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Dáil Éireann debate -
Tuesday, 15 Mar 1966

Vol. 221 No. 10

Committee on Finance. - Resolution No. 12: 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.)

I was saying that the truth is sometimes difficult to hear and not infrequently difficult to utter but it was long established in the mythology of the pre-history of our country that in Ireland the power of truth was very special and, indeed, as I have just said, in a house where falsehood was uttered, it was reasonable to anticipate that the house might fall and that it took the utterance of truth to restore the fabric.

I think the ordinary challenge of a Government to an Opposition to "tell us what we ought to do" is the customary fraudulent clamour of anyone who got himself into a mess and then starts saying, "Do not hit me with the baby in my arms."

It is the Government's duty to formulate policy for the welfare of the country and to sponsor it in this House. It is neither the function, nor is it within the power of the Opposition, to do it, for the simple reason that if we tried to formulate a Budget in the morning. without access to the secret information in the hands of the Revenue Commissioners, without access to the whole vast paraphernalia of the immensely able civil servants of the Department of Finance, we just would not know where to begin. The process of formulating a Budget begins in November and prior to that, there are months spent by every Ministry of State preparing its Estimate. It is only when all these have been reconciled with the views of the Department of Finance that the real work of formulating a Budget can be undertaken.

It is good enough codology to deceive the unsophisticated for a Government in trouble to say: "What would you do instead of what we propose to do?" To that, of course, the real and honest answer is: "If the situation is out of your control, resign. Get out. If this is the best you can offer the country, it is manifest you have lost control. Get out and we will take over. All we can undertake to do is to do our best but we are prepared to do better than you are doing now. The details of that we do not pretend to give until we have access to what our experience in office has taught us is indispensable to a Minister for Finance and a Government formulating their financial proposals."

Nevertheless, Sir, it is as well to state quite frankly that when you are the Leader of a great Party and the Leader of an Opposition, as I was, when I chose for my own reasons and the best reasons of the country as I saw them to retire from that position of responsibility, there is imposed upon one a certain restraint, a certain difficulty of speaking out as frankly as you are free to speak when you are no longer involved as Leader, every colleague that you have in awe with what you are about to say. So that perhaps my position gives me an opportunity of speaking certain fundamental truths now that badly need to be spoken.

What is the real root of our trouble? It is not the economic soothsayers and the astrologers because if there were a competent Government, they would have correctly evaluated the advice that was offered to them by the astrologers and their soothsayers. It may be to some degree the corrupt and wicked conduct of the Fianna Fáil Party in their reaction to the dilemma into which they have got themselves by the initial error of imposing the turnover tax. But still more fundamental is this, that we simply are forgetting in our time the choice our fathers made. Our fathers chose to be free rather than rich. There is a perfectly simple remedy for most of the economic difficulties which we are at present condemning, that is, to re-enact the Act of Union.

Sometimes when I listen, particularly to some of the younger generation, I begin to wonder are they beginning to yearn for the fleshpots of Egypt. Do they want to go back to being an inferior people in their own country so that they may live better? If that is what they want, the way to do it is not to deceive themselves by talking about re-entering the Commonwealth. What they are really longing for is to resurrect Castlereagh. I do not want that. I do not want the standard of living obtaining in Great Britain or the United States of America at the cost of becoming inferior in my own country. I deliberately chose to be free, albeit with a lower standard of living than I could have by becoming again a subject person.

I have the kind of feeling that in the ears of some Deputies, and I have no doubt in the ears of such people as Deputies Haughey, Lenihan and O'Malley, such talk is sentimental rubbish. They are "with it". They believe in keeping up with the times and throwing overboard the flotsam and jetsam of outdated sentimentalities which I was reared to look upon as patriotism. Let us make the choice and make it with our eyes wide open, because that is really what is at the bottom of this whole problem. We are trying to live a champagne life on a beer income. We cannot do it, and if we want to do it, we have got to pay the price. I think, and I was shocked to hear this said to me recently, that the second shocking mistake into which we have fallen is that we have got all our priorities wrong.

I was talking recently to a friend who travels widely about being free and being in bond. He said:" I agree with you, Mr. Dillon, but when you cross the Wall, when you pass through the Iron Curtain to the other side, you may find the main roads have potholes in them, that some of the windows are still filled with cardboard instead of glass, but there is a surplus of accommodation in their universities, in their technical schools, in their secondary schools, and a provision equal in every respect in their primary schools to the best that is available on this side of the Curtain." He said: "I wonder who is right, the people with the autobahns or the people with the universities and schools?" He said that their second priority is houses. They have gone to the extent that where the methods of automation are no longer available to them, they are building madly with their bare hands, building houses and homes.

Now when I look around me in this city of Dublin—and I will not refer again to that monstrous ball which is blotting out the artistic glories of the foundations of Nelson Pillar, but I will refer again to the same instrument blotting out acres of one of the loveliest cities in Europe to occupy those vacant acres with some of the most Philistine skyscrapers the mind of man can conceive. I ask myself what has happened that we here should find ourselves building these monstrous horrors on the ruins of our exquisite architectural heritage, to accommodate whom? Is it families taken out of Griffith Barracks? No. It is to accommodate the evergrowing army of bureaucrats who no longer suffer the indignity of sitting in the old-fashioned offices they used occupy. There is not a revolting sky-scraper in Dublin, one or two floors of which have not been taken on a long lease by the Government of Ireland to cover up their scarcity of capital and to emphasise again that the bureaucrats are great people in the new Ireland and must be accommodated in accordance with their status and dignity.

What has happened? When I first became a Minister, I used glory in the fact that every officer in my Department was proud of the term "civil servant". I used to rejoice in receiving deputations of people, who came into the room with the customary diffidence of people who frequently enter a Minister's room, by beginning the conversation by saying: "Now, ladies and gentlemen, let us remember that we on this side of the table are public servants. We are working for you and proud to be serving you". We used be very conscious of the fact that the noblest title known to man was "the servant of the servants of God". We are drifting slowly into the position in which there will be no more servants at all except the sovereign people of this country who are to be labelled servants and who are to be told "From now on, your masters inform you it is to be all take and no give. You can like it or you can lump it, but that is the way it is going to be."

I warned this country two years ago not to drift into a position in which we would be hawking the credit of Ireland through the world and finding no takers. Beware lest you are drawn into a position in which we are hawking our nation through the world and finding no takers. That could happen. If we are to avoid it and survive free, the plain truth—the truth capable of restoring the crumbling walls—is that the Government must spend less. Everyone else—and I say deliberately "everyone else"—the trade unionist, the shareholder, the salary earner and everyone else must spend less and share together the common burden of building up the small savings of our people into a citadel from which the Government can carry on the essential work that requires to be done.

