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Dáil Éireann debate -
Wednesday, 17 Jul 1963

Vol. 204 No. 8

Finance Bill, 1963—Fifth Stage.

I move: That the Bill do now pass.

This Finance Bill has been discussed at length and in detail in the Dáil in its various Stages. Now that the debates on it are coming to an end, so far as the Dáil is concerned, I think it desirable once more to try to relate the Bill as a whole to the wide issues of Government policy arising at this time. These wider, basic issues of policy seem to me to have been, in the main, evaded in the debates on the Bill so far as the leading Opposition speakers were concerned. This is a disappointment. So far as relates to Deputy Dillon, his failure and the failure of his Party to deal constructively and comprehensively with these issues was not concealed by his resort to the tactics of abusing the Government as reported in today's Press.

The efforts of political Parties to win credit for themselves and to bring discredit to their opponents are not necessarily harmful, so long as they are not regarded or presented as the sole purpose of political activity. In the final resort, the main purpose of political effort must be to settle the principles and the aims which should inform national policy.

This is quite out of order on the Fifth Stage.

On a point of order, I do not suppose any of us would wish to hinder the Taoiseach in anything he wants to say but I understand the rules of order place a limitation on debate on the Fifth Stage. Whether a general review of Government policy is relevant at this stage, I beg leave to doubt and submit to your ruling, but if you should rule that it is in order, certainly we would be quite prepared to urge on you a liberal interpretation of the strict rules of order if the Taoiseach wishes to spread himself, as he apparently does.

So long as it is for everybody.

As this is the last of the major debates in the Dáil before the Adjournment, I think it would be in accordance with the wishes of all Deputies that the limitations normally imposed on the Fifth Reading debate on a Bill should be applied, if at all, rather leniently.

So long as it is the same for everybody.

It was agreed at the Whips' meeting that in the event of the Bill being dealt with in this way, there would be no long-winded speeches by any individual which would hold up the Bill.

I shall undertake to the Deputy not to be long.

I should like an assurance that Independent Deputies will be afforded every opportunity to express their opinions without any limitation.

I do not propose to go over the whole field of Government policy. It is my intention to relate my remarks to the Finance Bill and the purpose which the Finance Bill is intended to serve.

I take it your ruling, Sir, is you will take a liberal view?

I do not feel called upon to make a statement.

Except when you are ruling again—

I am sure Deputy MacEoin will have confidence in the Chair.

Most Deputies are well aware that particular issues of policy have to be determined before Government plans, including taxation plans, can be settled. Certainly in the thinking of the Government, very important policy decisions have now to be and are being decided, whether Deputies realise it or not. Decisions are being made which will determine the rate and the direction of our national progress for a long time to come. This will become more obvious, perhaps, when the Government's second Programme for Economic Expansion is published in the course of the next couple of weeks. We are, in our thinking, at a point on the national road where we must firmly make up our minds whether to go forward or to go back and our decision is likely to prove irrevocable.

During the course of the debates on the Finance Bill, Government spokesmen have tried to explain that this Bill is not regarded as an ordinary routine measure of its kind, not merely as a Bill to settle the tax arrangements of this State for one year only but as a crucial part of the Government's whole plan for economic and social progress. Some Opposition Deputies must have understood this. To the extent that they concentrated on its purely political aspects, they have, in my judgment, defaulted on the obligation of a responsible Opposition to help to clarify the basic issues of policy by constructive debate on them. By and large, the members of our community get their knowledge of the policy questions arising for decision at any time in our political life by means of the debate on them by political Parties. To the extent that the Fine Gael Party have, in relation to this Bill, decided to rely upon their not inconsiderable powers of invective, they have advertised their disinclination to deal with these matters in a constructive manner.

Do we wish to accelerate the national economic advance or to slow it down to avoid spending money on it, or to retreat from it in the interests of a mistaken concept of economy? Do we accept that the fair distribution of the social benefits—the better living conditions which are made possible by economic progress—must be organised by the Government and must involve some redistribution, through taxation, of national income? Do we want the improvements which only Government action can make possible, in education, health, housing, social welfare and in all other public services and amenities? Do we want them to the extent of being prepared to pay for them? These are the questions to which Fine Gael have not attempted to give clear answers or indeed any answers. We sense that their answers, if they gave them, would be negative, but they have declined to attempt to define their political philosophy, if they have one. I think they have a political philosophy of sorts but because they are still hypnotised by the prospect of another Coalition arrangement with the Labour Party, they prefer to conceal it even if its character is occasionally and accidentally revealed in their speeches.

The Taoiseach discovered a new political philosophy last month when he decided to go left.

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.

That was a very weak clap.

It seems to me, however, that the Opposition Parties for some purpose of their own which has not been revealed, or because of their lack of understanding of what is happening, are now trying to show how right we were in the proportional representation Constitution referendum debate. If the Government should fall at this time because of the Dáil situation here, because of the external pressures and because Deputies who have not the protection of Party membership are improperly influenced by these organised efforts with proportional representation still in the Constitution, the probability is that the country would be condemned to a rapid succession of ineffective minority Governments until our democracy collapsed, as democracy collapsed under similar circumstances in other countries, or the people forced to make some such change as we had advocated.

I have said that we do not propose to revive that proposal for a Constitution amendment. That is still our position, but I believe that the dangers we were trying to eliminate by that proposal are very real and are still present. At this time they can only be countered by the determination of the Government not to be driven from doing things, which in our judgment the national situation may require, to avoid a Dáil defeat. We will not try to avoid a Dáil defeat by any time-serving operations. On the other hand, we have no intention either of walking out on our responsibilities. We will fulfil our duty as we see it unless and until a Dáil defeat forces dissolution or the Dáil's normal five-year term is expired. The Dáil records will show that in the course of the enactment of this Finance Bill, decisions were reached by some narrow majorities, even minimum majorities, but they were the right decisions and that is what will matter in the long run.

Run away now, boys. It is all over.

The place to make that speech is outside this House.

They are afraid to make it outside.

The impudence of the Taoiseach lecturing the people on this side of the House on their duty to the nation and the State! If these impudences were not perpetrated by the Taoiseach, I should forbear from reminding him that but for the people on this side of the House and those who went before them, there would be no State here to lecture.

A great sale of Blueshirts.

When I look at the Party opposite and when I hear the Taoiseach speak today about his resolution, purpose and clarity of mind, I cannot help recalling that one of the signal services his Party rendered this State was to give us the ambiguity of the dictionary Republic. Thank God, there was a Party to put an end to that detestable form of insanity and who said: "If our people want to be a Republic, let them, but let us not be such only in the columns of Chambers's Dictionary but coram populo.” These recollections are extracted from me: they have little relevance to the present or future, but the impudent attempt of the Taoiseach to cast himself and his Party in the role of sole protectors of this State and of its economy is the great treason to Irish life.

Let them get it into their heads that this House and all the Deputies who sit in it are the custodians of the welfare, of the survival of our nation. We will tear this nation to pieces if we are to attempt a brainwashing of our people and try to put it into their heads that one Party in this House have the prerogative of protecting their interests and that every other Party who opposes them are against the nation. Then democracy comes to an end. I say, and I am proud to say, that I believe the Parliament established in this country by successive generations of Irishmen are the true custodians of our national interests and the prerogative of that duty devolves on no one of us but is shared by all—by us in Opposition as by the Government in office.

I wish I could go on record as saying that I believe Fianna Fáil had discharged the latter part of their responsibility with anything like a realisation of what their duty to the State is. My experience in sitting opposite them when they were in Opposition has been of irrational, wild irresponsibility and willingness to associate themselves with any form of public misconduct in order to scramble back into office. I have not forgotten the windows of the Irish Press and their advertisements for the IRA when we were seeking to restrain the development of a civil war along our northern borders. However, enough of the past.

The Taoiseach begins his present brainwashing operation today by saying that the crossroads have been reached as to whether we go forwards or backwards. I have sat opposite this Taoiseach for 30 years, and in the course of that time he has crested more hills, turned more corners, reversed more stones, explored more avenues than any ten men I know. I heard him declare in this House 20 times the dawn of a great new State founded on some glorious piece of Fianna Fáil legislation. Notably, I remember 25 years ago this Taoiseach declaring that the problems of the Irish transport industry were finally resolved and that we were about to embark on a glorious period of transport development. Since then we have put £35 million into the transport industry and the net result is that the Taoiseach is now tearing up all the railways in the country. Now we are at the crossroads. If we follow Seán Lemass, we are advancing towards the dawn; if we follow anybody else, we are heading for hell.

You are, anyway.

That is good enough for the simpler members of his own Party; it is good enough as material for the more irresponsible elements in his Party; but it cuts no ice in the ears of any rational man. It amuses me to hear the Taoiseach, in pursuit of that general line of propaganda, brainwashing propaganda, declaring that the decision we now must take is whether we are to invest in national development or not. Has the Taoiseach never heard of the Shannon Scheme, has the Taoiseach never heard of the Land Rehabilitation Project, has he never heard of the establishment of the turf briquette factory? Has the Taoiseach never heard of our housing programme which provided a surplus of houses in the city of Dublin? Has the Taoiseach never heard of rural electrification which brought electricity to every rural home in Ireland, the bulk of which was done by our Government and part under the present Government?

You have a terrible neck.

Has the Taoiseach never heard of the forestry development, of the Agricultural Research Institute? The choice the Taoiseach suggests today is between investment in national development and non-development. Let me say to him that the choice does not exist. It has been the policy of every Government that I know of, since this State was founded, boldly to invest in the resources of this country and to provide by the joint efforts of successive Governments an infrastructure for economic development which has been declared by one international authority after another to be unique among small nations. One of the things that has struck successive international commissions who have come here to look at our economy has been the infrastructure that has been provided here, the roads, the power, the housing.

It is pure folly to get up in this House and make the case that one side of the House want development and the other do not. It is clearly a slander on our own people and is calculated to sap confidence in the economic future of this country. Are we putting forward the proposition to all potential investors in the economy of Ireland that if there is any change of Government, all must abandon hope? If such a proposition is being put forward, then it will have the effect which I have outlined because let me tell the Taoiseach that there is going to be a change of Government.

What a disservice it is to the national interest to declare before the world that if there is a change of Government from the Fianna Fáil Party, all prospects of economic development in Ireland come to an end. Of course such a proposition exists only in the imagination of the Fianna Fáil Party who may hope to blackmail a few poor weak men into dangling along into the Lobby because they are persuaded these propositions are true and are essential to the survival of Ireland.

Declarations of that sort do no service to Ireland. On the contrary, you place in real jeopardy the economic development which we all ought to desire to see, no matter what Government are in office. I would urge on the Taoiseach, who is, after all, like myself, now reaching the last decade of his public life, not to perpetrate that great disservice on this country. To associate the whole future of this nation with any one political Party is an illusion and a falsehood and a great disservice to Ireland.

I have no apology to make on behalf of this Party as to our record on the policy we set forth. No Party can do more than print its policy in black and white a fortnight before a general election, for all the world to read and criticise, and to stand on that policy. I want to ask Fianna Fáil this question. Where and when have they done it? If they have, if there is some hidden source which I have not yet discovered, where was there in it a proposal to tax the food, clothing and fuel of our people? I never found it. I never heard a whisper of such a proposal being laid before the country.

The Taoiseach says the Government in this country who are obliged to listen to the representations of what he pleases to call sectional interests are labouring under an embarrassment that no democratic Government ought to have to face. He goes on to say that if democratic Governments are faced with that in the future, democracy must collapse in this country. Was there ever such tripe spoken by a public man since democracy was first instituted? What is the difference between free democratic institutions and dictatorships and authoritarian regimes but that the Government of the day shall be susceptible to the will of the people and that if the Government proceed to go daft, the will of the people should be made manifest through Parliament and through lawful public demonstration?

I want to say most deliberately that time and again young people have come to me and consulted me as to what they will say to those who claim the right to defy the law by conspiracy or by violence. I have replied to them: "Go back to your young companions and remind them that in this country there is no justification for any man conspiring to defy the law or defying it with arms or violence because in this country he can join a political party. He can make his opinions heard and felt and, if that is not sufficient, if he cannot find a party to correspond with his desires, he has a right to go out and stand at any street corner, to get up on his barrel and gather his friends around him. If he can gather enough of them he has a right, in the last analysis, to change the Government. So long as he has that right, he cannot claim he is under any pressure which would justify him in defying the Government elected by the Irish people."

That is the right the Taoiseach seeks, perhaps unconsciously, to challenge. It is a desperately dangerous thing for a head of an Irish Government to say he feels that the invocation of that right by a section of our people constitutes an intolerable handicap on the Government of the day. It is not. It is a legitimate, proper and admirable exercise of freedom which, under God's providence and as a result of the work of those who went before, our people gloriously enjoy.

