When I reported progress on Thursday last, I was dealing with the obvious desire of the Government to mend their entire attitude towards the ninth round of wage increases. I was dealing with the manner in which the Government had claimed, at a time when it suited them, to be responsible for this and with the obvious effort of the paper which represents the views of the Party in Government now to dissociate the Government from the consequences of the reduced value of money because they realise, as the country realises, that the results have not been what it was originally thought by the Government they would be. At the time the 12 per cent increase was introduced, it was indicated that through better management, harder work and more diligent application by management and personnel, it would be possible for many of our industries and services to absorb the increase in wages. The first indication we had of the effect of increased charges arising out of increased wages was when we were told that the Minister for Posts and Telegraphs would, in the course of time, bring in a measure designed to increase drastically the cost of postage, telephone calls, and, in fact, all services provided by his Department.
In his Budget the Minister for Finance made a passing reference more or less to this but, overnight, the House and the country were made aware of the contribution the Minister for Posts and Telegraphs would make in consequence of the increased costs that had fallen upon his Department. If a Department of State, answerable to a Minister and a Government, cannot arrange to absorb the increase presented by the Government as being projected, how could any industrialist or anybody employed in the distributive trade so adapt his business as to absorb completely the increase agreed upon? Is it not clear that State bodies failed, like the Minister for Posts and Telegraphs, to absorb this increase and have, in fact, passed it on to the public by way of increased bus fares, increased rail fares and an increased price for sugar? Many of these concerns are, as we know, expertly managed and controlled and, if any body in the country could absorb these increases, surely these companies and firms should have been able to do so?
We have a situation now in which the cost of living has been and is spiralling ever since the Government introduced the turnover tax. The turnover tax was the fuse which caused the explosion of the spiralling cost of living. We in Fine Gael are sometimes asked: "What would you do in such a situation?" The answer is quite simple. We would not have allowed a situation to arise in which the necessaries of life, bread, flour, sugar, medicines, clothing, footwear, would all be taxed. When the Government were introducing this new method of taxation, it was presented as an entirely new way of securing the finances of the State. It was alleged that the traditional methods of taxation had been exhausted. Deputies behind the Minister expressed the view—and I am sure quite sincerely, having heard it expressed by members of the Government—that after the turnover tax was introduced last November, there would be no increase in the taxation on petrol, cigarettes or beer for many years. What a shock they must have got when they discovered that, despite the buoyancy of the revenue, despite the rate at which revenue was pouring into the Minister's coffers, the contents of the Budget were entirely contrary to the arguments advanced, and repeated ad nauseam in this House and outside it, on the merits of the turnover tax.
It is not good enough for a Government Minister to say to the Opposition "If you were in power tomorrow, what would you do?" The function of the Opposition is, so far as they can, to foresee the consequences of the actions of those charged with the government of the country. We reminded them of the occasion when the cost of living was deliberately increased by Government action when the food subsidies were slashed. and later abolished, and, having recalled those occurrences to the Minister and the Government, the Opposition have done their duty, and are in no way responsible for the consequences if the Government persist in their actions, despite the reasoned arguments of the Opposition.
Of course, the Minister for Transport and Power repaired to the hustings at the weekend and challenged the Fine Gael Party to point out where economies could be effected in the public administration. Of all members of the Government to go out to the hustings and have the nerve to inquire where economies could be effected, when he himself is the most superfluous Minister in the Government, when he himself could very well be done without, and when an economy could be effected by the abolition of that Ministry. What has resulted from the setting up of that Ministry? We were told by the Leader of the Government over the past quarter of a century that he could so arrange the affairs of CIE that they would pay their way, or break even. The last deadline to be set was 1964, and towards that end we had the creation of this additional Ministry, with no other responsibility but for transport, power and tourism.
