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Dáil Éireann debate -
Tuesday, 21 Apr 1964

Vol. 209 No. 1

Committee on Finance. - Resolution No. 11—General (Resumed).

Debate resumed on the following motion:
That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance—(Minister for Finance).

The Minister for Finance, towards the conclusion of his Budget Statement—as part of that conclusion—stated that the purpose of the Budget was to favour saving, to increase investment and to put a slight brake on consumption. I hope to demonstrate that none of these intentions or purposes is capable of fulfilment through the methods adopted by the Minister in this Budget. In fact, it appears to me to be quite plain that this year's Budget is the one acknowledged child of conservative finance and is, in fact, in its purpose and its intention, and in its effect, intended to be deflationary.

In listening to the Minister reading his statement, I was struck by the extraordinary conservative pattern which evolved as he went along. The method adopted by him in the reading of his statement last week brought me back to the years before the change in the form of presentation of the national accounts effected by the first inter-Party Government when they divided the national housekeeping into current account and capital expenditure. The Minister's way last week seemed the old way. You had a very slight indication of the economic situation of the country at the time the Budget was being introduced. You had the account of expected revenue and expected expenditure and how the Budget balanced or did not balance. If it did not balance, the deficit was to be provided in a certain way from certain taxation. You had proposals in this Budget for taxation to meet the provisions of the Budget, winding up with the conclusion to which I have referred. All that appeared to me to be quite conservative finance and it appeared to me on still further examination that the entire purpose of the Budget is deflationary and that it will not succeed in carrying out the declared purposes the Minister set out in his conclusion.

One of the things that has most disappointed the public—it is not only disappointment but a certain degree of wonder—is why it is that in view of the increased revenue which, year after year has been going up by millions of pounds, they have been able to read in the newspapers for weeks, if not for months, discussions on the Minister's problem—what sort of problem he had and what success he would have in the way of relief from or increases in taxation. They were taken through the figures that appeared from time to time, indeed very frequently, as to the condition of the public finances. They were told there were millions of money there for them to get something out of.

They found out that the revenue, the money that was coming in from taxation during the past three years, had each year increased steadily and they began to wonder what they would get. Both from the Budget discussion of last year and also from the figures produced in the newspapers this year, the public began to anticipate all sorts of benefits. The figures in Table V of the current Budget tables show that in 1962-63 the actual revenue for the year was £163.478 million. For the following year, it went up by nearly £21 million to £184.419 million, and the following year—this financial year just ended—the revenue went up to £208.350 million, an increase of nearly £24 million on the previous year.

The ordinary people, looking at that position, with the revenue from this small country through taxation amounting to £208,350,000, thought they were entitled to expect that some benefits would ultimately accrue to them, particularly having regard to the fact that Ministers, their advisers and economists, were stating most emphatically that this country was not merely on the high road to prosperity but had almost reached what could be, in the course of a few years, the peak of prosperity. The situation presented to the public, then months before this Budget, was that of a prosperous country, a small country yielding £208,350,000 in taxation to the Government, not to talk of local taxation and the amazing amount of money that has been extracted from the people through the instrumentality of that type of taxation.

The public generally thought they were in for a Budget this year which would give them great benefits. They have been gravely disappointed. If Deputies will cast their minds back to round about this time last year, when the Budget of last year was introduced, and when the Minister imposed for the first time the 2½ per cent turnover tax, they will remember the position. What was the position then presented to the people? The public, of course, resented the tax and that resentment was shown in various ways and in different directions. The Minister and his colleagues, here in this House and outside it, sought to justify the imposition of the tax on the grounds that it was the desire and the object of the Government to have a proper system of taxation as the, and I quote, "keynote" of the case made by Ministers and their colleagues behind them. That was the "keynote" referred to by the Parliamentary Secretary to the Minister for Lands, Deputy Lenihan, at column 594 of volume 202 of the Official Report:

This new method of taxation shows that the Government are very much alive to the necessity of reforming our taxation system and of ensuring that we have a balanced taxation system which will yield to the revenue the funds which will be necessary, I believe, to an increased degree for the various aspects of Government expenditure if we are to plan for the future.

Note the phrase "necessity of reforming our taxation system". In that connection, one must refer back to a phrase used earlier by him at column 590. He said:

It is obvious to anybody who looks at taxation figures in a realistic way that the traditional items of taxation have reached their limit in regard to further traditional taxation.

This was the backing the Government case had last year for the imposition of the turnover tax. It was a method they were adopting as part of their object in showing that they realised the necessity for reforming their taxation system and ensuring a balanced taxation system. In order to do that it had to be recognised that the traditional items of taxation had reached their limits.

No more taxation could be got from beer, spirits, petrol, or even income tax, according to the principles laid down by the Parliamentary Secretary. That was the case put to the public and the case was reinforced by the further submissions made here and elsewhere that this 2½ per cent tax was necessary, indeed essential, not merely for the purpose of getting a balanced system of taxation but also to provide funds which could no longer be provided by the old traditional system of taxation since that system could no longer be relied upon to produce year by year, over the years, a steady source of revenue which would enable the social and economic policies of the Government to be carried out.

We were told last year by the Government and their supporters that the purpose of the turnover tax was to enable the Government to carry out their social and economic policy. That was the justification given to the people last year for this tax and the people believed that, in this year's Budget, twelve months ahead, they would get benefits which would reconcile them to the taxation proposed to be taken from them under the turnover tax. In a not too ingenuous way, perhaps, I asked the Minister for Finance last year, when speaking on the Budget, would he give the House any indication of the purposes to which he proposed to apply the proceeds of the tax in the following year —that is, this year.

We were told last year that some £3½ million would be taken by way of taxation under this turnover tax when it came into operation and that, in the following year, which is this year, there would be some £10 million or £11 million secured. We know now it will be far more than the estimated £10 million or £11 million. It will probably be £12 million or £15 million. At all events, I asked the Minister how he proposed to apply the proceeds of the tax. He had a balanced Budget and he would have £5 million to £6 million, at a conservative estimate, the following year, and what did he propose to do with it.

I was bold enough to draw the Minister, knowing very well—in fact, I said so—that he would not answer the question. I gave him certain suggestions of my own as to how he could apply the proceeds of this vast amount of money available to him next year —that is, this year. I mentioned old age pensioners and public pensioners and, my own pet scheme over the years, the abolition of destitution. I put the question at column 408 and I said I thought the public were entitled to know. Deputy Sherwin interposed and asked: "Will it not go back in social benefits?"

Last year, I quite genuinely thought that when this vast amount of money became available this year the Government would be in a position to give very substantial payments to social assistance and other classes in the community, and that they would do so if for no other purpose more dignified or worthy than the purely political in order to sugar the pill and thereby enable the public to swallow it more readily. I genuinely thought that this year we would have quite large amounts given to unemployment, old age pensioners, social assistance classes generally, and that the balance of these millions now available would be used in furtherance of the policy adumbrated by the Taoiseach some time ago of going a little to the left.

That anticipation of mine was shared very largely throughout the country. Indeed, it was put to Fianna Fáil supporters as the justification for this tax in order to get from them their full support. Now there is disappointment at what we have to meet in this Budget. Far from there being any such wide distribution of benefits to those people who most require them, there is only a certain amount of money—a pretty large amount of money, I admit—distributed to farmers and a very small amount to social assistance classes.

While there is grave disappointment in regard to the additional taxation, which is always annoying, on petrol, tobacco, beer and by way of increased Post Office charges, there is even more annoyance and disappointment that what was held out to people last year as being an anticipation this year, benefits to all classes and particularly those classes who most need them, have not been brought about by this Budget. That, as far as I can diagnose it, is the feeling which is most prevalent in the country at the present time.

It is, of course, the ordinary procedure for the Minister, when he is meeting the situation facing him in the coming year, to find out what he can do with the resources he has. He will have to explain to the people why he is doing the particular thing he is doing. I have said that, listening to the Minister's introductory statement, I thought it had a familiar ring about it. It brought me back to the early days of this State up to the point in 1949 or 1950 when the system of public finance was changed in connection with the Estimates for Public Services. I heard and subsequently read what the Minister stated in true, conservative financial fashion, that there would be a deficit this year and that taxation in order to meet that deficit was unavoidable. That is the well-known expression that came from Ministers for Finance over the years: "We have a deficit. It would be wrong to leave that deficit unattended to. It would be bad finance and bad for the country. Therefore, there is no other way open to us but to have increased taxation."

There is nobody on this side of the House who will quarrel with the Minister when he says it would be bad finance in the circumstances existing this year to leave a deficit unattended to. There are occasions when a Minister for Finance should budget for a deficit. There are other occasions when the Minister for Finance deliberately, in circumstances where the country is prosperous, budgets for a surplus, for the purpose of doing certain things which economists and financiers occasionally—and sometimes, in my view, very wrongly—get Ministers for Finance to do.

The Minister for Finance says he is providing for a budget deficit and that the only way he can do it is by taxation. I join issue with the Minister for Finance when he says that additional taxation is unavoidable. I am convinced from a perusal and consideration of the Budget Statement that this was done deliberately by the Minister, not, as he said in one of the concluding sentences of the speech to which I have referred, to put a slight brake on consumption but to put a very strong brake on consumption. In his opinion, if the increased remuneration of 12 per cent, amounting to something like £40 million in purchasing power, were let loose, there would be grave danger of the finances of the country going all wrong because the money would be spent not in savings or upon essential goods but upon consumption goods that would bring no benefit to the country. By means of the taxation that is to be put upon the necessaries of life, the near-necessaries of life and perhaps some other things not necessaries of life at all, he will put a stop to spending by the people of the money they extracted last year.

The 12 per cent increase in remuneration was extracted—if I may use that expression without offence— both because of the increase in the cost of living and because of the increase or alleged increase in the prosperity of the country. The workers claimed there had been an increase in the cost of living but that was not the primary object of their demand for increased remuneration. They felt they were entitled to a share in the increased prosperity of the country to which they had contributed. The 12 per cent increase in remuneration was intended not merely to help them meet the increased cost of living but primarily, perhaps, to give them a chance of having something over and above what was the mere subsistence allowance for workers and public officials. They wanted to have something to rattle in their pockets at the end of the week or at the end of the month, something that had not to be handed out merely for necessaries to keep their families going without getting into debt. They wanted—and they were entitled to it, in my view—to have some little money, if the country were as prosperous as it was said to be, to spend as they liked, when they liked. They were entitled to spend it on consumption goods if they wanted to do that or to save some of it if they wished to do so. In this Budget that choice has been taken away from those people who got the 12 per cent and the Government are saying to them: "We will not let you spend it or save it as you wish. We will take it from you and spend it for you."

That is traditional, conservative, financial policy. That was done in the British Budget this year. The British did it openly and expressly but here the Minister did not say he was doing that. He said he was budgeting for a deficit. In various parts of the Budget speech he referred to risk to the economy—the word "risk" is used by him and repeated by the Taoiseach in his speech—of these increases in purchasing power being let loose on the economy. That had to be controlled and if it were not controlled then there would be increasing costs affecting our exports, increasing costs affecting our industries here in Ireland and an increase in consumption goods causing pressure upon our exports and an unnecessary increase in imports resulting in very great disruption to the economy.

There was a recurring note in the Minister's speech, as Deputies will find if they read it carefully, the risk to the economy caused by the injection into the financial system of this additional £40 million of purchasing power. The Taoiseach had the same thread running through his speech. The Taoiseach did say, however, that there was not much danger from an increase as regards our international balance of payments. I agree there is no necessity to get hot and bothered when it is found out that the international balance of payments is going a little bit high provided certain conditions obtain. That is what the Taoiseach said in his speech but the whole trend of the Minister's speech was that there is danger and risk. He did not say: "I intend to control it" except in one sentence to which I have referred when he said the Budget is intended to put a slight brake on consumption.

In the light of those facts I suggest to Deputies that it is not sufficient for the Minister to say that an increase in taxation is unavoidable. The onus is on him to prove that assertion. I believe that conditions require, and urgently require, that there should be no increase in taxation this year, and that the much-vaunted prosperity we are supposed to be enjoying will certainly be put in jeopardy by this Budget.

The Minister appealed to the workers to save. He said that is essential. The Taoiseach repeated what the Minister had said, that we should correct an adverse balance of international payments by savings. Everyone will subscribe to that doctrine. We have no reason to dispute it, having regard to the fact that we ourselves in our time set up the Central Savings Committee that is doing so much good and to which the Minister offered his thanks in the course of his statement.

The extraordinary thing—perhaps extraordinary is not the proper word; the amazing thing—to me is that the Minister emphasised again and again the necessity for saving and at the same time pointed out that last year small savings fell rather significantly below the estimated amount which it was expected to get from them. As reported in the Official Report, at column 1539, volume 208, the Minister said:

... the net increase in deposits, excluding interest, was only £2½ million instead of the £4½ million expected.

In those circumstances, small savings having dropped by £2 million last year, this year he says to the workers particularly: "You must save. I am doing my best to get the Central Savings Committee to make every possible arrangement so that you can save. Last year I asked you to save and you did not, but this year I am increasing the figure for estimated savings."

In my view, this year savings will be considerably less than the Minister anticipates. What incentive have the people to save now? A 2½ per cent turnover tax was put on last year. This year there is increased taxation, an increased cost of living, increased taxation on beer, which the Minister says is not essential, on tobacco which again is not essential, on petrol which is not essential, and on imported spirits which are certainly not essential. On top of all that taxation, we have an increase of £2 million for the Post Office which will percolate down even to those who do not post a letter or postcard, and affect them either in their wages or cost of living. How could they save in such a set of circumstances?

The real purpose of this Budget is to take from the people who have got this £40 million increase in purchasing power, their capacity to spend it or save it. What is the incentive to save when the more they save and the more they get in wages, the more taxation will be taken from them? There should be some incentive and, instead of increasing taxation, the Minister should have set up some scheme to educate the people who will have increased spending power on the necessity to set apart some savings this year, in their own interest as well as in the national interest. They had no incentive last year and none this year, and I do not think it will be any easy job to get from the people the additional amount of savings required to sustain the expenditure of this country particularly in the capital Budget, or to offer any prop to the balance of payments.

I have mentioned the Post Office. There is one significant phrase in the Taoiseach's speech which I want to emphasise and to which I want to refer Deputies. He spoke about what he intended to do. He said he intended to bring back the Fine Gael Party, and I think he included the Labour Party, to what he called realities. Last Wednesday as reported in the Official Report at column 1781, volume 208, the Taoiseach said:

Deputies in both Fine Gael and Labour appear to be perturbed about the announced increase in Post Office charges. I want to take them back to reality in this.

I am going to bring the Taoiseach back to reality now. Further down in the same column, the Taoiseach spoke about what Deputy Tully was alleged to have said and he said:

The principle that the Post Office should pay for itself and not be subsidised from taxation is not merely sound but as far as I know, has never heretofore been questioned in the Dáil.

I think it should be questioned now. What I want to emphasise at present is the principle the Taoiseach alleges is that the Post Office should pay for itself and should not be subsidised from taxation. That principle rests upon the fact, or the alleged fact, that the Post Office is engaged in a commercial undertaking, or a pseudo-commercial undertaking. If that is so, and if that is the principle that is to be applied, this country is entitled to know from the Minister for Posts and Telegraphs, and from the Post Office itself, that the Post Office is, in fact, being run, and can be run—which is perhaps more important—as a commercial enterprise. Before effect can be given to that principle, we should have some information as to whether it can be applied in existing conditions.

Leaving aside for the moment whether the Minister for Posts and Telegraphs will be able to come to this House and say: "We are running this as a commercial enterprise and can demonstrate that by giving the facts to the House and country," has any consideration been given to the efficiency of the Post Office services such as a commercial enterprise would expect or has any effort been made to effect economies while continuing to achieve efficiency? This House and the country should be satisfied, before these charges are imposed, that the Post Office is being run as a commercial enterprise. The Minister is not entitled to put on this outrageous charge of 5d. for a letter until the efficiency of the Post Office is demonstrated.

If it is not being run efficiently, the Post Office should be transferred to private enterprise and run as a private enterprise, and not as a Government service. If it were being run as a private enterprise, would its customers stand for the charges they are now being asked to pay in this Budget, and were asked to pay in previous Budgets? That is one aspect of the matter that has not been explained. That is bad enough, but let us look at what the Taoiseach said in the same speech. He goes on to say:

There is, I agree, an obligation on the Government to ensure that the cost of these services is not unduly inflated and the Minister for Posts and Telegraphs—

I want to emphasise this particular phrase—

—is now about to initiate a drive for economics in the Post Office.

He is now about to do it. Last Wednesday he started to do it. He had not done it last Wednesday. He had not done it before he was ordered to do it and before he decided to impose these charges.

The interpretation of the Taoiseach's remarks that I have quoted is that no effort whatever was made to see if economies could be effected in the Post Office service before these heavy impositions were unloaded upon the customers of the Post Office. Even on the day of the Budget, the Minister had not done it. He is now about to do it. He is only about to initiate them, according to the Taoiseach. He is now about to do it, now about to initiate.

In that set of facts, it is surely unfair to say that the public who use the Post Office services will have to put up with these impositions on the basis of the principle that the Post Office is a commercial institution when the first thing that should be done and that would be done in any commercial institution would be for the head of that institution to come here and to say: "Before we increased these charges, we had a very searching inquiry into the question of whether it was possible to reduce the charges or whether the charges were necessary and, if so, what?" It may be that because of the necessity to increase charges generally this can no longer be regarded as a commercial institution and that the taxpayer may have to come to its support. At all events, before these charges which are typified in their impact on the public by the charge of 5d on a letter can be justified, it at least ought to be the position that the Minister would come in here and say to the House: "We have seen and taken every care that this enterprise is being run as a commercial enterprise with all the efficiency that a commercial enterprise would bring to bear upon its activities. In that state of affairs, we found ourselves bound, because of conditions existing, to come to the conclusion that there is no remedy other than to increase the charges". Until that is done, these charges in their effect are entirely unjustified.

The Minister said that increased taxation was inevitable. I challenge that. I challenge it because, first of all, I submit that this Budget is really in its purpose and effect deflationary. It is intended to take away portion of the purchasing power from those people who got it last year. It is intended to take some of that £40 million that they got into their hands and put it into the hands of the Government so that the Government may spend it for them. That is unjustified in present circumstances in my view but, whether it is or not, that is what is being done. It is not being done because of the necessity to increase taxation. It is being done because by means of taxation—by that method—this portion of their purchasing power will be taken from the workers and from the public servants and from all the people who got the increase and it will be spent by the Government instead of by the people themselves. That is the purpose of the Budget. That being so, the onus is upon the Government to show why they had to increase taxation in order to meet the deficit. That was not what they were doing. They ought to have shown it, if the real purpose were, as the Minister said, that in order to balance the Budget taxation was unavoidable to meet the deficit. If that were the purpose of the Budget, then he ought to have shown that no other methods were available to him except the taxation he proposed. The burden is upon the Minister to prove that.

I shall indicate a couple of methods by which the Minister could have avoided if not the entire effect of this increased taxation then certainly a large amount of it. The Minister neglected to make any provision whatever for over-estimation in a Budget of this size and in a situation where the amount of money being asked for by public Departments is unprecedented in the history of this country. I think I am correct in saying it is the first time in the history of this State that that provision was not made. Certainly it has been customary over many years.

I remember in the year 1952 criticising Deputy MacEntee, the then Minister for Finance, for his failure to make adequate provision in his Budget by way of over-estimation and I proved it conclusively with figures that could not be contradicted. They are at it again this year. No proper allowance was made for over-estimation in the very drastic Budget of 1952 and there is none this year. The reason given by the Minister for Finance in his statement as to why he did not do it is, in my submission to Deputies here and, through Deputies, to the country, entirely unacceptable. As reported at column 1543 of the Official Report of Tuesday last, 14th April, 1964, the Minister gave his reason for adopting this unprecedented procedure. He said:

There are certain items of expenditure not provided for in the White Paper of which account must be taken.

Then he proceeds to give them:

Certain claims for pay adjustments distinct from the ninth round such as those of teachers and Post Office clerks have been the subject of conciliation or arbitration settlement.

That is the first—Post Office employees and teachers who have had some pending claims for arbitration or conciliation. The Minister does not give the slightest indication of the amount involved. He goes on to say:

Other claims and various minor items have also to be dealt with.

That is all he says—the claims of teachers and Post Office clerks which are subject to conciliation and arbitration agreements. There is no indication whatever, although the Minister must have figures, of what amount is involved. Then he goes on to make vague references to other claims and various minor items. What are the claims? What are the various minor items?

When the Minister was going to refuse to take account, in the interest of taxation, of something in the order of, to use his own words, from £2 million to £3 million that was available to him, one would think that in order to justify not taking account of that money available to him, in order to avoid that increased taxation, he would give some particulars of these other claims and various minor items. It is bad enough to ask the House to take, on his word—a mere ipse dixit—that there are these claims without giving any particulars or giving the slightest idea of the amount involved or letting the people in the country know the relationship between these claims which he says must be provided for and the amounts that he could save by deduction in the ordinary way for over-estimation.