If we had only faced that fact two years ago we would have never known the humiliation of standing in the streets of New York begging: "Brother, can you spare me a dime?", coming home with an empty cap and transferring our petition to the Federal Republic of Germany and to the financiers of London, to whom we undertook to pay the highest rate of interest ever prescribed, if we are to accept the calculation made by Deputy MacEntee, a rate of interest equal to ten per cent on a domestic national loan. I say the Government must set the headline by cutting down their own spending. My colleague here today, a Deputy of the Labour Party, proceeded to enumerate the ways in which that could be done. He threw the Leas-Cheann Comhairle into distress, who said these were matters appropriate to the Estimates. I think the world will laugh at the situation in which the Government are shouting over the House: "Tell us where you can economise", and the Leas-Cheann Comhairle is warning the House that that is the one thing we must not do. At least, a Chathaoirleach, I suppose it will be permissible to suggest that one of the ways they could begin is to recognise that better men than any bureaucrat today have done great service for this country in less luxurious surroundings than are considered indispensable for the Government to hire on long lease at present.

They have got to reduce the cost of living. People who face the problem of their profit ratios appearing to be in excess of what reason would allow should be given the opportunity by trade unionists not only to share that excess with their employees but to remember there are such people in this country as consumers. We have all got to make our contribution to leave sufficient money in the pockets of the people to enable them to save if our Government are not to be perennially on the paupers' road to Washington, London, Zurich and Berlin. Some time, somehow the vicious circle into which the Government have led this country—and in the perambulation of which at present the Minister finds himself with the despairing cry of "What went wrong with my last Budget?"—must be broken. That circle must be broken if we are not to perish as a nation.

Somebody must give the lead, and it is the duty of the Government to give it. It is the duty of every other section of the community, if the Government give that lead, to make their contribution. But there is no use in the Leader of the Government telling the people of this country that they have an obligation to the nation to tighten their belts and live on less if he claims there is to be only one exclusion to that general rule, and that is himself in his capacity as Taoiseach of the Government. So I say to the Minister for Finance, when he asks us: "Tell us what you would do," that my answer is perfectly simple. This vicious circle that your Government started with the turnover tax has to be broken. Nobody can take the initiative except the Government that started it off. They must demonstrate that they mean and are able to spend less. Then they can turn with propriety to the merchants and bankers of this country and say: "We are doing with less. We have had to make painful decisions to achieve that. It is your duty to do as much." When these two elements in our society have set the example, we have the right to turn to the trade unionists and say to them: "You have to shoulder the responsibility that goes with the kind of power that has been thrust upon you. Perhaps you never sought it but the march of history has thrust it upon you." Then we are entitled to say to the wage earner, the salary earner, the merchants and the bankers: "We are all together in this so that we may stay free. We have our lessons to learn from east of the Iron Curtain and from west of the Iron Curtain, but there is one simple requisition the Government of our people are entitled to make upon you: if the cost of government is being brought down, the burden of taxation relieved, the cost of living stabilised or pushed downwards, then instead of spending the surplus left in your pockets, we ask you to lend it to your own Government so that essential work may be done without making us beggars before the world." Our people still love their freedom and their dignity enough to answer a call of that kind.

I want to see survive in Ireland the rule of law and the sovereignty of the Irish people. I see both disintegrating under my eyes at the present time. Partly, if not wholly, on the testimony of Deputy MacEntee himself, the Government of the Fianna Fáil Party are too weak or too woolly to take the decisions required to be taken, too weak to control the potential anarchy that threatens this country, too woolly to sort out error from the truth in the advice tendered them by their astrologers and soothsayers. If that is their situation, the only remedy is for them to get out, and from the rest of this House I hope a Government can be found which will take their place and have the courage and the wisdom to do what Fianna Fáil have so signally failed to accomplish.

The Budget speech delivered by the Minister for Finance will undoubtedly go down in history as a unique speech for such an occasion from a Government. It will go down in history because the only thing the Fianna Fáil Party were interested in doing in this Budget was to collect enough money to pay for their previous blunders. Surely the people are entitled to expect a little more, in view of the situation in the country at the present time, than to be told that the hair shirt was being handed out again by Fianna Fáil, and this time they were not even making an apology or trying to cover up that the only reason for the £12,500,000 the Minister sought to get by this Budget was to pay for the mistaken policies pursued by the Fianna Fáil Party?

This Budget has done one thing at least: it has shown that the Fianna Fáil Government are bankrupt as regards economic planning. The Taoiseach avails of every opportunity to tell the people that no country in Europe keeps the people as well informed as this Government do by way of documentation, that no other Government in Europe spends as much time and effort on ensuring that the people are kept fully informed in regard to the economic position. However, the Fianna Fáil Government have no economic plan. They have a hope and they have done absolutely nothing to ensure that that hope might possibly be achieved. To plan requires something more than to set out on paper what one hopes will be the situation five or ten years from now. Not only is it necessary to set the targets but it is necessary to take positive steps to ensure that these targets can be reached. I do not think—and the absence of Fianna Fáil backbenchers' contributions to this debate is an indication that they do not think—that any effective steps have been taken by this Government to ensure that their hopes could possibly be achieved.

The Minister asked what went wrong with his last Budget. It is not very difficult to know what went wrong. The Minister is definitely in the minority if he does not know because the majority of the people know what went wrong. When the workers got a 12 per cent increase, the Government sat back and let the speculators and the get-rich-quick merchants jump in and exploit whatever benefit had been achieved by the ordinary people through the National Wage Agreement. The Government held up their hands in horror when it was suggested to them that they should introduce price control in order that what had been achieved through that National Wage Agreement could be maintained by the workers. No. The Taoiseach in Mullingar in April of last year, immediately before the general election, stated most emphatically that neither he nor the Fianna Fáil Party believed in price control, that if they were in Government, they would not introduce it and if they were in Opposition, they would oppose it. However, when the run of events showed even the Fianna Fáil Party that things could not be allowed to drift along in their happy way, and when it was far too late to stop the disaster that was overtaking the country, the heresy was introduced by Fianna Fáil. Had that been done in conjunction with the National Agreement, it would not have been necessary, I think, for the Minister to come in here last Wednesday and state that this Budget was a very hard Budget to introduce. I accept that it may have been a hard Budget to introduce, but it is a lot harder to bear; I am sure the Minister will accept that.