During his period in office, he has proceeded in my constituency to rip up every line of railway. He has ripped up every single mile of railway line in that extensive constituency. The whole thing was done in such a way that no single representation was permitted from anybody within that area affected by the railway closure. We were told: "You are the people who must suffer." We were told that the line was not economic. Is there any single line that is economic when the Minister comes in here and says: "We have been defeated in our efforts to make the railway system pay, and we want £2 million more in subsidies?"
When that line was being closed, it was presented to the residents of Bandon, Bantry and all points west of Cork, that they would be making their contribution to the national effort to make the railway system pay. We in the Cork local authority are faced with the additional cost of carrying on our roads many thousands of tons of beet and other goods which were formerly carried by rail. There is no provision to assist us, and no compensation for the higher charge upon the Cork ratepayers for the maintenance of those roads. We get some compensation on the capital development side by the removal of certain railway bridges. That is capital assistance only, and it is in no way comparable with the assistance which was given to the constituency of the Parliamentary Secretary to the Taoiseach and the Minister for Local Government.
I cite that as an instance of how the Government have placed the increased transport costs on the shoulders of the ratepayers and the consumers. For what purpose? To relieve the Exchequer. Notwithstanding the buoyancy of revenue, and notwithstanding the manner in which people were obliged to pay increased charges for everything they ate, drank and wore, in his Budget the Minister has had to introduce additional taxation. When the Parliamentary Secretary to the Minister for Finance sat in these benches, he was not without ideas for the effecting of economies. He said he would amalgamate Departments. He said that a Fianna Fáil Minister would be quite capable of administering two Departments, but the next time his Party got back into office, there was an increase in the number of Ministries. The cost of government is £100 million more than it was when the Government assumed office; when we were assured that the end product would be 100,000 new jobs. To-day we have 70,000 fewer people in employment notwithstanding the expenditure of that additional £100 million.
This Budget was presented in the country as a farmers' Budget. The debate has gone on for such a lengthy period that Deputies intervening at this stage have heard the contributions of other members from various sides of the House. I did not think that in discussing the Budget the Minister for Social Welfare and I would have anything in common. I was rather surprised—but of course I know the reason—when he intervened last week and made an excellent case explaining that this is not a farmers' Budget at all. It was presented by the Government as being a farmers' Budget. The member of the Government selected to speak on the radio on the night of the Budget was the Minister for Agriculture. That was no surprise. It was deliberately done to convey the impression that on this occasion special consideration would be given to the agricultural community. If the Minister for Social Welfare walked down through Ballyfermot and said that, he would not get much sympathy for that point of view, so last week—and I do not know whether it was intentional or inadvertent—he gave the impression that other sections of the community got increases and the farmers had been left behind.
Let us see what the Government did when they decided to give some relief to the farming community. When the dairy farmers got an increase of 1d. per gallon on the price of milk delivered to the creameries, on the same day we were told the Government proposed to find that money by putting 1d. on the packet of cigarettes. The milk farmers were jibed at and joked in every bar and in every public house throughout the country by smart Alecs. The Government repeated that performance in this Budget. It is suggested in one of the daily newspapers to-day that there was a deliberate transfer of £5 million from the urban community to the farmers.
Let us examine that. The agricultural community is approximately 60 per cent of the entire population. We must assume that this money is got from the 40 per cent. We must assume that those engaged in agriculture do not smoke, drink or drive a car as otherwise they could not possibly get this transfer of money from the urban and industrial community to the agricultural sector.
I strongly contest this figure of £5 million. I am in complete agreement with the views expressed by an independent observer shortly after the Budget of this year was announced. Writing in the issue of the Cork Examiner of 21st April, 1964, under the heading Implications of the Budget for Farmers, “Observer” states:
The initial reactions of possibly 80 per cent of our farmers to the recent Budget were favourable, but in 98 per cent of these the reasons were very different to what our writers and commentators think.
While appreciating the gestures of goodwill in it, farmers lament the smoke-screen tactics that were used and the despicable approach which made them appear as the nigger-in-the woodpile.