He goes on to say: "I do not know what the extra liability will amount to." He does not know what it will amount to. He faces this country with additional taxation to the order of some £8 million or £9 million. When there is available to him what I believe will be £3½ million or £4 million for reduction in taxation, or to avoid the necessity for increased taxation, he says he is not going to take that into account. He is going to take no account whatsoever of that amount of money. He says: "I do not know what I am going to set against it. You can take it or leave it because it is the prudent thing to do."

I think we are entitled to say that he is neglecting to take into account one very significant source of revenue, or source of saving, if you like to put it that way, for the relief of the taxpayer, already overburdened. That is not an acceptable explanation at all but it does reinforce the submission he made to the House that this is not a deflationary Budget, because with the particulars given by the Minister, we can make our own estimate and will come fairly near whatever it is. Whether we are accurate, or nearly accurate, there has been a surplus on that available to the Minister, as against budgeting for a surplus, just as he is budgeting for taking the purchasing power off the £40 million.

That clearly demonstrates the Minister is not setting himself the task of trying to avoid additional taxation. I have been unable to find anywhere in this Budget statement reference to other methods to avoid additional taxation. The only statement the Minister makes is that further taxation is inevitable. He gives no reason for it. Over-estimation, the year before last, was £3 million, at a time when there was far less in the Book of Estimates. Everybody knows no matter how close the annual Estimates from the various Departments are pared and pruned, and no matter how much they are adjured to pare and prune them, they are unable to spend in the year all they find they want to spend. Experience has shown that there is a considerable amount available at the end of the year because of over-estimation.

I suggest there is another condemnation of the Minister's statement that further taxation was unavoidable. At least some of that taxation could be avoided. He could have given us some estimation of the amount he needed. The Minister could have made use of that extraordinary feature of public finance, the Exchequer balance at the end of the year, the little nest egg that has always been appropriated by the Minister for Finance. We were never able to find out for what purpose it was needed.

It was alleged we found it there when we went into office after a number of years. It is now stated it was £2 million for last year. When Deputy McGilligan was Minister for Finance he made use of that little nest egg. Another nest egg has been added to the public nest egg since Deputy McGilligan's time, and not being used. There is £2 million not being utilised. The only information I could get about what that £2 million was doing there was that it was alleged there might be a general election and there might not be enough money to carry on until a new Government were formed. At least some of that £2 million could have been utilised and not left lying there doing nothing.

The Minister, in the course of his Budget statement, said that he had taken account, in framing his Budget proposals, of the buoyancy of the revenue and also of the fact that there would be increased revenue this year, but he gave us no particulars of that. He said that increased taxation was inevitable. If that is so, then he ought to have given us some indication of how much he could allow for the expansion of the economy and also the amount of revenue due to the additional taxation on the turnover tax and because the 12 per cent increase would bring incomes within the grasp of the income tax authorities.

There is nothing about that source, which could have been at least explored with a view to seeing if it would not provide some method by which new taxation could have been avoided. There was not a single word right through the Minister's speech about economies in the public service. In the course of past years we have had Ministers for Finance carrying out all sorts of inquiries, including an inquiry on economies in the public service, but there was not a word about that at all.

There was not a word about whether it was feasible or not to have any economies whatever and not a word about whether it was possible to postpone expenditure until some better period. Any examination of that kind by Deputies will demonstrate the fact that this Budget was not intended to avoid increased taxation. It was intended for the purpose of capturing the purchasing power that was injected into the economy by the ninth round of wages.

I have already dealt with the Post Office services. At least there should have been an effort not to throw this very heavy burden of additional taxation on large sections of the people, thereby increasing the cost of living with all its consequences. There ought to have been a full scale investigation long before now into the question of whether economies could have been made without decreasing efficiency or doing away with jobs or that kind of thing.

I suppose I shall be most unpopular if I suggest—it is my own personal opinion—that I do not know why we spend so much on the roads of this country. I go down to Cork very frequently in the course of my business. We have vast expanses of country, large quantities of good agricultural land, taken over for the purpose of providing speedways for private motor cars and CIE trucks. Incidentally, CIE get away with it because they were for a long time pretending they were paying their way. Of course, they never took into account the fact they were putting buses on the road instead of trains— buses and lorries instead of goods trains on roads built and maintained out of the Road Fund.

Private motorists had been financing the commercial operations of CIE in an endeavour to bring the CIE revenue and expenditure into line. Do we want all those speedways? I do not know how many millions of pounds are being spent on roadways between Cork and Dublin. At first we had two-lane roadways laid down at vast expenditure of money. At least I thought we would have four-lane roadways in the direction of Cork instead of two, certainly between here and Kildare, that at least they would have done the four lanes at once, that they would not have started and done two lanes and afterwards ripped it up and done four lanes.

I do not know how many millions have been wasted on the roads. I am expressing my own personal view. I make no effort to have anybody else in any way committed to my view. In circumstances where additional taxation is being put on the people, which may disrupt the economy and which will certainly increase the cost of living and cause a lot of hardship, it would be a very good thing if a halt were made on the roads. There is not so much employment on the roads as there used to be. Machinery is being used to a vast extent for the purpose of creating the modern conditions under which these roads are made, and there is no necessity in any way to increase the amount of employment being given on the roads.

Why should there be this vast capital expenditure on the roads when we cannot get sufficient houses in the city of Dublin? I am still being accosted by my constituents coming to me in very great distress looking for houses. In that state of affairs, I find, for the purpose of these big trucks of CIE and for the purpose of keeping going at 70 mph or 80 mph on these speedways, millions of public money are being spent. Although it is called the Road Fund, it is really public money. It is the motorists who provide the money. Motorists, when they have paid the increased taxation on petrol and everything else, do not want to provide money to lighten the burden on CIE, who pretend that by stopping the trains they are doing a good financial job. There are some indications of the ways this should be done.

The Taoiseach and some of his colleagues put up this sort of thing as a smokescreen—"Are you in favour of expenditure, or do you want it cut down?" They throw out the allegation against this Party—I certainly withstand it with all the vigour I can command—that it is a conservative Party. As far as I am concerned, during all my association with this Party I have sought to prevent it from being a conservative or Tory Party. This allegation is thrown out in order that we may get the smear of being a conservative Party, willing to cut down expenditure. I have a quotation here which I do not intend to quote now, because time does not permit it. But we are faced with this: "Are you in favour of expenditure or not? If you are in favour of expenditure, say how you are going to get it by taxation." That is not the issue here. The issue here is: is this taxation necessary? I think I have at least demonstrated in a prima facie way that it is not necessary. I have demonstrated—and it cannot be controverted—that in no single sentence or half sentence in the course of the Minister's speech did he give any indication that he had endeavoured to find alternative sources to the taxation being imposed by the present Budget.

I have criticised this Budget on general principles. I should like to express my appreciation for the Minister for Finance of the five per cent increase he has given in the Budget to the pensioned public officials, who are suffering very severely from the fall in the value of money and the rise in the cost of living since they retired. I appreciate, having regard to the discussion which took place some months ago on the Bill dealing with this matter, that the Minister in this Budget at least gave some token of the fact that he sympathises with these people and gave practical expression to that sympathy by giving them even the small amount of five per cent. It will be taken by them as an earnest of his desire, when the occasion permits it, to give them further increases.

A rather half-hearted effort has been made to call this Budget the farmers' Budget. They got twopence in the gallon for milk. The Taoiseach in his broadcast spoke about how the people of this country were fairminded and how the people in the cities, who got 12 per cent would not grudge the farmers twopence on the gallon for milk—even though butter is going to cost 5/- per lb. and practically disappear from most of the tables of the workers, even though milk is also going to increase and even though meat is at such a prohibitive price that it is almost a luxury for the ordinary people. I speak from the point of view of an urban community, which I represent. They resent these things. It is very difficult for them to accept the proposition—a proposition which has been fundamental to the policy of this Party—that the farming industry is the basis of all prosperity in this country. That is very difficult for my constituents when they find butter disappearing off their tables, when they find the price of milk increasing and find meat almost becoming an unknown luxury except in its cheapest form. But when they realise—as I think they are beginning to realise—that the Minister for Finance did not make any effort to avoid this additional taxation this year, I think there will be very grave resentment at the provisions of the Budget and the imposition of the turnover tax last year.

In connection with his proposals to give additional money by way of rates relief to the farmers, I do not know whether the Minister for Finance read the First Report of the Capital Investment Committee that was given to us in times of far greater difficulty indeed from the economic point of view. That Report dealt with this very point of giving money back to farmers by way of rates relief. The Report is dated the 22nd January, 1957, and I am referring to paragraph 15. I shall not quote it but I shall give its effect. They recommended that moneys already given to farmers by way of relief of rates, or even moneys that might be talked about as to be given to them by way of rates relief, should be taken back and utilised not for relief of rates, but for productive purposes. Did the Minister for Finance or the Minister for Agriculture give any consideration to that?

Speaking as a city man representing a city constituency and the working people and the people in the various grades, higher and lower, in the Civil Service, I do not believe that kind of community would object to the farmers getting relief of rates if indications were that it was going to be of any use. But next year the rates will go up, and the year after, again and again. This will be swallowed up. It would be far better for the farmers and far better for the community in general if the Government had set themselves the task of finding out what is wrong with local government and finding out how it is there has been such a vast bureaucratic institution created throughout the country, dealing with what should be for a small country a comparatively small sum of money.

What is wrong that the rates are going up year after year? We know there is one thing wrong. Deputy O'Higgins of this Party has already dealt with the matter in a practical and very cast-iron fashion. I refer, of course, to the health services. May I, at this stage, also commend the Minister for Finance for taking away the liability of the Voluntary Health Insurance Board to income tax on its trading profits? The Board was prevented from making profits but by some strange manoeuvring of the income tax code, the company that was bound not to make profits found itself taxed and being made to pay tax on profits which they were supposed not to earn. Not merely do I pay tribute to the Minister for taking away that liability from them but I express appreciation far more because of the fact that he had the graciousness, if I may put it that way, to recognise the important functions which the Voluntary Health Insurance Board was fulfilling.

As justification for doing this, he mentioned the fact that the Board was giving a very important social service. Deputy O'Higgins with his knowledge as Minister in the Department of Health has evolved a scheme, proposals based on which have been subjected to expert examination from the financial and other aspects, and it can be demonstrated and, I think, has been demonstrated, that the scheme he has put forward will greatly relieve the rates. The basis on which he proposes to establish this company and the proposals he has, will greatly decrease the amount of money the ratepayers will have to pay. Ratepayers and farmers in particular are paying far more rates because of the increased and increasing demands for health services.

That was one thing that could have been done by Deputy O'Higgins. The Minister for Health never thought of doing that. He did not say: "We have a Committee established under order of this House considering proposals for health services and our aim will be to take the expense of that service away from the rating authority." Proposals of that kind would be far better, and far more practical from the point of view of relieving farmers of their liability for rates—which is what they want—than even the granting of millions of money each year under these proposals.

These grants may indeed prove elusive. It is rather like a cat chasing its tail, trying to get the expenses of the rates down each year while they continue to go up and up and the more you run after them the more they get away from you.

The last observation I have to make is on a point made by the Taoiseach in his speech, very near the end of it. At column 1791 of the Official Report the Taoiseach is reported as saying:

The most futile person is he who asks the petulant question: "Why was this not done long ago."

I commend the Taoiseach's advice to himself and to each of his followers, the Minister and various others who are always throwing remarks at Deputy Corish and various others on this side of the House asking why they did not do this or that when in office. That petulant questioning should be stopped in accordance with the principle enunciated by the Taoiseach. As the Taoiseach said:

Many things are possible for us today which were never possible before, and there are many ideas, born of our own experience or the experience of others, which were not known before.

Yet we had the Taoiseach and the Minister for Finance and other Ministers and Deputies throwing it at us; why did you not do it when in office? First, conditions are different and secondly, we were in office for only 6¼ years while Fianna Fáil have been in office for 26 years.

Hear, hear.

I have avoided as far as I could, any controversy here through going back to justify what we did. Everything we did can be justified and many things we did or did not do have been subjected to untrue statements, innuendoes and false suggestions both in this House and outside. I have exercised, as far as I could, over myself a certain self-denying discipline but when my colleagues and my Labour colleagues who worked with us in loyalty and with great efficiency have these things thrown up against them, I may be provoked sometimes into vocal and perhaps prolonged justification because of these petulant questions put by the Taoiseach and others. I recommend them to take their own advice and stop putting these questions.

Opposition criticism of the Budget has been rather futile. This was inevitable because there is no provision in the Budget to which any reasonable person, aware of the task confronting the Government, could take exception. The task of creating an industrial arm in a predominantly agricultural country with the object of providing the maximum number of jobs for the people was a gigantic one; but Fianna Fáil faced it with realism and an energy to which unbiassed observers have paid tribute. The success which has attended the Government's efforts can be seen in the ever-rising standards which our people enjoy. The magnitude of the task has never been kept from our people who have been told time and time again that success depended on them no less than on any Government action. You cannot simply conjure the good things of life out of a hat. Schools, houses, social services, loans and grants, all the amenities which are our modern concept of social justice, must be paid for. Given the opportunity to work and to earn and create wealth, the burden of paying will not prove too heavy.

Social service benefits are perhaps not all that could be wished but we are moving nearer to a comprehensive welfare scheme. I think this scheme will come when it becomes obvious that the people can bear the cost of it and with an expanding economy, more jobs and more money circulating among a rising population, that day may not be too far distant. It may be well to remind those who like to compare our social services with those obtaining in Britain that the social welfare stamp here costs 11/10d while in Britain it costs 26/- and that in a highly industrialised country with a population of some 50 million.

It may be that here we shall have to introduce a less ambitious scheme but whatever the scheme, it must be financed. We cannot get something for nothing. The taxes provided in this Budget are levied I think for the express purpose of giving further aid to agriculture. Criticism of these provisions comes ill from a Party who have long represented themselves as the champions of the farmers and would be expected to recommend any provisions designed to help our most important industry. The Budget is one which might have been expected from a Government who have given to the country such calm, orderly and progressive expansion. The distinctive feature of Fianna Fáil budgets, which persists today, is one of growth, movement and development. Every possible means of increasing national wealth is explored and where feasible, it is acted upon intelligently. Inevitably, however, with increased Government commitments, taxation has to be increased; money has to be found to finance the colossal schemes of loans, grants and incentives to every branch of industry. Taxes, however, are imposed only when it seems possible for the people to bear them. Taxation is increased only in proportion to the increase in real national wealth and the money thus raised is always ploughed back into the economy in an effort to provide improved living standards.

Every Fianna Fáil Budget has been designed not alone to meet the requirements of, but to provide greater work for, the future. We have not on this side of the House a Party of expediency, purely and simply. Naturally enough, this Party wish to be popular with the people but not at the expense of the country's future. Nevertheless almost every Fianna Fáil Budget—and some of them were described by our critics as harsh—included an increase in social welfare benefits and out of the impositions contained in these budgets and out of the social welfare benefits included in them, we are evolving a social order, Irish, Christian and realistic, a social order based upon our people's willingness to grasp the opportunity offered to them and upon a realisation of the necessity for co-operating with one another in achieving that order.

This year's Budget is in the same position as its predecessors, an example of good national housekeeping. The money needed by the State will be gathered in a way which will cause the least possible hardship. There could be no better tribute to our progress than the attempt made by some Opposition speakers to prove that some measures taken by them when in office made this progress possible. It is extraordinary that if two Coalition Governments were aware of the country's needs and of the measures necessary to meet these needs, they did not pursue them to their logical conclusion. It was left to Fianna Fáil not only to have the courage of their convictions but the courage of the Opposition's convictions. The penny on beer should not prove any great hardship. Deputy Dunne seems to think it will. But there was very little comment when, about a fortnight ago, before the Budget, the publicans put on one penny to meet the cost of the 12 per cent increase paid to their employees. I wonder did Deputy Dunne see any far-reaching social implications arising from that penny increase?

Rising standards must inevitably lead to rising prices but we must remember that most of the increases find their way back into the workers' pockets by way of increased wages. It is not true to say that increases in the prices of commodities following on the ninth round of wage increases swallowed up the 12 per cent. Any wage earner, smoker, drinker, or bus passenger who takes the trouble to calculate the cost of increases imposed subsequent to a wage increase will find that he is still better off than he was before the increase. People have become progressively more prosperous since this Government took office in 1957. Living standards are rising annually; our people are better fed, better housed and they are considered more in every aspect of legislation than ever before. The building trade is one aspect of our economy which is generally used as a criterion in assessing progress. Do we deny that this trade is now working to a capacity never dreamed of before? As a contribution to a reasoned, well ordered and intelligent programme for national prosperity, this Budget must commend itself to the House.

People, they say, get the Government they deserve and having got it, then they must naturally expect to get the Budget provided by that Government. I have no doubt that quite a large number of people will be charmed with this Budget. I can see no reason why the people who voted for Fianna Fáil policy in the last general election should have any grumble, and certainly I see no reason why the people in Cork city or the Kildare constituency should have any grumble about the Budget. Surely they did not expect that the Government who only last year taxed the essentials of life with the 2½ per cent turnover tax, would refrain this year from getting in as much as they possibly could by way of increased taxation on the very items, drink, petrol and cigarettes, which last year the Minister said had reached saturation point and that a further tax would in fact yield less revenue rather than more.

I do not criticise a Government for increasing taxation for essential services. I should like to pay tribute to the excellent speech made by Deputy Costello. It was varied and detailed but I am surprised that he had to go to such an extreme to find the reason why Fianna Fáil put on taxation this year. It is quite obvious that it is an old political trick to impose taxation in the year you are not having an election so that in the year in which the election is to be held, they will have the ammunition and the means to provide benefits which will help to induce—to use a mild word—the people again to take a chance of returning the Government to power.

I am surprised that Deputy Costello did not see that point but perhaps he was too much of a gentleman to comment as openly as I have done. I am not tied by having voted for a Fianna Fáil Government in the last general election or in either of the two by-elections—or ever in my life—to support the Government policy of taxation. As a Labour Deputy, I should like to repeat what I have said in previous Budget debates, that if it were essential to tax luxury commodities or non-essential commodities in order to provide decent social welfare benefits and if the Government undertook to provide in the form of benefits all the revenue secured by the suggested tax, the Labour Party would support that tax.

Unfortunately, out of a total of £7 million increased taxation in this Budget, slightly less than £¾ million is to be earmarked for the purpose of giving non-contributory old age pensioners and non-contributory widows and orphans—in fact, the social assistance group—the traditional halfcrown per week increase, or 4d. per day, and that is to raise their standard of living, notwithstanding the fact that, as human beings, they will be affected by the very taxation being imposed, on the other hand, by the Minister for Finance.

I think it was a mean effort but I realise that there are people in this country, Ministers of State, Parliamentary Secretaries and Deputies, including the Fianna Fáil Deputy who has just spoken, who really believe that, in proportion to tax revenue, we in Ireland contribute more towards social welfare than is the case in Great Britain.

At a symposium in Blessington last Sunday, the Minister for Health and the Parliamentary Secretary to the Minister for Lands made that point or, at least, the point was made in the papers purporting to report them correctly. Of course, the figures quoted both by the Minister and the Parliamentary Secretary, certainly by the Minister, related to the amount of money spent in Great Britain in connection with health alone, whereas the figures quoted for Ireland included both health and social welfare. Even if that were not so, percentages are not a true indication of the value of services given. It could have been said at a time when a certain Party had two members in this House, that when only one attended they had a 50 per cent attendance, but that 50 per cent attendance was not comparable with a 50 per cent attendance of a larger Party, such as the Fine Gael Party or the Fianna Fáil Party.

A comparison of the percentage spent in Great Britain and the percentage spent in Ireland in providing a welfare State is not a true indication. It is much more realistic to examine the cold figures of what an old age pensioner and his wife in Great Britain can draw from the State in actual money and the purchasing power of that money vis-à-vis the old age pensioner in this country. Anyone who, on the one hand, attempts to suggest that we have a social welfare State and, on the other hand, suggests that we cannot afford to have one, is simply seeking to delude the public.

What are the facts? What is the improvement in social welfare in this country? The figures are obtainable from the statistics published by the Government. In 1957 the proportion of tax revenue devoted to social welfare was 24.8 per cent. In 1962, the proportion had declined to 20 per cent of tax revenue. The figure for 1963 must go below 20 per cent. Surely, on the basis of these figures, the suggestion that we are giving to the most needy sections, in proportion to our ability, a reasonable increase in standard cannot be substantiated?

The increase to farmers in the current year will cost £4½ million and in a full year, if continued, will cost about £5 million. I am not here to decry it or to argue as to whether the farmers needed an increase or not. Because of lack of knowledge of agriculture, I do not feel competent to examine in detail all the facets of a very vast problem. It is fairly evident to me that the farmers have not been sharing in the national increase that has taken place over a number of years. That being the case, I have no quarrel with a provision to give them some increase, whether by way of 2d. per gallon on creamery milk or by increasing the amount they will be paid for livestock or by way of further remission of rates.