Of course, when one is in Government and that right is exercised against you, you know a moment's resentment. I have recalled before in this House seeing 10,000 farmers march outside the Department of Agriculture when I was Minister for Agriculture. I do not deny that because I wanted to be Minister for Agriculture and because my whole heart was wrapped up in the industry of agriculture it hurt and exasperated me, more particularly when they were being led in that demonstration by a man whom I knew to be a staunch supporter of the Fianna Fáil Party, nominally to get delivery of a report a copy of which I knew that man had in his pocket as he was walking at the top of the procession. I was willing and anxious to go out and to tell them the facts but he took damn good care not to ask me. But was I entitled to go out and denounce them for exercising the right they had? I was not. They were perfectly law-abiding, perfectly orderly. They offered nobody any offence or threat but they were exercising the right I gloried they should have. I deplored the method of its use. I resented the fact that I knew Fianna Fáil Deputies were organising them into that folly but they were free men and they had a right to do wrong——

Strange theology.

——and that is the glory of true freedom. I know that the Taoiseach has been raised in a school which maintained continually that the people have no right to do wrong. I have always held that, under the supreme law of God, the people have the right to do wrong and if you take that right from them you make them slaves, not free men: they have a right to make mistakes. They have a right to go wrong politically and they have a right to discover their mistake and correct it. That is why we have general elections—so that when the people go wrong and make the mistake of choosing Fianna Fáil there will be a general election to give them the chance of correcting it—and that is what we are concerned, in connection with this Finance Bill, to bring about.

I want to say this and perhaps this shocks the Taoiseach and deprives him of the stimulus of the cut and thrust of debate for which he yearns though he does not seem to enjoy it when he gets it. I agree with him and I disagree with Deputy Norton when Deputy Norton says this Finance Bill should be submitted to a referendum. I think that procedure is the very negation of parliamentary democracy. We were sent here to legislate for the people and the decisions of this Oireachtas are binding on our people—and the Government act by the authority of God. Those seem to me to be fundamental facts which are accepted on all sides of the House. I do not think our decisions, except in so far as the Constitution requires it, should be submitted to referendum of the people. The proper method when it appears that the majority of the people have parted company with the Government's policy is that the people be consulted in a general election and a new Parliament chosen. So long as the Government feel that is not so, they have a right to hang on even if the only two buttons holding up their breeches are Deputy Leneghan and Deputy Sherwin.

What about the elastic in the underwear that you were selling for half nothing? You must be making a nice profit when you can give away two corsets for the price of one.

But when the two buttons, or one, give way they will have to go and I think there would be great merriment in anticipating that almost inevitable development of their going before the public and being caught holding up their trousers with one hand.

Tighten the belts.

Surely, if the Taoiseach finds that the taxation proposals brought by his Government before this Parliament move groups of people like the merchants or the farmers of the country to indignant public protest, instead of expressing bitter resentment that they should exercise that constitutional right, would he not be better occupied examining his own conscience? These are not the kind of people who ordinarily come out in the streets to demonstrate. If you try to get them to come out to a meeting it is extremely difficult to get them to do so. All of us know in our own political experience that if you go to hold a meeting the last people you can get to come to and attend the meeting are strong farmers and comfortable merchants. They may give you every other kind of support but to come out and demonstrate in the streets they are extremely reluctant to do. Surely when they are out demonstrating, you ought to ask yourself what has gone wrong? What has caused them to adopt this line of public manifestation? I suggest to the Taoiseach that, instead of stirring himself up into a frenzy of indignation because they have done this, he would be better occupied in asking himself why, in asking "What have I done or what have my Government done that could so move them as to make them do it?"

Sometimes the Taoiseach when he is in his more elevated moods launches in the general process of the brainwashing operation some sublime political aphorism. Listen to this. It sounds quite well until you ask yourself the simple question "What does it mean?" Here it is: "Every political decision is a choice between two alternative courses." Is that not a very profound observation? That is like saying every circle is as round as another. Such observations have a fine reasoned sound, but when you come to examine them they mean Sweet Fanny Adams.

The Taoiseach asks us to make up our minds on the question of whether the Government are travelling too fast or too slow. I want to put it to the Taoiseach that is not the question he should ask himself at all. The question he should ask himself is whither is he travelling. It is a very silly thing to concentrate on the pace at which you are travelling until you have made up your mind in what direction you propose to go. I want to suggest in the context of this debate, which has been widened on an unprecedented scale, that it might be no harm to return to what is strictly relevant on the Fifth Stage of this Finance Bill. Why are we opposing this Finance Bill? Why are we, as the Opposition in this House, voting against this Finance Bill? These are the questions we ought to be asking ourselves within the strict rules of order today.

We believe this Finance Bill will raise the cost of living on our people. We believe that the inevitable consequences will be to reduce our competitive position in foreign markets. There is no contesting that for it is agreed on all sides of the House and on behalf of the Government it was conceded last night by the Minister for Justice that the intention of this is to raise the cost of living on the people generally. What are the implications of that? I think Deputies are closing their eyes to the inevitabilities of the future. I have always believed, and I still believe, that a very large volume of our total export potential is providentially founded on the fact that there are 50 million hungry people living beside us and that we have the facility for delivering to that market perishable agricultural produce in a fresh state. In that I include our livestock and livestock products. I fully recognise, however, that, if we are to employ our own people in their own country, we have got to expand industrial output; and that means export markets as soon as we have reached the stage of substantially saturated domestic demand.

We have got to face two facts. One is that if we raise the cost of living in this country, it is wholly illusory to imagine that our industrial costs are going to remain low. Industrial efficiency is improving. Individual output doubtless is expanding. That in some measure ought to be able to bridge the gap between the rising cost of living and our industrial costs. But if the cost of living goes up, as certain as we are standing in Dáil Éireann costs will rise. We have to realise that in face of two facts. One is we are trading very largely in the British market, which heretofore has been a protected market for us and that protection is gradually being whittled away by EFTA and the prospect of our entering into the Common Market. I was always breast high for entering the Common Market if Great Britain entered it. I supported the Taoiseach's policy when he advocated that and fought for it and I deliberately refrained from exhaustive criticism so long as I believed him to be negotiating in Brussels on behalf of this country. But I want to direct attention to a most significant thing in that connection. When Herr von Brentano was speaking on the television two nights ago, for the first time since this business was mooted I heard a German statesman speaking of the next stage of development of the Common Market involving the admission of Great Britain, Norway and Denmark without referring to Ireland. In my experience of Germany I have never heard anyone do that before. That is a matter to which the Taoiseach might advantageously turn his mind.

Whether it is in the Common Market or whether it is as we are at present with the operation of EFTA proceeding, we are faced with a complete and progressive elimination of our protected position in the British market. That is one reason for reduced costs. But, over and above that, we are moving rapidly into a situation where automated industry is taking over. Within a decade or so our men will be competing with their machines. That is a very grim and formidable prospect. I see some industries being inaugurated in this country today and, when I compare the methods and resources on which they propose to depend for production with the automated processes I have already seen in operation, it strikes me that many of the processes we are inaugurating to-day are as much behind modern continental and American practice as the ass and cart was behind the internal combustion engine. How we are going to keep our place, except in highly specialised branches of industry where individual skill can be exploited to particularly great advantage, is a very important problem for us to consider. With the onset of automation, the scope for individual skill as opposed to automated skill seems to be getting narrower and narrower.

We oppose this proposal generally to raise the cost of living for it is going to decrease our competitive capacity in the export markets of the world. Secondly, we oppose it because, no matter what anybody says and no matter whatever adjustment is made in social service payments, the small farmers of this country, many of whom do not benefit under social service payments such as blind pensions, widows' and orphans' pensions and children's allowances, are going to have their standard of living further depressed. Unless we can expand our exports, both agricultural and industrial, in foreign markets, we are marching into a growing danger.

We have at present an adverse trade balance of £105 million per annum. That adverse trade balance does not produce the expected repercussions on our balance of payments because substantial sums in capital flow into this country. I have never yet discovered from any source any clear breakdown of the character of that capital investment. Certainly, some of it is coming in to buy Irish land as the traditional pledge against inflation. Some of it is coming in to buy city property, and a very large quantity of that is being purchased by British property investment companies. Some of it is coming in as "hot" money and some as investment capital for industrial enterprises, but in any case it is reasonable to assume that for every £10 million of it remaining in the country, there will ultimately develop an annual charge in perpetuity of £700,000 to reward that capital in foreign ownership.

That is all right if our balance of trade assumes a character which will carry that additional annual outflow, but, if we continue to run a growing adverse balance of trade with the purchases of land and property ceasing and the influx of capital reducing and the efflux of interest on the capital already here continuing, we shall run into a balance of payments problem of an extremely difficult kind to grapple with, unless we have prospects of steadily widening export markets for our industrial and agricultural produce and I cannot see, if we deliberately raise our own costs, how we can hope to achieve that.

I hear the Taoiseach pretending to believe there is contention between the different parts of this House about the desirability of investing in Irish industrial development. He knows perfectly well that is not true but I remember when we were in office one of the problems arising was not the availability of capital for investment but the availability of enterprises in which to invest it. Since we went out of office, what are the great investments that have been made of Government capital en bloc? There is Nítrigin Éireann, the Verolme Dockyards, Irish Steel Holdings, Potez Aircraft and Dundalk Engineering. I ask any rational Deputy would any entrepreneur in the world invest in that group, representing £15 or £20 million of public money, except the Irish Exchequer?

I am quite prepared to stand over any investment of public capital which provides employment for our people at home if it ultimately fulfils the modest condition that it will provide for its own depreciation and pay the interest that the Government have to pay on the capital they provide. I do not ask it to make profits in the commercial sense. Of course it is good if they can do so and plough it back into the enterprises expanding, developing and strengthening them but I do not regard that as a sine qua non of what you could describe as a successful enterprise. If it can depreciate its assets and pay interest on the money the Government have borrowed to provide the capital and give decent employment I think it has justified itself.

How can any of us say we view with confidence the prospect of these investments to which I have referred? I view them all with the greatest apprehension. Later today we shall have to go into the question of the Verolme enterprise but it is indicative that this enterprise was launched on the proposition that a Dutch capitalist wanted to put capital into Ireland. Next we were told he would not put in any more than a token sum in consideration of our providing about £4 million. Now we are faced with a suggestion that we should make him a present of £999,000 in order to keep him there.

That is an investment pattern on which I do not think this country has any reason to congratulate itself. It is silly and bad for the country to be proclaiming that no Party other than Fianna Fáil believe in capital investment in Irish industry. Far from that being true, as the Taoiseach knows, it was our Government which set up the Industrial Development Authority and initiated the whole system of freedom from income and corporation profits tax on exports. I do not want to take from our successors in the very least that they adopted and even expanded these schemes but it is bad for the country to pretend there is some conflict of belief about the desirability of promoting industry here when in fact there is not.

But there is conflict, not as to the general principle of stimulating industry by any means available in order to provide us with exports and proper use of the skill of our people in their own country—we all want that—but it is the quality of the undertaking that gives ground for pause. I admit we have certain joint responsibility. We got the Canadians to put money into Avoca. The mistake we made—it is easy to be wise after the event—is that we did not say on the first day: "Not a penny. This is just a hole in the ground. If the Canadians can exploit it and do well out of it, good luck to them, but no Irish money should go into this enterprise." I admit we have joint responsibility in agreeing to a policy of making more public money available which, as far as I can see, is all gone down the drain and that will never yield back a penny but I am fearful that we shall be dragged into other similar enterprises resulting in our having to carry a deadweight of debt around our necks which may create an atmosphere of disillusion with the whole prospect of development through Government intervention which could do harm to the economic life of the country.

I think we can set against incidents of that kind, with considerable satisfaction, the development of aspects of industry like the Irish Sugar Company. The Cumann na nGaedheal Government first set it up; Fianna Fáil further developed it and under the present administration this vegetable-canning activity and canning of other products is going forward, I hope with every success. So far as it succeeds it is a good thing applauded by all sides. The institution of the briquette factory was a valuable and desirable development because it is an element in Bord na Móna activities which is profitable and helping to carry the costs of many of its other activities. There is no charge on the generation of power for that branch of Bord na Móna activity. They are actually selling their products in foreign as well as domestic markets at prices giving ample return on the money invested. We began that: the present Government carried it on.

I believe this to be a really bad Bill. It is creating a widespread sense of anxiety and apprehension and I do not want to close without saying quite clearly that for anybody who wants to read the policy in detail of this Party, of which I am the leader, he can find it there in black and white and if he cannot and if he will write to me, I shall furnish it in black and white for all who run to read. I want to state categorically that we believe that people should be entitled to live in peace and dignity in their own country, that destitution should be the first charge on our resources. I presume these are propositions which are acceptable to most Parties in this House. I claim no special prerogative in this for the Fine Gael Party. We believe that every family should have a roof over its head and a roof that will stay up, and Fianna Fáil have made the great mistake of allowing the housing programme to run down to the point at which we have a housing crisis in the city of Dublin at the present time.

