This Budget has now been discussed in this House for three weeks and there has been an exhaustive discussion of the economy of the country during that period. I must confess that having re-read the few remarks which I made immediately after the Budget was introduced. I now find I have nothing whatever to change in them. I felt then and I feel now, everything that has been said and everything I have read in the interval has confirmed my belief—and it was one of the things which the Minister acknowledged— that we are suffering from an inflation but an inflation of the Minister's creation, one which he himself touched off 12 months ago. We said 12 months ago that it was bound to happen and it is no pleasure to us that we have been proved right to-day, that it has happened and that the dangers it has brought with it are ever-present and constitute a menace. Naturally everybody likes to be able to say that he was correct but in this case it gives no one pleasure to be able to say he was correct because that very correctness has raised fundamental considerations in relation to our whole national objectives and national progress.
Before I go on to consider in detail the matters that arise from this Budget I want to say categorically that certain people, and the Minister for Industry and Commerce in particular, who seemed to think that we on these benches, particularly Deputy John A. Costello and I were speaking of different things, were entirely wrong. It was the inadequacy of the Minister's ability to absorb the existence of the present trends that was really bothering him. As I say it is clear that this Budget was introduced at a time when the Minister for Finance accepted the view which we had expressed for many months beforehand, that there was an inflationary situation here which had been touched off by him. The Minister believes the measures he has introduced are going to put a slight brake on consumption. Far from doing that—and this is where I agree with Deputy Costello—I think the Budget will have the reverse effect and that far from preventing further inflation, the entire fiscal and financial policy of the Government is adding fuel to the flames.
It is of course utterly impossible to judge the total picture without the information that is available only to the Minister for Finance and to those to whom he gives his entire confidence. In relation, for example, to the method of financing this Budget and the method of utilising revenue funds, there are two influencing factors. You can have the deliberate extraction of funds from the revenue accounts into the Exchequer accounts, the running down of the open balances in the revenue accounts, as the Minister did last year. He ran down a balance, as far as my recollection goes, of some £2,018,000 to £45,000 this year. He did that under the announced provisions of the Budget of 1963. But there is another method, too, by which one can influence the flow of revenue, that is, in the actual collection of the revenue.
I must confess that when I saw the figures for revenue buoyancy this year estimated for 1964-65, notwithstanding the inflation which he believed to be present and notwithstanding the continued injection of capital into the revenue, that buoyancy, certainly to some extent, could be explained by a carryover on the second or what I might call the hidden methods of influencing revenue from one year into another. As I say, I am not prepared to make any categorical statement in that respect. Only the Minister, who knows the instructions that have been given to the revenue people, can tell whether that is so or not but I must confess that, in company with other people, of whom many were economists, I was surprised at the buoyancy figure that was taken into account. One explanation of that figure could be what I have stated. I cannot tell whether it is so or not because the secret, so far as the members of this House are concerned, is confined to the Minister for Finance and those in whom he has confided.
It was in that light, confident that we were in a situation in which there was real danger of an inflationary spiral and, therefore, a danger to our exports and a danger to our imports, that I examined these proposals put by the Minister before the House. Again let me say in passing that one of the statements made by the Minister in the capital Budget presented by him has made it clear that it is more than ever necessary that we should have a separate discussion on capital Budget proposals as against current proposals. In presenting the capital Budget of 1964, the Minister, at paragraph 4, said it was necessary to review from time to time the items in the public capital expenditure to make sure that they were genuinely of a capital nature, that is, expenditure which does not produce assets of a lasting benefit is not being treated as capital. The Minister went on in the subsequent two paragraphs to make it clear that he believed that at the present time it was essential we should have a review of our capital expenditure from the point of view of the basis upon which it was to be paid for.
I realise one of the things that has been done in that respect is that some £12 million of capital expenditure is included this year which was not included as capital expenditure in 1956-57. There are some elements of the 1956-57 programme of capital expenditure which have ceased to be expendable and, therefore, have ceased to be in the capital programme but there are items covering about that figure in the past year for which I have information which were not treated as capital items in 1956-57 but which are so treated now. Some of those items in 1964-65 will be less; some will be more.