I, like Deputy Costello, would probe as to whether that is the better way or whether some incentive should be given to those who will use it in their own best interests and in the best interests of the nation, to develop badly needed export trade, as to whether or not some system should be found other than this continual derating.

As I say, I am not too well qualified to judge but it has been said to me by people who I believe were completely disinterested, that the larger the farmer and the greater his valuation, the greater the concessions he received by way of grant or through this system of derating. I do not decry what is being given if it is deserved and if it will serve as a stimulus to increased production and increased employment in agriculture. I wish them well with it but I suggest that no organisation of farmers, or none of the many bodies of rural workers in this country, can make claim to having any greater need for substantial help than the people in the social assistance classes. The last Fianna Fáil Deputy who spoke said that if workers are being taxed additionally, they have got increased wages. He said that if further taxes come on them, they will know how to recover, through their organisations.

That is quite true. I am not worrying about the increased cost of living or increased taxation as far as organised workers are concerned because they, through their organisations, will be able to offset these increases and compensate themselves as they have done in the past. On the other hand, what happens to the man on a fixed income or, worse still, to the man on a miserable social assistance pittance given by a Government if that Government do not so adjust the amounts of the benefits so as to compensate for the hardships which the organised workers can offset by increases in wages?

Like Deputy J. A. Costello, I appreciate that in this Budget some trivial recognition was given to the needs of State pensioners. A five per cent increase was not a magnificent gesture but at least it was a gesture. Like Deputy Costello, I hope it is a token of more to come. Any of the increases in taxation, whether it be in respect of imported spirits, of cigarettes or of petrol, if taken in their entirety, would be more than sufficient to provide what I believe to be the minimum increase necessary for an old age pensioner—not this useless half crown but an increase of at least 7/6 per week which would bring him up to bare existence level.

It has often struck me why, when increases in pensions are being granted, no differentiation is made between a man or woman on a non-contributory pension who has to live entirely on that pension and a person who, though entitled to a full pension, has alternative means of anything up to £1 per week. I feel that those who have least should be given most on occasions like this and accordingly suggest that some system of graded increases be given.

I was somewhat amazed at the change of outlook of the Minister for Finance in connection with the new taxation on imported spirits. It is all very well to say this will encourage the home industry, that this will sell more Irish vodka, more Irish whiskey. I do not think we have Irish brandy yet. Is it not true that the general tendency here has been to prepare ourselves for entry to the Common Market? Is it not true that if by 1970 we find ourselves members of the EEC, these differential taxes we are now imposing will have to be withdrawn completely and that revenue from imported spirits will be on a uniform level with that from our own home-produced product? It is a simple point but it will have a most detrimental effect on our home producers.

In connection with the increased Post Office charges, while they may be absolutely necessary to meet increased costs both by way of wages and maintenance outlay, it seems regrettable the Minister should seek to indicate that the extra £2 million sought was to pay for increased wages. The postal officials are civil servants the same as employees in the various other Departments, and why it is they should be pointed out as being responsible for these increased public charges I do not know. The increases given to all State employees have cost money, have caused increased taxation. That is why I say it is regrettable that the postal officials should be singled out or that the Post Office services should be arranged on a commercial basis and that for the future they must pay their way.

The Post Office is giving an excellent service. However, the charge for first-class mail is to be increased to 5d. I had thought the Minister for Posts and Telegraphs would have rearranged the charges in respect of the 2d. open letter or circular mail in order to ease the increase on the first-class mail and keep it at a minimum. There is a fallacy that second-class mail does not receive the same attention as first-class mail. It is said that if you post a first-class packet together with a postcard, the second-class item will take longer to deliver. That does not happen, though the Post Office has every right to do it. I am informed it is extremely rare in this country to find second-class mail held up to the advantage of first-class packets. Consequently, I feel the second-class mail should have borne some of this increase.

The Irish Trade Union Congress appealed to the Minister responsible to keep a watchful eye on prices as a result of this Budget. I should like to endorse that appeal because I fear that a further spiral of price increases can set off another demand for wage increases. It is true that for the past year or so the opening of supermarts in urban areas and towns has had a controlling effect on the cost of living. But, if that is so, it is likewise true that the unfortunate evils that flow from such a development have also evolved: the small trader is being forced out of business. My fear is that, when the small traders, unable to face the competition, have closed their doors and a monopoly has been secured, the combines will then use their position to increase the cost of living in order to secure the profits they lost during the war with the small traders. If that does not happen here, it will be most unusual because it has been happening in America for the past 30 years and in England for a shorter period. Unless the Minister responsible is ready and willing to use measures designed to control the cost of living, there will, I fear, be need for a further effort by the trade unions to meet the position as they will then find it.

I should not like to pass from this Budget without commenting on the figures for emigration given to us last year by the Taoiseach and this year by the Central Statistics Office. We were assured by the Taoiseach last year that emigration had declined to 12,500 people. This year the figure is just slightly over double that, 25,060. I am aware these figures were given in a television programme by the Leader of the Labour Party. I am not quoting them now merely for the sake of continuing the argument or to impress on the public that all is not well in connection with employment, but I am informed by my colleague, Deputy Tully, that a most unusual thing happened at the Tuairim symposium in Blessington last Sunday.

The Tánaiste, the second most important member of the Government. sought to claim that the Government never accepted the 1963 figure for emigration as 12,500. Apparently the suggestion now is that it was much too low. Rather than admit that this year's figure of 25,060 is double the figure for last year, it is now being claimed that last year's figure, which was good enough at the time in order to tell the public what a wonderful job was being done, was wrong, the idea obviously being to prove that not such a bad job at all is being done this year. It is a very unusual position. I thought it desirable and necessary to make a statement because none of the papers, unfortunately, appeared to have accurate information. As I say, I speak from hearsay. I have quoted my source. If the Tánaiste has any grievance, he will know whom to attack.

I admire the efforts of the Minister for Industry and Commerce and his Department to try to attract industrial firms into this country. Any time I have had occasion to visit either him or his officials I have been received with courtesy and consideration and given most helpful information. Nevertheless, I think that an overall decline of 1,000 people working this year as compared with last year calls for further efforts if we are to reach the pinnacle of perfection hinted at each month as being just around the corner. Let us not deny facts.

Maybe it is true that in every country in the world people are leaving agriculture. Maybe it is true that up-to-date methods are displacing men. While the total employed continues to fall, we must accept the fact that those who cannot get work here, who will not get decent home assistance or insurance, must of necessity emigrate. That is a deplorable situation, a situation no one would wish for. Deputies of all Parties should combine with whatever Government are in office, not in criticising for the sake of criticism, but rather with the intention of spurring Government on to greater efforts or with the intention of throwing light on a situation that might otherwise remain hidden.

I conclude with an appeal to the Minister on behalf of a dwindling group, a group who in the past risked their lives to establish this State. I refer to those in receipt of what is known as the special IRA allowance. The number is a dwindling one. It is true they got 2/6 per week increase under this Budget. On 1st November last they got £4 per year, or 2/- per week. Surely they deserve better. Surely an extra £20,000 or £30,000 could be provided so that in the time that is left to them—in the nature of things, it cannot be of long duration —they may enjoy the frugal comfort to which they are entitled.

I have been thinking of the allegations made by the Fine Gael Party, and others, of excessive taxation as a result of this Budget. I could not help looking back on our political history and recalling the fact that the Fine Gael Party twice secured office by promises to reduce taxation and increase expenditure and, on the third occasion, when they tried to gain and to hold the seats in Kildare and Cork, they failed, for the first time in our political history since the war, when the subject of taxation was a major issue at an election, in so far as economic issues were involved, and it is well to remind the House now that back in 1948 the major allegation against our Government——

Is the Minister reading from Gléas now?

——was that we had not conducted the affairs of the nation well during the war, that for some extraordinary reason the cost of living should never have gone up during the war though it was going up in every other country, that the Government were being wildly extravagant, that the Government were influenced by large corrupt companies in high places filling the Fianna Fáil political funds with their ill-gotten gains, that there would be an end to that if another Government could defeat Fianna Fáil and get into office. It should be remembered they got into office and they found, after some elaborate researches, absolutely no evidence whatever of corruption or of excessive profiteering.

It will also be remembered that they had absolutely no idea of how to handle inflation at the time about which they talk so glibly today. We had a hurricane of inflation at the end of two Coalition Governments and the last people in the world who should give us any advice on how to handle a possible inflation are the Fine Gael Party.

It will be recalled that they, well supported by the Clann na Poblachta Party, who acted as a kind of virulent poison in their midst, encouraged the Irish people to believe that all was going magnificently well, that there was wonderful expansion in agricultural output, that the whole growth of the economy of the country was due to the beneficent Government of the Coalition when, in fact, what happened at that time was nothing but the normal postwar recovery taking place in every country in Europe. Because people were not spending enough on things to amuse themselves and so that they should have the good living which was bespoken by the Coalition Government as their due without any effort on their part, the Government at that time borrowed £40 million from the American people, threw it into circulation by importing all sorts of consumption goods. Then they left office after a three-hour speech made by the then Taoiseach explaining difficulties in regard to the health services. They left office just in time to leave us with the first great Fine Gael inflation in 1951 when, without any real growth of income to justify it, without any real evidence of massive capital investment in the country, they had an adverse trade balance, a real adverse trade balance, of £61 million. They left us the delightful job of clearing up the grim mess after they had departed.

How did we clear up the mess? We had to restrain the economy temporarily and we imposed some taxation, having discovered that, as usual, they left us a very large deficit on the current account of the Budget in the previous year. We imposed the taxation we considered necessary for the country. We explained that that kind of restraint had been found necessary in certain other countries in Europe, that whatever the growth in industry and agriculture, there could always come a moment when a restraining hand was necessary if the previous administration had just thrown money into circulation without regard to realities.

The realities were, of course, that, inspired by Clann na Poblachta, people believed it was a wonderful thing to sell out English and other foreign securities, that it was good for the country, that the more the English securities were got rid of the more the Government was wrapping the green flag round itself. Although we explained to the people that it would be a splendid thing if securities were sold to purchase shoe machinery, to purchase fertilisers or machinery for more factories, it was a wrong thing to sell English securities to buy consumption goods because the day would come when we would need to have an adequate reserve if on some other occasion there was an excessive importation of goods either due to some over-optimism on the part of the people or through mishandling of Government finances. We warned them. We were told we were anti-national. We had inflation in 1951 and it was corrected. Then we spent three years arguing about the criminal acts we were supposed to be committing in imposing taxation on the people in order to correct an inflationary situation. By 1953 the inflation was over. Our policy was beginning to show itself. Agricultural production was beginning to mount. The earnings of workers had grown well beyond the increase in the cost of living.

There was an election in 1954. Again in 1954 the Fine Gael Party, issuing millions of blue leaflets all over the country, made exactly the same promises to the people as they made in the recent County Cork and County Kildare by-elections, that they guaranteed the taxes imposed by the Fianna Fáil Government as a corrective process in 1952 would be taken off, that the cost of the commodities that went up would come down and that a good time would be had by all.

A small number of the people in certain constituencies were foolish enough at that time to believe these promises and the Coalition Government got into office for the second time. Then in 1955 we had another really flaring inflation in the form of an adverse balance of payments of some £35 million. Again, there was none of the real evidence of a massive growth in the economy of the country which would justify such an adverse balance of payments. There was no evidence of large-scale capital investment in industry in order to counter the effect of the excessive imports. The cost of living went up by three per cent in every year of the Coalition Government, just about the same amount it has gone up since and none of the goods came down in price. At the end, the Coalition Government imposed heavy taxation, heavy purchase or turnover tax or whatever you like, far heavier than we imposed, on all sorts of commodities.

They went out of office once more and left us another dreary mess to clear up. That time it did not take one year; it took us nearly two years to get the country back on its feet. Therefore, when I hear members of the Fine Gael Party talking about taxation I am very suspicious about them and so are we all on this side of the House. They should learn something about the inflation they created on two separate occasions before they start lecturing us about possible dangers of inflation in the future.

In the last two by-elections two representative sections of the Irish people, in the city and the country, did not accept the bribes which were offered to them in the 1954 election, and it makes me feel we are making real progress and the people are beginning to understand, under our Government, the nature of the problems of this country.

In regard to the allegations of excessive taxation, it is just as well to give the facts about this so that the people can understand them. One cannot escape giving figures when one is talking about taxes. It would be very much easier to talk in a general way but one must speak in terms of figures. The accepted international comparison of the burden of taxation on people is to compare the central taxation and the local taxation with the gross national product of the country which includes, as everybody knows, the annual expenditure by the people. I do not think anybody has contested that it is a fair means of comparison. On that basis, in the last full year of the Coalition Government, when everything was very nearly grinding to a halt, the Coalition Government took taxation both local and central which was equivalent to just under 23 per cent of the gross national product created by the people in that year, which is about one-quarter of the people's income and expenditure. Since then the country has massively grown in strength and prosperity. The people are about one-fifth better off than they were at that time. In 1963-64, including the proportion of the turnover tax collected in that year, the total amount of taxation, central and local, taken in relation to the gross national product was just 23.7 per cent—one per cent more. We make no apologies for that increase of one per cent.

We cannot make comparisons with other countries for the passing year because the figures are not available to us, but I think it can be taken for granted that the general basis of taxation has not altered very materially in the major countries of Europe in the past two years. We can compare our taxation in the period 1963-64 with the last period for which we have satisfactory figures for Europe, 1962, in relation to the expenditure of the people and the general figure known as the gross national product. That is where we can make the comparison on an international basis.

In 1962-63, our figure was just under 23 per cent—namely 22.4 per cent; the figure for Belgium was 27.2 per cent; the figure for France was 35 per cent; the figure for Germany was just over 35 per cent; the figure for Italy—a country with a comparable income per head with our own: it is slightly lower—was 29 per cent; the figure for the Netherlands was 31 per cent; and the figure for the United Kingdom was 30 per cent.

I should like to hear from Deputies on the opposite site whether they question these comparisons or regard them as reasonable, and whether they accept them as an international comparison of taxation. Quite obviously they are not perfect; quite obviously there may be some minor distortions; but as I understand it, they are a generally accepted index. Now for Deputies who are gloating over the possible political effects of the increased taxation this year, and the increased postal charges, I propose to make an estimate of what it will cost this year, and how the relation of the taxation to the estimated gross national product this year will change in comparison with last year.

I have heard Deputies saying they are in a daze over the increased taxation, as though we are imposing increased taxation and taking far more out of the common pool of prosperity than we did before, and as though there were to be some dramatic changes in taxation and that the people would be bled white in the coming year. We have estimated the increased local authority rates on the basis of the rates struck already. We have taken the whole of the Budget expenses on the same basis as in the case of the calculations made before.

We can assume that the gross national product will rise by £43 million this year. Last year it rose by £49 million. It was £556 million in the dark days of 1956. I think we can reasonably assume that it will rise at least nearly as much as it did last year, so I am making the calculation that in relation to the increase in the gross national product, which includes the personal expenses of the people, the estimated rates that will be imposed, and the total taxation central and local for this year, will be up by one per cent, bringing it up to 24.3 per cent. That is still way below a large number of countries in Europe, including countries with incomes comparable with our own.

As I have said, this is an accepted basis of comparison. What it means is that in order to secure from the people, roughly speaking, one quarter of their expenditure in incomes and so forth, certain taxation is imposed. We have altered the incidence of taxation. As has been explained by the Minister for Finance, taxation receipts do not go up automatically and necessarily in relation to what the people are spending. We have adjusted taxation in order that we could secure the amount of money we require.

Let us be absolutely frank about this. Taxation has undoubtedly increased very slightly. We intend to use the Budget as a means of developing the economy, and as a means of transferring incomes from one section of the community to another when that is necessary. We believe in using it for investment purposes and also in using it, when necessary, as a weapon to combat inflation. We make no apology for that slight increase in the amount taken as a proportion of what the people will spend. We need it for education, social welfare services and agriculture. There is no use in people imagining they are being bled white. No figures produced by this accepted international basis of comparison would suggest that the load of taxation here is something excessive that the people are unable to bear, or that the load of taxation has increased compared with what it was.

It is easy for Deputy Dillon in one breath to offer to remove the turnover tax, to increase the social welfare benefits and to add all sorts of other items to the Budget, and in the same breath, ask: "Why does it cost £80 million more to run the country than it did the last year we were in office"—when there were 97,000 unemployed and massive emigration was taking place. The answer is absolutely clear. We now realise that if we are to develop this economy, it will not be possible to alleviate taxation in any large measure. As the economy of the country grows, and as prosperity grows in the next four or five years, we will not be able to say to the people that in relation to the amount they spend, because the country is getting more and more prosperous, we will take less and less money from them. In practically every country in the world which is strongly developing, and where Governments play a remarkable part in influencing the economy and so gearing investment as to make capital available, the proportion of taxation has not been radically reduced.

Some of the emerging countries of Europe in developing their economies have had massive problems to solve. They have had economic problems to solve. They have had to build up their nations in other respects, in their transport services, housing and social services. They have not found it possible to say: "Now that you are so much more prosperous, you will not have to pay as much in taxation in relation to what you spend." If we go through these figures of taxation in the modern up-to-date nations of Northern Europe in relation to what the people are spending, we find that no place is there evidence that that has been possible. Yet Deputy Dillon glibly suggests that there is no reason why it should cost £80 million more today to run the country than it did in the grim days of 1956-57.

That simply is not happening in other countries that are developing and prospering as we are. The fact is that because our development was minimal since the war up to 1958, we had one of the lowest increases in national income per year during that period and, if anything, we shall be strained to the limit in the next five years in order to find all the resources we require to develop the economy. We make no false promises like Fine Gael that if everything goes marvellously well next year or this year, we will be able to wipe out taxation. We will make adjustments where we can. In the past five years, the Minister has made adjustments in personal allowances. He has helped people with adjusted taxation in one section of the community compared with another. He has looked after people who were in need of help. He has looked after State pensioners and is bringing them up gradually to the position which they merit. He has made alterations in this Budget in personal allowances for people living on very small unearned incomes. There will be, I hope, opportunities for adjustment to help people in special positions. There may be necessity for altering the incidence of taxation from one item to another.

We have published our Second Programme. We have made clear in it that there will not be any great change in the relation of taxation to what the people spend. At least, everybody knows it. Nobody can accuse us of being dishonest or of predicting in the next five years, up to 1970, bumper Budgets in which we can suddenly make large releases of spending power to the people, simply coming from growing prosperity. We have made it clear from tables in the first part of the Second Programme that we shall continue to need very large sums of capital and current expenditure in order to develop the economy. I am very glad that there has been no hedging about it.

The figures published prior to the current Budget indicate that current Government expenditure, as a percentage of gross national product, was 22.7 per cent. Is that the figure the Minister is taking?

For 1963-64, it was 23.7 per cent and for 1962-63 it was 22.4 per cent. In the coming year, I reckon, by adding £43 million to the gross national product—to the £823 million of 1963—and taking the Budget figures and using them in the comparable form, and taking an estimate of the increase in rates, the total proportion will be 24.3 per cent, an increase of about two per cent on 1956-57.

The Minister is not including local rates?

I think not. The Minister will find from the Statistics of National Income and Expenditure that the figure is £27.1 million, if rates are included.

I do not think anybody has given the figure for 1964-65 except myself, so far.

I am talking about 1962.

The figures I have given are relative to each other. I had them very carefully checked yesterday. I was also looking at some figures about the increase of the earnings of workers in recent times. They reveal that, under the various rounds of wages increases, there have been fairly satisfactory increases which is at least a sign that real progress is being made in securing a better standard of living.

Again, as a result of increased productivity and as a result of a growth in the economy, from June, 1959, to December, 1963, I notice that there was an average growth of 6½ per cent per year in the earnings of workers. If that is related, in turn, to the cost of living, it works out at about four per cent. It is interesting, because that is the figure which the Taoiseach and the Government say it is safe to estimate. In other words, if the general productivity of the country increased by four per cent, then wages and earnings should be able to go up at that rate. I hope that this steady progress will be continued and that it will not be disrupted by violent changes which take place at various periods and which prevent progress from being orderly and prevent workers from enjoying fully the results of increases in wages.

With regard to the agricultural position, some of the Opposition ask on the one hand: "Why should the farmers get the increased aid made available in the Budget?" while others say: "it is not enough." It is just as well to state the position in general in order to show the progress that is being made. It is utterly untrue to suggest that farm incomes have not increased in the past ten years. They have increased by 41 per cent, allowing for the number of people working on farms. Migration from the land, however undesirable it might be, is universal. Migration from the land in this country has not been excessive, compared with other countries. Our difficulty has been to create an industrial atmosphere in this country and to secure new industries at a sufficient rate to absorb people migrating from the land. The OECD has published all the facts about migration from the land in European countries.

Let me give one example. From 1952 to 1962, the proportion of people at work in agriculture, compared with the whole of the workers in Germany, went down from nearly 23 per cent to 13 per cent in ten years. The same figure for us was roughly in the order of 40 per cent to 35 per cent. Our difficulty has been to accelerate industrial production sufficiently to absorb the people who are migrating from the land.