Some short time ago this House spent a considerable time discussing the NIEC report and particularly its recommendation in relation to the introduction of an incomes policy. We had on that occasion a repeat of the performance by the Fianna Fáil Government in regard to price control. The Taoiseach has stated repeatedly and most emphatically that Fianna Fáil do not not believe in an incomes policy. But there has been a change of heart, though not a complete change. They believe in a little bit of an incomes policy. They believe in an incomes policy that will hammer down on one section and control salaries and wages. There is no mention, no thought, no suggestion of touching any other section or any other income. Those they propose to control must be confined to three per cent—the economy could not not stand any more. Where can one find a spokesman for Fianna Fáil making any positive suggestion that any other section of the community should try to help to overcome the economic difficulties in which we find ourselves? There is none. So much for Fianna Fáil's change of mind with regard to an incomes policy. As far as Fianna Fáil and the Government are concerned, the NIEC might as well have stayed at home as recommended an incomes policy to this Government because an incomes policy can be implemented, only if all sections of the community are involved and all earnings controlled, including profits, dividends, rents, fees, etc. Only if all these are brought into the net can an incomes policy succeed. But that is something Fianna Fáil have not even thought of doing.

Time and time again the ordinary people, the people who will pay the £12½ million for the blunders of the Fianna Fáil Government, are told that they can have only three per cent. The man with £10 a week is told he can get only 6/-. That is all the country can afford. Do not loss sight of the fact that we have a great number of people earning £8 a week; the man earning £8 a week is told that he can get only 4/9. That is all. But out of that 4/9d or that 6/- collectively, and mainly, they will deliver to the Fianna Fáil coffers the £12½ million required to pay for the blunders of this Government. Fianna Fáil want to get the ordinary people both coming and going, and this despite the fact that in the Government's second Progress Report they acknowledge that the purchasing power is four per cent less now than it was in June, 1965. But the ordinary people are told that three per cent is enough for them.

One would have expected, remembering the state of the country, that the Minister would have availed of the opportunity last week to say something about unemployment and emigration. But no. There was only one purpose in the Budget this year—money. There was only one thought—self-survival; get the money and get out. Unfortunately, the "get out" is not the get out the people would like it to be.

Out of the £12½ million the Minister intends to raise by taxation from the ordinary people one-quarter will be used to relieve the plight of the old age pensioner. There were headlines in the Evening Press. One wonders how they managed to appear on the streets so early because they were out before the Minister sat down. The headlines told the pensioners that they were going to enjoy an increase of 5/- per week but the headlines did not tell the people from whom the Minister was extracting his £12½ million that three per cent was enough for them and that only one-quarter of a million would go to the old age pensioners, and not to all old age pensioners. Oh, no. That would be too much to expect. It would go to those who had absolutely no means. If one could prove one was destitute the Fianna Fáil Government would graciously give one another 5/- a week. But that is not the full story because this 5/- increase will not be paid until November. It will be paid for approximately five months of the financial year. But the taxes come into operation immediately. If these old age pensioners are fortunate enough, or unfortunate, whichever way you like to look at it, to survive until next November, they will qualify for an increase of 5/-.

One wonders how backbenchers of the Fianna Fáil Party react to this Budget. One has no alternative but to wonder because they have been noticeably silent on this issue. They will find it extremely difficult, I believe, to walk into the Lobby and support a Government who have absolutely and utterly ignored in this Budget the many grave difficulties that face the country. They use the Budget for one purpose only, namely, to extract from the people sufficient money to pay for their mistakes. Not only that, but they have given an indication that we are not finished there. The Minister said that if the measures he is now taking are not sufficient—or possibly he is anticipating more mistakes—he will introduce a supplementary Budget. It is generally expected, particularly by the people on these benches, that the Minister will introduce a supplementary Budget. It is expected that he will come into this House next October and tell us that unless he introduces a supplementary Budget, and unless we support him in so doing, it will not even be possible to give these unfortunate destitute old age pensioners the promised 5/- a week from 1st November next.

Many ways have been suggested as to how the Minister might have got his £12½ million without imposing a tax on children's lemonade, a tax on ordinary people's private transport, a tax on petrol and—let us not forget to give him the credit side—an allowance of £30 per year for each child over 11 years. I wonder how many will benefit by that—possibly the same number as will benefit by the 5/- that is to be given to the destitute old age pensioners.

I wonder if the Minister and the Cabinet gave any thought to the millions upon millions that have been handed out by the Fianna Fáil Government to people, some of whom at least can be described as nothing but speculators, who have come in here with their draft plans for new industry and plenty of work. The Government handed out to them, ad lib, hundreds of thousands of pounds without any assurance whatsoever as to employment or the return to this country for the millions of taxpayers' money.

We have had a very sad and hard year in this House in seeking to extract from the Minister's colleague, the Minister for Industry and Commerce, by way of Parliamentary Question plus supplementary questions, how much exactly was paid by some of these industrialists and the exact benefit by way of employment in this country. Although the Minister was rather evasive, it nevertheless emerged quite clearly that in very many cases the millions that were paid have not justified the expectations. This is but one of the many places where the Fianna Fáil Government might have looked to raise at least some of their £12½ million, or they could have curtailed their generosity to these industrialists and perhaps, with the saving, it might have been possible to add something to the 5/- that the minority of old age pensioners will receive for five months of this financial year from this Government.

(South Tipperary): I suppose this could be described as a grab-all Budget. Certainly, the small amount which the Minister was able to give out in the form of relief or aid must be the lowest in our history. An increase of 5/- a week to a very limited category of old age pensioners, beginning next November, is poor compensation and very little out of the £12½ million which the Minister hopes to secure from his budgetary efforts, not to speak of the other amazing concession of, I think, one-tenth of £1 million, or something like that, to the West of Ireland, a part of the country which is extremely under-capitalised. I wonder how on earth they arrived at that fractional sum.

This Budget is not a good Budget economically but the Minister was caught between the upper and nether millstones of fiscal necessity and economic policy. In the ordinary course of events, one might say that a Budget which attempts to tax severely and mop up excess money in circulation has an economic thinking behind it, but, in this particular case, any increased money in circulation must largely be eroded by the increased cost of living which has occurred since the last wage and salary increases were given. Furthermore, I think it is agreed that there has not been a great increase in consumer spending. There has been investment spending but not a great increase in consumer spending, as far as these tables which we have been given would seem to show.