That summarises my comments on the way in which these increases were introduced. The article continues:
Those outside agriculture have been led to believe (deliberately or inadvertently, is open to question) that the increased taxes on petrol, cigarettes, beer, spirits, and postal services were introduced solely for the sake of farmers. Nothing could be further from the truth.
How true it is that nothing could be further from the truth. It is also a fact, as "Observer" continues to record: Emphasis has been given to the money that is to be given to farmers, as though they were to be the first to be considered. In point of fact they were one of the last. Merely because their requirements were partly met at the balancing stage the whole exercise earned the misnomer "a farmers' Budget".
It is remarkable, too, that the Minister for Finance mentions these increased costs arising in this Budget by reason of the recent wages agreement. These costs amounted to about £19 million, of which nearly £4½ million was for agriculture.
Relative to the £4½ million, Ministers partake of dinners on certain occasions. They are wont, in recent years, in referring to what the country is doing by way of support for agriculture, to keep all expenditure, whether capital or administrative, to a figure and then to say to the community: "That is what the farmers are costing." Consequently, I am entitled to put against the £4½ million the £2¾ million involved in the scheme for the eradication of bovine tuberculosis. Therefore, in effect, the net increase to agriculture is £1¾ million.
After the Minister had spoken, there was an announcement that the Agricultural Wages Board had decided that, due to the increase in the cost of living, due to the increases resulting from the turnover tax, the farm labourer was entitled to an increase of 15/- per week. We must all admit that it is just pitiable that our premier industry cannot carry an increase for its workers equal to the increase which workers in other sectors of the economy can obtain. Yet, the Agricultural Wages Board, representing employers and employees, recognised that 15/- a week extra was necessary to cushion to some extent the impact of the cost of living on the agricultural labourer.
Take a dairy farmer who employs an agricultural labourer. I have worked out the position on the basis that the farmer gets the increase of 2d per gallon for his milk. Any Deputy, whether in Government or Opposition, could inform the Minister, if he does not know it already, that the farmers do not expect to get the increase of 2d per gallon of milk. They know, through their representatives on the co-operative societies who are responsible for running our creameries throughout the country, that the costs of operating the creameries have increased just the same as they have increased for industry and for everybody engaged in the distributive trade. Consequently, it can be assumed that a proportion of the increase will be absorbed by the increased cost of operating our creameries.
Take, for instance, the increased cost of transport. Even before this Budget, these increases were alarming but the Budget pushes the spiral higher. We all know, in relation to the transport of milk to creameries and to various places where it is processed, that an amount of transport is involved. There is no doubt that the tax on petrol and diesel oil will very seriously inflate the costs of that industry, the same as it will inflate the costs of every other industry, but, in fact, more so in relation to the creameries. Then there are increased costs in relation to telephones, postage, and so on, which will also aggravate the position.
It is really an optimistic assumption to think that this increase of 2d per gallon for milk will find its way into the pockets of the farmers producing milk. However, even if it did, what does it represent to our average farmer? It represents 7/6d per week, on the average, in respect of all those engaged in agriculture in the community.
Again, let us come back to those for whom it was specifically intended, the dairy farmers. To pay an increase of 15/- per week to an agricultural labourer would require on an average for the entire 12 months, some 90 gallons of milk per week, that is, an increase of 2d per gallon on 90 gallons per week. I assume that every Deputy realises that milk is not available from milch cattle for 12 months of the year. If we deduct the lactation period of five months, the relative cost of meeting the increase in agricultural wages will absorb from 180 to 200 gallons of milk per week. The Taoiseach referred to the fact that the farming community had not been as happy as other sections. He said that the most disturbing feature of our national situation is that agricultural incomes per head were rising less rapidly than the incomes of those engaged in non-agricultural occupations. He pointed out that that disparity was tending to widen rather than to narrow. In fact it has widened further even since the Budget Statement and there is no indication that it will not widen still further according as the cost of living increases.