The incomes of the farmers have gone up by 41 per cent since 1953 but non-agricultural income has gone up much faster—by 70 per cent. This discrepancy is universal. There is no use in having a kind of close, hot-air atmosphere about our agricultural position as though the difficulties here were not universal. There are very few countries in Europe where there is not a pretty wide gap between agricultural and non-agricultural incomes. There have been some splendid improvements in farm incomes in certain areas. I was delighted to be informed by one of the co-operative societies in Monaghan that the milk cheques of farmers there had doubled since 1959. Admittedly, there had been difficulties in the area in relation to the disposal of potatoes but the improvement in relation to the milk cheques indicates the progress farmers can make as a result of Government incentives and Government aid.

With regard to the 2d a gallon which we are giving on milk, the milk cheques of the whole country per farmer went up from £216 to £298 from 1953 to 1963. It is not as though the milk cheques remained completely stable. The position is that the general price level for what the farmer sells does not show the same change as the price level for what other people sell. Again, it is interesting to note how we stand in regard to the gap between farm incomes and non-farm incomes. I do not think these facts are published sufficiently often. It is very difficult to expect the average farmer who has done a hard day's work to search for facts to see how he fares compared with the farmers of other countries. I wanted to mention these figures for incomes because I thought they were important.

In a recent year, the income per person in agriculture, as a percentage of the average income of the country concerned, has been given. If we take the average percentage of income of the whole country as 100, then the figure for the farmer's income in the United States is 48 per cent of the average income; in France, it is 51 per cent; in Western Germany, it is 50.4 per cent; in Italy, it is 53.5 per cent; in Denmark, it is 73 per cent; and in our country, it is 68.8 per cent. In the Netherlands, it is put down as 106.1 per cent. I imagine that the reason for that is the high proportion of specialised products, including horticultural crops, and so on, of the farmers there.

That shows that our position could be better and could be a great deal worse. The gap between farm incomes and non-farm incomes is something about which we wish to do something whenever we possibly can but there are countries where the relative incomes are more widely separated than they are here. It is just as well to mention that. One so often hears the story given as though it were unique to this country. Most Deputies know some of the reasons for it—our particular trading relations with the country with which we do the most trade in agriculture; the policy of cheap food imports there and the lack of a completely integrated system of agricultural planning and price levels such as we hope we shall be able to participate in if we join the Common Market.

There are a great many reasons for the gap in the income. One of them is the fact that we still need a great deal of investment in agriculture in the shape of more modern methods, greater use of fertilisers, and so on, before we can make progress. In relation to that, the Government are giving a great measure of aid. It is quite natural for the National Farmers' Association always to ask for more and to say that enough is not given so long as this gap remains. I think it is essential to point out that the capacity of the non-farming community here to transfer some of their incomes to the farmers is obviously limited by the numbers of them that exist as compared with the farmers themselves. I have figures to show the capacity of the non-farming community of various countries to pay for farm aid to the farming community to help support their prices.

Even in some countries where we imagine agriculture is of tremendous importance, we find they have far greater capacity than we have. We reckon the capacity of the non-farming community, their resources in comparison with the farmers' resources, their capacity to help in paying the farmer, by the transfer of income as follows: In the United Kingdom, it is about 8½ times the Irish capacity; nearly double in Italy; in Denmark, it is actually double: in France, the capacity of the non-farming community to assist the farming community is over three times what it is here and in the Netherlands, it is over three times.

That means that our efforts to assist the farming community are limited to some extent by the capacity of the incomes of those not engaged in agriculture to help them. Putting it in another way, huge farm subsidies made available in England, about which the farmers there are constantly complaining, only mean some 1½ per cent impost on the total production of the country, whereas the same subsidies here would mean 6½ per cent impost on our production. We will find that there may be an absolute limit to this if we go on extending this kind of assistance to farmers. Eventually the farmers are bound to pay some of it themselves, and so they are paying some of it now. Our aid to farmers to help them increase production per acre, which is very low in some areas by standards abroad, is the real solution. Our aid to them to help to increase their production per acre is far the most important part of their progress.

When I hear anybody in Fine Gael start talking about agricultural policy, I wonder how they have the nerve to discuss it. If you look at the whole panoply of agricultural services provided by the present Government, it will be seen that they have completely outstripped anything ever before in the history of this country, either in scope or in detail. There is no comparison with what is being offered now and previously. Before the Budget extras were announced, on the basis of the Estimates, and before the additional Budget aid, we are paying nearly three times the subsidies paid by the Coalition Government. We give six and a half times as much for fertilisers. We spend three times as much on livestock improvement. On the improvement of farm buildings we spend over twice as much as they spent in their last year of office.

Deputy Dillon constantly includes that in the list of things he says he did for the farming community. The Farm Building Scheme was announced publicly by the present Minister for Agriculture on 1st January, 1948, and it was not the work of the Coalition Government. The announcement that there would be grants for farm buildings was made on 1st January, 1948, as I have looked up the record myself to see when the announcement was made. Equally, of course, the land reclamation scheme, which was worked very excellently throughout the war when there was a scarcity of diesel oil and farm machinery, was the work of Fianna Fáil. Deputy Dillon rightly expanded and mechanised the scheme when the Coalition Government took office but the original concept was ours.

In connection with rate reliefs, we have enormously increased the relief available to the agricultural rates. More will be heard about that later with the announcement of the details of the further rate reliefs.

Deputy Kyne, in the course of his speech, compared the amount spent on social welfare as a percentage of the total Budget of 1957 with the amount spent now. I was not able to follow him entirely but I do know that at that time there were periods of the year when there were twice as many unemployed as there are now. I should say the Government of that time left us an unbalanced Budget—again if I remember rightly, it was unbalanced to the extent of £6 million.

In relation to what we have done for social welfare, we have heard a great deal about the old age pensions which we have increased from some 24/- to 37/6, some 50 per cent, since the Coalition Government. It is much more important to mention some of the changes that have taken place for people who are in really difficult circumstances, and with children. We never hear of any of those people from members of the Opposition or from members of the Labour Party and I think that what we have done for people with children who are in difficulty, to enable them to face the hazards of life, should be mentioned.

One can take, for example, a widow with three children living in a rural area, and in receipt of a non-contributory widow's pension. If you include the children's allowance, for children under 16, in 1956 such a person was receiving £2 3s. 2d. and in 1964, when the increases have taken place, she will receive £3 13s. 2d., an increase of 70 per cent. During this period the cost of living has gone up 22.3 per cent. I am not saying that that sum is a wonderful figure but I am saying it is an enormous increase. No increase of that kind was ever given by either of the Coalition Governments, nor did they attempt such increases for persons such as widows with three children.

I give another example, unemployed assistance. A man with a wife and five children in a rural area was receiving in unemployment assistance, including the children's allowances, in 1956, £2 2s. 10d. and in August 1964, he will receive £5 4s., an increase of some 140 per cent. Again, by modern standards, the sum is not large, but at least figures for social welfare services for people with families are mounting at a rate never envisaged before.

It is easy to talk about the continuous shillings, one-and-sixpences and half-crowns that have been given by this Government since 1956. It is naturally, I suppose, politically inevitable that nobody would look every year to the increases for the children, for the orphans, for the dependants, which have made it possible for us to increase very substantially, aid to the people who really need it most—the people with large families. We hope to go on making progress of that kind. I do not honestly think any member of the Labour Party can say in respect of that particular type of allowance that we have not been making progress. We would naturally like to make more, but if you go from 42/10d to 104/-from 1956 to 1964, nobody can say we are not making an effort to improve social services.

It is rather natural that we should make the improvements because practically every increase under the social services was given by a Fianna Fáil Government. The greater part of the improvements in conditions of work and employment were brought about by legislation passed by a Fianna Fáil Government. We have shown over a period that whenever the nation's income expands, we do our utmost to see that part of it is transferred to those with lower incomes. We hope the income of the country will expand to the point when all these services become less necessary. Nevertheless, in so far as they are necessary, we have been constantly increasing them. We have been increasing them at a far greater rate than the increase in the cost of living.

It is ludicrous for people to get up here and say: "You have not made allowance for the increase in the cost of living," when you simply compare the increase in the cost of living, which is over 22 per cent since 1956, and examine the social services, particularly for people with dependants and children, and see how the increases have mounted far and away beyond the growth in the cost of living. I know the standard of living is going up, that people's means are increasing, and that you cannot make an absolute comparison because people naturally consider they merit more. But at least we are making progress.

I should like to say something in general about Fine Gael policy. I have been reading some of the speeches made on the occasion of the Budget and of the Vote on Account and during the course of the by-elections. I find it very difficult to ascertain whether the Fine Gael Party really have as an established policy a belief in programming the future, whether they really think in our circumstances it is a good thing to provide a target for the people and not merely a mythical target, as they suggest, but a target obtained by getting experts of every kind to consult with industrialists in every industry, with the State companies and everybody else concerned as to how much they think they can expand, and making some assumptions about the kind of progress made in the last five years and what can be made in the future—not simply political flag-waving, as is being suggested by Fine Gael, but a really serious examination by economists, going into it in great detail with the major industries concerned.

Do they believe in our circumstances it is a good thing to prepare a chart for progress? Once you have established a target, you just do not blandly go from Budget to Budget over a period of five or seven years and hope you are going to find the capital for this and for that. You allocate the capital in advance. You say how much you are going to spend in successive years in order not to cause confusion and chaos, in order that there can be orderly progress so that, for example, Bord na Móna will know it can get the money for the construction of new briquetting factories and for going ahead with development of bogs until their programme is completed and in order that their efforts will not prevent my effort in my Department in making sure Dublin Airport can grow in proper fashion, so that working plans are able to be drawn, so that I am able to see Dublin Airport as it will be five years from now with all the new buildings laid out, so that I can know I have been allocated a certain amount by the Government in connection with the Capital Budget.

Naturally there may be minor amendments and changes as a result of economic crises in other countries, but, nevertheless, in principle the target can be achieved. Likewise, the Minister for Industry and Commerce, having seen the claims made as a result of an examination in close collaboration with the major industries, will know he will be able to get sufficient capital to establish industries by grants to Foras Tionscal and be able to find sufficient resources to provide grants for work study and industrial consultancy in order to enable industries to improve and increase their productivity.

The same thing applies to agriculture. The predictions in regard to agriculture were made in the light of the knowledge of the difficulties of our trade with other countries and the prospect of our joining the Common Market. The progress to be made was related to certain products. Certain steps were taken and certain calculations made. If the farmers really take advantage of the aids being offered to them and some of the aids that will be announced from time to time in connection with the second part of the Second Programme—the part that still has to be published, with details, in the future—the cattle population can grow and in that way the farm income can be increased.

I cannot find anything in Fine Gael speeches which suggests they have accepted the very important social and economic principles involved in the establishment of the National Industrial Development Council. I find very little about that. I cannot find any comment by them on the necessity for getting employers and workers together, as they got together in Sweden, in the Netherlands and in Switzerland, to examine every year the balance sheet of the nation, to have the facts as put to them by the Government checked by them independently to find out what the growth in profits and what the growth in productivity has been, to find out how far people can improve their standard of living and improve their living conditions, to find out how far workers can demand increased wages for themselves without imperilling the programme for national development.

One of the most important things that has happened since the war has been that, whereas we have had several rounds of wage increases since 1947, no very serious harm was done and the national income, whether it was expanding greatly or not very much, was able to grow at least enough to cover these increases in wages so that the greater part of the increase was real and was not entirely swallowed up by increases in living costs. We now have got to the point where we are making enough progress that it is of tremendous importance to have employers and workers in far greater communication with each other, exchanging information on the gains that each are making, on a far greater scale than ever before. As understanding becomes closer, when an increase of wages is announced and agreed to by the Council and fortified by the Government, the further we go on, the more it will tend to become an absolute increase with a minimal increase in the cost of living taking away from the actual gross increase of wages.

The trade union leaders have made it clear they understand that principle. They have seen the great progress being made in the northern countries of Europe in establishing that principle. It cannot work absolutely perfectly. There is always some minor drift in wages occurring in one place or another. Nevertheless, it does establish a principle which means greater collaboration between employer and worker and that closer understanding between the two which, in turn, makes possible schemes for greater productivity, schemes which might end restrictive practices because the workers feel confident they know more about what is going on, what is happening in each industry and they know the deliberations that take place within the Council itself. That is a very important innovation in national policy. It is only in its early stages but, again, it is matter of planning for the future, of constantly looking forward towards what is coming in the future.

It is very difficult to see from the speeches of quite a number of the Opposition whether they believe in that kind of modern attitude towards our economy or not. We hear a lot of foolish things said such as those I have indicated already, the suggestion that the members of the Government have either copied an OECD document or taken the word of just one civil servant and have sat down together having drinks around the fireside and said: "Boys, let us jack up everything 50 per cent." That is the kind of propaganda for foolish people and is completely unjustified. This programme is being worked out just as seriously here as in other countries and we are doing it in the confident belief that as we managed to exceed the targets suggested in the first economic programme — we nearly doubled them— this time we hope to be more successful. The possible increases have been examined in greater detail than they were at that time and in the light of experience we have had up to date.

It is very difficult from reading the speeches of the Opposition to find out if they really do believe in taking calculated risks in establishing many ventures. We hear all sorts of suggestions and innuendoes about some of the casualties that are inevitable in the onward march of a country in our circumstances. We never hear much about the absolute necessity of taking calculated risks in relation to our industrial economic growth. I am always reminded of the appalling decision of the Coalition Government in selling the Constellations not realising what would have happened if they were not sold and we had developed what would have been at that time a very remarkable air service with a very wide field of operation at a time when international air services were still in their infancy.

Their feeling about calculated risks still remains. Until about six months ago there were constant suggestions made that the service across the Atlantic, which was one of the things the Fine Gael Party decided to discount, was unsuccessful. We now know that of the two arms of the air service the transatlantic service is the more successful, bringing enormously increased numbers to this country and showing a rate of economic profitability which was believed to be utterly impossible at the time when the Taoiseach, who was then Minister for Industry and Commerce, announced the opening of the service. People absolutely laughed at the predictions that were made regarding the growth of the service and the number of passengers and there were ribald cries that the Taoiseach was gambling again. If anyone doubts that I shall read the speeches made at the time and they will make anybody who hears them ashamed of them. The plans made by Mr. Garret Fitzgerald for the air company were exceeded in regard to the number of passengers and in regard to the proportion of passengers coming and going via Shannon. As an example of a calculated risk that was one well worth taking.

It is the ambiguous attitude of many people in Fine Gael that results in people feeling they have not got the same attitude as Fianna Fáil towards progress in this country and the same belief in what we can do. I have not yet heard anybody in Fine Gael repeat the statement made by the Taoiseach at the Fianna Fáil convention three years ago when he said very proudly that this country could do anything on earth as well as, or better than, any other nation if they made up their minds to do it. That, Sir, is Fianna Fáil policy.

In all fairness to Fianna Fáil, it should be said that they seldom fail in the role of well-drilled chorus boys. All the Taoiseach has to do is sound the tuning fork and every one of them will play the same refrain. This year the tune chosen by the Fianna Fáil Party as their entry for the top ten is apparently the idea of a better distribution of the national income. The tune is all right but when I see it translated into action by a niggardly halfcrown a week for the poorest and neediest section of the community, I certainly feel justified in asking not so much whether it will be a hit or a miss as whether it will be a hit or a myth.

The speech just made by the Minister for Transport and Power is in many ways typical of what might be expected from a Fianna Fáil Minister. At times Fianna Fáil adopt the large attitude of: "Let us forget the past; let us think of the present and plan for the future." At the same time, we hear the old propaganda spirit coming out and Fianna Fáil have always been good at propaganda. Two or three times in his speech, the Minister for Transport and Power referred to the "grim year of 1956" and the "dark days of 1956". I propose to invite the Minister for Finance and his colleagues to look up the record and see how Fianna Fáil from 1957 onwards have matched the works and achievements of what they choose to call the "the black year of 1956". I assert that since then Fianna Fáil have failed significantly in regard to employment. They have failed this year again significantly in regard to the balance of payments; they have failed every year since they got back to office as compared with 1956 in housing and the cost of living and the cost of government.

These were all matters that were put in issue by the Minister for Transport and Power and his colleagues during 1956 which he chooses to call "the grim year". They are all matters put in issue by Fianna Fáil Party speakers, including the present Taoiseach. I invite the Taoiseach and the Deputies supporting him to examine the type of statements they are making and the type of claims they put forward, to see what was done in the year 1956 by way of Government achievement on these particular questions and to see the result of Fianna Fáil policy and Fianna Fáil action since then.

All of us remember the type of propaganda which the inter-Party Government, under Deputy J. A. Costello, met with during 1956 in regard to employment. Speaking in Drogheda and reported in the Irish Press of 16th February 1957, the Taoiseach, then Deputy Lemass, had this to say in regard to employment and unemployment:

The measure of the worsening of the national situation is the increase in unemployment. That is the real test of the soundness of the policy of any Government. Unless the policy of the Government is successful in putting people to work, of giving a chance of getting work to all who are dependent on them for their livelihood, it is not good enough. The aim of any worthwhile policy must be full employment.

About a week later he is reported in the Irish Press on 23rd February 1957, speaking in the Dublin South Central constituency headquarters, as saying:

The policy of any Government should be judged by its effect on employment. If it is putting more people to work it is all right; if it is putting them out of work it is all wrong. Fianna Fáil had never refused to accept that test. Its main economic aim was to bring about conditions in which every Irish man and woman can get a livelihood through work in Ireland. Full employment must be the objective of any worthwhile programme.

Side by side with that we had Fianna Fáil talking of 100,000 new jobs a year. I know that members of the Fianna Fáil Party are a bit sensitive about this topic of 100,000 new jobs. As I understand it, they say that there was not really a plan at all, it was simply a programme for discussion. I do not care whether there was any plan or programme. The talk of 100,000 new jobs was floating around in the context of speeches of that type made by the Taoiseach in 1957.

Are we not entitled now, after seven years of effort by Fianna Fáil, after seven years of "getting cracking" by Fianna Fáil, to ask what has become of the 100,000 new jobs? What is the record of Fianna Fáil in relation to this matter and comparing it with the so-called "black year" of 1956? All we have to do is look at Table 15 on page 36 of the Economic Statistics published by the Government. There the whole sorry story is told in black and white after seven years of Fianna Fáil effort, initiated by all that criticism and all that talk about 100,000 new jobs. We find that after seven years of Fianna Fáil effort it is not a question of 10,000 new jobs, it is not a question of 20,000 new jobs, it is a question of 73,000 fewer people at work in this country. How now about the “black year” of 1956 so far as employment is concerned? Then we have the Minister for Transport and Power having the audacity to deliver a lecture to these benches today with that record behind him, a record which has pushed more than 10,000 people per annum out of work since Fianna Fáil were re-elected to office in 1957. That is their record so far as employment is concerned.

We heard the Minister for Transport and Power talking about the balance of payments. In the years 1956 and 1957, before they were re-elected as a Government, we had Fianna Fáil spokesmen talking about the situation which had arisen by reason of a deficit in the balance of payments in 1956. Deputy Lemass, now the Taoiseach, speaking in this House on 8th May, 1956, and reported at column 51 of the Dáil Debates said:

After two years of this incompetent Administration, we have a deficit in our balance of payments which threatens the future of every man, woman and child living in this country. We have rising prices. We have rising costs of Government. We have a higher, and a rapidly increasing burden of taxation.

In the Irish Press of 23rd February 1957, he is reported as saying:

Last year there was what is called an external payments crisis. That was a situation in which the country imported more goods than it could pay for by means of its exports. Obviously something had to be done about it because it would be only a question of time until other countries would not sell us the raw materials and machinery that we could not pay for.

What is the Fianna Fáil record? Those two quotations from speeches by the Taoiseach referred to 1956. Then if we look at the Economic Statistics we find that in the so-called “black year” of 1956 the deficit was, in fact, £14.4 million. It was £14.4 million in 1956 when Deputy Lemass was saying that there was a deficit in our balance of payments “which threatens the future of every man, woman and child living in this country.” In 1963, according to Table 1 of the Economic Statistics given to us by the Minister for Finance, that was £22.1 million. That is their record as far as the balance of payments is concerned and the excess of imports over exports in 1963 has risen to £110.5 million as compared with £74.4 million in the so-called “black year” of 1956.

What about the cost of living? Deputies on these benches will remember the very strong, very vigorous campaign which Fianna Fáil succeeded in developing in relation to the cost of living in the year 1956. We remember how the impression was created that the levies imposed by the inter-Party Government to remedy the imbalance in the trade position were something bad, were something that need not have happened. All that was in the general atmosphere of a campaign criticising the then Government with regard to the cost of living.

Again, going to a source which the members of the Fianna Fáil Party will hardly question, I find that the present Taoiseach, then Deputy Lemass, one of the leaders of the Opposition, spoke in Cork in terms which persuaded the Sunday Press to set up large, black headings “ `Living Costs Never Cease To Rise', says Lemass.” In the Sunday Press of 15th January, 1956, he is reported as saying:

Every three months since the Coalition came into power a new increase was recorded and the cost of living was now an all-time record.