We are now reaching a current capital expenditure in this country of about £1 million per day which we cannot finance out of taxation or out of taxation plus national borrowing— an expenditure which compels us to go outside our country to borrow. The Minister said he is budgeting for a surplus. He has intimated that there is a likelihood of a second Budget in the Autumn: certain circumstances may arise to make that necessary. The only inference I can draw from the reference to a second Budget is that if expenditure demands get out of hand and the private sector of the economy yields to them, he will go out and mop up any additional expenditure that comes into circulation so that it will not stay in the recipient's pocket but will find its way back into the Minister's pocket.

I was listening to the Minister when he spoke the other night. Apparently he has accepted that taxation will continue to rise. There is, apparently no foreseeable ceiling to the level of taxation. It is usual in Budget speeches for a Minister, dealing with the economic situation in a general fashion, to refer to unemployment, employment and emigration. In fact, the customary practice is to deal with these aspects before taxation proposals are given in the speech. But, in this case, the Minister completely avoided any reference to employment. He immediately plunged into his speech and gave us the figures of the new taxation increases. Speaking about our tax burden he concluded, at page 20 in reference to taxation as a percentage of our national income;

It was 22.4 per cent in 1956-57 and will, I estimate, be 24.6 per cent in 1966-67. There are many countries in which the percentage is higher.

There is a false reasoning here in saying in regard to the percentage of taxation of a man's income, that if the man is poor, he is as well off as his rich neighbour if they both pay 20 or 30 per cent in taxation. It surely bears more heavily on the poor man than on his more opulent neighbour. In so far as the residue of the well paid individual is considerably higher, he has more money to play about with and considering that our per capita income here is low by European standards, roughly half what it is in Great Britain. To draw an anology on a percentage basis is, I think, a little naive. To my mind, it is not exactly a fair comparison.

Apropos that, the Minister makes a very revealing statement on page 24 of his Budget speech, in which he admits:

I find that the annual average percentage increase in consumer prices over the period 1960 to 1965 was 4 per cent, which gave Ireland the doubtful honour of sharing, with Austria and Norway, the fifth highest place in the OECD table.

This is a very candid admission by the Minister but I would submit that it is a position which has largely arisen from the mismanagement of our affairs by the Minister's Government. In so far as the deliberate policy of inflation was introduced here primarily for political reasons, they must bear the responsibility of placing us in the unenviable position to which the Minister saw fit to advert in his Budget speech.

Later on in his speech, referring to incomes, the Minister says, on page 26:

In particular, emphasis was laid on the need to keep money increases in line with the growth of national production so as to avoid further price and cost increases, diminished competitiveness and intensified balance of payments difficulties.

The first people to step out of line in that respect were the Minister's Government when they allowed a spiralling to start here and made no attempt whatsoever to control prices or incomes. I admit there is a difficulty in controlling prices and incomes, but the Minister's predecessor stated here on more than one occasion that he was quite satisfied that the ordinary forces of commercial competition were adequate to control prices and keep them at a reasonable level. In point of fact, while we all appreciate the dangers of mounting costs, must it not be obvious to everybody that this particular Budget, in itself, will cause increased costs, increased prices? It must be obvious to everybody that it will aggravate the demand for increased salaries and wages, a demand which, indeed, we must admit, with ten strikes on our hands at the present day, is sufficiently clamant. Does the Minister not realise that the increased income tax demand alone on the PAYE sector of the community is, in effect—as Deputy Dillon described it—a wage tax which will not help to improve present industrial relations in our society here?

Further on in his Budget speech, on page 28, the Minister mentions that no increases should be allowed on incomes over £1,200 per year. This fits in with the sketch on, I think, one of our Sunday newspapers recently showing the Minister closing the stable door after the horse had gone: stating there will be no increase in salaries or wages over £1,200 per year when we have already given a large status increase to our higher civil servants and have been much criticised for so doing. In so far as these increases were granted by arbitration, there was some justification for them but the timing was very unfortunate.

When I look at the overall Budget Statement proper, it seems to me that most of our troubles arose in the field of the Capital Budget. The Minister has asked what went wrong with the May Budget. There were errors of estimation which gave him a deficit of £8 million and I think he was budgeting for something less than that. Errors seem to have crept in, and unforeseen developments also, in the field of the Capital Budget. Last May it was estimated that it would be necessary to borrow through the medium of national loans and banks, £43 million, and, in the event, this figure came to £68 million.

Some of the difficulties possibly could not be foreseen. The Budget deficit of £8 million arose because expenditure under the various Votes was not compensated by savings under other Votes. There were market development grants, over £2 million; there was the international subscription, £4.3 million; our State enterprises had to get some extra money, over £3 million; there was a falling off in expected revenue from Exchequer Bonds. Apparently the Government wanted to try to bolster up our shares and there was less money available to the departmental funds. Finally there was a falling off in our small savings. Altogether considerable errors of estimation were made and there was the difference between £43 million and £68 million.

For the coming year, it is anticipated that our banking and external borrowing will be £28 million, with National Loans of £22 million, to give us a projection requirement for these two sources of £50 million. I can only hope that the misjudgments or errors which arose in our estimations for last year will not be repeated this year. It seems to be a very large figure on which to make an error, and it is significant that it arose on estimations dealing with activities which are so much outside the control of our national Parliament.

Indeed, one wonders what control this house actually has over those forms of monetary activity. We have the Committee of Public Accounts, and this matter has been adverted to in their report this year. While they deal with ordinary day to day departmental expenditure which we deal with on the Votes, there are now mounting expenditures over which there is very little accountancy control by this House or the Committee of Public Accounts. This is now becoming such a problem that many Deputies on both sides of the House are beginning to wonder what measure of control could ultimately be designed to satisfy the public who sent us here that we are making some effort to act as watchdogs over that type of expenditure in the public interest.

The words "Second Programme for Economic Expansion" are pretty hack-neyed by now, and our progress towards the targets laid down in that Programme have not been satisfactory in recent times. Indeed, it has been so unsatisfactory that many people are stating that we should now revise the targets set down there and aim at a more modest figure. In particular, we seem to have completely fallen flat on the projections as regards employment, nor am I in the least hopeful that the employment targets will be realised or nearly realised. I am coming more and more to the conclusion that this employment target which we have set ourselves is completely erroneous.

