changes or in demands to have the effect on personal incomes compensated by income increases. The growth target which we have set ourselves, this four per cent per annum increase in real terms, taking one year with another, cannot be achieved unless the present rate of investment can be increased. Our rate of investment expressed as a percentage of the gross national product is still one of the lowest in Europe. We regard it as essential to the achievement of our economic aims that the rate of investment should increase faster than gross national product and, if this cannot be realised by activity in the private sector, then the responsibility is on the Government to see that the investment activities of public authorities are maintained at the level necessary to meet the requirements of economic and social progress.
A corollary of investment rising faster than gross national product is that consumption should not rise as fast. The considered policy of the Government was expressed by the Minister for Finance in his Budget Statement as follows:
Clearly it is right that the State should directly and indirectly increase the volume of investment and do everything in its power to promote as rapid a growth of the economy as can be sustained without excessive strain on the balance of payments.
I said, during the course of the Second Reading debate on this Bill, that every political decision is a choice between alternative courses. It is right that the Central Bank should warn us of the dangers of trying to move too fast, of the dangers of adding to the inflationary forces which are always present in our economy. The dangers of the alternative course—of moving too slowly, of cutting down our programme of economic and social progress—are of a different character, but they are just as serious. If the impetus of the national advance should be checked at this time we could have very real difficulty in getting it started again.
The crisis of confidence which this Government inherited from the Coalition proved more intractable as an impediment to recovery than did the financial crisis. Public confidence in the country's future progress is not yet so deeply rooted that we can afford to weaken it. While it would be shortsighted to pursue policies that would be likely to impair the prospects of sustained growth, or that would involve risk of a serious recession later, there are no economic indicators, and the Central Bank report does not point to any which show that this is happening now. Because there is in the building industry, to which the Central Bank report refers, some danger of excessive stimulation of demand inflating costs unduly or creating a danger of a later recession, the Government have taken steps through the formation of the Building Advisory Council to keep this situation under examination and to seek to maintain activity at a uniform level representing the full productive capacity of the industry. We do not think we are trying to go too fast.
This is, I agree, the key problem in economic policy and a critical test of Government competence—fixing a rate of progress at the highest level which can be sustained, and applying all the checks and balances required to keep it at that level. Nor is it entirely under the control of the Government because when a momentum of progress has been built up it cannot be arbitrarily checked or precisely regulated.
There is now, I believe, a much wider public understanding than previously of the elementary economic considerations which will determine the country's rate of progress. I am certain the Government will see any danger signals as quickly as others. We have, I can claim, shown our intention and our capacity to act when they are seen, minority Government though we may be. If we miss any signals we expect the Central Bank to direct our attention to them. We will certainly take heed of their warnings but the considerations which operate in determining Government policy are not exclusively those to which bankers attach the chief importance.
I hope soon to see set up and functioning the Economic Council which is at present under discussion with the Irish Congress of Trade Unions and with employers' organisations. This body will be concerned with the principles which should guide policy— the policy of the Government in sectors outside agriculture and of the employer-labour conference in securing the further development of the national economy towards full employment with adequate wages and stability of prices—and will be, in my judgment, an important addition to the mechanism by which national policy is formed. Its importance will grow together with its influence in policy formation and on public opinion as its purpose and value become widely understood. The ultimate responsibility for organising national policy, for framing legislation and for preparing administrative arrangements, rests on the Government in office and cannot be placed elsewhere. This is the kind of democracy on which we have decided, with a Government responsible to a national Parliament elected for five-year terms.
In the course of the Second Reading debate, Deputy Norton proposed that this turnover tax should be submitted to a national referendum. No system of democracy could work on that basis. If the turnover tax is to be submitted to that test, why not every other tax, and when the people have voted against all taxes, certainly all indirect taxes, as they probably would, then we could shut up shop and give up this idea of an independent Irish State? In the Constitution Referendum of 1959, about the proportional representation system of election, we argued that our system of electing Deputies to Dáil Éireann, related to the political circumstances as they were likely to develop, created a risk of a succession of minority or coalition Governments, ineffective and short-lived Governments, with the disappearance of all elements of consistency from Government policy, leaving the country without democratic leadership and making planned progress a virtual impossibility.
The Opposition Parties argued that the retention of the proportional representation system need not have that defect. This Government is a minority one and none other is possible in this Dáil. We have tried to prevent the forecasts which we made in that Constitutional Referendum from coming true, at least during this Dáil's lifetime. We have decided to pursue the same policies as if we had a secure working majority to save the nation from the worst consequences of political instability and when the going got difficult not to seek the easy solution of another general election as our predecessors did. Because we are a minority Government we are, and we knew very well we would be, liable to be subjected to pressures by organisations outside the Dáil which are trying to exploit the Dáil situation for sectional purposes. These pressures are being used to an extent to which they would not be, and were not in our own experience, attempted when we had a secure working majority. This is the main weakness of minority Governments, that these organised sectional pressures will surely be used and can sometimes become intolerable. It is essential for the preservation of normal democratic procedure and arrangements that the activities of some of these pressure groups should be discouraged.
Independent Deputies who supported the Government during the progress of this Bill—those of our members against whom these pressures were directed, Deputy Leneghan and Deputy Sherwin—have, in resisting these pressures, rendered a service to Irish democracy the importance of which will become far more obvious in time, and have set an example which is likely to be frequently mentioned in future Dáils and which will give strength and encouragement to others who may find themselves in future in similar circumstances.