This report goes on:

There is no prospect that any reduction will ever be made as a result of action taken by the present Government. They have apparently thrown in the towel on that issue, declared Mr. Lemass.

That was only part of the picture that was being painted. We had other Fianna Fáil spokesmen making statements on the same lines. We had the Fianna Fáil propagandists at work in their publication called Gléas which, I understand, can be translated as “ammunition”. It was the ammunition given out by the Fianna Fáil headquarters to the boys, to be made use of at crossroads meetings, to be made use of also at branch meetings. The particular issue of Gléas I have at hand is that of June, 1956, and I see at the top righthand side a heading: “No End To Higher Prices”. The article goes on to say:

Figures for May last show that there has been yet another increase in the cost of living index figure. Since the Coalition came to power two years ago there has been a total rise of 10 points in the index. When Fianna Fáil left office it stood at 124. It has now risen to 134. If there were even any prospect that there would be a halt in these ever-increasing living costs the public might be more willing to accept the situation.

And so on, we had one statement following another of that sort.

We had Deputy Mrs. Lynch going on record in a speech reported in the Irish Press of 23rd February, 1957, as saying:

A Fianna Fáil Government is the housewife's choice. It must be. There is no alternative.

As the Fianna Fáil propaganda sheet which I have quoted pointed out, at the time of which they were writing, at the time that the present Taoiseach was referring to the cost of living as having reached an all time record, the cost of living index figure stood at 134. Since then, the consumer price index, as given in the Statistical Abstract, rose, despite an alteration which I do not clearly follow as to the method of its compilation, to a figure of 159—an increase of 25 points.

The consumer price index in May, 1963, had reached the figure of 159. The figure quoted there is the figure for May, 1963, which I am taking as comparable to the figure for the month of May which was quoted in Gléas. The figure compiled in May, 1963, does not, of course, take into account the further 2½ per cent increase in the cost of living occasioned by reason of the Fianna Fáil turnover tax of last year. It does not take into account the further increases in prices and consequential increases in the cost of living occasioned by the 12 per cent wage increase which was allowed as a compensation for the deliberate action of the Fianna Fáil Party in putting up prices last year and, of course, it does not take into account the further increase in living costs which will take place as a result of this year's Budget.

There is no doubt that the Budget introduced by the Minister this year shows the tragedy and the folly of the turnover tax proposals which were introduced by Fianna Fáil just 12 months ago. All of us, no matter on what benches we sit, now appreciate that the turnover tax was quite unnecessary and we appreciate that the increases in the cost of living which have taken place as a result of that have to a very large extent negatived the wage increases which were granted.

While I am on this subject, I should express agreement with what was stated by the Minister for Finance, and subsequently reiterated by the Taoiseach when he spoke here last week, with regard to savings. It is quite clear that savings are necessary. The more savings this country can induce its people to make, the better it will be for the country. That was recognised by the inter-Party Government when they set up the National Savings Committee and when they set on foot various inducements to endeavour to encourage the people of this country to save.

The Taoiseach is reported in the Official Report of 15th April, that is, last week, at columns 1774 and 1775. as saying:

As the Minister for Finance emphasised in his speech here yesterday, the surest remedy for that situation is an expansion of savings. In 1963 small savings, by and large, did not expand. If, as the Minister for Finance urged, those in our community who have got increases in their wages or their salaries would decide to save some part, if not the whole, of the increases by any of the means which are open to them, then it would not only benefit themselves but help the country over a difficult patch. We expect with some confidence an expansion of savings in this year.

I agree with the sentiments expressed by the Taoiseach, with every word I have quoted in that passage, with the exception of the last sentence. I cannot for the life of me see how the Government can express confidence that there will be an expansion of savings this year. Again, my authority is no less a person than the Taoiseach. I have given the House what he said on the 15th of the present month with regard to savings. Here is what he said on 15th March, 1956, reported at column 622 of the Official Report for that date. Again, I agree with his remarks. They were true but they do not become any less true when one crosses from one side of the House to the other:

Ministers are pleading with the people to save, and exhortations have been addressed to all classes of people that they should save money. Saving committees have been set up. Exhortations of that kind do little good in the absence of price stability. Nobody in his right senses will exert himself to save when the outlook is one of continually rising prices. He faces the probability that the money he saves will buy less one year or two years hence than it will buy now.

There were 100,000 unemployed then.

The Parliamentary Secretary was not in the House when I dealt with the question of unemployment. If he had been he would not have opened his mouth now. What is the picture the Government are giving us now on price stability? If the Parliamentary Secretary had been here some time ago to listen to the Minister for Transport and Power, he would have found that not only did they increase taxation last year and this year but that we can look forward to continually increased taxation so long as Fianna Fáil remain in Government. That, of course, is acting to a pattern. They are the architects of high prices and high taxation, the architects of price instability. Of course, Deputy Lemass was quite right in laying down as a principle in 1956 that if you want to encourage savings the best way to do it is to bring about a situation of price stability.

Under the inter-Party Government, you had at least reasonable stability of prices, encouragement of savings, and you had real savings made. Under the Fianna Fáil Government, with the increase in the cost of living year after year, what inducement is there, what encouragement is there to the people to save? According to the Statistical Abstract, Table 338. at page 321. we find that the cost of living has risen gradually, year by year since 1956, with the exception of 1959-60 when there was a slight change. I am talking about all items, but the same picture is reflected if you break it up under the headings of fuel, food, clothing.

In May, 1956, the figure stood at 134. In 1957 it was 138, in 1958, 146. In 1959 it had risen to 147. In 1960 there was a drop back of one point to 146, but they made up for it in 1961 when it jumped to 150. In 1962 there was a double jump to 158 and in May, 1963, it had risen to 159. As I have said, that does not take into account all the repercussions of the turnover tax. In that situation what encouragement is there to the people to save? Let me put the same proposition the Taoiseach put on 15th March, 1956:

Nobody in his right senses will exert himself to save when the outlook is one of continually rising prices.

What about the levies that yielded £3 million?

They are permanent taxes now.

I dealt with the levies and Deputy O'Sullivan has reminded me now that notwithstanding all the talk and all the whining about it, as soon as they got in they wrote them into the permanent framework of taxation.

Why were they imposed?

Deputy O'Higgins.

Unemployment as a result.

If the Chair will permit me, I am prepared to go back over everything I said with regard to employment and unemployment. However, perhaps the Parliamentary Secretary will do me the courtesy of reading it. Let us pass now to the question of the cost of Government. In the year 1956, we had a very strong campaign launched on a number of fronts. I have dealt with the question of employment and have shown that despite all the talk of 100,000 new jobs there are 73,000 fewer people at work.

I have dealt with the question of the attack made on the balance of payments in 1956 and have been able to show, from the official figures published by the Government themselves, that the deficit in the balance of trade was greater by some £7 million or £8 million in 1963 than it was in 1956. I have dealt with the question of the cost of living. Another of the fronts on which the inter-Party Government were attacked in 1956—and one of the leading contenders in the attack at that time was the Parliamentary Secretary —was the question of the cost of Government. In the debate on 8th May, 1956, reported at column 47——

I remember the Ceann Comhairle giving a ruling that long and tedious quotations were not in order.

This is one the Parliamentary Secretary does not like to hear.

I read it in the Fine Gael pronouncement.

I hope the Parliamentary Secretary will not have the brass to tell the Taoiseach this is a tedious quotation. I shall now quote from a speech by the Taoiseach, reported at column 47 of the Official Report for 8th May, 1956:

Have the Government any sense of responsibility, have they any knowledge of the tasks that are facing them? Did it occur to them that this Budget deficit of theirs could be rectified by reducing the cost of Government?

The policy there was reducing the cost of Government. He then went on—I shall not quote him: the Parliamentary Secretary may take my word for it—to point out that in 1953 a Fianna Fáil Government, of which he was a member, had taken a decision that taxation rates would not be allowed to increase beyond the 1953 level. He went on to claim that there was a sum of £8 millions increase in taxation which he alleged, had gone on waste and extravagance.

In case the Parliamentary Secretary to the Minister for Finance should feel I am not giving him his full quota of attention from the point of view of quotation, may I say that on 14th March, 1956, at column 536 of Volume 155 of the Official Report, Deputy O'Malley made his own recommendation as to how the cost of Government could be reduced. He, in common with his colleagues in the Fianna Fáil Party, were beating the drums in an all-out effort to tear down the then Government. Deputy O'Malley made this recommendation:

The local authorities—the people —cannot pay any more in rates. The only solution of a constructive nature, as far as I can see, is that the Government should give the example. How can the Government do that? In my humble opinion, the Government should give the example at the top. Take one example—the Department of Justice. Does everybody not know that the Department of Justice, instead of costing the taxpayers some £100,000, could be equally competently carried on by the Minister for Defence? Everyone knows the Minister for Defence could be Minister for Justice as well and carry on both Departments.

Later, he says;

I am simply showing the Parliamentary Secretary how the cost of Government can be reduced.

Read what Deputy MacEoin said after that.

Of course they were not Fianna Fáil Ministers and, therefore, they could carry two Ministers, a thing no Fianna Fáil Minister could do.

We have fewer Ministries.

Next year, the Government changed. Lo and behold, instead of abolishing the Ministry of Justice and letting the Minister for Defence do both jobs, Fianna Fáil promptly appointed a Parliamentary Secretary to the Minister for Justice.

There were reasons for that, as the Deputy knows. Anyway we have fewer Ministries than you people had.

And, please God, after the next general election, there will be considerably fewer Fianna Fáil Ministers.

(Interruptions.)

Will Deputies allow Deputy O'Higgins to make his statement?

(Interruptions.)

Deputy O'Higgins is entitled to make his statement and he should be allowed to do so.

I am rapidly coming up to date and that is what the Parliamentary Secretary does not want. This campaign was embarked on in the year 1956, the so-called black year of 1956. The cost of Government was too high and the proper thing to do was to give the example at the top and reduce the cost of Government. The year Deputy Lemass, as he then was, was accusing the Government of waste and extravagance—

That is right.

——was the year when, under the inter-Party Government, 4,011 local authority houses were built as compared with 1,828 in 1963 under a Fianna Fáil Government. I would say that, in terms of real money values, more money was being spent by the inter-Party Government on housing than is provided for the current year in the Estimates.

The Deputy is, of course, wrong.

He said "in real money values."

Add private housing on to local authority housing.

I am not forgetting that. According to my calculations—I am sure the Parliamentary Secretary will correct me if I am wrong—the Estimates for this year, 1964-65, show at page 113 under subheads E.1 and 2, the amount of money it is proposed to make available for local authority housing and private housing grants. It is intended to make available in the current year a sum of £2,460,000 as the contribution to local authority housing——

£2,460,000. The Parliamentary Secretary will find it at page 113, subhead E.1, of the Book of Estimates. There is a sum of £3,040,000 in respect of private housing grants. At page 209 of the Statistical Abstract, we find the figures for 1958 —that is as far back as this particular book goes. If, however, the Parliamentary Secretary will look at the Statistical Abstract for the year 1961 he will see that comparable figures go back as far as 1956. He will see that in the year 1956 the actual amount spent by the then Government, as I understand the comparison, and I am open to correction if I am wrong, in respect of the particular items for which Fianna Fáil estimate this year to make a total of £5½ millions available, was £4,271,000.

I mentioned real money values. The Parliamentary Secretary must take real money values into account. Last month I put down a question to the Taoiseach to ascertain the purchasing power of money now as compared with ten years ago. The calculation up to mid-November, 1963, showed that the purchasing power of the £ had dropped to 15/1d. When we take into account the price increases that have taken place since and the price increases that will take place as a result of this Budget, it is a conservative estimate, I think, to say that the alteration in money values between 1956 and 1964 shows that the £ has dropped by a quarter. Therefore, to get the real amount in real money values that the Government estimate to spend on housing, we must take a quarter off the £5½ millions and that shows that in fact, in terms of real money value, the Government are proposing to spend about £4,125,000 on housing this year. However, let the result be in the houses built.

The figure the Deputy gave is entirely incorrect. He is millions out.

Will the Parliamentary Secretary look at subheads E.1 and 2 on page 113 of the Book of Estimates and tell me what they represent?

With your permission, Sir, I should like to point out to Deputy O'Higgins that, for 1964-65, the provision for the building of houses and flats by local authorities is £7.24 million, which compares with an expenditure of £4.61 million in 1963-64, and the public capital invested in housing, which amounted to £10.74 million in 1962-63, rose to £12.12 million in 1963-64 and a further substantial increase is expected in 1964-65, and a sum of £16.61 million has been provided for the year 1964-65, an increase of £4.49 million over 1963-64.

If the Deputy will look at Table 5.

Perhaps Deputy O'Higgins would be allowed to make his speech.

The Deputy has left out the Local Loans advances. He is confused. He has not the figures right.

If I am wrong I make no bones about it. I have never been slow to apologise if I am wrong and I do not hesitate for a moment to accept correction from the Parliamentary Secretary. All I am saying is that it appears to be the position from these items in the Book of Estimates which seem to be the comparable figures with what is in the Statistical Abstract.

However, I do not want to argue about it. What I am interested in is the houses that were put up. The Statistical Abstract for 1963, which goes back to 1956, indicates that in 1956, in regard to local authorities, in rural areas there were 1,648 houses built; in 1963, there was a grand total of 586. In urban areas, the total for 1956 was 2,363; in 1963, it was about half that, 1,242. As regards new houses, that is, including new houses built by private persons and by public utility societies as well, presumably, of course, with State assistance—this is given in Table 160, page 208—in 1956 the total was 9,837; in 1963 the total is 6,867, the last figure available to me. Therefore, if the Parliamentary Secretary is right and if there is a considerably greater amount of money than I had thought being injected into the building of houses this year, it is not before its time because the Fianna Fáil Party, since they were re-elected to Government in the year 1957, have a miserable record so far as housing is concerned.

The Deputy left out a very important figure.

I am quoting the figures given here. I do not mind the Parliamentary Secretary supplying it if he thinks I have left anything out.

This Government gave very substantial grants as well for the reconstruction of old houses, and that was a very large figure of 9,961, given in the same statistical table.

They did not provide accommodation for more people. They were for the existing people in those houses.

If we did not give them the money, these houses would not have been preserved.

There were no houses provided for the people who were sent to live in barracks.

That is only propaganda.

Are there not Dublin families living in barracks?

Let us look to the future.

Very well—in relation to the future?

Housing should not be the plaything of politics.

I wish the Parliamentary Secretary would understand I am not trying to avoid giving him, in particular, or his Government credit for anything they have done. If they have made grants available for reconstruction of old houses, it was a worthwhile thing to do. I am glad they did it and they deserve credit for that. It was not a new idea. It has been there all along and the figure has varied from time to time. In 1956, the number of houses reconstructed with State aid was 6,494. It had reached a figure of 9,961 in 1963. As Deputy O'Sullivan points out, that was not a question of providing new houses to relieve overcrowded conditions but one of giving grants for the repair and improvement of existing houses.

And loans.

Anyone in this House and a lot wealthier people than those in this House are entitled to get the benefit of these improvement and reconstruction grants I am not belittling that. It is a good thing to do. It is a policy that is supported from this side of the House, and when the field was opened more to enable a greater number of houses to qualify for such grants, that amendment in the law was welcomed from this side of the House. Therefore, the Parliamentary Secretary need not feel I am finding fault with him in that. I give him any credit to which he is entitled.

On the overall picture, the Government have failed badly as compared with 1956 in housing. They failed badly as compared with 1956 on the question of the cost of living. They failed badly as compared with 1956 on the question of the cost of government. They failed badly as compared with 1956 on the question of the balance of payments. They failed miserably as compared with 1956, notwithstanding all their talk of 100,000 new jobs, on the question of employment.

I do not wish to take up much more of the time of the House but I do want to say, in rebuttal of what has been alleged against us by Fianna Fáil speakers, that we in the Fine Gael Party do not stand for retrenchment for the sake of retrenchment. We do not stand for retrenchment regardless of the consequences, and we are not a bit afraid of money being raised by taxation, provided the money is spent sensibly, spent prudently, spent in the interest and for the benefit of our own people. Any charge of spending recklessly for retrenchment which may be levelled against this Party is complete nonsense and I have no hesitation in characterising it as such. It is a question of approach. It is a question of deciding a proper order of priorities, of deciding what should come first and how moneys should be spent.

In this I am expressing a personal view. I do not think money spent in rates relief for farmers is the best way of aiding farmers. I recognise, as any Deputy representing a rural constituency must recognise, that the agricultural community are an exceedingly hard-pressed community at the moment and they certainly did require and were justified in seeking some type of aid from the Government. I wonder are the Government satisfied that the rates relief being afforded to the hard-pressed farmers is the best way of assisting them. This seems to be a case of caviare for the few and not meat for the many because when money is being spent in relief of rates, the biggest landowner will get the greatest benefit and the poorest farmer will get the least benefit. That does not seem to me to be the best way of doing things. The farmers were certainly entitled to look for the reliefs which they got.

I have not said anything—and I do not intend at this hour to say anything —with regard to the little Budget introduced by the Minister for Posts and Telegraphs in relation to the increases in postal charges other than this: whether the Government realise it or not, this will be a very heavy impost on industry. It will bring about further increases in costs and prices of one sort or another, just as the increase in the cost of petrol will bring about increases in prices because of increased carriage and freight charges by users of petrol.

All in all, this is a bad Budget, and I do not think any amount of whistling or tub-thumping by the Fianna Fáil Party will make the Budget one whit better than it is.

Was there anything good in it?

There was, but it was a very niggardly effort.

What was it?

A niggardly 2/6 to the social welfare beneficiaries.

Not enough, we agree. What about the 2d. for the creamery milk suppliers? Was that good?

It replaces what was taken from them, and I suppose it is good to make retribution now and again.

What about the rates relief?

I have dealt with the question of rates relief. Do not let us conduct this by means of cross-examination. This is a bad Budget. The Government should make up their minds on that and learn something between now and this time next year, if they are still there.

We are always glad to learn.

Like the Parliamentary Secretary, I was wondering if Deputy O'Higgins would have a good word at all to say to us. Listening to him, I was reflecting on the fact that it was rather a pity the Coalition Government fled from office in 1956 if they were, at that time, conferring on the community all the benefits which the Deputy says they were conferring.

Plus the levies.

It seems strange to me that the Ministers of that Cabinet rushed into Leinster House, snatched their hats off the pegs and made for the main gate. Not merely did they take the top and bottom of the gate but they took the hinges as well, and ran to the country overnight. I was wondering, if the Coalition Government had so much to offer the community, why did they not stay in office? It is rather a pity that at this stage Deputy O'Higgins should have to lament the fact that we have not another Coalition Government.

I want to make one or two points, before trying to make a speech on the Budget, regarding some of the remarks made by Deputy O'Higgins. He said we had created a balance of payments deficit for 1963. That is true. It is a larger deficit than was created by the Coalition Government in 1956. The difference, of course, is explained in the Budget statement. The difference is that in our case the Budget deficit was created for worthwhile capital projects, and the country was not spending money on consumer goods. Neither did we have recourse to Marshall Aid or any such other aid.

As reported in the Official Report, Volume 208, Column 1536, the Minister for Finance said:

It is estimated that a balance of payments deficit of £22 million was incurred in 1963, as compared with a deficit of £13½ million in 1962. As the net external assets of the banking system and departmental funds rose to £3 million during the year, the deficit appears to have been more than covered by the inflow of capital. I agree with the statement in the OECD report that foreign capital should not be a substitute for measures to stimulate domestic savings nor for proper action to deal with a balance of payments deficit resulting from domestic inflation. The 1963 capital inflow was accompanied by a rise in domestic savings and helped to raise the proportion of the gross national product devoted to capital formation.

In my opinion, therein lies the difference between this Government and the Government of which Deputy O'Higgins speaks.

He also made another point regarding housing, and I am very glad the Parliamentary Secretary corrected his figures. I was looking up figures as published in Table 5 of the Budget Statement under the heading "Public Capital Programme". It gives figures from 1959-60 to 1964-65 and, under the heading "Building and Construction", as the Parliamentary Secretary said, we find that £16.61 million is being set aside in aid of building and housing. Under various other headings, various other amounts are being set aside, and the total amount for building development is £29.22 million. Therefore, there is no use in Deputy O'Higgins, or any other Deputy, trying to decry the efforts of the Government in the field of housing, when we see public capital programmes of these dimensions.

It is also argued that more money should be devoted towards the relief of rates. On the other hand, when we go down the country and meet members of the Fine Gael Party who are also members of various local authorities, we see the spectacle of those members standing up in the various council chambers and not opposing any of the individual estimates that make up the total rate, but when it comes to voting on the total rate, they go into the lobby and vote against it. They are afraid, as they are afraid in this House, to decry certain types of expenditure. They are afraid of the word "retrenchment".

Deputy Dillon started off in Kildare with "Retrench", but he shied away from that later. Deputy Barrett opened the election campaign in Cork with the word "Retrench", but he also shied away from that word because it is counted an ugly word; it means cutting-down and also a lowering of living standards. Therefore, the Opposition cannot have it both ways.