I want to emphasise the appalling fact that no direct taxation was necessary when so many sectors in our society received their increases at the time of the ninth round. Nobody can point specifically to a particular tax and say: "I am required to pay so much for my cigarettes, so much for my gallon of petrol, so much for my pint of beer. It is intended that the revenue will be directed towards the relief of a particular sector of the economy." This must be reserved to the occasion "which is not often" when the agricultural community gets something. I hope I have succeeded in exposing the manner in which it has been done on this occasion.
Now there is a feeling in the country that we are, and have been for a few years, disposing of some of our resources. The Minister for Finance, in answer to a Parliamentary question recently, revealed that of the £18 million opened to the public for subscriptions, of the £25 million National Loan last year, some £7 million came from abroad. We welcome the injection of foreign capital into the country, but it has also been stated quite firmly by the Taoiseach, when we sought to know in what way the economy could get a shot in the arm, that he saw no difficulty in obtaining the necessary capital within our own country.
The Taoiseach said, during his last American tour, and on notable occasions at home, that we can provide ourselves with all the money we require for our economic development. As I say, this money, which has been brought in from abroad, is to a certain extent supporting our balance of payments position and bringing some solace to the Government in the present position, in which the gap is widening so seriously—in fact it is wider now than on the famous occasion in which the people now in Government accepted that the steps being taken by the Government then in office in 1956 were neither early enough nor strong enough. In fact, they were too little and too late. Yet the balance of payments gap is wider today than on that occasion. It is true that certain weapons, which are available to any Government to correct such a situation, if it needs to be corrected, have been thrown away by this Government when arranging their permanent taxation.
It becomes extraordinarily popular for members of the Government, in relation to industry—the Parliamentary Secretary to the Minister for Finance was quite glib on the subject—to throw overboard the old outmoded policy in relation to supporting home industry. It was stated, by way of intervention, by the Minister for Industry and Commerce, that a consequence of the drastic reduction in the support for industry would be that there would be more employment. It is some years since views were expressed by members of this Party that there could be a gradual, but not an abrupt, cut down on such industries as had been given opportunities over a lengthy period to settle down and to develop their production, their markets, and so forth. It is true we have now, with all the enthusiasm of the convert, thrown overboard the Control of Manufactures Act. As well as that, the reduction in duties has presented to some firms considerable difficulties in the manner in which it has been done.
Furthermore, we are getting no quid pro quo, for if it is indicated it was in consequence of the easement of import duties on certain items that we were getting some comparable easement in the situation relative to our exports to these countries, one could more readily understand the reasons for this rapid and drastic reduction in the rate of duties.
There was absolutely no reference to our admission to the EEC in the Budget Statement. Neither the Taoiseach nor any of his Ministers, over the past 12 months, has expressed any view in relation to our entry, but the year 1970 is dangled before us as the date by which this country, in company with Britain, will be admitted. There is nothing to sustain that view. We learn from expressions of people who are well recognised as authorities in the European situation that they cannot certainly be as definite, as the Leader of the Government is, with regard to this year 1970. We can only hope that it will be achieved more readily than the date by which it was said CIE would pay their way.
I want to say, on this question of industrial advancement, that the trotting out of a global figure relating to the number of people employed in industry will bear some examination. It is high time some of these people who have been given substantial grants and substantial inducements by way of export facilities, and so on, were made answerable for the type of employment they give. It so happens in one of these industries, in my constituency, during the past three weeks, that 50 to 70 employees have been laid off. One could understand that laying off if it were related to any market troubles, availability of raw materials or financial complications.
But no; they have been succeeded in their employment by as many trainees, so that company may now start again on the ground floor with child labour. Let us hope when they, like those who worked before them in that concern, reach the time when they will be receiving wages of which they can be proud, will not be released from employment in order to make way for this shuttle service of more trainees who can be employed at starvation wages.