We have also made substantial errors in our estimates of gross capital formation. Apparently there must have been an under-estimation of what that type of activity would cost. I suppose in a world of increasing expenditure, some error was likely, but we seem to have been very much off target here. There are other fields too, and very serious ones, in which we have been considerably off target. We have over-estimated our exports and under-estimated our imports. In both those fields, we have made serious errors, and have been quite substantially off target. I do not think it will matter "tuppence" whether we realise that programme or alter the figures in it. I cannot see that it would make very much difference. It will not alter the facts.

In passing, I should like to say that the presentation of the Capital Budget as outlined here could be improved. One has to go over it very carefully. It is not easy to see at first glance what has occurred. It is quite simple for the people who drew it up. They are dealing with these matters every day, but for the average Deputy, if he wishes to study the capital programme, it is not presented in a simple or readable fashion, and I am quite sure that with a little effort and time, it could be improved so that Deputies would be able to follow it more easily than is the case at the moment. Certainly, speaking for myself, I feel it could be possible to distribute it in a form more easily assimilated. However, that is a small point but I thought it worth mentioning in passing.

One of the most difficult things, I suppose, in writing any treatise on the industrial situation of a country is to give projections. Indeed, nobody has got the gift of prophecy. Last year I adverted to a chapter in the Progress Report on the Second Programme for 1964 and I criticised at some length the projections made for 1965. As it happened, the projections turned out to be very erroneous. I have never been quite able to understand why they should be so erroneous. I expressed the hope then that when the Department of Finance came to write the chapter for 1966 they would be a little more cautious in their prognostications. I think they were. They have given projections but they have hedged them around by a number of provisos so if their projections do not come to pass they have a perfect alibi. Amongst those provisos are that the average earnings will not increase beyond three per cent, that the average rise in profits, professional earnings and rents will not go above five per cent and that there will be no widespread disruption in industrial output in the remaining ten months of the year.

Those are very pious hopes and judging by recent trends, certainly as regards industrial unrest, it certainly does not look particularly pleasant at the present time. The prognostications for the coming year are hedged around by those provisos, that is, if those things are not fulfilled they suggest such and such will happen. Much of what they have written depends on the likelihood of securing that degree of industrial peace which we all hope for and which is a sine qua non of the development factors they have given us. The NIEC Report on page 24 has this to say. I quote from paragraph 35.

In our comments last year on the Department of Finance Review of Economic Progress in 1964 and Prospects for 1965, we obviously did not recognise the full strength of the inflationary pressures that were then working themselves through the economy, nor did we anticipate the financial difficulties that became apparent very soon afterwards. This can be seen from the comments we then made on investment, and indeed from those on employment and output. In some measure, this can be explained by the fact that the forecast for 1965, that was then made available to us and on which we based our comments, proved in retrospect to be rather optimistic, and we have already discussed in Section II above how it differed from the estimated out-turn for 1965. In some measure, our failure last year to recognise the financial difficulties that were then imminent arose because forecasts within the framework of the national accounts give very little indication of what is happening, or of what is likely to happen, on the financial plane. We would welcome next year, therefore, such supplementary information as can be provided on the financial and credit positions and on how they seem likely to develop.

Therefore, it would seem that the members of the NIEC are complaining that they are not adequately documented or not kept fully provided with the necessary data on which to base their opinions. That may be so up to a point, but I personally feel that there were sufficient data available to them last year, and covering a number of years past, to give a less rosy prognosis than that in point of fact given. I believe there was sufficient information available also to the Government but there was no indication from the Government that there were any clouds on the horizon.

The answer as to why no indication was given that everything was not all right is clear and obvious. We were facing a general election and it would not be politically expedient to bring to the notice of the people, and the country in general, the trends which had been apparent over a few years. I will now proceed to enumerate those trends, even though, as a Deputy, I have not the information which is readily available to the Taoiseach and the Government. However, I have the information which is available to every Deputy. First and foremost, before one becomes very involved in such fancy terms as "balance of payments" or "capital inflow" there is the ordinary position of the country. Nobody wants us unless we can produce, sell and export with a reasonable degree of profit an increasing quantity of goods. Our standard of living must fall if we cannot do so. Yet, it is a fact that over the past five or six years our import excess, the difference between our merchandise exports and our merchandise imports, was increasing substantially. It did not require a financier or an economist to forecast the ultimate significance of that. Any layman with national school education would realise that such a position could not continue indefinitely with a trade deficit increasing year by year out of all proportion to our national resources.

A further thing was happening. Our competitive position was declining. Let us forget for the moment the basic position between ourselves and Britain. Our costs of production were increasing vis-á-vis those of Great Britain with which we did the greater part of our trading. Our costs particularly increased in two periods, 1962 and 1964. That information was available to the Government, was available to anybody who bothered to look for it. It meant nothing more than that our position in regard to exports was becoming more difficult. Had production costs in Britain increased at the same rate, at least we should have maintained a parallel position but our position in that respect kept deteriorating all the time.

A third point was in relation to capital inflow. Our capital inflow increased by £36 million. Obviously, when you arrive at that situation, whether you live with Lynch or live with Ryan, you live dangerously. To depend on this spurious flow of capital, subject to so many international pressures, and to think you could balance your economy on that type of income and forget the fundamental importance of your merchandising trade was false thinking and has now so proved. To think you could sustain, much less improve, capital inflow was clearly unwise.

Furthermore, as a natural corollary, our balance of payments position deteriorated, but it did not deteriorate in one year. In 1961, I think, we were balanced. From that onwards, our balance of payments began to go out of line. Finally, our external assets began to fall to a very low figure last autumn. This combination of circumstances had been building up during a period, not every one at the same rate, but the cumulative, interlocking effect of these changes should have been apparent to any Government. Indeed they were told so dozens of times from this side.

The ratio between our trade deficit and our bank reserves — commercial and simple bank reserves — showed a progressive worsening, a matter which was drawn to the attention of every Minister for Finance. Our bank liquidity began to deteriorate. At one time, we had a figure of 30 per cent but it began to go down to 28, 27, 25, until last summer it reached the low figure of 19 per cent. If we are to accept the new method of computation, it will be 17 per cent. That was associated with a massive increase in bank lending at a time when we here were speaking of a measure of control on a priority basis through the Central Bank. This was repudiated or laughed at by the gentlemen on the far side.