As regards some of them, I would be in entire agreement that they should be treated as capital items and I am not putting the matter any further at this moment than to say that the existence of these two paragraphs in the introduction to the capital Budget of this year makes it clear beyond question that it is vital, if this House—and the public, because the public gets its information largely from the debates in this House—is to have not even control but adequate consideration of the facets of our economy involving such enormous capital expenditure as is being paid at present, that we have discussion away and apart from the current Budget.
The Minister himself went so far as to underline the point I am making by putting the words "method of financing" in paragraph 5 in italics. However, it was the Minister and no one else who deliberately changed the procedure in this respect which I had announced in 1956 for the provision in years to come of precisely that capital examination by this House.
Let me say in passing that I can see no open declarations in this Budget of any such examination having been effected by the Minister for Finance. I can see no evidence anywhere that the Minister did more than pay lip service to the principles he has enunciated. I can see no evidence anywhere that he practised what he preached. In fact the open statements in the various papers that are published imply exactly the reverse.
It may be, of course, the Minister has in a hidden way taken some account of his real estimate of revenue and receipts that he has in his mind, or the real estimate for errors of estimation that he has in his mind. If that is so, it would be far better, far cleaner and far more appropriate to the needs of the country that he should have disclosed these rather than that he should have hidden them in that way. If the Minister disclaims he has made any hidden reserves, if he disclaims he has made any allowance in errors of estimation for more than is projectable on a current basis, then all I can say is that by his very disclaimer, he will be making a liar of himself in relation to the capital Budget preface introduced by him, and he will be failing also to follow the advice emanating primarily from his own Department and publicised in the publication by OECD in the past couple of months.
However, nobody can make any definite statement in that regard without having the Minister's confidence and he and he alone knows in which way the hidden figures have been influenced in that regard. It would be better if he had not influenced them in a hidden fashion and if he had come fairly and squarely to the House and put the facts on record. As I say, if he disclaims that he has not told the House the complete truth, he is making lies of the paragraphs he has submitted in the preface to the capital Budget.
The Taoiseach, when he came in to defend the Budget on the first morning, was most emphatic as usual. In fact, I think I would not be offensive if I said he was even more brazen than usual. One of the things I heard him say at the time which I was satisfied was untrue, but for which I then could not find proof, was as stated on 15th April, 1964, reported at column 1770:
Taxation represents a smaller proportion of our national income than it does in other countries.
It is difficult if one is not completely skilled to analyse what the taxation figures in other countries are, compared with what they are in one's own country when obviously one knows one's own basis and cannot possibly know so fully the basis of another country. I feel, however, that the House and the country would accept that a more accurate, factual comparison of this figure is available in another source. I am not asking anybody to believe the opinion of the Taoiseach against the opinion of anyone else, but a factual statement was made by him that taxation represents a smaller proportion of our national income than it does in other countries. I ask Deputies and the Minister for Finance to compare that with this quotation—I will give the source of the quotation in a moment:
From such data as are available it appears that central government revenue in proportion to national income in Ireland is high in comparison with other countries in which income per head is in the medium range.
The two statements cannot be correct. Surely the Taoiseach was not trying to compare Ireland and the Balubas on the one range, or perhaps with the extreme wealth of the United States of America on the other, though I have grave doubts even there whether the comparison would be true. But, like to like would be a country, as we are, in the medium range, perhaps slightly at the lower edge of that medium range. It is accepted by everyone that the lower your wealth, the less the proportion of national income which should be taken for central government expenditure. Unfortunately, it is to some extent asserted that the less developed you are, the more you want to expend on development. But equally, the less developed you are, the less you can afford to have taken from national income for central government expenditure.
As I say we have the Taoiseach's opinion on the one hand, and another opinion on the other, not of desirabilities but of analyses of facts. Personally, I prefer the quotation which I have just read, from Page 27 of the Report of the Central Bank for 1962-63 as being accurate. That is for 1962 but all of us doubt somewhat that in 1963 the proportion went up. In fact, as regards national income, total taxation, as a percentage of national income, in 1962, when the Central Bank was writing about that, compared with other countries, was 27.1 per cent, and in 1963, it went up to 28.8 per cent, an increase of 1.7 per cent. I venture to say without any shadow of doubt that the effect of this Budget will be that the proportion of national income taken in total taxation in Ireland will this year exceed the 30 per cent mark. Economists for a long time have said that once the percentage of national income taken exceeds 25 per cent, a country is running near the danger level, but this year it will be over 30 per cent.