If the Government agreed to the demands made upon them in this House from the various members of the Opposition for increased expenditure and were prepared to levy taxation in order to meet the expenditure sought by the various Opposition Parties then the Minister for Finance would be looking not merely for £250 million odd currently but would require twice that sum to cover all the requests from the various quarters which now decry our spending.

I notice also that various members of the Fine Gael Party come in here and attack the Government for not doing enough for people in retirement. Some of them wax eloquent and make very strong speeches from the Opposition benches on the plight of and the hardships suffered by those people. We hear, for instance, my colleague, Deputy MacEoin, inside and outside this House advocate better treatment for Old IRA men. Deputy MacEoin did nothing for them when he was a Minister in a Government and was in a position to do something for them.

On looking up the records, I find that increases in military service pensions took place during our period of office, notably in 1953 when we increased the pensions of Old IRA men by 50 per cent: these are military service pensions which were expressly excluded in 1955. On 1st August, 1959, we added six per cent to their pensions. On 1st August, 1960, we added five per cent to their pensions. On 1st August, 1962, we added 20 per cent to their pensions and on 1st November, 1963, we added five per cent to their pensions. I assume that those various categories will participate in the five per cent which is made available in this Budget. Deputy MacEoin and others of his Party are the people who say to members of the Government and the Fianna Fáil Party: "You are not doing enough for pensioners. You are forgetting and neglecting the Old IRA men who won the fight for freedom."

I want also to draw the attention of the House to the fact that not merely did we better the conditions, as best we could, of Old IRA men in receipt of military service pensions but we bettered the conditions of those in receipt of special allowances. In 1943, the appropriate annual sum for a married man under 70 years of age was £97 10s. In 1953, we added, by various stages, £32 10s. to that, which made the appropriate annual sum for the purpose of reckoning the special allowance £130. In 1961, it rose to £143. In 1962, we added another £13. In 1963, the total appropriate annual sum for a married man under 70 years of age who would be seeking a special allowance was £160. Therefore, the total increases since 1953 could be deemed to be £62 10s. I want to draw the attention of Deputy MacEoin and his backbenchers to that little fact. I would ask him not to shy away from it when he is making reference to the terms and conditions of military service pensioners and Old IRA men in future.

In the whole course of the discussion on this Budget, fault was found with nearly everything the Minister for Finance has tried to accomplish in his financial statement. The Fine Gael Party, as is, I suppose, the right of an Opposition, fume away like a Hallowe'en faggot at the rate of spending which is supposed to be current. It is also to be noted that during the present week and last week not one member of the Fine Gael Party mentioned the word "retrenchment". One can only deduce from that fact that the Party are afraid to come down on one side or the other. I suppose they dream their position fairly comfortable to sit on the fence.

Down the country, we hear warnings from various quarters which proclaim themselves to be neutral in politics and yet at the same time those people dish up all the main points of Fine Gael propaganda. They could, indeed, be said to be manufactured in Fine Gael headquarters. If one is in conversation with them one is told: "I have no politics, but look at the national debt; look at the rate of spending; where will it end?" One instinctively sees the new-look Opposition emerging. It was illustrated to me the other night by an old supporter of Fianna Fáil who is a member of what might be thought to be a very backward cumann down in County Longford. "Indeed," he said, "it is like being present at the installation of an African Chief to hear the Fine Gael Party followers shouting all the right slogans." Anybody listening to the debate in this House could fully agree with that fact. Party followers are instructed to shout: "Put out Fianna Fáil and give Fine Gael a chance." This is the current campaign. Where will it end? If you draw attention to the fact that the economy is advancing somewhat and that people are achieving a higher standard of living, they will instinctively answer "For how long?"

Fine Gael never can get over the idea they acquired away back in the 1930s when they derided our campaign for industrialisation, called all our factories "bucket shops" and said that Irishmen engaged in Irish factories could not turn out a comparable article with that produced in England or any other country. I invite the Fine Gael Party to come out of the shadows and try to get into the sunshine, because now is the time. While we hear all this weeping, wailing and gnashing of teeth, we learn that at least one very important member of the Fine Gael Party feels his firm had very good results last year. If 1963 was as bad as Deputy O'Higgins made it out to be, I do not know how Mr. Morrissey could say, as he did in an advertisement in the Irish Times of 8th January, 1964, “I report a record year.” In that advertisement he said that the total amount obtained for property sold during 1963 exceeded by no less than 64 per cent the amount realised in 1962, which, he said, was itself a record year. The total number of lots of machinery, equipment, vehicles and trade goods sold by the machinery division exceeded the previous record by 130 per cent and, he added, the amount realised was 187 per cent greater. He went on to say:

Morrisseys sold factory premises at £185,000, the highest price ever obtained in this country by an auctioneer. Morrisseys sold a public house for £70,000, the highest price ever recorded for a licensed premises at a public auction. Morrisseys sold second-hand plant and machinery——

I am sure Mr. Morrissey will be pleased with this, but is it very relevant to the Budget?

It is not in order to discuss the affairs of people outside this House.

I am sure Mr. Morrissey would not object at all.

The quotation is rather long.

I agree, but it is public property. I am quoting from the Irish Times. If Deputy Costello and his colleagues believe 1963 was such a depressed year, I do not know how Mr. Morrissey could make out it was a year of records.

He is a very good businessman.

As usual, we find serious flaws in the arguments of Fine Gael. That would not suggest that Mr. Morrissey agrees that the country has gone astray economically. Far from it. Yet Mr. Morrissey was a prominent member of Fine Gael up to lately and was a Minister a few years ago. There are many other former friends of Fine Gael who now also reject the old firm's line of argument, of thinking and of sentiment. Take the bankers. Not long ago some bankers used to subscribe to Fine Gael funds in the hope of putting the Party on the right track. Again, I must refer briefly to a leading article in the Irish Times of 8th January. I learned a lot from this issue. The main object of the article was to set out that, whereas heretofore we had pawnbrokers, we now have banks. The article is headed “On the Move” and goes on to say:

These new banks are appearing where sometimes the nearest previous equivalent was a pawn broking shop. The pawnbrokers are losing business, but the banks are gaining it. The amount of money held on deposit in Ireland last year was up nearly to the £250 million mark, whereas current accounts total another £150 million odd. With these huge resources behind them Irish bankers have been able to play a far greater part in financing private enterprise through extended overdraft facilities than has been the case in Britain.

Let us take one small example in support of that. The House is aware of the scheme of housing grants announced recently by the Minister for Lands. It is gratifying to be able to recall that small farmers, who hitherto could not raise a penny in a bank, can now compare the relative merits of a loan from the Land Commission or from the local bank. If the Opposition will contest the point with me that that is not a step forward, I do not know what to say.

I said at the outset that Fine Gael would like to retrench but are afraid to do so. I want to put it to them: should they receive a mandate from the people, where would the axe fall? Would the Opposition cancel the pay increases awarded to the teachers and the gardaí or reduce spending on education?

The Opposition talk a lot about the need for education and contend that we are backward and have bad schools and depressed standards and so on. It may interest them to know that the number of scholarships provided to promote post-primary education is more than three times greater than formerly, solely due to Fianna Fáil. The number of teachers has increased by 664, from 13,554 in 1958 to 14,218 in 1963. That has made it possible to dispense with untrained teachers. The position is now much more favourable in that regard and compares more than favourably with that of other countries.

In the past five years, for example, roughly 412 new schools were built and, speaking from memory, I think 279 other schools were reconstructed. We spent roughly £9.5 million in grants in aid of school-building and reconstruction. That is a sizeable figure. It may not be enough. We all agree that we should have better educational facilities but at least that is an honest attempt to give a share of the national cake to a very necessary and praiseworthy purpose. A notable feature was the establishment of a special training course for teachers engaged in teaching mentally and physically handicapped children. I am sure the Opposition will agree that this is a move in the right direction and that whatever we may be able to devote to the uplifting and training of retarded children should be provided for that purpose.

That would seem to be a matter for the Estimate.

In the context of the Budget, the Vote for social services makes up a good part of it and education is one of the social services. I do not want to dwell on details but we are spending a fair amount in proportion to our income on education. The net point is that if we will the end we must also will the means. Budget figures show the gross national product is growing and individual spending on social, economic and general services will expand. As the Minister for Transport and Power pointed out, it is preferable to be able to increase the gross national product than to take a larger share of national income in taxation. It is preferable to be able to spend a proportionate sum, as we are doing, on social services.

It has been said we did not do enough for the social welfare classes. That is nearly always said at Budget time but I should like to remind those who advance that argument that in every Budget, great or small, since 1957 we have made provision for social welfare recipients. Sometimes the provision may have been humble but we always made what would seem to most people a serious attempt to help those members of the community receiving social welfare benefits.

As the Minister for Finance said, provided we can keep our costs within reasonable limits so that we can sell our goods against our competitors, we should be able to achieve the aims and objects set out in the Second Programme for Economic Expansion. That will carry us into the 1970's. It has been said it is better to travel hopefully than to arrive sometimes but I am not referring to hope in that context. We hope we shall be able to accomplish the aims of the Second Programme.

The reliefs provided in the Budget came in for some criticism. Deputy O'Higgins in particular dealt with the allocation of moneys towards relief of rates on land. The Minister for Finance, and I think the Taoiseach, previously pointed out that a complete survey of the rating position was being carried out and that, pending a report on the subject, certain reliefs would be made available which would take the rates below the 1956-57 level. As I said at the outset, we know the tactics—I am not going to call them the manoeuvres—of the Fine Gael Party who make great play with increasing rates, despite the fact that everywhere we go as politicians, at every meeting which our public duty demands we attend, we are reminded of the fact that people are seeking better roads, better houses, more land division, more afforestation and water supplies in every household.

It might be summed up in this fashion: in effect the people are demanding higher and better living standards. That is a praiseworthy objective which may be said to have been the objective of the Fianna Fáil Party since they came into politics. That was the objective we were pursuing when we published the First Programme for Economic Expansion: that is the objective we continue to pursue in the Second Programme for Economic Expansion; and that is the objective which this Budget sets out to attain.

The criticisms which I wish to make of the Government's general economic and financial policy fall under six main heads. First of all, the Government have turned their back on economic planning and have contented themselves with what is known as economic programming; secondly, the Government's whole economic policy is based on the assumption that there will be a decline in social capital investment; thirdly, the Government prefer indirect to direct taxation; fourthly, the Government's policy and their whole programme is based on an assumption, which is now a patently false one, that we will be in the European Economic Community by the middle of the 1960s; fifthly, the Government have this year introduced a deflationary Budget when it was unnecessary to do so; and sixthly, the major criticism of the Government's economic policy is in regard to their failure to bring about any reform in our banking structure.

It is to be noticed that Government spokesmen take care to use the word "programme" and do not use the word "plan". Notwithstanding this, people talk loosely about the Government's economic plans. In fact it must be clearly understood—and the Government have so set it down in the White Paper relating to economic expansion—that this Government have decided that it is not necessary, or it is not desirable, or it is not feasible for us to have proper economic planning because the whole basis of the Government's economic programme is what is called programming and not planning. There is—and this must be repeated — a clear distinction in principle and in practice between economic programming and economic planning. The essence of the former is in fact a forecasting by statisticians and economists of the likely outcome on the community, given an agreed annual growth. Last year the economists worked out that it might be possible for the economy to increase by four per cent per annum in the growth rate and accordingly worked out on that assumption what the different contributions from the different sectors of the community would be. This, I repeat, is economic programming. It is different from the sort of economic planning which I believe is necessary in this country.

If we got the sort of progress that we all want, we could have a laissez faire economy. If our economy were buoyant and producing jobs for the people who need them, if in fact our free private enterprise worked as it did, say, in Germany and as it does work in the United States of America, then it would not be necessary for us to undertake proper economic planning, but unfortunately it does not. One of the remarkable things about the plethora of facts and figures given by Government spokesmen in the course of this debate and elsewhere is the ignoring of the most vital fact, namely the rate of employment at this time. If we can produce statistics that show our growth rate is four per cent per annum and that it was 2.5 in 1962 or 5.9 in another year, what real value have these figures if all this time a decline in employment is going on? That is the fact; notwithstanding the increased growth rate over the past five years, employment each year has been going down. Of course we can point to the increase in industrial production, the increased numbers in jobs in industry, and we welcome this, but the simple unanswerable fact is that we are not producing jobs for our people.

For many years, there has been a steady decline in the number of persons employed and there are fewer persons now — something like 70,000 — in employment than there were in 1956. That is a fact which no Government should tolerate. If the system of giving grants, of projecting our economic development by means of different economists' statistics, by talking at chambers of commerce, by praising businessmen for their progress, by talking about the increase in gross national product, by making available industrial grants and by making available tax concessions—if all these techniques were sufficient to bring about the growth we need, then it would be unnecessary to take other steps; but they are not, and the sooner we face up to the real problems facing the country the better. No matter how you juggle around with the statistics, there are people who are not able to get work.

The Government sometimes take figures for the net passenger movement by sea when it suits them. If the figures are favourable, they say there is a decline in emigration but if they are not favourable, the Government say: "You cannot take the figures for net passenger movements by sea; you must wait for the census figures." Whatever way you take it, you can play politics about it if you wish. The plain fact remains that there are not enough jobs for our people and that the standard of living of the great majority is deplorably low. It is this complacency about the situation which leads to the main criticism we can make against this Government and the fact that they are prepared to let the economists make statistical projections and then sit back and think that everything will be all right that justifies our main criticism of the Government.

It is known to everybody that if we run into a balance of payments crisis and if the assets of the commercial banks decline, you will have retrenchment here. It is known by everyone that if, in fact, we are unable to maintain our exports to match our imports, we will have crisis conditions arising again. In the past couple of years, we had quite serious deficits in the balance of payments, amounting in the past two years to £35 million. This country was fortunate that during that time, for some reason of which we are not informed, or which the statistical data are negligible, of which Government spokesmen give no clear indication, there has been an inflow of foreign capital into this country, amounting to £24 million each year, amounting in all to over £48 million in the past two years.

If that had not happened, we would be in the middle of a grave balance of payments crisis now. In fact, of course, the assets of the commercial banks were not reduced by reason of the deficits in the balance of payments because of this capital inflow and what not very long ago was termed the foreign debt—"the contracting of foreign debt", was the phrase that was used in our official publications about this process—has come to the aid of the economy and avoided what would have been a serious balance of payments crisis.

Of course, the need for economic planning is seen in the housing situation. I agree with those Deputies who say that this is not a matter about which politics should be played. Of course, it is not. It is much too serious. But if, in fact, you see a Government who set out as their aim to bring about a decline in social capital investment and if, in fact, the Corporation housing programme declines from 14,000 in 1957 to 261 in 1961, I do not think it is playing politics to say that, in fact, this is something which should not have happened and which would not have happened if there had been proper economic planning.

It seems to me that the basis on which we approach these problems should be changed. It seems to me that we should have a Ministry for Economic Affairs, with a proper planning board, with proper measures taken to see that there are proper planning and proper economic growth in this country.

I have said that the Government's economic policy is based on a decline in social capital investment. I should refer, for the benefit of those Deputies who are here but principally, perhaps, for the record, to the Government's view on these matters. The Programme for Economic Expansion produced in November 1958, has this to say, on page 8:

The social capital investment of past years has given us an "infrastructure" of housing, hospitals, communications, etc., which is equal (in some respects, perhaps, superior) to that of comparable countries. What is now required is a greater emphasis on productive expenditure which, by increasing national output —particularly of goods capable of meeting competition in export markets—will enable full advantage to be taken of that infrastructure and in due course make possible and, indeed, necessitate its further extension. The expected decline in social capital expenditure in the coming years will afford an opportunity— and underlines the necessity—of switching resources to productive purposes.

The Government were not quite so blatant in their Second Programme for Economic Expansion. They hid the reality behind these words. At page 63 of the programme produced last year, it is said:

In the sphere of capital expenditure, public authorities will observe the fundamental principle laid down in the first programme that priority must be given to capital outlay which is not merely necessary but also productive in the sense of yielding an adequate return to the community in competitive goods and services.

In other words, capital investment, social capital investment, is to continue to decline.

That is a policy which this country cannot afford. We cannot afford to have the appalling social conditions that exist, particularly in our large cities like Dublin, Cork and Limerick, situations in which 19 people are living in a two bedroomed corporation house, in which people are literally being sent demented because of worry and strain over where they are going to be able to remain, in which families break up because of the housing conditions in which they live in which you have a waiting list now and in which it will be impossible to give proper housing to the people for years to come.

I am not playing politics when I mention these facts. These are known to every Deputy. They are known outside the House. It is a scandal for this country that they should exist and they are brought about because of wrong policies which were operated in the past and which are still being operated at the present time.

The Taoiseach, last week, made a rather trite statement, that the Budget is the instrument of social policy. Of course it is. If you find a Budget whose social policy is, in fact, reactionary, whose social policy on the level of taxation is designed to hit the poorer sections of the community rather than the better off, then you take whichever side you wish on it.

I know where I stand in that regard. I am against the fundamental policy of the Government, which has been in operation for the past five years, of increasing indirect taxes as against direct taxes. This Government have decided, as a matter of fundamental policy, that we should have indirect taxation rather than direct taxation here. Income tax has been reduced; surtax has been reduced; and taxation in indirect forms has been increased all the time. This, as I say, is one of these items of policy which are forgotten, which are ignored. You have to burrow through the official statements to find the reality but it is there, and you will find it in the Minister's speech last year introducing his Budget, at Volume 202 of the Official Report. In the course of the speech which he delivered last year he said:

It is a good principle in the circumstances of a developing country to place the emphasis of taxation on expenditure rather than on income so that earnings and savings will be encouraged rather than spending.

That is the fundamental difference between my view of financial policy and the Government's. If it is said: "What is the difference between what the Government are saying and what the Opposition are saying," I point to this fact. This is a fundamental point of departure between what I think the financial policy of the Government should be and the policy the Government have operated over the past few years.

The Minister went in September of last year to the dinner of the Stock Exchange and he apologised for the fact that last year it was necessary to put on the corporation profits tax and said that this tax increase represented a limited and exceptional departure from the fiscal policy consistently followed in recent years of reducing direct taxation in order to encourage earnings and savings.

This is why I think it is very important that we should understand the difference between the myth and the reality. As I have said, you have to burrow among the many thousands of words spoken to find out the reality of this Government's policy. It is a very simple one: that the Government prefer indirect taxation to direct taxation. I know there are arguments for and against this. There are economic arguments such as the Minister has espoused. I do not accept them; I do not accept economic arguments and solutions which result in an increased cost of living, in another wages spiral. That is bad economics and I also believe it is bad socially.

We are not a well off country. There are statistics trotted out and used to clothe the reality of the situation, which is that of all the OECD countries, we have the fourth lowest gross national product, per capita. We are beaten by Spain, Portugal, by Greece and by one point by Italy, for the bottom of the list. We are fourth lowest, per capita income, of all the OECD countries. We are a poor country and we cannot afford to be putting these impositions on the people when there are other sources available. I do not think for a moment that our economic improvement would in any way be affected by an increase in direct taxation, particularly with all the sources available to the Government. If there had to be an increase in taxation—I do not for a moment agree there should have been—I believe it is through means of direct rather than indirect taxation that the money should be found.

This brings me to another matter on which a legitimate criticism of the Government can be made. We are now facing the glorious years ahead, the 1970's, the glorious years for which our economic programme has been based on a completely false assumption, the assumption that we shall be in the EEC in the mid 1960's. If in fact a businessman prepares his plans for the future, based on conditions which everybody knows will not be realised, you must either change the plans or the businessman who is controlling your affairs.

This Government announced last year in their Second Programme, on page 10:

It is impossible to predict when the way will be open to membership of the Community but for the purposes of this programme it is assumed that Ireland will be in the Community before 1970.

It was even more specific when it came to deal with the very modest increase that the economists were allowing for the agricultural sector because on page 22 we are told that the target for agriculture was also based on the assumption that in the second half of the 1960's, international marketing arrangements would be considerably improved as a result, inter alia, of our being admitted to membership of the EEC.

It says the second half of the 1960's. We are very near that now. I assert that the idea of our joining the Common Market in the immediate future is dead and that the sooner we accept this unpleasant economic reality the better it will be for all of us, instead of having a Government shielding behind this little blue publication which is based on a supposition which it is obvious to anybody who knows anything about the situation is false.

This delicate balance achieved in the economic programme is all based on a fundamentally false assumption that we shall be in the EEC in the mid-1960's. I would wish it were otherwise. I am one who strongly favoured our application to join the EEC, for a number of reasons. One of the reasons that I believed most in was an economic reason because, of the facts that are kept aside, one of the facts about the Irish situation is our almost complete dependence on conditions in England for our continued economic growth, and the Minister for Finance makes a little gesture in this Budget of a deflationary nature, a move to mop up from the extra purchasing power of the ninth round—a little gesture of not allowing for over-estimation this year when all that is necessary to put our whole economic growth in jeopardy is for a British Minister in Whitehall to make a decision. That is the reality of the Irish situation. It is put in different and less bold phrases by the economists, but it is the reality.