We believe that the ideal to be aimed at and the objective to keep constantly before us is that the best we have to offer in primary, secondary, vocational and university education should be available to every child, without reference to the financial circumstances of his parents. We fully appreciate that over the long term that will cost money and we believe that the people must be asked to provide the money to attain that end as quickly as may be. It will not be attained overnight but it should be the agreed objective of us all.

We believe that agriculture and industry must make their contribution, and they can, to the economic life of this country. We deplore the view that agriculture should be treated as a kind of poor relation of the economic life of Ireland and we have frequently urged on this Government, and when in office did our part, to expand and modernise the agricultural industry and would continue to do so if returned to office in the morning.

I believe the Government are wholly wrong in accepting this method of financing the essential requirements of the country. It is wrong to accept as a principle that you should tax the vital necessaries of the people in order to do that and that that is the only method whereby the necessary revenue can be obtained for the economic expansion of our society. We have stood all our life in the public life of this country against the principle of taxing the foodstuffs of the people. We believe that that tax, if enacted by this House, should be repealed, and we are glad and happy, if the Fianna Fáil Party at any time wish to go to the country in a general election, to argue that issue with them on the platforms of Ireland. We will accept the verdict of our people, whatever it may be, in a general election.

We are not in the least afraid that any decision the people may take will result in the breakdown of parliamentary institutions in Ireland. Parliamentary institutions are more secure and more firmly based in Ireland than they are in practically any country in Europe. I rejoice in that fact. I have no apprehension that they will ever fail us and I confidently appeal to the Government now to do Ireland the best service they can possibly do, that is, to call a general election at the earliest possible date and put out of all doubt or question what the will of the people really is in respect to the financial policy enshrined in this Finance Bill.

I am sure the Taoiseach's intervention this morning was considered to be very necessary within the ranks of the Fianna Fáil Party. After the contributions we have had from the Government side on the Finance Bill, I should think the Party's forces would need some rallying because such a lack of enthusiasm for a Finance Bill I have never seen since I came into the Dáil.

For what Finance Bill did the Deputy see enthusiasm?

Certainly the Minister for Finance had a lone task in trying to defend the Bill in its various details and naturally found himself in some difficulty in respect of some of the questions he was asked. He did not get much help from those who pretend they are enthusiastic about the provisions of this Finance Bill and especially that in connection with the turnover tax.

The Taoiseach appeared—and it is not his usual role—to lecture the Opposition Parties generally this morning as if he were the purest politician who ever sat in this House. I would not accuse the Taoiseach of being the greatest scoundrel that ever sat in the Government benches but I would not say he was the purest of politicians. Nevertheless, his whole speech this morning was based on the assumption that everything that was done from this side of the House, everything that was said from this side of the House, had the ulterior motive of trying to catch a small section of votes here and a small section of votes there. I have not been as long in this House as the Taoiseach but I recognise—and within his heart, the Taoiseach himself will admit it—that very many of the measures that were introduced into this House by him, and particularly by his predecessor, were designed entirely to win or to maintain a certain vote, and the Taoiseach himself knows there are certain sections of this community which he is afraid to touch, which he is afraid to investigate from any point of view, even the point of view of raising money, because he knows that if he did that, he would be swept out of office at the next general election. He is a man of courage in many respects but he knows his Party is too strong for him and that they will not let the Taoiseach——

What has he in mind?

The Taoiseach knows well what I have in mind. Every single member of the Fianna Fáil Party is committed to the Fianna Fáil policy and I do not take any exception to that. Neither do I take exception to the two Independent Deputies who support them or the people who voted for them. However, these Deputies were voted for as Deputy Leneghan and Deputy Sherwin. They had no mandate for any type of policy. They have a mandate from the people of Mayo and a constituency here in Dublin to represent those people fairly in Dáil Éireann but it is ludicrous to suggest that these two people, of all those who are not of Fianna Fáil in the House, have the best judgment, especially in respect of this turnover tax.

The Taoiseach seems to take credit for, and attributes in particular merit or virtue to, the fact that he is not dissolving the Dáil. That is not a very big-hearted thing for him to do. That does not show tremendous courage or a tremendous sense of responsibility. What else can the Taoiseach do? If my judgment is correct, if there were a general election in the next three or four weeks, Fianna Fáil would lose substantially. That is my judgment and I think it is the Taoiseach's judgment as well as that of every member of his Party. If he were to go to the country in the next three or four weeks— naturally, he will not—he would be swept out of office. Therefore, all he can do is to hang on—maybe that is not the right word—or stay in office as long as he can with the support of the members of his Party and that of the two Independents in the House.

The Taoiseach did a disservice to this debate by widening it. It is right at times in an adjournment debate that the Taoiseach should give a general review of the progress of the State in its many sectors, to give a review of Fianna Fáil policy generally, and state what are the intentions for the future. However, every debate cannot be a broad or general debate and what we are considering and what we are expected to consider here is what is in this Finance Bill. The one objection we see to the Bill is the introduction of what is described as the turnover tax. We are considering the proposals that are before us.

The Taoiseach and members of his Party have asked us on many occasions: "What would you do to get the £11½ million which we expect the turnover tax will bring in?" Will the Taoiseach answer a question? In recent times he was in Opposition for six years. Does he remember that he or any member of his Party suggested a method for raising extra money? Did he or any member of the Fianna Fáil Front Bench suggest to an inter-Party Government Minister for Finance any new method by which he could raise money? Did they ever advocate a tax? When taxes were introduced in respect of cigarettes, beer, tobacco, and the usual things, to provide money for social welfare and health, and to advance the country generally, Fianna Fáil voted against them. I have no objection to that. I take the advice of the Taoiseach in that respect when he said while in Opposition: "It is not for us to propose new taxation. It is not for us to make proposals. You are the Government and you have the responsibility. It is for us to criticise when we think you are wrong."

That is exactly what we are trying to do on this Finance Bill. The Taoiseach and members of his Party are trying to give the impression that those who vote against the turnover tax are denying the people increases in social welfare benefits. That is entirely untrue.

It is true.

Would Deputy Burke please not interrupt? I do not intend to delay the House very long. On this Finance Bill, the Labour Party are giving a positive vote to enable the Government to raise a little over £4 million per year which will just about pay for the small increase the Government propose in respect of social welfare, children's allowances and other benefits.

This morning, the Taoiseach spoke as a kind of Simon Pure in politics. I do not know whether that was deliberate or unconscious. Let us not dwell too much on some of the things for which the Taoiseach was responsible in the past. He tries to give the impression that the Labour Party want everything, but do not want to pay for anything, that we pretend to be concerned about social welfare benefits but do not want to pay for them, that we are always clamouring about unemployment and the cost of living. The Taoiseach has as good an appreciation as anyone else of how elections are run in this country. If he wants to attribute ulterior motives to the Labour Party, let me remind him of some preelection promises he made. "Wives, get your husbands back to work." Fianna Fáil did not succeed in getting them back to work. There is no doubt about that. The Taoiseach and the former Taoiseach, now the President of Ireland, promised they would not interfere with the food subsidies. The Taoiseach made that promise in Tramore.

In Waterford.

The Taoiseach made it in Tramore and the former Taoiseach made it in Belmullet. When they got back into office, the excuse was that they did not know what the financial state of the country was. They did not know it when they made the promise. They were stupid and dishonest to make that promise if they did not know the financial state of the country.

We did not believe it was so bad.

The Taoiseach and the Minister for Finance have enough experience as politicians to know what the state of the country was, because all the facts were available in the various statements published by the Department of Finance from time to time. The Taoiseach promised that he would get cracking on housing. He tried to allege that the Minister for Local Government in the inter-Party Government lay down on the job. The Taoiseach knows in his heart that from 1948 to 1951 under a Labour Party Minister for Local Government, there was a new housing drive, and that there was an awareness of the need for housing on the part of the Minister which he passed on to the officials of the Department and to the members of local authorities. He certainly did more in his efforts to provide houses for the people than most Ministers for Local Government. The situation is as bad now as it was when the Government took office in 1957. So far as I can see, there seems to be a go-slow on the building of houses, for what reason I do not know.

The Taoiseach made many promises prior to the last election—promises which he did not fulfil. He says he did not promise 100,000 new jobs but that that was a blueprint for discussion. We did not get 100,000 new jobs. On the contrary, we got emigration. We find that in the past 12 months unemployment has been increasing, despite what the Taoiseach says. The Taoiseach said that in this debate we evaded the wider issues. I am sure the Chair would have taken us to task if we had taken the line which the Taoiseach took this morning. He talked about a second Programme for Economic Expansion. I know the Taoiseach's intentions were good and the intentions of the Government were good when they introduced the first Programme for Economic Expansion. Again, I do not think they have any reason to be unduly happy about the final results of that programme, especially in view of the fact that employment is precarious in many parts of the country, and unemployment has risen.

The Taoiseach also said that the Opposition failed to deal with policy questions. We are concerned about what is in the Finance Bill and that is what we are talking about. Deputy Dillon referred to the fact that the Fine Gael Party had a policy document which they published before the last election. The Labour Party have a policy document, too, in much greater detail than that of any other Party. What the Taoiseach thinks of it we do not know, but the policy document of the Labour Party issued prior to the last election is the most detailed of any policy document of any Party.

This debate has been notable for the fact that there have not been many contributions from Government spokesmen. The Taoiseach jumped in this morning to rally the flagging forces of Fianna Fáil. I see the Minister for Transport and Power is ready to enter the fray, for what reason I do not know, but we will get a "clatter" of statistics in any case. I know that in a debate such as this, suggestions are likely to be lost, and it is impossible for the Taoiseach or Minister to deal with them all.

I believe there is a reasonable chance of reducing expenditure in this country in some directions. I am not trying at all to tell the Taoiseach that by a reduction in expenditure in certain directions we can get all the money the Minister for Finance needs, but I suggested in the debate on the Vote on Account, or in some such debate, that there should be established committees of this House to inquire into expenditure, especially in respect of Agriculture, Industry and Commerce, Local Government, the Department of Defence and all the bigger Departments of State.

Transport and Power.

I know the Taoiseach will tell me that the officials in these various Departments have scrutinised and pruned to the very last £, to the very last penny, but all the wisdom as far as the administration of expenditure in this country is concerned is not vested, and they would be the first to admit it, in the officials in the various Departments.

In the latter portion of the year, we consider the Estimates. We know the type of debate we get. It is merely a criticism of administration, various suggestions, and so on. Never do we seem to get down to the expenditure of money and I would say in respect of Industry and Commerce and Agriculture that we may be carrying—I am convinced we are—what could be described as dead wood which could be cut out. I am also convinced in respect of Industry and Commerce and Agriculture that we are misusing the moneys. I am convinced that the money is not being applied in directions that are really productive and that much more use could be made of some of these moneys. I believe that much can be done by committees of this House whose task it would be to finecomb, so to speak, the expenditure, especially the expenditure in respect of these bigger Departments.

We heard many high sounding phrases from the Taoiseach this morning. They appeared like that. One appreciates that the Taoiseach cannot, perhaps, explain in detail what is in his mind when he uses these phrases. We hear such phrases as "a fair distribution of the nation's wealth". I must confess that I am not impressed when I hear phrases like that unless I see evidence that the user of the phrase is determined that there will, in fact, be a fair distribution of the nation's wealth. If we take one example, wages, we cannot say that tremendous efforts are being made to distribute the nation's wealth in a fair manner. When we remember that in respect of what is described as the most important industry, the agricultural industry, those employed in that particular industry receive the lowest wage of anybody in the country, the agricultural industry on which people say this country depends, the agricultural industry which provides us with most of our exports, the agricultural industry which does all that for the country, and yet it is the industry that can pay only £6 odd per week to agricultural workers in the major portion of this country.

The Taoiseach made some mention of what we describe as the "pay pause" document and what he describes as the "Closing the Gap" document. Now we must approach this Finance Bill bearing in mind that there is a pay pause, bearing in mind that there is to be a turnover tax, and also bearing in mind the seeming reluctance of the Government to exercise any form of price control. The Government seem to believe that prices will control themselves by dint of competition amongst manufacturers and traders. I think the Taoiseach will have to be concerned about the control of prices when this turnover tax comes into operation, as it undoubtedly will seeing that the Government have a majority in this House to put it through. Because there will be differences in the prices that traders will charge in order to compensate themselves for the turnover tax they will have to bear, I believe there will have to be some form of control of prices because, if the Taoiseach is wise, even he must recognise that, if the trade union movement is to act with discretion, is to act in the interests of the State, bearing in mind also its own interests, trade unions will have to be convinced that the Government are concerned about the control of prices. If we are going to have a pay pause we must have some effective control of prices. Otherwise we will find ourselves in a situation in which I believe the Taoiseach does not want us to find ourselves.