I know of course that in issuing comparisons the Government love to avoid any comparison of total taxation with national income. They switched to gross national product because the percentage looks smaller. They did that quite deliberately. I think that not merely the Fine Gael Party, of whom he is a member, but the country, owes a very considerable debt to Senator Dooge for the manner in which he, in the Seanad a couple of months ago, described that switch as a deliberate codding of the people into a lower percentage for the purposes of hiding what had been highlighted by the Central Bank in their report last year. Incidentally, in relation to Senator Dooge's speech, may I say I thought it was one of the best speeches delivered in this Oireachtas since it was elected in 1961. I agree with Senator Dooge that it is unfortunate that the Minister has not introduced a detailed programme for economic expansion so that we could discuss in the Budget debate in a fuller way the proposals of the Government towards that expansion.
The significant thing in relation to the outcome of the First Programme for Economic Expansion, when one is comparing the outcome of that programme with the second, is the fact that during that period we carried through something that was not at all anticipated and not at all projected. It was made clear in the First Programme for Economic Expansion, and in its foundation Economic Development, that our hopes were bound to be based mostly on the release, in the current jargon, of a dynamic agriculture. In fact, it became obvious that the basis of agricultural expansion, upon which the programme was built—the increase by 1964, as the main objective of policy, of cow numbers to at least 1,500,000 — failed completely. The defence of the Government, of course, and the Minister for Agriculture, particularly, in that respect is that the failure there was due to the scheme for the eradication of bovine tuberculosis. Of course, everyone knew, and the Government knew, when in November, 1958, they were releasing the First Programme for Economic Expansion, we were going to have that scheme for the eradication of bovine tuberculosis with the inevitable killings which would be involved. They were different types of killings from the killing of the calves of which the Minister for Finance was the chief exponent as a method of economic policy.
We knew then, and the Government knew then, that the scheme for the eradication of bovine tuberculosis was bound to have some effects on our cow numbers. Yet they committed themselves, on Page 15, to the statement that "the objective of the policy will be to increase cow numbers progressively to at least 1,500,000 by 1964". Of course they failed. The First Programme for Economic Expansion was significant in that it was not carried out. It is significant that the result of these years is the result of an entirely different programme which was announced in November, 1958. It is very much because of that that I would prefer to await, before discussing the Second Programme, the publication of the detailed analysis which we have been promised.
I think I am not wronging the Minister in saying that it was to come first in February, then it was to come in May and now it is to come in July, at a time when, the Minister hopes, the House will have risen. That is unfortunate because, as I say, it is difficult to discuss the outline in the Blue Book as I personally would like to discuss it in the House until such time as one has first seen a more detailed explanation, in view of the fact that the whole basis of the Blue Book seems to be that because the growth target in the First Programme was exceeded, therefore, the targets we are putting up in the Second Programme are bound to be realistic and bound to be exceeded also.
Of course, that is nonsense, for two reasons. It is nonsense, first of all, because the growth target put up in the First Programme was not exceeded as a result of that programme but as a result of an entirely different programme and, in the second case, because, unfortunately, we are a very small country indeed, considered economically, and it may well be that the external factors for growth in the years ahead will be radically different from what they are at the present time and from what they have been for the past five years. I shall not go into any prognostication of what may happen or what may not happen in the nextdoor island after the general election there in the autumn of this year. It would be impertinent for us here to offer any comment on the outcome of their election or the way in which that election may run but it is an undoubted fact that our whole growth will be influenced vitally, up or down, by the manner in which the British economy moves and the fact that they have been deliberately scraping the bottom of the barrel—naturally enough—for the purpose of endeavouring in so far as they possibly could to get in the last couple of years the optimum results, was bound to have an effect on our economy here and bound to mean that we had conditions here favourable for exports in a way in which, to put it mildly, we cannot guarantee after the next six months.