Again, during the past five or six years, we have had a progressive, overall Budget deficit, current and capital combined, so that overall Budget deficits were out of proportion to our national assets or our national income. As a corollary, our public debt was increasing and its servicing has become increasingly burdensome. In recent times a small but important indicator has been the decline in what are called our small savings. In spite of all that deteriorating economic position, we had to face the position in which our employment figure, always associated with emigration, was deteriorating. We were also faced with the position—this was not our fault—that we had to adapt ourselves for a period of free trade and our investments on that score were progressively increasing.

That has been broadly the trend during the past five or six years—since 1961, when I came in here. These trends were known to the Fianna Fáil Government who, to the rank and file of the Irish people, called us all sorts of names if we dared to rock the boat. Now the boat is damn well rocked and for the first time in our history, we have to hawk our credit to the capitals of Europe and the United States. We had to come back from New York with the specious excuse that there was congestion on the lending market.

Some time last spring or early summer—certainly before 30th June— the Taoiseach announced the steps he was taking to remedy our economy which then appeared to explode upon us and the Central Bank issued instructions to the commercial banks to control lending. Lending, they said, should be diverted to productive purposes. It is not quite clear when that instruction went out, but it went out and after that, the Taoiseach was still saying he did not believe in any form of credit control through the medium of the Central Bank. In spite of that instruction, and I admit that, perhaps, the room for financial manoeuvring might be limited for a Government or a Minister, the State continued to borrow and from April, 1965 to December, 1965, Government borrowing increased by £31 million while the private sector of the economy declined by £10 million, so much so that the Governor of the Bank of Ireland said the other day that money was not being left to the private sector but was all being hogged by the Government.

This is a poor country. We must not forget that the per capita exports from our nearest neighbour, Northern Ireland, are four times ours. A small country with half our population is able to export £4 worth of goods for every £1 worth we export and that is the next door neighbour with which we are going into economic fusion in the next few years.

Finally, there is another indicator to which the Government are now adverting very much but to which they did not advert while it was politically inexpedient for them to do so, that is, the impact of wage and salary increases upon the economy. Before coming to that, I wish to emphasise the complete lack in this Budget of anything calculated to encourage or improve the agricultural section of our economy. Coming from a rural constituency, I must emphasise the importance to our economy, particularly in the field of exports, of agriculture. This is not sufficiently appreciated and certainly not by the industrial-minded and city-minded sections of the community. There is nothing in the Budget to bridge the gap that already exists, the disparity between agricultural incomes and incomes of those engaged in various other occupations in our society.

Various figures are given as to the average agricultural or average non-agricultural income. It seems to be a difficult figure to establish with any finality. Mr. Johnson in an article in the Irish Times on 6th December, 1965 gave a figure for agricultural incomes of £477 and for non-agricultural incomes, £718. I do not know how those figures were calculated. Research work is being carried out at University College in the economic section in regard to agricultural incomes. I think it is generally agreed that there is considerable disparity between agricultural and non-agricultural incomes. There is nothing in this Budget to rectify that situation, in spite of all the rosy promises the Minister for Agriculture had been making to the farmers throughout the country.

Nor is it sufficiently appreciated by the man in the street that in the field of exports, there is a very small import quantum in the agricultural export, whereas the industrial export usually has a very large import quantum in its make-up which is very important from the point of view of trade and our balance of payments.

One may ask, as the Minister asked: what happened to that 1965 Budget? I shall attempt to answer the question for the Minister but as I have tried to show, the Minister's problem did not arise on 13th June, 1965, but had been building up over a number of years as had the problems of his predecessors. I shall quote for him a precis of a speech which I made a couple of years ago and which is contained in the Fine Gael Digest of 1964 at page 16:

In February, 1963 the Taoiseach produced a White Paper entitled "Closing the Gap" in which he purported to show that wage and salary increases had outstepped the rise in productivity and that the Eighth Round wage increases had already produced an undesirable position. The Government's attitude suggested a wage freeze or pay pause. The Budget of 1963 introduced a 2½ per cent turnover tax. The Dáil Opposition, Fine Gael and Labour, traders and the public in general reacted violently, and the Dublin North-East by-election on 29th May was fought primarily on the issue of the turnover tax and resulted in a resounding victory for Fine Gael, 6,000 voters approximately having defected from Fianna Fáil as against the General Election results of 1961.

On October 11th, 1963 occurred the death of a Fianna Fáil Deputy for Cork city, Deputy John Galvin. With a new by-election pending, panic seized the Government. On 11th November the Taoiseach announced that the gap between output and earned income was now closed. He suggested that a conference between the Federated Union of Employers and the Irish Congress of Trade Unions should be held and that the way was now clear for a further round of wage and salary increases. On November 13th a Labour motion to issue the writ for the Cork city by-election was defeated by Fianna Fáil in the Dáil. On December 4th Deputy William Norton died and this meant there would also be a by-election in Kildare.

That 12 per cent round, by the Taoiseach's instruction, was unprecedented. I am not aware of a Taoiseach of any Government, Socialist, Labour, Conservative, at any time saying to the people of a country that the time was now ripe for an advance in wages and salaries and having this broadcast on the national press. I remember distinctly the day this broad announcement was made in the national newspapers. It was clearly an attempt to buy back the popularity the present Government Party had lost through the introduction of the turnover tax, as was clearly shown to them by the Dublin North-East by-election. It was dictated by political expediency and was not economically sound. The Taoiseach claimed subsequently that he had advised that all the economy could stand was six or seven per cent. Yet he acceded to 12 per cent.

That 12 per cent was given out but no attempt was made to preserve the purchasing power of that increase. Not the slightest attempt was made towards a prices-incomes policy. I admit the difficulty of a prices-incomes policy.

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

(South Tipperary): I was adverting to the failure of the Government to make any attempt to introduce any measure of price control to curb the inflationary effect the turnover tax and the subsequent ninth round wage increase had brought into operation and I was admitting that a prices-incomes policy and price control are difficult things to operate. George Brown is finding his own difficulty in Britain with it at the present time and I understand that it took 20 years to get an incomes policy fully into operation in Sweden. I appreciate the difficulties of it. What I do not appreciate, and what the country does not appreciate now, is the complete failure of the Government and the Government Party to make any attempt to control prices and wages after the ninth round wage increase. That was literally giving a man something with one hand and taking it back with the other. That, I believe, is largely responsible for the degree of industrial unrest we have here at the present time.