I should like to refer to one of the publications of that excellent body recently set up, the Economic Research Institute, by one of its most able economists, Mr. Kuehn. Trying to judge, and endeavouring to find out how this economy of ours can be improved, he says:

From the foregoing discussions, it is clear that the given variables to economic conditions in Ireland are export demand and, to some extent, limitations imposed by the weather.

It is referred to in roundabout language in the Second Programme itself. It is stated on page 12:

The Government will use the means open to it to maintain adequate—while avoiding excessive —demand as a basis for maximum economic advance.

In Ireland, as I have already explained, we are particularly dependent on external demand for our goods and services as the main strength of our economic progress. Let this be underlined so that we can face the realities of the Irish situation. The mainspring of our economic progress is conditions abroad. If those conditions are good, things will be all right. "Abroad" in this connection means Great Britain.

May I underline further the point I am making by referring to the latest report on Ireland by the OECD? It says that the expansion here slowed down in 1962 largely because of a weakening in foreign demand. In other words, conditions in Great Britain in 1962 meant that we had a growth of only a little more than two per cent. Last year it was four per cent because conditions had improved.

The reality is that we are dependent to a very considerable degree on conditions in England for our economic progress. It is to get away from this almost complete dependence that we should make every effort to join in arrangements with the Common Market and I should like to suggest that the Government make every effort to try to negotiate a treaty of association with the Common Market.

Of course, there are difficulties involved in this. There are our trading arrangements with England to be considered. At the moment, it would appear from the vague statements being made by the Government that our application to GATT may be under discussion at the present time in regard to our admission to GATT. These are not sacrosanct by any means. We must weigh up the advantages and disadvantages of any course that may be taken. I suggest, for the careful consideration of the Government, that it would be to our economic advantage to endeavour to secure a treaty of association with the EEC. By this means, we might be able to spread the risk, so to speak, so as to ensure we shall not be so dependent on the British market.

I said at the outset that one of the criticisms of the Budget which is legitimate is that it is a deflationary Budget. Again, one must read the words and parse the sentences of the Minister's statement in order to ascertain exactly what he meant, but it seems to me this sentence can have only one meaning. It is towards the end of the Minister's speech at column 1558 of volume 208 of the Official Report:

The Budget, therefore, is intended to favour saving, to increase investment and to put a slight brake on consumption.

How did the Budget put a slight brake on consumption? What was done in this Budget that put a slight brake on consumption? The Minister does not tell us that. He merely makes the statement. The answer is, of course, obvious. The Minister made no allowance for over-estimation in the Budget this year. He deliberately raised taxation by £2 or £3 millions when that could have been avoided. Alternatively, and this is another way of looking at it, instead of giving the old age pensioners 5/- or 7/6, as he could have done if he had allowed this £2 or £3 millions over-estimation, he ensured that the old age pensioners would have less purchasing power by means of this device. Whichever way one looks at it, there is the slight brake on consumption. This seems to me to be quite fantastic. It seems to me quite fantastic that, when we are so dependent on conditions in Great Britain, when our whole economic expansion and our growth rate is dependent on Great Britain, the Government should think they are doing something remarkable by a £3 millions effort on the current Budget, as if that could make any significant difference to our growth rate in the current year.

I know where I should have preferred to see that money spent. I should have preferred to have seen that spent on the old age pensioners. I should have preferred the Minister to do what every other Minister for Finance did in past years. I should have preferred him to make this allowance for £2 million or £3 million over-estimation, giving the old age pensioners and those on public assistance the benefit of it, in which case they would have got an increase of 5/-, or even more. That would, of course, have been remarkable in this country.

I wonder were the old age pensioners and the widows going to create a deficit in our balance of payments, going to go on a spending spree with their 35/- a week? Were they going to bring about a serious economic crisis? I do not think so, but the Government obviously thought otherwise, and so the old age pensioners get 2/6d., a sum altogether incommensurate with the increases given to other sectors of the community. The public servants who have retired will get a few shillings extra instead of the amount that would undoubtedly have been available, had the Government wished to do something a bit more munificent in the direction of making the lives of these people more tolerable.

I said that this country is to a considerable extent dependent for its growth upon conditions in Great Britain. There is another factor in the economy which influences economic conditions here to a very considerable extent. I refer to the credit policy of the commercial banks. This country must be unique as a so-called advanced country in having no control whatsoever over the credit policy of its commercial banks. I know the Minister for Finance can meet the Standing Committee of the bankers and have a chat with them, all on an informal level, but I do not think it works, and I think one of the most serious criticisms of this Government has been their failure to tackle, at times when it could have been tackled, the problem of getting effective control by means of the proper agencies here of the credit policies of the commercial banks.

I know there is a great deal of discussion among economists as to exactly what role the credit policy of the commercial banks plays. I know the phrase is used as to whether or not the lending policy of the banks can be regarded as merely a lubricant or is it, in fact, a petrol that sets off the economic growth. At any rate, whatever way these theories may work out, the figures, I think, speak for themselves.

In a very interesting paper read to the Statistical and Social Inquiry Society of Ireland in May of last year, published in its annual proceedings, one of the economists of the Central Bank read a paper dealing with a survey of sources of monetary supply in Ireland. He gave interesting statistics, statistics which are difficult to find elsewhere. He pointed out, in the course of these statistics, that there had been considerable change in the domestic credit in the year 1955. There was, in fact, a remarkable increase in that year of £31 million in the credit made available by the banks to the economy. In that year we ran into a very serious balance of payments crisis and I believe that had a great deal to do with it. In 1956, 1957 and 1958 there was very little change. These were years of less growth. Indeed, we made no progress at all. In 1959 then, 1960, 1961 and 1962, we find that once more domestic credit has considerably increased. The figure for 1962 is £90 million. I have no recent figures for 1963. Economists can argue as to what is the cause and what is the effect. It is one of those things in which the arguments may be nicely balanced but there can be no doubt, as any person with any experience of business knows, that if the banks are retrenching, you cannot get one shilling and, if the banks are in an affluent mood, it is no trouble to get credit of any kind.

It is obvious to me that this power, and it is a great power, of influencing the economy should be under the control of the Government, the Government who will direct a proper economic plan. It is obvious to me this should be brought about. I think it can be brought about. It does not mean nationalising the banks. It does not mean you will change to any great extent, in fact, the present methods of operating, but you will have what every other developed country has, namely, ultimate responsibility in the Government for this very important power, a power which I think it is wrong to leave in private hands.

As I said, the times are now favourable to do this. Of course in times of balance of payment difficulties, when imponderables like lack of confidence and these psychological factors are at stake, it is a bad thing to start making changes. You are told that you are tampering with the banking system. You are told—I remember some of the things said not so long ago by the Tánaiste—that the Government are going to take the people's money out of the banks. That is the type of propaganda that is always made. Our external assets are now increasing. There is no danger that our external assets will be run down. Now is the time when steps should be taken. I know that people who talk like this are written off as cranks. If one is not a banker, a senior civil servant or a Minister of State, one is regarded as a crank if one talks about banking.

I remember speaking in this House some years ago about the situation then prevailing. We had 100 per cent cover by British sterling for our bank issue here. I remember making the point—it was not mine; others had made it, others labelled cranks—that it was unnecessary for this country to have 100 per cent backing of sterling for our note issue. That was changed. Again, there was little formal announcement made about the manner in which the holdings of the legal tender note fund would be held in future. By a simple ministerial order, a fundamental change—it was a fundamental change—was brought about so that we now have not got 100 per cent backing for our note issue in this country.

Where are these matters discussed? Where are these things debated? Where is there public controversy on these important matters? One of my criticisms of what is going on in this country is that we are muzzled too much, that the people are not told what the reality is, that we are not facing up in an adult way to our economic problems, and they are grave enough.

One thing I must confess annoys me very much is when Government spokesmen say it is wrong for us to be complacent, because I think they are. A Government who set out to say they are in favour of economic programming, of social justice and full employment and yet have as the fundamental basis of their policy what is really a reactionary financial policy, a preference for indirect as against direct taxation, a decline in social capital investment, and unable in spite of the efforts they make, to bring about proper conditions of employment, are not worthy of support.

These are matters on which I know we shall not get agreement from the Government benches. Our hope is that by raising these issues and by making comments on the reality of the situation, we can bring about improvements. There is no doubt there are very serious social conditions in this country. You can say what you like about the halfcrown being sufficient to meet the increase in the cost of living for the old age pensioners. You can say what you like about the people who received the ninth round being delighted with it. You can say what you like about the country's prosperity but the reality is, as anybody who is in public life, as any social worker, as any doctor, priest, teacher, corporation or local authority official knows, our people are poorly off. The sooner this is faced the better and the sooner steps are taken to improve it by adequate means, by courageous action. the better for Ireland.

It is somewhat difficult to speak on a Budget debate because looking back over the years, we must admit that general policy seems to be that those behind the Minister support the Budget, agree with the Minister and defend him in what he has done; whereas it always seems to be expected that every member in the Opposition benches will condemn roundly all that is in the Budget. It may give us some little satisfaction if we try to criticise in a constructive manner, giving credit where it is due and pointing out the shortcomings not only of this Government but of all other previous Governments. After an examination of the booklet Economic Statistics, if we are fair to ourselves, if we are fair to the political Party we support, we must be prepared to admit that to a certain degree we have all failed. Whether or not one Party in Government failed more than another remains to be seen.

I agree wholeheartedly with Deputy Costello regarding the financial set-up in this country but would Fianna Fáil or Fine Gael agree to change it? That is the trouble. I believe it would go a long way towards solving our problems but neither of the two main parties, one Government today, another Government the next day, will accept a change. As long as those two Parties support the present financial policy and as long as they are there to oppose the policy of which Deputy Costello has spoken so well, so long shall we continue as we have been for many years.

I wish to quote from the Cork Examiner of 16th April last where the Taoiseach is reported as stating:

In our political philosophy we accept that education, the relief of poverty, including better housing, care of the sick and the eradication of the undue and unjust inequalities prevailing in the community, are matters for which the Government must make provision, acting for the community.

It is known to everyone that we in the Labour Party agree with every word stated there by the Taoiseach. We are wholeheartedly behind him in that. There is no difference between our political philosophy and that of the Taoiseach in regard to what I have quoted. We shall go further and say we are anxious to support any policy that can bring about an improvement in conditions in that respect. However, where we differ is in regard to securing the wherewithal to put such a programme into operation.

I wish to draw attention to the anomalies in connection with agriculture. All these matters have been debated fully but it is important that we should examine our political consciences as to whether we are doing sufficient for agriculture. I agree with another Fine Gael Deputy, Deputy O'Higgins, when he expressed his personal opinion, as I am expressing mine, regarding the amount of benefits for agriculture in this Budget. I know the Minister will say he had to get the money from some source and I know that members supporting the Government will go down the country and say that Labour voted against the Budget because they voted against the provision of a certain amount of money for agriculture. I know they will go down the country—I am not picking out any individual member; it happens in politics—and say Labour voted against the Government and by so doing, voted against an increase for pensioners.

First of all, let us take agriculture. I wish to refer again to Economic Statistics. In 1958, salaries and wages amounted to £15 million. In 1959, the figure increased to £15.2 million. In 1960, we saw a further increase. It went up to £15.5 million. In 1961, it dropped slightly to £15.2 million. In 1962, it moved up slightly to £15.3 million and, in 1963, the amount of money in wages and salaries in agriculture, according to the statistical returns, amounted to £14.8 million. That is one side of what is probably the most important industry in this country, agriculture. Those are the figures over those years. I am not saying they were much better in previous years. I do not want to become a bore by quoting figures for previous years which are available to members of the House.

If we take profits, which include incomes of farmers and their families, we find that in 1958, the figure was £99.4 million; in 1959, it was £109.1 million; in 1960, it was £119 million; in 1961, it was £123 million; and in 1963, it was £121.5 million. Whatever happens we cannot say those engaged in agriculture over those years have had a very happy time. Let us go further and take output. According to Table 6 of the statistical returns— again I will jump through different years and not compare one Government with another—in 1953, output amounted to £148.4 million; in 1960, the figure was £160.8 million; in 1963, it was £170.8 million. It is true to say there was an upward trend, but, when we consider money value in 1953 and in 1963, we certainly cannot say there was a very extraordinary trend in favour of agriculture.

That brings me to another very important point in connection with agriculture: the question of male employment over the years. In 1953, there were 420.8 thousand employed; in 1954, there was a slight increase to 421.3 thousand; and in 1963, after a downward trend each year, the figure was 354.9 thousand. That is the picture of employment in agriculture. The reduction in the number employed in agriculture between 1954 and 1963 was 66.4 thousand. Therefore, when we speak of agriculture, we must realise that over the years there was a drop in income between wages and salaries, that while the income of farmers and their families showed an increase, it certainly did not show an increase corresponding with actual costs and other changes in money values, and that there was an increase of machinery and a decrease in employment.

When we take into account the fact that agriculture plays so large a part in our exports, and when we take into account the loss of employment on the land, and the wages of the men who work on the farms, must we not wonder whether our whole approach to agriculture is right or wrong? On the question of wages, we know from recent reports that farm workers are getting another 15/-, bringing it up to the £1, but they must wait until 4th May to get it. Last week a Deputy on the Government side drew attention to the fact that there was such a difference between the wage rates of farm workers and industrial workers, and said that farm workers were moving from the land. He claimed that they should have £10 or £12 a week.

It is all right to make statements here, hoping, perhaps, that what is said here will be known outside, provided it is favourable, but the trouble is that when the Labour Party had a Bill here, and asked the House to support us in putting the farm worker on the same basis as the worker under the Industrial Employment Act, and to give him the benefit of legislation which other workers have, we were defeated. I am not saying those who voted against us did so wilfully. Perhaps they thought we were wrong, but if we had succeeded, the farm workers would have been protected.

If, by some endeavour of their own, they succeed in protecting themselves, in order to provide the wherewithal to pay the men, the farmers naturally will be entitled to, and must be given, financial assistance. At present it is a case of Peter and Paul robbing each other, perhaps. There is the movement from the land into the city. We know what emigration is, and we know that more machinery is appearing on the land. The Minister and the Government have to depend on their advisers, but I wonder will we ever get the full picture of the amount of machinery used on the land as against the cost, including the cost of hire purchase which the banks are financing.

Surely we must admit that the trouble is that in a parish one farmer gets some machinery and, human nature being what it is, others think it is a shame if so-and-so has it and they have not. Whether there is a lack of co-operation, or whether the advice available is being ignored, I do not know. Machinery that is used for only a short period of the year is now appearing on the land to such an extent, that I think agriculture is suffering from it all, and when agriculture suffers, this country suffers.

It would not be any harm to try to get a picture of what is happening in other countries. I am not advocating the setting up of more commissions. Goodness knows, this country is infested with commissions. We want to join every form of organisation that appears on the international scene, it seems, and we are mad, apparently, to join every little club. Surely, with the advice of all experts and economists which is available to us, we should be able to have some comparison between our general approach to agriculture and that of countries competing successfully against us even on the British market?

Agriculture in Denmark is a flourishing industry. What is it they have got that we seem to lack? Why is it that they can be so successful on the British market? Even at this late hour, we should seek a true comparison between the methods of our rivals on the international market and our methods of financing agriculture, of backing agriculture and of marketing agricultural produce. It might help us to achieve better results than we are achieving at present. I do not blame the Government for not having done that as the Government before them did not do it either.

Deputy O'Higgins mentioned the rates relief given to farmers. As I said here on another occasion, when either of the two big Parties are in Opposition, they are anxious to offer something more to the farmers. Let us say that an extra £5 million is being given to the farmers, but, as Deputy O'Higgins asked, is that the best way to give £5 million to the agricultural industry? Will there be a better return from agriculture by channelling the money in that direction or are there any other ways by which we could achieve a better return?

Is it wise for us, over the years, to give a few million pounds more to agriculture now and then? Are we gaining by that procedure or is it like the case of the man who brings his shoe to the shoemaker and gets a patch on the sole and conveniently finds, a week or two later, that there is another leak in the sole so that the shoe has constantly to be repaired and the job is never properly done?

Money has been poured into the agricultural industry. Many advantages have been given to it by all Governments but the returns now show that the position for farmers and those employed in agriculture is not as satisfactory as it might be. Until the Government make a critical appraisal of the agricultural industry, we shall not achieve the increased productivity we all hope for because we are all very conscious that agriculture is the mainstay of our economy.

Let us learn from the Danes and others like them, where necessary. Once we recognise that we are not as wonderful as we sometimes think we are and that we can learn from others and are willing to learn from others for the benefit of our agriculture and of the community as a whole, we shall see the commencement of a satisfactory agricultural policy for our country.

Much money has been spent on agriculture in one way or another over the years. There was a national plan in connection with drainage. When travelling through the country, I often wonder whether maintenance is continued in respect of fields which have been drained, and other such works. Sometimes it is obvious that very good attention has been given to such works but sometimes there has been no maintenance with the result that the value of the work initially carried out is reduced and represents a loss of much of the money spent. I shall not develop that point further.

The Government are giving a good advisory service to agriculture. We have experts who can hold their own with those in any country. However, if we do not adopt the right system or work along the right lines, there is no point in complaining about the activities or otherwise of those experts.

Deputy Costello is very interested in our agricultural position in relation to our entry into the Common Market. He said that, from the beginning, he was very much in favour of our joining the EEC. It was not my love, and I suppose it never will be my love, for Britain which made me say we should keep out of the Common Market and rightly or wrongly, I still hold that we should be pretty careful about entering the Common Market.

Have we any guarantee that if we enter the EEC, our conditions and our agricultural position will be any better? We shall have to compete in a more direct way—to the benefit, of course, of continentals such as the Danes and others. If they can beat us now to the British market, can they not beat us to the continental markets?

We are told of the benefits which will accrue to our agricultural industry if we enter the Common Market. For how long have the West Germans and the French been arguing about the agricultural sector of the EEC? I am not one of those who pray that we shall be in the Common Market by 1970. My desire is that we should be able to demand a greater proportion of fair play, as it were, from the British, through the British market because we are such a good customer of Britain.

When this Government told us, over the years, that the Common Market represents the be-all for Irish agriculture, some of us were not very happy. There is no guarantee that the Irish farmer will reap the huge rewards mentioned. I do not accuse the Government of withholding information but the fact is that nobody knows where we stand in relation to EEC, EFTA and GATT. The Labour Party are very concerned about this matter. They would be behind the Government and would hope that the Government would be successful in striking a better bargain with the British as regards the British market.

We want exports. In agriculture, production is one thing but, from generations of experience, our farmers know that whether we export his produce or consume it at home, the production and sale of his produce are inter-related. Unless the farmer believes that if he increases production a market will be available for his increased produce, our efforts to improve agriculture will always be a struggle. I know one farmer who spent a lot of money on a crop last year. After the harvest, when he sent in his produce, it was condemned as unfit. They are faced with that problem. If we can do more towards securing a stronger foothold on the British market, rather than have all this talk about EEC, I believe we will be helping agriculture and the whole community.

In support of what I have been saying, I should like to quote the Taoiseach, as reported in the Cork Examiner of 16th April. He stated:

A real improvement in agricultural incomes by increased sales of agricultural produce at economic prices can be realised only when international trading conditions in respect of agricultural products have been reorganised. It could only be when that happens, if it ever does happen——

So, the Taoiseach is a bit chary about conditions for agriculture on the international market and whether they will ever be to our advantage.

The late Deputy Norton, God rest him, was greatly concerned with the establishment of industry here. However, I often wonder what are the individual sums given by way of grant to those who come to set up factories here. We are told we should not know so much about these concerns, but at times the Government bodies concerned with them do not seem to know a lot about them either, if we consider the fly-by-nights who got grants and disappeared after a short time. Even in the case of genuine industrialists, we do not know whether or not the factories they are setting up are only small subsidiaries of large international combines. We do know that in the event of any international crisis, if there has to be a cutting-back of production, these large concerns start by closing their subsidiaries here.

I am not against the opening of factories—far from it—but I believe we are not examining critically enough the possibility of establishing more State industries here. It may be said that some attempts in that direction were not successful, but some attempts at the establishment of private industry were not successful either. It is all right to hear that people from other countries have opened factories here and are making a profit. But it would be of greater benefit to the economy as a whole if these were State factories and the people employed in them knew that their employment was protected by the State. There is not complete protection for the workers in all these new industries being established, and so long as there are black sheep amongst them we are entitled to draw attention to them. I should like to have a certain amount of supervision over State companies and I should not like to have people speaking in a derogatory manner about all and sundry. However, there is room for the further development of State industry.

We hear a lot about tourism in statistical returns and other publications. One thing I have not yet heard, and which I believe I will never hear, is a genuine breakdown on tourism. Will the day ever come, irrespective of what Government may be in power, when we will be told so many tourists came into this country and so many thousand are Irish people back on holidays? We have returns to show how many millions tourism is bringing the country, but we know that many of the so-called tourists are Irishmen and women returning on holidays.