Be that as it may on one aspect, I want to suggest that there is another aspect which is even more likely to give cause for anxiety in the immediate future, that is, the estimate that is made and given to us now officially by a non-political body that in 1964, compared with 1963, total manufacturing exports will rise by only two per cent. The prognostication of a rise of two per cent only for total manufactures in this year must be causing the Minister for Finance extreme anxiety. It is certainly something in respect of which all of us had hoped we could expect in this year a very much greater increase.
We must view that increase in manufacturing exports in the light of the balance of payments deficit for last year and in the light of the deficit for the first three months of this year, announced in the fourth month, and we must bear in mind that when that balance of payments deficit in these three months increased by £5½ millions, it did so at a time when our livestock exports were, I think, bigger than they ever were in those three months of the year and that the very large figure for domestic exports for the first quarter of this year is largely the result of livestock exports. If, when livestock exports, as they are bound to, taper out and come back to normal as a result of that excessively high increase in the first quarter, we will get only a two per cent increase in manufacturing exports, then I am afraid we will find a very difficult situation in relation to our external trading position.
What has that external trading position been up to now? It has been, as the Minister knows, that last year we had a deficit on our current account which of itself was not of appalling proportions—even that deficit of £22 million coming after the deficit of £13 million the year before —but, if we take the first quarter of this year in conjunction with the fact that cattle exports took up such a large part of such domestic exports and if we take with it the forecast of the Economic Institute that manufacturing exports will rise by only two per cent this year, then I wonder where we will travel in relation to our balance of payments.
I know that the Minister has indicated in these documents that he expects a further deficit this year, a larger deficit, but I wonder is he prepared to say that a deficit of the size that these three things envisage is one that we can swallow satisfactorily —a deficit of £22 million last year, starting as our base; an increase of £5½ million in that deficit in the first quarter, which would be an increase of £22 million for the year; and the forecast of a rise of only two per cent in manufacturing exports by the Economic Research Institute?
These are figures that must give considerable cause for concern to anyone and when we take them into account with the quotation from the Central Bank that I have just given of the proportion of our national income that is being taken in taxation, then they become even more significant. This balance of payments deficit, has, of course, been met entirely by capital inflow. The figure of other capital transactions which can only be broken down by the Minister and cannot be obtained by anyone else is a figure the significance of which requires considerable attention.
The Central Statistics Office know part of that break-down. Part is a residual figure which they cannot provide at all, and the part they know they cannot publish because to do so would involve perhaps tearing aside the secrecy of individuals concerned. The Minister knows it and though I am not asking him to break that secrecy, I do ask him categorically whether he is satisfied beyond question that the £24 million for "other capital transactions" is a safe basis on which to build a current deficit of the same size.
My own view is that it is not and I am reinforced in that view by the almost daily take-overs I see in the newspapers, of foreign capital coming in and being utilised for the purpose of meeting balance of payments current deficit without bringing in its train the increase in manufacturing potential we should all wish to see. I have already referred to the manner in which the Government have deliberately changed the percentage of taxation about which they speak from one of national income to one of gross national product. They have done that because they feel there is cause for anxiety about the advance of public expenditure and public indebtedness at the present time and because they want, from their point of view— naturally, so does everybody—to influence public opinion to believe that the size of the bill being taken is not excessive.
I do not always agree completely with the views expressed by the Central Bank. It is their task to accentuate one point of view, but on the other hand no one can read the report of the Central Bank which, I presume, is the unanimous opinion of the directors of that body, without feeling a distinct sense of anxiety. The manner in which they have commented on national expenditure taken as a picture of our wealth is one that would repay considerable research on that aspect.
Immediately after the Minister had finished his Budget statement, I said, and I repeat now, that one of the things that appals me in relation to national expenditure is not its absolute figure but the fact it does not take into account what heavy increases we must have if we are really to progress. The whole additional amount of tax revenue that is to come in this year, and the manner in which it increased last year over and above other years, is to a large extent being frittered away without allowing for the things that really matter.
I know, for example, that the Book of Estimates includes an additional sum for education, but the additional sum for education, as I said when speaking on the Budget on 14th April, is merely to bring up the salaries of the teachers, through the ninth round, to some semblance of equality with those in other walks of life. It does not include the heavy expenditure necessary if we are to accept that education is one of the matters on which we must build our resources if we are to move ahead productively.