Of course, a wage increase, ninth round or any other round, 12 per cent or any other percentage, is a dirty word. It was not a dirty word in 1964; it was a lovely word then. Poor Deputy Tully here has been crying time and time again and has told us a dozen times how hard he worked when they were handing out this ninth round wage increase. They had failed three times and the Taoiseach had to ask them to go back and sit down a fourth time. Deputy Tully should get some recognition for that 12 per cent wage increase. The Taoiseach is letting him have all the credit he wants now but when credit was any use, the Taoiseach was far too astute to allow Deputy Tully to have the credit for it. The Taoiseach took the credit for it when the credit was worth something and before the two by-elections in Cork and Kildare, he went on television and smiled captivatingly at the people of Ireland and said to them: "Next Saturday night you will have a big, substantial increase in your pay packets. What is wrong about that? The week after, the traders will have more money going over their counter. What is wrong about that?" To the average simple Irishman, unschooled in economics, nothing seemed wrong about it. Only now, two years later, the people find that the 12 per cent increase which they got has been eroded by a corresponding increase in the cost of living.

To appreciate the full significance of that wage increase, its full political significance, let us have a look at the figures. Taking 1963 as base year, that National Wage Agreement with some other increases added on led to disbursement by the community of some £62 million or £63 million in wages and salaries in 1964 as compared with 1963 and, in 1965, to that £62 million or £63 million, there was another £25 million added on. That meant that through the intervention of the Government—and they took credit for it and made sure they were given credit for it —£150 million extra was put into circulation in the years 1964 and 1965— the two election years—to 660,000 people. If I could have that much money to disburse, I could put Rasputin into the Taoiseach's place.

I emphasise these figures because they show the extreme danger of a National Wage Agreement if it is used, as it has been used and wanted to be used, and unscrupulously used, for political purposes and to the detriment of the Irish economy. All these troubles began not with the 12 per cent wage increase per se but with the turnover tax, the unpopular thing which the Government felt they had to do when the Taoiseach's son-in-law as Director of Elections, was resoundingly beaten and the Taoiseach, like a gambler, took panic and nobody can panic so much or so dangerously as a gambler.

Labour Party speakers who have already contributed to this debate have made perfectly clear how the Labour Party feel about this vicious Budget. It is not my intention to repeat all that has been said but one thing that cannot be too often repeated is the demand for an explanation as to what brought about this situation. What went wrong? The nation is entitled to be told what went wrong, particularly having regard to the fact that since 1957 we have been repeatedly told that everything was going all right. Suggestions made last year that things were not going all right were hotly denied by Government spokesmen. Now we find ourselves in a morass. If an ordinary working man were found making mistakes of the kind that clearly have been made by the Government in their handling of the national economy, he would not last for a second in his job. I have yet to hear of anybody in the Government service or in Government departments being taken to task or being dealt with for bringing about this situation.

Down the years there have been all sorts of predictions, planning and programming, all with the purpose of having the people believe that things were going to be all right. It is not unfair or untrue to say that it was admitted by the Taoiseach in the debate on the Free Trade Agreement that some years ago the Government had contemplated entering into a free trade agreement with England and that they had made overtures in that connection. That, to my mind, shows the necessity for the Government having prepared themselves for such an eventuality. Did they do that? They certainly did not.

In the event of the Free Trade Agreement, we had a considerable number of people speculating about what was going to happen to their employment. Nobody was quite sure about the position. The Taoiseach did express the view that some would go to the wall. It was also said that there was to be a manpower policy, another way of locking the stable door when the horse has gone. Surely it is not unreasonable for the community to expect, when the Government were contemplating entering a free trade arrangement, that a manpower policy would have been introduced which would provide for the training or retraining of workers who would find themselves displaced? This did not happen and up to now we can only advert to a White Paper. There is no real indication as to when something positive is to be done.

Similarly, for a number of years we have been promised an improvement in our Industrial Relations Act. This has not come about, yet we have people saying that the workers are at fault because they try to get back to the position they were in in 1964 when they got the 12 per cent wage increase. Surely this is not unreasonable behaviour on the part of the workers? It does appear that the Government have a penchant for formulating programmes and leaving them there, in the belief that the people will remain content and be satisfied if they are told that there is something on paper, even if there is nothing moving in connection with it.

We must not be unmindful either of the fact that the Government announced that they were going to set up a clerical tribunal to ascertain what should be paid to clerical workers. They picked on the lowest-paid workers. This has led to some discontent because a number of cases on behalf of clerical workers had been referred to the Labour Court and the attitude of the Labour Court has been: "Should we do anything about this in view of the clerical tribunal?" In the meantime, the workers concerned, who are not employed by the State, are being told to mark time. This sort of position cannot go on forever. The last speaker referred to the National Wage Agreement and the 12 per cent wage increase, but I do not think that sufficient people realise in regard to the 12 per cent that the Government got a fair whack from it in two ways. They got it through PAYE and they got it through the turnover tax. Then, of course, we did not have the price control which we should have had. Price control was only introduced when it was too late, when it was found that the cost of living had risen by over ten per cent. Working class people who had benefited from the 12 per cent were expected to remain quiet and do nothing to get back what they had lost.

During the debate on the Prices Bill, the Labour Party repeatedly pressed the then Minister for Industry and Commerce to put teeth into the Bill by providing for employers to give notice of their intention to increase prices, just as working class people, through their trade union representatives, have to supply facts and figures and advance arguments at conciliation conferences, the Labour Court, and so on, before increases in wages are extended to them. The Prices Act came into operation and not long after its introduction, there was a bread strike and we read in the public press that bread was being sold on the black market. According to a statement issued by the Government Information Bureau, the Minister had no power to deal with matters of that kind. So much for the Prices Act.

Another matter which confuses members of the working class is when they witness lavish spending and great waste, when they see millions of pounds being handed out to different types of people as inducements to start industries here, some of whom eventually abscond, while at the same time, the working people are being lectured, are being told to be careful and that they cannot have more increases in their wages. This sort of thing does not make sense. On the one hand, we have this hypocritical way of going on and on the other, we are depending on charities for the provision of amenities of different sorts for which there is a great need. It is obvious to me that the Government have developed this technique of putting the blame on somebody and, in my opinion, that has been going on for far too long. This technique is now worn out and the people have become wise to the situation.