The Taoiseach also says that so far as the Labour Party are concerned we always seem to say "No" when there are proposals for the raising of money for certain purposes, purposes which he describes. I said at the outset that as far as we are concerned, we have shown approval in a positive way for three proposals in the Finance Bill, one a major proposal, for the raising of money. We had no hesitation in walking into the Division Lobby with the Government in their proposal in respect of corporation profits tax. Had there been a division with regard to the proposal in respect of the increase in the profits on rents or the tax evasion proposals, I and my Party would have had no hesitation in joining the Government in voting for these proposals.

What we are concerned about in the turnover tax is not what the Taoiseach believes some of us in Opposition are concerned about. I am not acquainted with RGDATA. I know they have their problems in regard to the operation of this tax, but my primary concern, and the primary concern of the Labour Party, is not the problems that traders and shopkeepers and manufacturers may have in respect of the turnover tax but the problems in respect of the consumers, the people who will have to pay.

There have been statements from the Government side, and boasts, to the effect that we are now going to increase old age and widows' pensions, unemployment assistance, children's allowances, and all that sort of thing, to the extent of about £4 million per year. Again, Fianna Fáil speakers have tried to give the impression that the whole of the turnover tax is going to social welfare. If questioned they would, of course, admit that it is not but in general statements they make and from the general observations of their supporters down the country one would think the whole £11,500,000 will go towards giving increases to social welfare recipients. Mark you, I do not think it is a great feat that in a year in which we are raising £16 million extra taxation we still give the same sort of increase, particularly to the old age pensioner. We give the same increase in a year in which the Finance Bill is expected to raise an extra £15 million or £16 million by way of taxation as we gave in the years in which extra taxation represented some £2 million or £3 million. We still dole out the usual half-crown.

The Taoiseach talked this morning about the planning of the economy generally. He suggested, especially to the workers, that their work must be worth more. I was glad he went on to qualify that by saying there must be better organisation because, too often, people think in terms of harder work, and more work by the workers when they think about increased production. I think all of us in this House would agree that, as far as the Irish worker is concerned, he is the equal of most workers in most other countries in the world. What militates against the economy in this country, what militates against greater industrial production, is the lack of organisation.

I should still like the Taoiseach to dwell at greater length on a statement he made during the Budget debate. He said, and I do not want to appear to be giving his exact words, that Government policy should take a step to the left. I think that is a fair paraphrase of what he said, but there does not seem to be a great deal of evidence that the shift to the left in government is to be marked. There is a great deal of scope for some shift to the left in Government policy.

I heard Deputy Dillon talking about the investment in the Verolme Dockyard, the Dundalk Engineering Works, Nítrigin Éireann, Potez and other concerns. I agree that some of them do not seem to have been eminently successful. I would blame the Government and Government policy for that. They are doing a disservice to the idea of establishing State or semi-State organisations in the manner in which they are giving financial assistance to projects of that kind. As far as the Avoca Copper Mines, the Dundalk Engineering Works, the Verolme Dockyard, or as far as any of these industries in which the Government put a substantial amount of money are concerned, I say they are doing a disservice to the idea of the State promoting industries so long as they do not seek some sort of control in the running of these industries in which they invest substantial amounts of money.

They have themselves to blame if some of these projects are not as successful as the Government wished they would be. The move to the left will not be successful if we are to be confronted with the examples Deputy Dillon quoted today. My Party believe, where private enterprise fails to do the job, in the encouragement of the establishment of industry by the State so that the people will have employment. We are in favour of a co-operation of public and private enterprise because that also is possible, but all these projects will fail unless we are to exercise some control. We need not be afraid any more of being regarded as this sort of socialist or that sort of socialist; our primary concern should be for the welfare of the people in keeping them at home in good and remunerative employment.

The Taoiseach very quickly adopted —and nobody blames him for it—as part of his policy some of the things embodied in the late Holy Father's Encyclical Matter et Magistra. He could read that again and adopt many more other things in that famous Encyclical to such an extent that he and his colleagues would have greater encouragement in intervention in the establishment of industries, in the promotion of the economy generally, so that Irish men and women can find good and useful employment.

I should like to ask the Minister for Finance if he has any reason to review his estimate of the revenue he expects to get from the turnover tax. This figure of £10½ million was mentioned in the Budget speech and has been referred to throughout the debate, but we have never had a breakdown of the figure; whether it is merely a simple 2½ per cent on the expenditure on consumer goods or not, I do not know. Last night, there was an amendment seeking that the turnover tax should be removed from certain items of food. We were informed by the Minister for Justice, speaking for the Minister for Finance, that if these items were exempt, the turnover tax would have to be 3½ per cent in order to bring in the £10½ million. I wonder could we get a breakdown on the position—if bread were exempt or if butter or meat were exempt. The Government are expressing their problem as a problem of £10½ million, but if the yield of the tax on bread were to be £1 million, the problem would only be £1 million and surely our ingenuity would not be taxed too much in finding ways of raising £1 million or £2 million to ensure that bread would not be taxed.

The Minister should be able to tell us what these essential foodstuffs would cost and what the loss in revenue would be, if they were exempt. There is no doubt—and it is no cliché—that a tax on these items is going to increase the poor person's expenses. They eat more bread than the wealthier people. The staple diet of the old age pensioner is tea, bread and butter and perhaps a rasher, sausage and egg. Undoubtedly such people depend more on these items than the wealthier people do who have a wider variety of food available to them, even the people in the middle income group. The compensation they are going to get by way of the extra 2/6 a week will not mean a great deal to them. They will still have to pay— I know it will be an infinitesimal amount—of something amounting to a halfpenny on the 2/6. If they are to live at all, especially those living at home, they must expend all of the 35/on the essentials of life, in this case, food.

One matter to which I had not got the opportunity of referring last night was the tax on medicines, drugs and appliances, on prescription. I do not think we should tax them. The turnover tax is to be passed on and the public will have to pay. We all agreed in this House in October, 1961, that these things are very costly for the middle income group and in the majority of cases, constitute the heaviest part of the burden when one becomes ill. It must be recognised also that these drugs, which are very effective, are also extremely dear. A doctor prescribes pills or medicines to be taken for three months and many of these small pills cost 1/- or 2/- each. Those people who have not a medical service card, or who do not come under any health scheme, find themselves crippled by these charges. Now, under this Bill, they will have to pay another 2½ per cent.

Last week an argument was made that it would be difficult to exempt them but I do not think it would. In respect of other purposes, separate accounts must be kept but as far as prescriptions are concerned, there should be no trouble. The prescriptions should be kept for the inspector who calls and it is not difficult to determine what sales should be exempted.

The Bill provides for many exemptions, in respect of all types of agricultural produce, moneylending, banking, insurance. There are exemptions in respect of certain types of building materials. Yet we cannot exempt medicines. Even at this late stage could I appeal to the Minister or the Taoiseach to exempt medicines? I presume the Taoiseach knows that medicines prescribed by veterinary officers for animals are to be exempt. Surely if we can exempt drugs and medicines for the treatment of animals, we can do so in regard to medicines for human beings. People must have tea, bread, butter, sugar, to stay alive but if there is a danger of death through illness, surely it is unreasonable for any Minister to impose a two and a half per cent tax on the drugs and medicines that may help to save lives.

As I said at the beginning, the debate today has taken an unusual turn. What I am mainly concerned with in this Bill is the turnover tax. We in the Labour Party are concerned primarily for the consumer who, we believe, will be called upon to pay at least two and a half per cent more for the commodities he buys. This tax introduces a principle which I am sure will be perpetuated by future Fianna Fáil Governments. We feel sure that since such a simple method of tax collection has been introduced, the amount will be increased to five per cent next year once the Minister sees such an easy way of getting money.

I thought, first of all, I would deal with some of the things Deputy Dillon said in the course of his speech.

If you dealt with the railways, you would be doing a lot better. Stay out of this House and do your work.

The Deputy is talking nonsense as usual.

The Deputy must allow the Minister to proceed.

I am only trying to get him to tell us something about the railways.

It does not arise on this Bill.

It does. There is money being provided for the railways.

CIE are doing a very good job in reorganising the transport system.

Tearing up the railways, yes. You ought to be ashamed of yourselves.

Deputy McQuillan is a great man to interrupt.

I did not interrupt all morning. It was only when I saw this man rising to speak that I interrupted. Even the Taoiseach left when he saw who was going to speak.

If the Deputy had to come here to vote some £4 million in subsidies for CIE, he would be telling a different story. He is not having to do that—it is not included in the Bill this year. I was about to deal with some of the things Deputy Dillon said. He has a way of repeating statements over and over again which has the effect of deceiving the people of this country and which gives a false impression of the economy. He said once again that the adverse trade balance in 1962 was £105 million. He likes to use big figures to give the impression that they have some importance for the community.

Deputy Dillon knows perfectly well that from the figure of £105 million must be subtracted the invisible exports such as expenditure on tourism, receipts from foreign investments and other such receipts. The Deputy knows perfectly well that in using the figure of £105 million, he is trying to give the impression to the public that there has been a startling change for the worse in our balance of payments situation. He knows perfectly well that is not true. He knows we have had an almost unique record in the past five years, enabling us to balance our trade as between different years and that we have a far better record than he ever had.

I was amazed to hear Deputy Dillon talking so glibly about a £105 million adverse trade balance. When he departed from office in 1951 he left us with an unmanageable balance of £61 million and when he left office for the last time in 1956 the major reason for the crisis for which his Government were responsible was another balance of payments crisis which was mishandled and not taken care of. So the less we hear from Deputy Dillon about adverse trade balances the better. Of course, he failed to mention that the external assets of the banks have been increasing, that they have gone up virtually ever since we took office after the Coalition left office, when Deputy Norton had to get up in this House and inform the public the available reserves of the community for the purchase of essential goods had so far deteriorated that the most drastic action would have to be taken in reducing imports, making materials for industry more expensive, inhibiting the economic growth of the country. Again, I say the less we hear from those so-called experts the better.

I should like now to refer to one of the points made by the Minister for Finance, that in this debate we ought to accept the general challenge on the question of the burden of taxation which the people have to face in maintaining Government and local government services. It is very difficult for the average man to try to make any comparison in regard to what he has to pay in taxes and rates and what the people in other countries have to pay—the conditions vary from one country to another.

It is only fair we should be asked to issue some reply to the challenge that comes from people who say: "You are taxing the people too much, you are placing too heavy a burden on them, and this will have some effect on the costs of production." The only way we know of comparing the burden of taxation between one country and another is a comparatively simple one which does not involve an avalanche of statistics. It is to compare the total weight of taxation with the total production of the country and in that way we can make allowances for the country which is relatively less well off than others, for countries with small populations as compared with those with larger populations. This is recognised internationally as a good method of comparison. People who have been defending the interests of the less well off people or of the large companies do not complain about this method of comparison. The Fine Gael Party have been complaining about the growth in the cost of Government since 1956. They have been saying that the amount for current services has increased since 1957 by £56 millions.

I do not know of any country where prosperity has grown and where that country has been able to take a very much lesser share of the national cake by reducing taxation. What we have to measure is just how much we are taking from the national pool. These figures have already been given but they do not seem to have been noticed. The Minister for Finance has mentioned them at various times. On the conclusion of this debate, it is a good thing to repeat again that in 1956 which was a year of considerable crisis, of enormous unemployment and emigration, the total amount taken by the Government and the local authorities in that year when compared with the production of the country—goods and services—was just a shade under 23 per cent, 22.9 per cent.

I am informed that this year, if the national income rises by the amount we expect, the total amount we shall take through taxation and the rates we now know will be levied will represent 23 per cent of the country's total value of production and services. There has been virtually no change except that the country has grown very much more prosperous since the dark days of 1956. There is more expenditure and more consumption and, as a result, it is possible to find money for the many purposes for which we require it and which have been elaborated over and over again by Ministers during the course of Estimate speeches and by the Minister for Finance in the course of his Budget speech.

As I have said, I have not seen any country which has been able to do without the money that comes from increasing prosperity. We need not go into it in detail: let us just say that this figure is just under a quarter of the value of the total production and services of the country.

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

I was speaking of the amount taken of the total production of the country in tax and was trying to make some comparisons with other countries. It is a curious fact that this figure of roughly one-quarter does not seem to alter very much from one country to another. It is a little bit more in Northern European countries, a little bit less in the Southern European countries, but we are at least in good company. We can say that the amount taken in taxation and rates in this year and the amount taken next year when the sales tax is fully operative—again, if the national income expands, as we hope it will expand—represents the amount taken by other countries in search of better social services, in trying to find money for better education and in investing money in various products for their State's advantage. There is nothing exceptional in the total burden of tax and of rates levied in this way.