In the present age, the unskilled man does not lead in the building up of national productivity or national produce. It is the skilled man who does it all. There are different grades of skill. Yet there is nothing in this Budget for the extension that is necessary to increase skills—the comprehensive schools programme that has been promised by the Minister for Education, much wider technical education, much more extensive secondary education. These are not in the Book of Estimates. There is no provision made for them to anything like an adequate degree. We see nothing in the Book of Estimates designed to take up the slack that should be taken up. It is being frittered away by the Minister in the policy he has been adopting.
In Sweden, Government expenditure on research is something between one per cent and one-and-a-half per cent of gross national product. Our Government expenditure on research is not anything like the same percentage. Is that not another thing which should be there available to be pushed into the slack the Minister should have had through buoyancy of revenue? Do we not all agree on both sides, though we may differ about the means of achievement, that it is vital we should have improvement in our health services?
The increased amount in the Book of Estimates for Health services is purely an increase arising from increased costs in other respects and does not visualise in any way the radical change in our health services which we must have if we are to improve materially as well as humanly. It is not because of the growth in the volume of expenditure that people have become anxious: it is because it has been growing without our getting anything worthwhile for it.
To go back to what I was saying a few minutes ago, do any of us doubt that, for example, the most dynamic force in the world to-day is research? Do we see any evidence of acknowledgement by the Government that it is only through recognition of that dynamic force that we shall see real progress in improving the standards of our people? It is to hide the fact that public expenditure has taken this race, this gallop, without getting any really worthwhile results, that we have had the change in statistics of which the Government speak from taxation as a ratio of national income to a ratio of gross national product and failing, in so doing, to apply the percentage correctives from one to the other.
The Taoiseach tried to suggest that in a criticism of capital expenditure I was suggesting that we in this Party did not want capital expenditure. I said again and again that we based our policy on having as high a programme of productive capital expenditure as the people were prepared to support. What surprises me in relation to it is not its size but the manner in which, again, it has failed to take into account the things necessary towards that production and the manner in which, I fear, political decisions have been allowed to sway what should be economic decisions.
I am not suggesting that a cut back in the housing programme is a thing that should be done on an economic basis as apart from a political basis. Social investment is, and was, urgently necessary if we are to keep our people at home. It is of little use being able to increase the standard of living per capita of the people if it is being increased for those who are here because more are going out. One of the ways in which it is possible to provide an antidote to that drain is by the provision of proper housing facilities for our people.
When I heard the untrue speech Deputy Noel Lemass has made each year on the Budget for the last five years, I looked up the exact figures in relation to Dublin Corporation housing. They show that in 1955-56 Dublin Corporation expended £2,778,833 on their housing programme, and in 1956-57, they spent £2,689,259. The best they were able to do since was in 1963 when they were forced to by public opinion after an unfortunate incident in this city. In that year, they spent £2,263,000. The volume of small dwellings loans has never risen above £1 million, except in 1961 when it was £1,115,000, although in 1955 and 1956 it had been £1,800,000 and £1,500,000 respectively. Yet one sees figures quoted by people who ought to take the trouble of checking their accuracy, since they are members of the Corporation themselves, implying exactly the contrary.
Let us consider also the figures for Cork Corporation, of which, I am sure, Deputy Anthony Barry behind me is fully aware. In 1963 and 1964 their expenditure on the housing of the working classes was £402,000 and £403,000 respectively. They were told by us in 1956 that they could get all they could spend, and they did get £697,000 in 1955, £726,000 in 1956 and £741,000 in 1957. It might be understandable if expenditure on State borrowing had galloped ahead to catch up with a backlog of houses to be built. In fact, as these figures show, far from catching up, the effect has been to go backwards. Indeed, in the rest of the country it has gone backwards to an even greater extent.
What of employment during the five years 1958 to 1963—the five years which the Minister and the Government say are the Mecca to which we are all looking as the result of the programme he introduced? In their own Pink Book, they admit that in that period there was a reduction of 16,000 people at work. If one goes back to the previous two years, the reduction is of a very much higher nature. The total labour force in 1958 was 1,141,000 people, in 1957 it was 1,162,000 and in 1963, it went down to 1,113,000. Yet we were promised, in no less a place than Clery's Restaurant, 100,000 new jobs—20,000 a year. All that was necessary for them was that Deputy Lemass should walk from here to the benches over there.