We on this side of the House are very happy, in relation to the acceptance by this Government of what was the brainchild of Deputy Sweetman, the policy of encouraging foreign industrialists into this country and the complete acceptance by this Government of that policy. The Minister for Finance had the nerve, in rather light vein, to suggest to the Taoiseach that he had the formidable task of teaching the Opposition Parties. We can point to the fact that if at the moment we can afford the standard of living which we have and if we can afford the volume of imports, the industry which has played the most notable part in the export trade is the live cattle industry. That is the industry which the Party now in Government decried for so long. That industry is now contributing more to the economy of the country through exports, than any other item we export. It will continue to be so as long as we can guarantee that the marketing arrangements which were secured by another Government are brought up to date, so as to guarantee to the producers of this country that they will be given, in Great Britain, Northern Ireland and other countries, the markets necessary for them to dispose of their increased production.
There are sections of our community who have not yet received anything by way of recompense for the increases in the cost not alone of Government administration but local administration. I refer to the business people in the towns and villages and in the rural parts of the country who, in recent years, have suffered many reverses. They have had to meet the challenge of the cutprice shop and the attractions offered to the consumer by the multiple stores. The facilities offered in these multiple stores take the people from the environments of the towns and villages into the cities and larger towns.
These small shopkeepers constitute a very necessary sector in our community. They are now the unpaid taxgatherers for the Government. They are the people who, hourly, while their shops are open, and nightly after their doors are closed are obliged to do clerical work in respect of the amount of money which the Minister for Finance and the Revenue Commissioners are to get, by way of turnover tax, on their transactions during the day. Yet, these people have not obtained any relief in rates or any recognition either in this Budget, nor has there been any indication from any member of the Government of relief in years to come.
These are people who normally do not bother Departments very much. There are few occasions when they are eligible to approach Departments. If they want to modernise their business premises, they get no grants from the Department of Local Government. They have had to face increased outgoings and suffer loss of business due to very heavy emigration in many parts of the country. They have also been the victims of what was a commendable development in relation to street trading and the change over to cattle marts. They are finding it more expensive to educate their families, more difficult to get employment for them when educated. They are being called on to pay increased prices in relation to their business, increased charges occasioned by the increased costs of transport, both CIE and private, in relation to petrol and also in relation to telephones and stamps. We are rapidly reaching the situation of being one of the most expensive countries in Europe in the matter of the costs of operating our Department of Posts and Telegraphs. These are the people for whom I want to make a special case since I feel they have not been given any consideration.
I shall conclude as I resumed, by decrying the reprehensible way in which the Government have sought by their presentation of the Budget to drive a wedge deeper between the urban community and the agricultural community and implying to industrial workers and city residents that on this occasion they are being called on to pay increased taxation so as to relieve the agricultural community but that is not true. We are aware that other sections of the community got increases without specific taxes to pay for them. This treatment is resented very much by those whom the Budget allocations were supposed to help.
In addition, we have the appalling pittance set aside in the Budget for social welfare recipients. There is nothing for the contributory pensioner and only 2/6d. a week for the non-contributory pensioner. This is entirely contrary to the claims made at the introduction of the turnover tax, that it would bring in such a flow of money to the Exchequer that we should have very large sums available for social welfare recipients, for improved educational facilities, for State-aided education within the reach of many unfortunate brilliant children who, because of family circumstances, are not able to secure the education their ability would entitle them to have and who could contribute so much to the country's economy if they got that education.
There is no provision in this Budget for additional expenditure of any consequence in education other than that occasioned by the legitimate demands of the teaching fraternity as a result of the increased cost of living. It is in these circumstances we examine this Budget and we can only express considerable regret at the fact that the Government have failed to develop anything in the way of long-term proposals in relation to the country's economy. This is merely a stop-gap effort and nothing has been done other than a slight cushioning of the detrimental effects of the Government's own policy in bringing about a reduced value of money and causing such drastic and deliberate increases in the cost of living.