I am aware that you cannot make absolute comparisons between one country and another. However, it is a fair enough comparison. If you look at the history of those countries you will find that countries far more developed than we are, with a long history of independence and privilege in that regard and who have raw materials which we lack, have not found it possible to dispense with the proceeds of taxation and although their national incomes are very advanced indeed they still go on taking something over one-quarter of the value of the people's production and services for their essential social services and other State requirements.

I wanted to mention this because the implication has been made that this is a very heavy burden on the community, but of course every increase in taxation in any form is felt by the community. However, I want to make quite clear to the House and to the people that there is nothing exceptional in the imposition of this tax when it is related to all the other taxes we levy and to the value of the production of the people of this country and the services rendered known as the gross national product. I can say that without any fear of contradiction from anybody because the figures can be examined and studied and those are the facts as I have given them.

Throughout this long debate we have waited for some genius in the Opposition to explain to the House what they propose to do when the taxes on liquor, tobacco and petrol no longer truly reflect the growth of consumption of the Irish people, when they no longer make it possible for money to be found for all the essential purposes that have been described in the course of this debate. Nobody has really suggested any alternative to this sales tax. Nobody has given us any kind of indication as to why, in our special circumstances, we should be virtually the only country in Europe without a tax on ordinary current consumers' expenditure of one kind or another.

Nobody has suggested how we can replace the sales tax with any other form of taxation. Some Deputies have suggested that there might be higher income tax or that more taxes might be placed on industry. At the same time, it has been made quite clear to us that we dare not go beyond the present limits of corporation profits tax which have already been criticised by the Opposition and that therefore we cannot have recourse to that kind of taxation to find the money we need.

We know that the Irish people spent on consumer's expenditure, nearly £40 million more in 1962 than they spent in 1961—a very considerable increase. We know that that has virtually nothing to do with the increase in the cost of living because the increase in the cost of living was so small as to have little effect on the gross increase. We felt, therefore, that there was an opportunity for proposing a form of taxation which is universal in Europe and which has certain satisfactory features—and the satisfactory features have already been fully illustrated by various speakers. I should like to repeat them.

We believe the people want the programme of social and economic expansion to continue. We believe the turnover tax in future will reflect accurately the growth of the national wealth. If people save more as between one year and another and if they save in the right kind of way, it will be possible for us to make use of their savings for capital expenditure. On the other hand, if they spend money, the turnover tax will accurately reflect the increase in the spending and again will enable money to be found for national social and economic development. As already indicated by the Taoiseach, this tax enables a redistribution of the profits of the community at large through their expenditure to be effected. It is possible to find out how much can be given to increased social services each year by relation to the collection of the turnover tax.

As already indicated, the increases in social welfare benefits which will come into operation when the tax commences are in fact more than what is actually required to meet the effects of the turnover tax on the cost of living for those with lower incomes who face hazardous circumstances of life. That has been made absolutely clear. Yet we hardly heard any speaker go into detail in regard to that. We heard airy statements that the increases are not nearly enough, but nobody has given us any specific information to prove that. We claim very definitely that these social welfare benefits are part of a long series of increases that have taken place under Fianna Fáil down through the years, which show that we have a policy of redistributing a proportion of the nation's surplus each year. I might add that if one looks back on the last ten years it will be found that virtually all the increases in social services that have been given have been given by the Fianna Fáil Government. The list of those provided by the Coalition Governments is very small indeed. The greater share has been given by us. Particularly in the case of necessitous persons with families, the increases have been very much greater than the increases in the cost of living. For example, anybody who examines what a widow receiving a non-contributory pension with three to five children receives now compared with 1943, will see there has been a very remarkable increase—nearly double the increase in the cost of living. That does not mean the social services are adequate yet. We are always trying to increase them. They have steadily gone up, and I hope they will in the future.

Again, at the conclusion of the debate we might challenge someone to suggest some way by which the essential items of increased expenditure can be eliminated. We have heard vague suggestions of extravagance in this or that Department. We have had questions asked by Opposition Deputies to try and bring out some elements of extravagance. But if we add all the alleged extravagances together, we find they would not come to £500,000 and would not solve the problem at all. It is obvious from the speeches of Opposition Deputies that they recognise that. In regard to the main increases under social welfare, agriculture, education, industry and commerce, which form the bulk of the requirements for the extra money, we have not yet received from the Opposition any definite suggestions either to reduce the expenditure or of finding the money in some other way.

Deputy Dillon advocated four different methods by which the money could be found, but I have never heard them described by him in detail. If the Opposition are to discuss in a constructive way this very serious decision on our part to institute a new form of taxation, which is already in operation in most other European countries, they should treat the matter with more intelligence and detail. It would have been most interesting and constructive if we could have had a debate on the value of a sales tax in comparison with increase of taxation on all the list of taxes we have at present. But I would not expect very much from the Fine Gael Party, because their reputation for financial acumen has not been very great since the second World War.

If we examine what happened between 1954 and 1956 and all the warnings given to them by us from 1951 to 1954, and if we examine the promises they made at that time as to what they would do if returned to office, we find they had an obsession in regard to taxation and living costs and when they tried to get rid of their obsession on being restored to office, they were not able to do anything about it. All through this debate, I am constantly reminded of the major propaganda campaign of Fine Gael in 1954. There were thousands of leaflets distributed throughout the country and hundreds of speeches made in which they promised specifically to reduce the prices of all the commodities that had gone up in the previous three years and promised to bring down all taxes. They made that the major point of their campaign. It was a campaign which promised to make things easier for the people, but when they got into office the cost of living rose, none of the taxes were reduced and none of the commodities were reduced in price. It was the most silly, superficial election campaign ever run in the history of the country. Looking back on it, I much prefer the earlier type of election campaign when we were at least discussing fundamental issues on which we sincerely disagreed. The campaign of 1954 is a perfect illustration of the superficial attitude of Fine Gael towards matters such as taxation and the cost of living.

Tell us about the recent campaign in North-East Dublin.

I heard Deputy Dillon speak about the increase in the course of this debate. If Deputy Dillon looks at the whole increase in the cost of living from 1954 to 1963, he will find there was an increase during the three years the Coalition Government were in office and that the increase since then, worked out per year, has been very little different—just a shade higher than it was during his three years of office. Deputy Dillon knows very well that increases in the cost of living relate in many ways to what is going on outside us. If we look at the increases in the cost of living in the countries of Europe since 1957, we find that the increase that has taken place here is nothing remarkable. It does not indicate a lack of attention by the Government to the problem of inflation.

We want to make sure we can increase productivity in industry and agriculture here. The increase in the cost of living is something that compares favourably with increases in the countries with whom we have to trade. The reputation of the Fine Gael Party for predicting reductions in the cost of living and taxation is so poor, that I think the less we hear from them on that subject the better.

Deputy Corish said that when we used as propaganda the statement about putting husbands back to work, it was a lie, that we did not do so. The Deputy seems to have forgotten the appalling unemployment there was at the beginning of 1957 when some 97,000 people were out of work. He seems to have forgotten the growth of employment that has taken place in industry since then, the growth in the national income and the real living standards of our people. He seems to have forgotten that actual agricultural income per person went down during the three years of Coalition Government and has gone up by about one-third since then, not quite as much as industrial income. There was very serious unemployment and mass emigration from Dublin city in particular where we used that propaganda, during the Coalition Government's term of office. He seems to have forgotten the great change that has taken place since; that there were a great many Dublin Corporation flats vacant in the two years following the Coalition Government as a result of their mishandling of affairs and the great change that has taken place in that respect. There is a new and tremendous demand for housing accommodation in Dublin, quite apart from the unsafe buildings, a demand from an expanding community, expanding in economic growth since then.

We have heard so often from Deputy Dillon about the 100,000 jobs but no member of Fine Gael has yet had the decency or honesty in making that statement to give credence or respect to a statement made with tremendous publicity by the Taoiseach four months before the general election that the previous calculations made by the Fianna Fáil Party in regard to what could be done with the given amount of capital and the blueprint made for finding 100,000 jobs would require drastic revision; that it was not to be taken as valid because the country's financial position was deteriorating so rapidly that if Fianna Fáil were returned to office, they would have to make a fresh appraisal of the position.

When did he say that?

That speech of the Taoiseach, then Deputy Lemass, was published as a special supplement of the Irish Press in October, 1956. Yet, we have been plagued with this deceptive propaganda from Fine Gael ever since about the 100,000 new jobs as though, having written and designed the blueprint to show how the nation could advance, much of which still remains valid, we never took steps to warn the country of the results of the three years of Coalition mishandling and never warned them that we would have to re-examine the position when we took office. However, we can take it that one of the features of Fine Gael propaganda is endless repetition of the same alleged facts for some rather obscure political purpose.

Deputy Dillon referred to the need for better educational facilities. He had better look at the bill of the Department of Education and the cost of education during the Coalition Government. It has gone up from about £13 million to more than £20 million, nearly double. Apparently, he was not paying much attention to education then. He spoke of the need for assisting farmers but we are spending two to three times what was spent by the Coalition in their last year of office on agriculture and its aids. We wait in vain for someone to criticise the main features of the agricultural programme in the Programme For Economic Expansion. We hear complaints and lamentations from Fine Gael but no real criticism of the main features of the programme. The only proposal I have heard from Deputy Dillon in the past two years was the proposal for an extension of credit facilities for farmers and an increase in the number of farm advisers. His Party were in office at the end of the war and again at another period and never even thought of tackling one great problem of finding a marketing system for our milk and pig products. It was left to us to do rather late in the day and we had to make some effort to establish marketing boards for milk and pig products. There was no mention of it in the Coalition time.

What about CIE?

The turnover tax and the arrangements that have been made not to tax commodities directly used for production purposes was inevitable under the circumstances. Under this Government the tax will be used wisely for the regeneration of the national economy. Our decision to establish a programme for economic expansion was good because it enabled the people to see what our plans and hopes were and how we were dividing up the available capital for various productive purposes. It enabled the programme to be criticised constructively——

It enabled 300,000 people to go to England.

One of the major successful results of the Programme for Economic Expansion is that there was practically no criticism in detail of it at any time by the Opposition. The major features of it were accepted and we could say to would-be investors in industry from abroad: "Here is a programme which sets out how we believe the nation should advance, how it is proposed to allocate money. You may take it no matter how ferocious the debates may be in the Dáil it is a document representing the opinions of the vast majority of the people since there has been no effort by any Party to criticise it as a whole. On occasions, on Estimates, they may have criticised one or other point but they have not questioned the validity of the document or suggested it was not the right approach to the national economy."

We are now about to publish a Second Programme For Economic Expansion in which our hopes for the next five years will be fully elucidated in every field of national endeavour. Perhaps we could get more constructive criticism from the Opposition on this occasion and be able to say once more that the programme is generally accepted because nobody in the Opposition has tried to tear it to pieces or deny its general validity. If we can do that, perhaps we can look forward to the turnover tax and the national capital which the State finds each year being used to good purpose in the future.

This debate is remarkable not only because it has been used to depart from the generally accepted procedure of discussing on the Fifth Stage of a Bill the actual contents of the Bill but also because it is being used by the Taoiseach to distract, by the introduction of extraneous matter, the people from the actual effect which the Finance Bill will have on the economy of the country and on the economic and social life of the community. I want to emphasise that there is so far as we are concerned and, I believe, so far as other Deputies in the House are concerned, no disagreement between ourselves and the Fianna Fáil Party on the aims. Where we differ is on the methods to achieve those aims.

There is general acceptance of the objectives of stimulating a high rate of national development, of producing by Government intervention and action economic growth and expansion, of aiming at a high level of employment, improved living standards, reducing emigration and maintaining a reasonable balance both in trade and in our balance of payments. All these objectives are subscribed to and accepted by Deputies in every part of the House. Where we differ is on how to achieve these objectives and, in particular, on the failure of Fianna Fáil to implement in practice the promises that were held out during the last election campaign. During the earlier discussions on this measure references were made to the policies and statements which the Taoiseach made when in opposition. It is not sufficient for him to say that the Opposition are against raising the money to pay for the proposed expenditure because we have expressed our willingness to provide whatever money is necessary for the essential services for the running of the State and for the provision of social welfare, health and other necessary public expenditure.

We differ from the Government on the proposed turnover tax. One of the reasons we advance against this tax is that it will nullify to a very considerable extent the views expressed by the Government when they introduced earlier this year what has been known as the pay pause White Paper, and we believe that if price stability is to be achieved, it cannot be achieved, on the one hand, by giving some increase in social services and, on the other hand, substantially increasing the cost of living by direct Government action and intervention.