I have no faith in some of our tourist returns. I do not agree with the amount of money being poured into tourism under the guise of improving amenities for tourists by the building of colossal hotels. The Government can save money by not pouring it into the construction of these colossal hotels, when many of the "tourists" who come here will never spend a night in them. It is extremely tragic when we are inviting people to stay in a certain place and live in certain conditions of what is described as medieval grandeur and where, in the words of one Sunday newspaper journalist, "wenches of a certain century attend the tables," when Irish history teaches us that the girls who worked in these places in their heyday were, unfortunately, slaves to the owners, whether it was in Limerick or Clare or Cork.

In discussing the Budget, it is natural to touch briefly on prices. What struck me forcibly was the admission made by the Minister for Justice some months ago when I referred to this matter. While the Minister for Industry and Commerce says he is insisting that prices be shown on goods in shops, at the same time the Minister for Justice made it clear that no shopkeeper is compelled by law to sell at the price marked on the goods. That was a couple of months ago. Has anything been done by the Minister for Justice since? So long as the law remains unchanged, even with the best intentions, the Minister for Industry and Commerce is only wasting his time in insisting that prices be marked on goods.

Every member has been supplied with the Consumer Index Prices and we see, as against the wholesalers and others, the consumer is being codded much more than statistics reveal because the position varies in every village, town and city. The two-and-a-half per cent levy works out in such an extraordinary way that the prices in every shop seem to be different. The Minister for Industry and Commerce is powerless because I presume his colleague, the Minister for Justice, is not prepared to co-operate with him to make sure that legally he will be able to do something about prices—if he wishes to do so. I know that the Minister for Industry and Commerce and his colleagues hope that the supermarkets will be the answer to the danger of increases. I do not believe that. It may be the answer at present to some extent in Dublin and, perhaps, Cork, but it is equally noticeable that there is displacement of persons employed as a result. It is also noticeable that the big supermarket is buying up the smaller one and a continuation of this policy must eventually give a monopoly to somebody. That will not help the price structure or those who must pay through the nose because of lack of competition and the removal of the small family shopkeeper.

While this goes on it is extraordinary how some industries are affected because of the reduction in some protective tariffs. The Taoiseach made a statement on the 16th April which to me seems extraordinary. He said there were some concerns which could not carry the higher costs now and they must be given a chance of reorganising before new burdens were placed on them. Preservation of employment was of greater importance to most workers than the upward movement of their wages.

The Taoiseach wishes us to believe now that most workers, in order to hold their jobs, are quite prepared to say: "Forget about the ninth round increase; forget that the Government have forced us into paying more for our everyday commodities," while at the same time, by reducing tariffs, the Government are putting Irish firms in the position of becoming less competitive with foreign concerns.

The latest complaint I got concerns an industry employing a large number of people, Carrigaline potteries. They are facing the position—because of the reduction of tariffs others are facing the same prospect—that they cannot pay. I am not saying they cannot pay but if the Taoiseach says they cannot pay, will he stop reducing tariffs when we have not the foggiest notion of when we shall be in EEC, and stop opening our markets to foreign concerns or allowing so-called Irish people, in some cases, who are more concerned at making colossal profits themselves, from bringing stuff from Japan, China and elsewhere to compete with Irish-manufactured goods for their own benefit?

On the admission of the Taoiseach and by his own action he has placed some concerns, perhaps, in the dangerous position of not being able to meet the full wage increase. He tells the workers to be satisfied and be patriotic Irishmen and, at the same time, he tells manufacturers that he must continue reducing tariffs year by year to make their goods more competitive. The Taoiseach must realise from the trade returns in the Statistical Abstract that because of these reductions we are getting into a more dangerous position each year.

To prove the point it might be well to quote from Table No. 3, Import Excess. The figure shown for the year 1950 is £85.9 million. In 1963, after a continuous increase—I want to point out that I am not dealing only with one Government; there were two Governments during that period—the imports excess was £110.5 millions. Surely the easier we are going to make it for the manufacturer outside, and for the Irishman who from greed wants to import from the cheapest source, the harder we will make it for the country.

After agriculture and after industry, we come to what must be the kernel of the whole situation, that is, the employment figures. Employment figures must be the key to prosperity as a whole, not the prosperity of one sector and not a division between those who may be able to go to a fashionable establishment and those who go to an ordinary publichouse for a drink. The figures are shown in Table 15 and, first of all, I shall take agriculture in four different years. In 1951, the figure was 496.2, speaking in thousands; in 1955, it was 442; in 1960, it was down to 390 and in 1963 it was down to 360. In non-agricultural employment in 1951, the total labour force employed was 720.9, again speaking in thousands; in 1955, it was 704, in 1960 it was 665 and in 1963, it was 692.

That is not the complete picture because in the same years, we must take the unemployment position into consideration, those people who were available for work but who could not get it. In 1951, again in thousands, there was a total of 44.8; in 1955, 62; in 1960, 63 and in 1961, 61. The total labour force, which is very important when we speak about emigration and unemployment, in 1951 was 1,261,900. Then there was a drop all the way. In 1955 the figure was 1,208,000; in 1960 it was 1,118,000 and in 1963 it was down to 1,113,000. We can, therefore, see a constant drop all the way through, not with one Government but with two.

I did not get up to slate one Government or one Party but to try to speak as I believe I should in connection with the financial, economic and agricultural position as it stands. As these are figures published by Government Departments surely they cannot be questioned as being incorrect. If they are correct, how can we say, as some economists seem to wish to say for us, that we are amongst the best when, at the same time, the figures prove the direct opposite in many instances?

When comparing employment figures, it is incumbent on me to draw particular attention to another aspect for which I do directly blame the Government. The Taoiseach said that the Government found that salaries—he was speaking of personnel in the Department of Posts and Telegraphs— had fallen behind comparable salaries in other classes of the public service. That being so, then it is only right that they should get a fair increase but I wonder what happened the Taoiseach and the Minister for Posts and Telegraphs when they were examining the position? Have they not yet realised that they are still denying a fair rate and a fair increase to a very important section of the service in that same Department, the auxiliary postmen?

The Taoiseach and Ministers may tell us that they endorse the agreement between the Irish Congress of Trade Unions and the employers' associations regarding the 12 per cent increase but yet these people in a Department of State, these unfortunate men, are not getting even as a minimum the £1. It may be said that they are getting 12 per cent but there is a clause in that agreement, as the Taoiseach and the Minister know, whereby under exceptional circumstances employees may be given the £1 as the minimum increase. In these cases they are getting less. It is the determined policy of the Government to keep them down so that they cannot be brought to the scale at which they would have to get the £1.

I condemn the Taoiseach and the Government for being unfair to these men who have such a difficult time in rural areas all the year round. They should get the same as those in Dublin offices. Another point is this. Usually when we are speaking in this House there are Government advisers present and I suppose it is natural that they should be male members of the Civil Service. I wonder, without being personal, what percentage of the male members of the Civil Service could boast that, when they sat for the examination, they took higher places than some of the girls? Yet we are in the position of saying that we do not believe in equality of pay. Of course, it is unjust. The girl who enters the Civil Service should receive the same financial treatment as any man who is in the Civil Service. Recently, because of the full co-operation of members of all Parties in Cork County Council, when we asked the Minister to accept a recommendation that a fair financial increase be given to all concerned, not to one section more than the other, we got it through.

I do not think this is relevant to the Budget debate.

I have no intention of arguing with the Chair but the point is that the Taoiseach has stated that it was found necessary to increase some salaries. I am pointing out that while some salaries have been increased, a system was introduced a couple of years ago—and the Minister for Finance is here who did it—whereby inequality has crept into the Civil Service. That is general policy. I made it clear that it was a retrograde step. It is an encouragement to private employers to pay less to girls. I give credit to this Government and to the Minister for Education for what is being done for education. It is no use for parents of girls to struggle in order to find the wherewithal to have them educated and to see them get, perhaps, first place in an examination, only to find that they are treated as inferior beings when it comes to payment by Departments of the State, starting with the Department of Finance. That situation must be remedied and the sooner the better. Otherwise the example will be followed by all firms and employers.

It may be said that I have been critical during the past half hour. Perhaps I was, constructively, I hope. It may be said, of course, that we have not made suggestions as to how the money could be provided. Recently I gave figures, which I do not intend to go over again now, relating to the financial position. These figures show that the index of ordinary stocks and shares between 1958 and 1963 increased by 140 points and that from June 1962 to March 1963, there was an increase of 40 points. In banking, between 1958 and 1962, advances increased by £65 million. The increase in currency circulation amounted to £9 million. The increase in bank advances between June 1962 and August 1963 amounted to over £50 million.

The Government may say that that is a good healthy sign, that the banks are the trustees of the people. They may be forgetting one important point, that the banks are getting their loaf all the time. I said, before the Minister came into the House, that I agree with what Deputy Costello said: Is there not something wanting there? Neither Fianna Fáil nor Fine Gael will tackle it. That is the tragedy. For the amount of money involved, the amount of interest is colossal. We are doing nothing about it.

Of course, we know that the banks are engaged in a lucrative business in connection with some of these investments, and making profits. I suppose they are entitled to do that. I do not object but when so much of the profit is at the expense of the State, in other words, at the expense of every man, woman and child in the State no wonder we speak in tones of awe of the national debt and the interest thereon.

In the past few years, the annual returns of banking houses, insurance companies and various other commercial concerns have shown a very healthy growth—healthy from the viewpoint of the shareholders concerned. I suppose they, in turn, convince themselves that because it is healthy for them, it is healthy for the employee. The profits accruing to them arise not only from their investment but also through bonus shares. When we see dividends of 18 and 20 per cent being handed out, the situation must be examined.

At the present time the ordinary person pays 2½ per cent purchase tax on what he buys in the shop. The higher the charge for the goods, the more money goes to the Minister for Finance. Increases in taxation have been imposed this year. I shall not say anything about them. So many Deputies have referred to them that there is no need to dwell further on them. I have been critical because I believe the system of balancing the Budget could be improved. I will be fair to the Minister and say that if his opposite number in the Opposition were in power, I believe he would do the same as the Minister has done. I may be wrong in that. It is an easy way to get money to increase the tax on cigarettes by a few pence and perhaps to increase the turnover tax next year. The trouble is that that money is, in the main, being got from the workers because the majority of the people are workers. In their own way, they spend more of their income than the wealthier sections do. Taxation is a heavier burden on them than it is on the wealthier sections. We all know that that is found to be the easy way of balancing the Budget. In our opinion, it is not equitable.

Speaking personally, I would ask if there would be anything wrong in finding a small percentage by way of levy on the profits of the banking and insurance world whose profits are of the order of 20 per cent or more? It would not break the shareholders. I am not being in any way personal, I assure the Parliamentary Secretary. I am speaking of the whole lot. If the Minister wanted money to increase old age pensions—he might think the increase is fair; I may not agree— would there be anything wrong, for instance, in getting more out of the Hospitals Trust? It may be said we are getting a great deal. Many people are becoming very wealthy down there also. They might be able to bear it better than the ordinary man and woman in the country.

When the Minister, wisely or unwisely, removed the tax on dancing—I am not saying whether he was wrong or right—one thing happened and every young man and woman would say the same: charges went up and now they can pay £400 or £500 for a band. Would there be anything wrong in the Minister finding a bit of money there? He might say that the amount to be got from all this is small but two 10/- notes make a £. Old age pensioners say their increase is small. They may not realise that, according to the Minister, he is scraping the barrel in order to find the increase. If he takes small increases in the way I have suggested, the Minister may find that they represent a fair sum.

I suppose most of us believe in patriotism. It is right that the young people should realise that it is expected from them also. Would there be anything wrong in having a little levy on sporting fixtures and racing? I am not picking these things out because I am against them. Maybe I might have an odd shilling on a horse, the same as anyone else but, if we must find money, there are ways in which we can get it that nobody can say represents a hardship on the people concerned. It would be worth it, even if the levy were restricted to one purpose—the benefit of old age pensioners, widows and orphans.

I read last week in a newspaper the report of a meeting of a charitable organisation. Eight hundred items of clothing were given to babies in a hospital, it was stated. Some mothers who had nothing to give to the babies gave themselves. That was charity. I do not know the people concerned but they had sufficient charity to become members of that organisation. Thank God, there are such people. I suggest the Government should have some liaison with such organisations who appear to handle this problem of need so much better than Departmental officials. We could help them by placing a little levy on those who can afford it.

Would you vote for the little levy?

I said here, and the Parliamentary Secretary must have heard me, that I never put up a proposal without the intention to stand by it. My word, thanks be to God, has always been my bond.

We are taking the turnover tax off the race meetings.

What sort of race meetings? What is he talking about?

And the dances.

I would be quite satisfied to have a direct levy at any time on such a function, provided, as I stipulated at the outset, the income so gleaned were channelled directly into a pool to help old age pensioners, widows, orphans and the blind. The Minister may not agree.

That is ridiculous.

Of course it is ridiculous to see a shareholder in a bank with 22 per cent or a shareholder in an insurance company——

They are paying their taxes.

How much in surtax has been collected this year?

They are paying 42 per cent.

Let the Minister not try to fool us. I tried to be constructive and if the Minister does not accept what I say, I cannot help it. I made it quite clear that I was not satisfied with certain aspects of Government administration. The word "image" is being used very frequently these days. We are apparently very anxious to project our image through membership of various international associations and organisations, to give the impression we are very important on the international scene. That is the image we are striving for.

There are many in this city, in Cork and elsewhere, who believe in that image. I am afraid it is a shadow. If we think of the shadow rather than the image, we may find the shadow is pointing to 800 babies who have to depend on charity and charitable organisations for a little clothing. If we still remember the shadow, we shall find it in places where charitable organisations such as the St. Vincent de Paul Society and others are trying to do their bit. Do not let us fool ourselves. The shadow is something we should think more often about. By the image we shall make fools of ourselves; the shadow will remind us of our obligations as Christians.

It is usual and only natural that any Budget introduced here to raise the funds necessary to run the services for the following 12 months, including the different reliefs given, should come under review not alone by Government Deputies but by those from the Opposition as well. It is only natural to expect a rather protracted debate, interspersed with fantastic statements on the Book of Estimates. As far as fantasy is concerned, it was not lacking this year. Listening to the majority of the Deputies who spoke, and reading their statements, one would imagine we were living in a different world altogether.

One would imagine the people of the country were in dire poverty, that they were suffering from a very low standard of living, that our finances had all got lumped up together, that our economy was retarded instead of expanding. Some of the statements were deliberately made to mislead the public and to blink the true facts. The real position is that our economy was never more advanced and that it is still advancing vigorously. Not for years was there so much employment at remunerative wages in our towns and cities. It has been shown in recent surveys that our people, thank God for it, are among the best fed in the world. Thank God, we have lived to see the day. Some of us are old enough to remember the low standards that prevailed in some homes in this dear country of ours many years ago now.

It is a great pity that public speakers do not make some attempt at least to stick as close as possible to facts. I am not suggesting that members of the Opposition should agree with everything that is said and done by the Government, but they could at least be truthful. We all have minds of our own. We all have the right to differ from one another, but that does not give the right to misrepresent what our neighbour has said or done or what his motives may be. In my opinion, the ordinary people are fed up with the antics of the Opposition as a whole; there are, I admit, a few honourable exceptions.

This Budget, like all Budgets before it, had to make provision for the running of the services of this country over the next 12 months. In doing so, the Government had to take every section into consideration, not favouring one more than another. They had to make provision to help the weaker sections who need assistance from the State. These services cannot be run and this assistance cannot be given, neither can we expand nationally, unless the money is provided.

We hear a great deal of talk about the national debt. Is not most of that money owed to our own people? We are not today, as we were formerly, paying a levy to a foreign power. The magnificent efforts made since the foundation of the State each time a loan has been floated to help to build up the economy of the country are a credit to our people.

The comparison we can make now, travelling through the country, with what conditions were like half a century ago is a heartening one. The rural scene has been transformed. There are better houses; the people are better clothed and better fed; there are better roads and better public facilities of every description. There are facilities designed to prevent disease— decent water supplies and sewerage schemes. I can only express my admiration of the people who, through their enterprise, have made these things possible. Nine or ten years ago I remember speaking to a man whom I met accidentally in a midland town. He had arrived only that morning from Australia and he was amazed at the progress that had been and was being made. He told us he had been informed that things here were in very bad shape and, if one were to take the statements of some Opposition speakers at their face value, one would be inclined to come to the same conclusion now. That man was amazed at what he saw.

Ten years ago?

That was when the inter-Party Government were in office.

They were not in office. Do not draw me now on the inter-Party Government. The Deputy has nothing of which to be proud.

(Interruptions.)

Order. Deputy Meaney.

I was shocked last week by the bigoted sectional attack made in this House on the farming community. The farming community has got long overdue recognition in this Budget. By the farming community, I mean the man who works with and for the farmer as well as the farmer himself. There was a tirade of abuse hurled at the farmer.

(Interruptions.)

The only argument we heard from Labour Deputies representing urban constituencies, including the Labour Deputy from Limerick, was that the farmers have no right to get any increase at all. The gap between the wages of the agricultural worker and the industrial worker is too wide and it is about time it was closed. The position will never be right until both sides are equal from the point of view of wages. I appreciate that that cannot be done overnight. If we were depending on Deputy Mullen, it would never be done.

15/- a week.

(Interruptions.)

Order. Deputy Meaney.

According to Deputy Mullen, the farmer should get nothing. I had sympathy with Deputy Desmond in his efforts to rescue his Party from the trouble into which it had been put by his colleagues. Deputy Desmond, on the whole, acted with decency. He recognised the farmer's needs as well as the worker's needs. I recognise the rights of all sections of the community, be they urban or rural. Some of the people belonging to this city do not want to recognise the rights of the people in the country. It must be remembered that practically all the wealth of this country, in some shape or form, originated from the land. The economy is expanding and the more it expands and the more the workers can get from it the better I like it.

The Taoiseach is from Dublin.

We must give fair play to the country as well as to the city.

Why did you not give it?

We have given it to them, and it was long overdue. I come from a creamery area and I can say there is full appreciation in that district of the extra price given for milk supplied to creameries, as well as of the extra relief given in rates and the increased ceiling price for bacon. They are all steps in the right direction. I hope the economic position will enable us to improve further on that next year without detriment to other sections.

As I have said, some of the people who speak here have no regard for the truth. I take exception to a few things that even Deputy Desmond said a few moments ago. He charged the Minister for Finance and the Minister for Posts and Telegraphs with doing nothing for the auxiliary postmen. There were many Deputies in the House when the Minister made the announcement that it was intended that all public servants would benefit by the 12 per cent increase.

Then Deputy Desmond mentions that the Labour Party have plans to help agriculture. I know there are a few rural Deputies in the Labour Party who would like to help agriculture but I do not think they will ever secure agreement with their city colleagues, They want to keep the rural people the hewers of wood and drawers of water. Thank goodness, we have a Government who are prepared to give fair play to all sections of the people.

The Deputy should not be so sectarian.

Some people will never learn. They thought they had the country bluffed a few months ago but they found out they could not bluff the people of Cork city and County Kildare.

They were only by-elections.

You were satisfied to leave it at that, as to whether there would be a general election or not. Take your beating. Money was never so plentiful.

Among whom?

Deputy Mullen should cease interrupting.

The Taoiseach made a very sound speech on the Budget. He said it was the policy of the Government to put a substantial amount of money to work as capital. The more money that is utilised effectively, the more people will get employment. Our economic programme is expanding and will expand further. Without going into detail, I should like to praise the heifercalf scheme which has been put into operation. It will improve the stock and benefit the farmers greatly. Things are buoyant in the country at the moment. May I conclude by congratulating the Minister on the very fair Budget he has put before the people?

So much has been said already about this Budget that it is difficult to avoid repetition. However, I suppose the debate must go on. Following the introduction of the turnover tax last year, many people expected—and I think it was a reasonable expectation—that this Budget would bring a considerable reduction in taxation. It was expected, for example, that there might be relief in income tax, but the fact that the Minister has had to resort this year to what may be called the old reliables to secure additional revenue—and this despite the colossal increase in revenue forthcoming from the turnover tax— is an indication that something is wrong somewhere. It is an indication of bad management. It is a clearcut proof that the five-year programme for economic expansion which is now drawing to a close has been an absolute failure.

This Budget follows the familiar pattern of former Budgets. It is the same old story of more spending, more taxation, more borrowing and fewer benefits. I venture to forecast that next year's Budget will see the old reliables left alone and the turnover tax increased. Despite the colossal increase in taxation and spending, one looks in vain to this Budget for any indication of new thinking or a new approach to the economic and social problems of this country. One looks in vain for concrete evidence as to how the ambitious targets set out in the Blue Book, the Second Programme for Economic Expansion, can be achieved. There is nothing in the Budget to give any indication as to how these targets can be achieved. There is no provision in this Budget for the drastic overhaul of our educational system which now becomes a matter of extreme urgency in view of the technological and scientific advances being made in so many spheres.

Progress reported; Committee to sit again.
The Dáil adjourned at 10.30 p.m. until 3 p.m. on Wednesday, 22nd April, 1964.
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