He has been on those benches for seven years now. That means that on the basis of the untrue statements he made then, there should be an additional 140,000 people at work. Instead, we have had a reduction from 1957 of 50,000 people in the number at work. I am sure Deputy O'Connor went from his constituency of South Kerry to Listowel to hear Deputy Lemass at that time repeat that promise. I wonder how the number of people at work in North Kerry and in South Kerry compare today. I will bet the Deputy that the number of people at work in his constituency is considerably down from that day to now. It is easy to get it from the Statistical Abstract. We will have another opportunity on the Finance Bill of paying that debt, though not, let us hope, in imported spirits.
Another matter in respect of which the Minister seems to be going backwards is the cost of government. Again, I do not mean the absolute cost. I mean the building up of a more massive machine of Government administration than we have ever had before.
I have some sympathy with the Minister in this regard: he came in here in 1957 and announced, as one of the great reforms to be initiated by Fianna Fáil, that he would ensure that not merely would the growth of the Civil Service be stopped but the numbers would be brought down to a realistic level. Far from that happening, the numbers have, of course, gone up considerably since then. I wonder how many of us and how many of the public realise that in the past two years alone, since 1962 to the present day, there has been a quite fantastic growth in the Civil Service machine.
The Government have so fallen down on their promise in 1957 to reduce the administrative machine that in the last two years alone there has been an increase of 1,825 in civil service personnel. The growth of the administrative machine is such that we cannot hope to avoid, in the inflationary position created by the Minister, paying a very substantial amount more than we did before for these civil servants. If the Minister would like the reference for these figures, he will find them in the answer given to Question No. 79 on 8th April last. The number of permanent civil servants is set out as 21,558 and the number of temporary civil servants is given as 9,529. The Minister can compare those figures with the figure of 20,162 permanent civil servants and 9,200 temporaries on 6th March, 1963. I think he will find my addition correct, though I am not always prepared myself to verify its accuracy. I have not taken account in these figures of those civil servants transferred to State-sponsored bodies. Neither have I taken account of the manner in which the index was Fianna Fáil-wise changed some years ago, with the result that certain categories previously included were deliberately dropped out for political and comparison purposes.
Again, in relation to its effect on business and the economy flowing therefrom, the Budget does not measure up to expectations. We shall have another opportunity of discussing in greater detail the very large impost placed on the business community by reason of the increased letter, telegram and telephone charges. I shall make no comment in regard to telegram charges, heavy though they are, because I understand the difficulty for the responsible Minister in that the more telegrams that are sent the greater is the loss incurred and the Minister is, therefore, anxious to reduce the volume rather than deal with telegrams on an ordinary profit and loss basis.
Neither do I quarrel with the statement of the Minister in the Budget that it has been the practice for the Post Office to pay its way as a commercial proposition. But there is more to it than that. In the past three months, the Taoiseach, the Minister for Finance, other Ministers on those benches, and even Parliamentary Secretaries, have taken every opportunity to impress on business concerns that they must do their utmost to absorb increased costs arising largely because of the ninth round. When we remember the Government's assertions in that regard and their advocacy in pleading to the business community, and when we compare that with what they have themselves done in relation to the Post Office, we are entitled to conclude that they are being utterly hypocritical.
The Taoiseach gave away a great deal of the game the day after the Budget when, speaking here in reference to the increased charges, he said at column 1781 of volume 208 of the Official Report:
The Minister for Posts and Telegraphs is now about to initiate a drive for economies in the Post Office by adjustments of the services to the reasonable needs of the people and changes in procedures which, it is hoped, will increase individual productivity.
That is all that was said about it the day after the introduction of the Budget. If the Government were awake and not living in Cloud-Cuckoo-Land, they should have known from last December that there would be a substantial ninth round increase. If the Government had been awake to their responsibilities, and if the Minister for Posts and Telegraphs was functioning as the Head of a Department should function, then he would have initiated the necessary steps at the appropriate time. Businessmen throughout the country initiated these steps. If the Minister for Posts and Telegraphs failed in his duty to do that, then the Minister for Finance, who was at that time, I am sure, discussing the likely cost of various Departments, including the Post Office, should have reminded him of his duty and not waited for him to be about to initiate a campaign on 15th April, as promised by the Taoiseach. This is just another indication of the incompetence of the Government in dealing with Government affairs in contradistinction to the advice and pontificating to which they so frequently treat the business community.