That view is not peculiar to this side of the House. I want again to quote what the Taoiseach, then Deputy Lemass, said in 1956 when he spoke in the Dáil during the Budget debates of that year, as reported at column 621, Volume 157, of the Official Report of the 17th May, 1956:

I think it is true to say that most people who have written upon the theory of public finance subscribe to the view that it is desirable that the number of separate taxes should be kept as few as possible, that the State should rely for the bulk of its revenue on a few main taxes and should not try to multiply the number of separate taxes.

There is an obvious reason for that. It is undesirable that the hand of the tax-gatherer should be brought into business. The number of businesses subject to the regulation which is necessarily involved in the collection of taxes should be kept to a minimum. Government intervention for tax-raising purposes in any business always results in waste and is the cause of higher costs as well as of higher prices.

That was the Taoiseach's view when in opposition. It was a view that was reinforced by the booklet Economic Development which was published with the approval of this Government in 1958. When the Commission on Income Taxation considered this matter, they recommended by a bare majority a purchase tax but that purchase tax was to be in substitution for, and not in addition to, the existing rates of tax. In a minority report, indeed a very pertinent report, which was signed by Professor Meenan, he expressed the view that if a tax of this sort were once introduced, it would be merely the thin end of the wedge and that ultimately it would not be in substitution for the existing rates of tax but would become additional to them.

There can be legitimate ground for different views on different types of taxes but where there is no legitimate ground for different opinions is on the application of this tax as applied to four specific types of commodities, food, clothing, fuel and medicines and two out of those four are more compelling than the rest, namely, food and medicines. I believe the effect of this tax will be to raise further the cost of living, and remember that the emphasis in Government statements and in the various comments that have been made by columnists and others has been on the fact that we should aim at price stability. Nobody will disagree with that view. It is a generally accepted aim and objective.

It has been stated here in recent years by the Taoiseach that he thought we had reached a situation in which prices had levelled out. I have been looking at the figures and they show that consumer prices which were reasonably stable between 1958 and 1960 rose on an average by 4.3 per cent between 1961 and 1962, compared with 2.8 per cent between 1960 and 1961. Subsequently, the consumer price index indicated a further rise in 1962 and a further rise up to the beginning of this year.

The need for price stability has not merely been emphasised by those who have considered the matter in this country but has also been referred to by the Organisation for European Co-operation and Development, which published a report in 1961 after the question had been examined by a group of economists. It is entitled The Problem of Rising Prices. The report said:

By having a wages policy, we mean, first of all, that the authorities themselves must have a reasonably precise view, estimated by the best means which they can devise, of the average increase in wages that is appropriate to the economic situation and consistent with stability of the price level. This view will necessarily depend primarily on experience and expectations regarding the longer-run rate of productivity increase in the economy. But it may also have to take into account various aspects of the current economic situation, such as the phase of the trade cycle and the state of the balance of payments. Having such a view, getting it known by the interested parties and mobilising support for it as an objective towards which to work, is the essence of having a wages policy.

The report went on to address itself to circumstances which are applicable to this country as well as to the other member countries of the OECD. Last year, the National Employer-Labour Conference which met and established a sub-committee to consider the matter expressed the view that:

... the central objective of economic policy should be the attainment of the highest possible rate of economic expansion consistent with reasonable price stability and without seriously disturbing equilibrium in the balance of payments.

The effect of this turnover tax will be to raise the cost of living.

Your purchase tax would do the same thing.

It has been asserted by Government spokesmen that the increase in the cost of living will be compensated for by the rise in the social welfare benefits. That is all right, but the social welfare benefits cover a very limited category in the community. They apply in full only to the limited number of recipients who are entitled to the maximum benefits, persons with large young families. There are others outside the social welfare section who will be affected by it. I have in mind the case of a retired person living on a pension, or a pension and a small income from investments accumulated as a result of past exertions. Many such people derive no direct benefit from the social welfare schemes. They are outside the scope of the schemes because of their income or because of their age. They are also excluded from participating in the Voluntary Health Insurance Scheme. There are very many people who will be affected by the rise in the cost of living and who will not get any off-setting compensatory benefit.

Is it not a fact—has it not been demonstrated by experience here as well as in other countries—that what the Taoiseach said in 1956 is correct, that once the State intervenes, once the State directly participates in tax gathering, or the operation of a tax of this sort, it becomes more expensive? On the one hand, you have through the shopkeepers or traders, or directly through the Revenue Commissioners, State action and State interference to raise money, and on the other hand, the State pays some limited increase to the recipients of social benefits, but in the long run, the result is that there is first of all, a rise on the cost of living followed by a demand for wage and salary adjustments. Instead of price stability, instead of the objectives of the pay pause, or the paper entitled Closing the Gap, there will be all round demands for wage and salary adjustments, and in the long run, the economy will be faced with a vicious circle of rises in the cost of living followed by rises in wages and salaries.

Undoubtedly so long as wages and salaries keep pace with the cost of living, it is reasonably satisfactory for those who benefit by it, but what about the weaker sections, the retired pensioners, those who are unable to benefit? Unless we consider the small shopkeeper, the small trader, and the self-employed person, who are unable to compensate themselves for the rise in the cost of living, they are the people who will suffer the adverse effects of the turnover tax.

I believe there is general agreement on the aims of providing better social welfare benefits and a general redistribution of the national income, but how will that work in practice? The recipients of social welfare benefits are not the only categories in the State looking for help or assistance from the State. I am considering in particular the case of those who are looking for houses. I want to compare the record of this Government with the record of the previous Government on the building of houses, not merely in Dublin but in the country as a whole. I have here the figures given in the Statistical Abstract published recently. They show that the number of houses erected by local authorities in 1956 was 4,000 and in 1961, it was 1,400. There was a slight improvement last year but the figures are not yet available. The number of dwellings erected with the aid of State grants under the Housing Acts in 1956 was 5,300. In 1961, it was 3,895. In 1956/57, Dublin Corporation built 1,564 houses. In 1960/61, the figure was 277. Again there was an improvement last year.

The Taoiseach talked about social aims and objectives. One of the most pressing needs in this country is not merely to deal with the backlog of bad housing conditions from historical causes, but to keep pace with the demand for new houses and better accommodation for those who marry and have families, or those whose family circumstances alter and who require bigger and better accommodation. If we take that aspect of Government policy over the past six years, we find that they are not building as many houses as were being built in 1956/57. There was considerable criticism then that we were not doing better and that we were not building or reconstructing as many houses as were necessary, but at any rate we were proceeding in the right direction.

If we take employment, we find from the figures published in Economic Statistics issued prior to the Budget this year that in 1956 there was a total of 1,127,000 in employment. In 1962, the figure was 1,068,000, a drop of 58,000, not to mention the numbers who have emigrated in the interval.

Everybody subscribes to the view that State intervention should be undertaken in order to provide employment and to supplement, or assist, where private enterprise is unable or unwilling to provide the necessary remedy. In that regard, it is essential that we should examine carefully what has been done. It is necessary to have regard not merely to the employment provided but also to examine critically whether value is secured for the State expenditure involved. In this it is, I believe, possible to take an objective view because all Parties have been responsible for and directly concerned in the State expenditure involved. It is equally important to recognise that political considerations sometimes operate as reasons for the expenditure involved.

I have taken a note of a number of State projects undertaken either directly by the State or partly by public or individual financial investment and partly by State investment. If we examine the expenditure incurred and compare the projects initiated over the past five or six years and the return on the money invested, we will find, I believe, that a very considerable proportion of the expenditure incurred has been both unproductive and unsound. In that regard, I noted recently that the monthly review on banking issued by the Standing Committee of the Banks commented on the fact that the forces pushing up expenditure were irresistible, expressed the view that money had to be found, and the turnover tax was the answer.

It is easy to speak of forces being irresistible if there is no regard to the particular purposes on which the money is spent and equally easy to speak in facile fashion about the turnover tax when the persons concerned are themselves excluded from it. Banking is excepted and one has, therefore, to dismiss to a considerable extent the views expressed by some anonymous writer in that article. It is all right to apply it to the other person; as long as it does not apply to me, there is nothing wrong with it. If we examine the money that has been invested, we find some rather interesting results.

Now, I do not seek to avoid the commitments into which we entered in respect of Avoca, but during our period the investment was by the Canadian interests involved. Subsequently we approved the Government proposal to continue expenditure there in order to explore and exploit to the fullest possible extent any prospects that existed. If, however, we take Avoca, the Dundalk Engineering Works, Verolme, all these and others, they can be considered in the light of the volume of public investment involved and the comparable employment and economic prospects held out. It will be possible at a later stage to discuss in greater detail the Verolme situation, and it is unnecessary, therefore, to go into it now.

I believe we have got to examine far more critically than in the past the huge national expenditures that have taken place. If huge national expenditure is undertaken without adequate examination of the prospects, without an adequate assurance that a market will be found for the goods or commodities produced, without a full disclosure of all the facts behind the project, without a full examination of the various factors involved, and full information on the capacity, the skill and the competence of those directly concerned, it is obvious that the forces which are described as "irresistible" will continue. If, on the other hand, public expenditure is investigated critically initially, there will be fewer occasions on which the Dáil will be asked to vote Supplementary Estimates or come to the rescue of particular undertakings or investments.

Investment by the State should be justified by sound reasons based on as full and accurate an assessment as can be made. The greatest tendency here has been to start an undertaking with State aid, either full State capital, or partial State capital and private investment, and, if that undertaking subsequently gets into difficulties, to invest further State moneys in order to rescue it or continue it in operation because of the employment content. Public capital investment is then increased in an effort to salvage or maintain the undertaking. These considerations naturally force up public expenditure, described, as I have said, by some writers as "irresistible".

I believe that in future we must ask ourselves if these investments are justified. Is it not often the fact that because of the employment content and because of political considerations —this applies equally once an undertaking has started — a very grave decision lies with either the Government or the Dáil and the fact is that the situation may be such that neither the Government nor the Dáil can withdraw because of the large numbers employed. It behoves us, therefore, to examine in a more critical fashion State investment and State participation before embarking on what in a number of cases in recent years have proved to be undertakings of which there was no proper or adequate consideration.

We should consider in future whether State investment in other spheres of activity would not give a greater return and a better response. I have in mind such things as housing, drainage, afforestation and, above all, education. I should like to give now the comparable figures for State investment in education to show how little is being done not only over the past few years but over the past 30 years. I find that the sum provided for education purposes in 1930-31 was £4,697,000, or 21 per cent of the total Supply Estimates. Thirty years later, in 1961-62, the total amount for education was £19,500,000, or 13.4 per cent of the total Supply Estimates. As a percentage of national expenditure, we have not, therefore, even kept pace with what was being spent 30 years ago.

It is quite true that a great deal of State expenditure in other spheres increased very substantially in the intervening period. State investment and State expenditure in other branches trade liberalisation to 90 per cent, increased greatly but the fact is we are not keeping pace with—not to mention improving on—the expenditure. Undoubtedly the actual rate of expenditure has increased but compared with the total Supply Estimates expenditure, the proportion spent on education is lower now than it was 30 years ago.

I want to say a few words on the effects of the turnover tax on our competitive position in international trade. One of the effects of the turnover tax will be to raise still further the cost of production and to impair the competitiveness of Irish industry. It is true to say that the comparatively rapid growth of industrial development in some recent years was due to a temporary improvement in the home demands as well as in an improvement in certain cases on the export market. Now, however, conditions have altered very considerably. Costs of production have increased, export demands have dropped and our position vis-à-vis our trade with Britain and with continental countries has altered very considerably.

I want to ask what action do we propose to take on the adverse trade balance which exists between this country and the continental countries with which we have trade agreements. By and large, the pattern of trade between this country and the continental countries, either the Six or the other European countries with which we have agreements, is that the total trade between ourselves and these countries means that we buy approximately £40 million worth of goods each year from them and they buy approximately £10 million worth from us. So far as the trade with Britain is concerned, on a two-way basis, it amounts to £250 million a year. That by any standard is a sizeable sum. So far as our trade with others is concerned, we have had a heavier trade balance over a great many years.

These trade agreements were negotiated many years ago. Some of them have been continued on an annual basis or altered in numerous ways since then, but we have had this experience in the OEEC, and now in the OECD, that we implemented in practice as well as in theory as far back as 1956, and even before it, we initialled the OEEC recommendation and protocol on trade liberalisation and we implemented that not merely in theory but in practice. However, we found—and we have found since—that some of the countries with which we have trade agreements and who in theory subscribe to trade liberalisation under the OEEC auspices took administrative or other action to defeat the objectives of these measures and failed to reciprocate the trade agreements which were made. Notable was our lamb trade with France and our butter trade with Western Germany.

On two occasions at least, we had to make representations in order to get these discriminatory measures modified. We now find the whole pattern of trade is both obscure and uncertain. It is obscure because we cannot see what the future pattern is going to be as a result of the failure of the Brussels negotiations, and uncertain because as far as one can see the Government have decided to remove, unilaterally, tariff and quota protection without any reciprocal advantages from these countries with which we trade.

I want to question the wisdom economically and politically—no matter from what angle we consider the prospect of European economic development in the future—of this country unilaterally reducing tariffs without some quid pro quo in return. As far as we know, there is no immediate prospect of this country becoming a member of the European Economic Community, no immediate prospect of any bilateral or multilateral trading arrangement which will compensate us for any decisions we may take to reduce tariff or quota protection. Here we have available a mechanism built up over a number of years which provides employment for a great number of our people and a great lot of emphasis has been laid on public expenditure and effort by different Governments to promote economic and industrial development by State action and assistance, not merely by State investment through capital or other facilities but by State protection and assistance by means of tariffs.

We have endeavoured to participate in the wider problems of a European Economic Community. In the past, we have indicated our willingness to accept trade liberalisation and implemented it not merely in theory but in practice and we have seen other countries refusing to implement these undertakings in practice, but now we decide unilaterally to reduce tariffs this year by ten per cent and next January to go a further step of ten per cent without any quid pro quo in return. I have no doubt a great many industrialists view this prospect with concern but more important is the concern which must be felt by many employees.

In other countries, schemes have been introduced for the re-employment of labour, for retraining workers and for the diversification of employment of one sort or another and provision had been made in the Rome Treaty for certain facilities, financial or otherwise, to facilitate that arrangement. But we are outside the terms of the Rome Treaty and outside its provisions which may be available, under the Social Fund, or otherwise, to provide these retraining and resettlement facilities and we, in those circumstances, decide to embark on these steps with the risk of serious damage being done to the position of employees, with no compensatory advantage being secured either by training arrangements or otherwise.

I understand that one of the effects of the turnover tax will be to impair still further the competitiveness of Irish industry. It will not merely raise the cost of living but also of production, and one of the problems Irish industrialists face is the position in which they will meet competitors with a far greater market, far bigger capital resources, far greater opportunities of trading as well as a far older industrial tradition. In those circumstances, I question most strongly the decision to reduce tariff protection without any quid pro quo or any reciprocal advantages in return.

The turnover tax will affect severely the wage and salary earners. As I have said, it is easy for the quarterly bulletin of the banks to speak lightly of this matter because it does not affect banking. It is easy to speak lightly of it because they are excluded, but it affects the vast bulk of the people, the wage and salary earners, who have to buy the ordinary necessities of life, bread, butter, tea, sugar, clothes, and who will also have to pay this tax for drugs and medicines. I agree there is a very strong case for excluding medicines from the scope of this tax.

There is something wrong in our sense of values—I can understand the administrative difficulties involved— when animal medicines are to avoid the tax because of arrangements under which agricultural purchases are excluded, while medicines for human consumption will fall within it. Nowadays, the bulk of the medicines are preparations sold pre-packed by manufacturers and are far more costly than they ever were previously. A notable development in medicines has been the rise in their cost. Everyone recognises that people can avoid certain types of expenditure: a person may eat less expensive food, postpone for a while the buying of clothes or some other such necessary and essential commodity, but if people are sick, particularly from serious ilness, the purchase of medicine is inescapable. For that reason, I believe this tax will affect very considerably a number of persons who are not equipped financially to meet the extra bill. I want to express the view that this matter should be recognised sympathetically by the Minister.

When the Taoiseach opened the debate, he referred to the fact that so long as the Government had a majority, they proposed to implement the measure now before the House. I find no fault with that view. I know from experience that the Fianna Fáil Party will cling on as long as possible. Indeed, I know of no other Party here or in any other democracy who have subordinated national considerations to Party purposes to the extent to which Fianna Fáil have done it and will do it.

Has the Deputy forgotten John Jinks?

When you look at the record of the Democratic Party in America under Roosevelt, or the Liberal Party in Canada under MacKenzie King, both astute politicians who sometimes subordinated national considerations to Party advantage, you will find the parallel to some extent of the manner in which Fianna Fáil operate. They have always endeavoured to identify Party as distinct from national interest in that operation, and, of course, it has the effect of being more compelling and more appealing when done in that way. The fact that democracy and parliamentary institutions function here as they do is due in very large measure to our Party in the past.

Indeed, in the years gone by, those who represented our Party can claim —I have no doubt history will accord the major share of the credit to them —not merely courage and determination but a selfless devotion to the interests of the Irish people which won the approval of all who witnessed their achievements and, indeed, the admiration and respect of their opponents in Ireland and elsewhere. It is only legitimate and right that we should discuss all the merits or otherwise of this question, that these discussions should be carried on as vigorously and strongly as possible.

I have never had the same admiration for proportional representation as some of my colleagues, but it is the system we have at the moment and, so long as it operates to provide this country with a Government, we are entitled to operate it. I believe the people would welcome an opportunity of expressing their views on the proposals enshrined in this measure. I believe the present Government have no mandate, that they gave no indication—in fact, they gave the very contrary impression—to the electorate at the last general election that such action would be taken. The present Taoiseach in 1956 expressed himself as strenuously opposed to the State intervening in the way he is now doing through this measure as a taxgatherer.

He expressed that view, as set out in the report of the Budget debate in 1956. There was no indication at the last general election, or in the report published by the Commission on Income Tax that this type of tax would be introduced. It imposes for the first time a tax on a limitless range of commodities. It will operate in every home and on every individual. No indication was given of its imminence beforehand. I submit that no fundamental economic or social change of that character should be introduced where the Government are not certain of their mandate and not certain of their authority. The only election that has taken place since the general election has been the by-election in Dublin North-East. In that by-election the people expressed emphatically their opposition to and repudiation of this tax. I believe that when the opportunity offers, that repudiation will be emphasised clearly, indignantly and definitely by the electorate as a whole.

On the Government and on the Government alone lies the responsibility for introducing this tax, contrary, in so far as people have had an opportunity of expressing a view, to the expressed views and opinions of the public as shown in the recent by-election, and contrary to the views of the elected representatives who believe this turnover tax is bad economically, bad socially, bad nationally—bad for this country from the point of view of the individual consumers and taxpayers, and bad for our trading position. We seek, and will endeavour to secure at the earliest opportunity, a mandate from the country to withdraw this tax and to carry out a policy of economic and social development designed to raise the standard of living of the people of this country through improved economic and social opportunities, better housing, better health and educational services, and by raising for all our people an edifice through which they will procure improved economic and social conditions for their families.

Roughly 100 years ago, an Irishman in England started an agitation to secure certain fundamental rights for the ordinary people. One of these was the right of the citizens to assemble peacefully and to petition Parliament. It was rather strange to listen this morning to the Taoiseach challenging that established principle and right.

In a way, the sentiment he voiced in connection with the organised objection to the proposed turnover tax was like a voice from the Tory benches of the British Parliament House in the early part of the last century, only phrased in modern Fianna Fáil terminology. It just shows how far people can become removed from first principles and how Lord Action's axiom on the influence of power really does operate when he said that power is a corrupting influence and that all power corrupts. I do not use the term "corruption" in its accepted sense in relation to the Taoiseach but it seems that the possession of power over a long period does develop in the minds of men who hold power an insidious belief in their own infallibility. We had a demonstration of that here today. A man of great acumen and great ability controverted what I believe and what most people accept to be fundamental democratic principles in his criticism of the agitation which has gone on outside this House against the proposed tax. To quote his own words, he referred to the improper pressures of outside groups. "Improper pressures"— I do not know exactly what that is intended to connote.

Speaking for myself as an Independent, I have had no representation of any kind from any outside groups in connection with this tax, good, bad or indifferent. I have not been threatened or cajoled. No attempt has been made to bribe me or to suggest that I should vote one way or another. It has been left entirely to myself. Therefore, I can claim I have examined this proposition coldly and from the point of view of the welfare of my constituents. I have taken a line of opposition to it from the beginning and have continued consistently to do so and will to the end because I believe it to be a proposal which will mean a reduction in the living standards of the majority of the people of this country.

I believe that the turnover tax which is suggested at 2½ per cent will not in fact mean an increase in the cost of living of 2½ per cent but of much more than that. Of all the different aspects of this tax and the possibilities that flow from the proposal, there is one which has not been touched upon at all and which appears to me to be the most dangerous of all and certainly appears to be an inevitable development. I refer to the probability—the certainty in the case of unscrupulous traders, and there are such people— of profiteering at the expense of the people.

I think I read recently that the Tánaiste was talking at some meeting at which he said that the objection to putting the tax on at source—and by source, I take it is meant the manufacturing or distributing level or earlier—was that by the time the tax would become effective in the hands of the retailer it would be up to 3¼ per cent. However, as I see this thing developing, of a certainty this tax will become, even from the moment of its initiation, something which will increase the cost of living from five to six per cent, and perhaps even more.

I remember having an argument recently with one trader on this subject. He told me he would feel justified in putting it up ten per cent. He obviously is one of the profiteering groups to which I have referred. He is not alone. Human nature being what it is, any trader reading the handbook circulated by the Minister and which purported to explain this most involved piece of legalistic machinery would feel he was given carte blanche to go ahead and charge what he liked. He was explicitly told the Minister was not concerned about what items would be increased in price or what prices would be; that it was up to the trader to go ahead and “get what you can so long as you give us 2½ per cent.” Who will suffer except the person who always suffers? Who will pay?

Take the ordinary people, the people living near enough to hardships and difficulties, people such as the many thousands in Ballyfermot who are being forced to pay far too high differential rents out of meagre wages, who are being forced to pay exorbitant bus fares in order to keep relatively well-to-do farmers in a more or less politically happy condition and available for the Government at their call. These people, with the workers throughout the county and the country generally, will be the sufferers because they will be at the mercy of the unscrupulous trader who will take full advantage of the Minister's suggestion in this matter.

The principle of the tax is not one with which I find myself in great disagreement, were it enforced in the proper way. The Minister and the members of the Government and others have been saying to the Opposition, in effect: "What is your alternative, if you think this is wrong? What should we have done in order to get the money?" I would accept the principle of a tax of 2½ per cent being levied on goods at source, by which I mean at the distributing and manufacturing end, provided that food and medicines were excluded. Surely it should be a fundamental principle with us that food should not be taxed under any circumstances, nor should medicines.

These items are the very essentials of life—food for the maintenance of life and medicine for the relief of pain —and should be made as cheap as possible. No deliberate step should be taken by any Government to increase them in price in the slightest. It is socially and morally unjustified. This tax will become a runaway tax in the sense that it will be completely ungoverned. I would have had no objection to it were it imposed on the manufacturer, had these things been excluded and had machinery been provided to ensure that the 2½ per cent would be tightly controlled and that there would be no possibility of profiteering by the distributor or the manufacturer. But here we have unbridled licence being afforded to the traders. That is a bad thing. It is asking too much of human nature that people should simply seek the 2½ per cent and no more. We know from experience they will go much further than that. In order to keep their records, a number of firms could probably justify adding a half per cent or one per cent for expenses. Of course, it will go a much greater distance than that and the tax may very well be disastrous.

The question of inflation has been mentioned. Of course, that is inevitable. This is an inflationary move. It will provoke wage demands. It is hardly to be expected that the working people, who carry this country, will take this lying down when they find that when the tax comes into operation, their wage packet is reduced. I submit that a man in the city of Dublin with an average wage of from £10 to £11 per week will find his purchasing power reduced by almost 10/- a week. It is not to be expected that Dublin trade unionists will grin and bear that, nor should they be expected to. What little prosperity some sections may be enjoying today is long overdue. It is a very marginal prosperity and one that should not be interfered with. It is confined to a small section of the population. The vast majority of the workers are still living more or less from hand to mouth. They are facing very high rents. This has provoked a great deal of opposition.

The Taoiseach talked about this tax as being essential for the improvement of social services. That line of argument has always been followed by Governments seeking to obtain money. It has been my experience over a number of years in this House that when measures are brought in to obtain money, the excuse is given that we must improve the lot of the social welfare classes. But what has been done for these people has been miserable. It is something we have every reason to be ashamed of. I have no doubt that the half-crown for the old age pensioner has become with Fianna Fáil — and I suppose with other sections of this House — the accepted standard. No matter what amount of money will be obtained by this tax, it does not appear to me there has been any change in the attitude of the Government as far as their approach to the problem of the old-age pensioner is concerned. I am not to be convinced that the proceeds of this fantastic operation — the extraction of this money from the pockets of the working people—is going to benefit the social welfare classes at all.

I feel the Government have made a grave blunder in this. It is obvious from what the Taoiseach has said that he intends to maintain power until defeat in the Dáil. As a very experienced and able politician, he realises that if he went to the country now, the Government Party would come back in a very attenuated form. Whatever high idealism he may seek to attribute to himself and his Party in pursuing this line of maintaining power in such a marginal fashion, the people outside see it in an entirely different light, and indeed in its true light. They feel the country is holding on in the hope of better times, in the knowledge that if they were to go to the country now, they might be out of power for many a long year.