In relation to incentives for further productivity, what can we say about this Budget? I can see nothing in it that will help towards increased production. I agree with the Minister that in imposing taxation indirectly rather than directly he is not putting a further bar to or brake on incentive. That does not mean that I accept his indirect impositions. I agree that indirect taxation, so long as it is not on the necessaries of life, is better than direct taxation—I say categorically "so long as it is not on the necessaries of life". It was because of the regressive effect of the turnover tax in general, its imposition on the necessaries of life, that I was particularly opposed to the impost which the Minister put on last year, thereby touching off the inflationary spiral.
As I said earlier in relation to education, there must be an increase in skills through education. There must be increased incentives for management as well. One could have hoped, and expected, that there would have been something in this Budget to ensure that we would be able to get the possible top executives, top management people, to ensure the greatest possible development of our economy. What inducement is there for them to come back here if they are Irishmen? Not much; because the tax which a top executive will pay in Ireland is considerably greater than the tax he will pay in the United Kingdom, or in the United States of America, money for money and the salary being the same. That is not much inducement to those who are the best that money can buy, and we want the best that money can buy if we are to succeed in the international race.
Nor is it much inducement for companies to find for the second year—a small minority, agreed—that the Minister is going back to 1st January for retrospective corporation profits tax in respect of unlimited companies. Nor is it much inducement or incentive on the direct side for the small businessman who will now have to bear increased postage charges, increased telephone costs, increased cost of collection of the turnover tax, without any relaxation whatever in his direct taxation allowance.
For many years people have been wondering why the married allowance of £394 for income tax purposes was not double the single allowance. I cannot understand why the Minister does not accept that it costs twice as much for two people to live as it does for one. If the Minister could not have gone far enough, for revenue reasons, to meet that claim, at least he might have gone some part of the way to show that he was prepared, at any rate, to travel along that road towards the goal of making the married allowance double that of the single allowance.
I wonder how many people engaged in industry of one class or another, when they were promised the benefits of the 12 per cent increase by Fianna Fáil, realised that there would be no 12 per cent increase in the allowance for tax purposes, but that the whole of their increased wages and salaries would be taken into account by the taxation authorities when sending out their 1964-65 demands.
Apart from the individual aspects of the Budget which has failed in those respects, what are the objectives that we should be considering? I suggest there are six for any Government in any country, and particularly in Ireland. The first is full employment. The record of the Government, in their Pink Book, of 50,000 fewer at work in Ireland in the past seven years is not impressive.
The second objective is to keep the value of money stable. The manner in which the cost of living has increased, as a result of the action of the Minister a year ago—which is another way of saying that the value of money has decreased—is adequate evidence of the failure of the Government in that respect.
The third is a reasonable distribution of income. In Ireland we have not got a very high excess of great wealth at the top. It is not, therefore, a matter that requires budgetary adjustment here to quite the same degree as it does elsewhere. Would anyone consider that the manner in which State pensioners have been treated in this Budget represents a reasonable distribution of income?
The fourth point that would be set down by anyone examining the situation is equilibrium in payments in relation to dealings with foreign countries. I do not mean equilibrium each year, but one year with another. I have already indicated that the record of the Minister in that respect is one of paying with capital for current deficits.
The fifth objective is effective utilisation of our country's productive resources. Our primary productive resource is agriculture, and is it not a fact that in the past seven years it has been virtually static, has not progressed at all? Does the Minister consider that in that respect his Government can claim effective utilisation of the country's productive resources?
The sixth objective I would name would be rapid economic growth. I wonder how much of our economic growth over the past years has arisen from circumstances in other countries, and particularly in Britain, and how much we can hope for in economic growth in the future without proper provision for research, and without proper provision for the wider educational facilities which we need to bring the skills right to our door and into our daily lives? None of us can be certain that there will be a continuation of boom conditions in the world.
Under those six headings the Minister, his Budget, and the fiscal policy which he introduced this year have failed, and failed lamentably.