The final auction has started. Already, surely a very high price in words has been paid for this Finance Bill. But still the bidders are here, prepared to go further. I heard some extraordinary statements this morning and last night. Last night, we had Deputy Costello in terrible trouble over what was going to happen to all the foreigners going to come to this country. He forgot until after he sat down that he should have talked about the natives. This morning, we had Deputy Dillon defending the gombeen men once again and hoping once again to impress some of them. Later, we had Deputy Cosgrave in trouble over foreign trade—over the lamb trade with France. He forgot to mention the new land trade with Egypt which one of his Senators has started. He did not say a word about that. It is nice to see a new industry has now been started in Longford-Westmeath. Along with all the others imported, we now have one from Egypt to improve the situation there.

Deputy Dillon and Deputy Corish held out at length about the housing situation here in Dublin. They said there was a surplus of houses in 1956. If there is one house in a place and no person for it, there is a surplus of houses. That was the position in 1956. If there were houses built in Dublin in 1956—I do not know whether they were or not—there were no houses built in my constituency during that period because they gave us no money. As a member of Mayo County Council for a long number of years, I have good reason to know. In December, 1956, the Government owed Mayo County Council practically £1 million. If they had as much money to spend on houses as they want us to believe, it is surprising they did not think it worth their while to pay Mayo County Council the money to which they were entitled. It was paid over immediately there was a change of Government in 1957.

I admit there was a surplus of houses in Dublin in 1956 and 1957 because I saw the people running out of Dublin. I saw 600 houses vacant in a small area. The people had baled out and there is no use in trying to fool the people or fool ourselves. I saw people going in the middle of the night. They owed money to the corporation and had nothing to pay it with because they had no work. That left a surplus of houses.

I heard talk of the necessity to produce some sort of small coinage to meet the 2½ per cent on low-priced articles because there was not enough farthings in the country. When these same shopkeepers were charging £5 for articles worth 30/- and 30/- for a lb. of tea and 30/- for a 2/- bicycle tyre and 10/- for a 2d. jar of vaseline they were able to get sufficient big coinage to make these deals but nobody here alluded to that. They will get the small coinage as readily as they found the large coinage when they made their ill-gotten profits for which they are now afraid they will be brought to book and may have to pay over their ill-gotten gains to the Revenue Commissioners. That is all that worries them and their defenders on my left.

I am glad that I have lived to see the day in this country when the rich men are marching, not the poor. That is certainly a big change when we see the gentlemen marching who defrauded the Revenue Commissioners for years. Today some of them make out they did not get the letters in time or there would have been more of them out. The "wise guys" kept out of it; they did not march but they sent out the crowd of fools who were daft enough to march for them. Surely the ordinary citizen is only laughing at us. When anybody here says the ordinary people are behind that march they must know that it is the Fine Gael branch members who are behind it. That was the case in my constituency where my opponent went out last week and the week before when he thought he was going to bully me and Deputy Sherwin into causing a general election, even though there is nobody in Ireland more afraid of a general election than he is.

Somebody sent me a postcard yesterday from Dundalk. I presume it was sent down there from here to be posted. It says "Dear Judas, how many pieces of silver did you get for voting the way you voted——

That came from Hume Street?

I presume it did. I wonder who offered the pieces of silver? It was the people organised by Fine Gael who offered me the motor cars and all the rest and I refused to have anything to do with them. I never even discussed the matter with any member of Fianna Fáil or the Government. I have a completely clear conscience. The other gentlemen did offer me silver or money and all the cars I wanted for the election and gave me to understand that I was sure to head the poll. But who belonging to me could live in the country in the future if it could be said that they bribed me and got away with it? No man will bribe me or get me to change my mind.

I was elected to represent my own constituency and I know what the position was there about 1956. There was not an employed man, no industry or anything else. The power station was gone and the Bord na Móna works. They wiped out the grassmeal factory. Deputy Dillon has already said it would be his first concern if he gets into office to close it down again. The people of the area want that industry there and whether Deputy Dillon likes it or not, he is not going to move it or any other industry as he did before. He closed down the grassmeal company on a former occasion because a certain Deputy of his Party happened to be a director of a grassmeal company in the east of Ireland. If that is untrue, one of his present Senators is wrong because he made that statement. He wants nothing for the west because he knows he could not possibly be elected in Mayo. As they say about foxes, if they keep far enough from their den, they may get away with something. Let him talk for the people of Monaghan if he wants to, but I am talking for the people of Mayo where his Party were given an answer already.

You will not be talking for them for very long.

Those who criticise the turnover tax have criticised every other tax, good or bad, because it was introduced by this Government. They never introduce anything. They have not the imagination to do it. So long as you do nothing you cannot be criticised but if you do anything you stir up a hornet's nest. Fianna Fáil are the only progressive Party in the State. In 1932, after years of native government, there was not a house in the country or anything else. The only thing Fine Gael ever talk about is the Shannon Scheme and they would not have that only that they got the Germans to do it. Any progress that has been made has been made when the Fianna Fáil Government was in office.

We may fool ourselves but not the public: where is the alternative to the present Government? If there were an election tomorrow, some of the Fine Gael Party would have heart failure. Deputy Sherwin and I would have some chance of forming a Government compared with the chance they would have. If they said they would go into a Coalition, nobody would vote for them because they would be a coalition of two opposite policies. Surely Labour cannot follow Fine Gael because Fine Gael are the most conservative and reactionary Party in Europe, apart from the Unionists in the North. Even if they put up enough candidates to form a Government, they could form nothing and there would be no Government. They are too well known now. I do not need to go into the prospects of the other Parties, the twins or triplets. There is no Opposition Deputy with any alternative to the present tax. They may say: "We are not supposed to tell you what we would do but you are wrong." How do we know we are wrong when there is nothing to compare? If they have an alternative, they should mention it and that is the only way they could impress people. Why not stand up and say what is right and maybe you would convince the people?

My attitude is that I have to defend the rights of the people who elected me. I would not be fair to the people who elected me if I took the side of the rich people, the gombeen men. It is scandalous to see people defending a crowd of chancers and racketeers, purely and simply on the grounds that these people have made false returns and are afraid anybody will go back over their accounts. It is not Section 48 of this Bill which is worrying them but the section in which the Revenue Commissioners have been given power to go back over three years. If I had anything to do with it I would go back to the time they started, during the War years, when they made their profits, and make them repay their ill-gotten gains. It is not £1 million the Government would get then but £6 million or £7 million.

There is not an ordinary worker in this country who would not laugh to see that money being collected because I know poor workers up to their knees in the bogs who are earning £6 to £7 10s. a week and who have to pay income tax while rich people by making fake claims can get away with murder. Some of the claims made by these people would run the furnaces of hell for a year not alone an ordinary business. I know a case where an auditor from Northern Ireland was even brought into court to swear a public house was making a loss when, in fact, it was making a profit. The judge did not believe that because being a publican himself he knew no publican was running his establishment at a loss for the benefit of the public.

Opposition Deputies try to convince us they are anxious about the tax on medicine and food but they are interested only in the effect of these provisions on their pals because within the next 12 months the bottom will have fallen out of their bucket and these people will have to pay their fair share into the revenue. As has happened in other countries, the Government that has introduced this measure will be on top.

The ordinary people are not worried about this tax. In my own constituency the people who have contacted me in this regard are all traders and many of these traders had hardly shoes on their feet in 1939. The decent trader has no complaint because he has kept accounts and he has been honest. Even Fine Gael's chief organiser in north Mayo defended me because he is a decent honest man, an unusual thing in that Party. It was very hard to understand RGDATA going around saying shopkeepers were charging too low a price for their commodities, and pursuing a policy of price fixing. How is it that in TODCO a tin of vim is advertised with 4d off and there is 3d off a bottle of sauce? If these people can reduce prices by that amount, which is a lot more than two and a half per cent, and still make a profit, what percentage of profit must there be when the normal price is charged for such commodities? There must be a colossal profit in goods in Ballaghaderreen when two articles of underwear could be sold for the price of one. The same applies to places selling two bottles of stout for the price of one. One would want to be making a huge profit on a bottle of stout in order to be able to do that. This is a fiddle and it is time it was exposed.

What has been going on here over the past three months is pure hypocrisy and the people who have been defending the big shots have no more interest in the ordinary workers in this country than I have in what is at the back of the moon. This is the best tax that was ever introduced and nobody but the frauds will worry about it. I can buy a pint in Belmullet for 1/4d. while in Dublin it is 1/10d. Do I argue about it? That is a lot more than two and a half per cent and in the Dublin house, you cannot drink it at all. It is like sour buttermilk.

I can justify my position before the people of my constituency. I have the gumption to stand up amongst the people in my county to be elected. I do not have to go to another county amongst an anti-Irish gang to be elected, and the man who will put me out of that constituency has not yet had the baptismal waters of the Catholic Church put on his head.

One thing is quite clear from the speech we have just heard, that the decision I made in September, 1954, when that same person came to me to look for a job, that he was not fit for the job for which he was looking, is clearly and amply vindicated.

The Deputy gave four jobs in one week on my behalf.

The Deputy came looking for a job from me and I decided he was unfit for it. I am glad to know that I was right.

The Deputy is bringing this to a low level.

What have we been listening to?

It is clear that I was right. Fianna Fáil think rules are grand, so long as they suit them, but when they cease to suit them, Fianna Fáil believe in throwing them entirely overboard. That was evidenced this morning by the Taoiseach's approach to this discussion. However, I welcome the fact that he made his speech in that way, because I believe the more that speech is publicised, the more it is read, the more it is understood, the more it will sound the deathknell of Fianna Fáil.

That is what the Deputy thinks.

That is what I know. That speech was made in an effort to stimulate the flagging morale of the Fianna Fáil Deputies. It was made to gather them together and to soften out and straighten out the discontent that is not merely written all over their faces, but which we hear up and down the country amongst their own supporters and their own Deputies.

(Interruptions.)

I know that was the purpose of the Taoiseach's speech this morning.

Do not be too disheartened.

I am greatly heartened by the fact that the more that speech is read, the more certain it is that it will turn even more people away from Fianna Fáil.

What a hope.

Since this debate started on 23rd April, every week more and more people have turned against the financial proposals of the Minister.

The Deputy must not have been reading the papers.

(Interruptions.)

The manner in which week by week the indignation against the proposals made by the Minister on 23rd April has grown in volume and velocity has been very noticeable.

You are losing votes everywhere.

I know the Deputy is very worried about the position in North Tipperary.

I am not a bit worried.

I know the Fianna Fáil Party are very worried about him.

I would take the Deputy on anywhere.

He is very worried about the Party as well.

(Interruptions.)

Let him get on with the pep treatment.

It is clear that the feeling against these financial proposals has been growing week by week. It started in reverse to the usual procedure because of the deliberate misrepresentations of Fianna Fáil. If in the beginning they had endeavoured to tell the truth—if the Minister had told the truth—the tax might perhaps have had some chance of being accepted for a while, but we had one Deputy saying the tax would be borne by the shopkeepers alone, we had another saying it would be met by the consumer and we had the Parliamentary Secretary to the Minister for Lands saying it would be put on luxuries only, things like fur coats; we had other Deputies saying the ordinary people would not have to pay it and, as part of a deliberate policy of duplicity by the Government, efforts were made to try to hide where the brunt of the tax would fall.

At long last in this debate, it has been admitted by the Minister that it will fall where we always knew it would fall, on the backs of the consumers. It was inevitable that if it was brought in—in an expenditure in the current year of just under £63 million —it would fall on the backs of the public. It was so constructed that it would have the effect not of promoting the economic growth about which the Taoiseach spoke this morning, but of retarding that growth, preventing expansion, increasing the cost of living, increasing the cost of an already high cost economy, affecting our competitiveness in the export market, worsening our already precarious position in relation to the balance of trade, and generally turning the whole economy into exactly the reverse direction from the direction about which we heard this morning from the Taoiseach.

Undoubtedly, the attitude adopted by the Government has had the effect of shaking the confidence of the country—not of shaking their confidence in the Government because that confidence was "shook" long ago—in economic growth for the future. It is believed by those who have given thought to our future problems that this Budget and these financial proposals are not a firm or sound basis upon which that growth can be built. We all know they are not a popular basis. That is obvious. It is clear beyond question that the people regard the Minister's Budget proposals as being the nearest thing to the proposals of the devil as could be imagined. Apart from that, the long-term view is and must inevitably be that these measures which we are discussing will not promote economic growth.

There are apparently no arguments the Taoiseach or any other member of the Government can adduce in relation to the display of popular feeling except that anyone who does not agree with him is automatically anti-national and automatically looking for a bloody nose.

Progress reported; Committee to sit again.
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