This goes for the attitude of the Taoiseach, of the Minister for Finance and of the Minister for Industry and Commerce. Each one of those is aware of the attitude of the trade union movement towards the national economy and aware of the contribution which the movement, through the Irish Congress of Trade Unions, has made in trying to maintain the national economy in a proper way and aware also of all the time that has been given by trade union officials on committees dealing with matters of this kind. What do they get in return? They get a Minister of State adopting a new role as industrial relations PRO for the Fianna Fáil Party. Perhaps this is due to the fact that his job as Minister leaves him with nothing to do because he will not accept responsibility. It is unfair for a man of this kind to go around continually lecturing the trade union movement when he is obviously not fully aware of what is needed in industrial relations. The Minister for Transport and Power should examine his own department and find out what is wrong there. There has been a good deal of trouble in that department and its offshoots and nobody can get to the bottom of it. Are we satisfied that industrial relations there are all right? We know they are not. In recent years there have been disputes in industries within the ambit of the Minister's department, but he was not even available to discuss the causes of the disputes with the trade union people. Neither was he found to be available when the citizens of Dublin attempted to have something positive done to provide themselves with proper transport.

Could the Deputy relate his remarks somewhat more closely to the Financial Resolution?

I feel I am doing all right.

Acting Chairman

That is a matter for the Chair to decide. Industrial relations seem to be outside the scope.

I think I am entitled to criticise the actions of the Minister for Transport and Power when he talks about industrial relations and the behaviour of the trade union movement in regard to the national economy. I do not have to remind the House of the importance of buying Irish, but we well know the attitude of this particular Minister towards the importance of buying Irish. One of his colleagues, Deputy Corry, repeatedly had to take him to task for allowing CIE to buy material outside this country. This is the man who talks about the economy, tells working class people they have to be cautious and reprimands them.

We come now to deal with the attitude to the claim of the trade union movement for an increase in wages. Before the talks got under way at all, we had the Taoiseach and other Ministers saying that the nation could afford only three per cent. We had the Federated Union of Employers accepting the ball passed to them and saying the claim would cost £50 million if conceded and bankrupt the country. Shortly afterwards we had the Parliamentary Secretary to the Minister for Industry and Commerce saying it would cost £35 million. Then the research department of the Irish Congress of Trade Unions—they did their home work properly—told us it would cost £25 million. At the same time, we had the Federated Union of Employers and other employers meeting trade unionists to talk about an increase in wages. We had the outcome of a special delegate conference of the Irish Congress of Trade Unions at which an increase of £1 per week was decided upon. I remember that prior to Christmas last you, Sir, complimented the trade union movement on their attitude in that regard. It is not unreasonable to say, when we take into consideration the Taoiseach's repeated suggestion that the increase should not be more than three per cent and also the attitude of the FUE, that talks to bring about a national wage agreement are doomed to failure. That combination means, in effect, that even before you sit down in conference the matter is decided at the dictates of those outside and within. That is the sort of thing we have to contend with now.

If the trade union movement persist —and I understand they will—in seeking an increase of £1 per week, all sorts of things will be said about them. Having regard to what has happened in this matter, it is not unreasonable that there should be an investigation into what brought this situation about. During the course of the Taoiseach's speech on the Budget I understood him to say that he would have a look at raising the pay of lowly paid workers, although he was making a point about the three per cent. To what extent will the Taoiseach and each Minister follow up that line? For example, has an instruction been sent to the local authorities, the county and city managers, telling them to have a decent look at the low wages paid to local government employees? It is not untrue to say you have married men in different counties as local authority employees—hospital workers, road workers and so on—who are expected to exist on £7.10, £8 or £8.10 a week. Surely they cannot be called unreasonable if they demand more than three per cent or if they insist on £1 or more than £1? I know from personal experience as a trade union official that county managers have a happy knack of asking "What is the fellow doing in the next county? When he tells you what he is going to do, come back to me." We call that passing the buck.

We look foolish spending millions and then, on the other hand, calling on people to save. Bad example has a lot to do with it. You cannot expect people living on £7.10, £8.10, £9.10, or £10 a week to stay put when they see this lavish spending all around them. I appreciate that taxes must be imposed and we must get the money to run the country. But I submit in this case that ordinary people have been "taken on" more than they should have been. I do not think it would be unreasonable to reduce the limits in respect of sur-tax to £2,200. I do not know of any supposed working class person or trade unionist with £2,200 a year.

I was intrigued by the way the taxes were imposed in the Budget. From what they read in the papers social welfare beneficiaries believed they were doing all right, that they were going to get an increase, but further down in small print they learned they would have to wait almost a year before receiving it. On the other hand, the taxes went on immediately. People in business who had the wherewithal were allowed to make hay on prices immediately. There was no stipulation that this increase would operate as from as from a certain date hence, as the Minister said the increase in social welfare benefits would operate as from November, 1966.

Another aspect about which it is proper to complain is that out of the £12.58 million which the Minister seeks, he is giving only £0.25 million to the social welfare people. That is absolutely unfair and it is only codding the people. Similarly, the income tax allowance in respect of a child over 11 years of age is a sop to make this Budget more palatable. We must question the logic of that. How many people will benefit by that? I imagine very few, if any, will benefit. A considerable number of people who have children going to secondary schools have already adjusted themselves to that and this allowance will not bring in any number of real significance.

The tax on petrol is a burden on what can be described as the working man's car. Again, the 25 per cent increase in road tax is being put on the working man's car. There are more and more cars on the road today and Deputy Booth made great play about this in the course of his speech here. He talked about how well off people are under the Fianna Fáil Government. These taxes will hit the working man with an average income very hard and in all probability he will have to take his car off the road. Many working-class people have cars which are not a luxury but a necessity for their work. What strikes me as ironical about this system of taxation is that the company director can have the cost of running his car set against his taxes. He will find a way out of it, but this will not apply to the man who is struggling, who is running a family car and at the same time using it for going to and from his work. Another thing which strikes me as rather strange is that the big hauliers who break up the roads are not affected by these impositions.

One interesting thing in this Budget is the extension of the turnover tax to dances. The turnover tax on dances will be increased from 2½ per cent to 10 per cent. This is an indication that this tax can be used selectively and that it need not be imposed on essentials at all.

Bearing in mind all that has appeared in the newspapers about industrial unrest, I believe if we are to get away from it—and I hope we will—the problems must be worked out in a more reasonable fashion than has been attempted up to the present. The Government, and in particular the Minister for Transport and Power, will have to change their approach because one thing about the Irish people is that they do not like to be talked at for so long by a person who feels he can do no wrong. There must be a little more understanding about the real problems, and an example set. It is very hard to dissuade ordinary workers from looking for increases in wages when they look around and see what is happening elsewhere in the country. Workers see that the people who are saying they cannot have a five-day week are the very people who have already got this benefit themselves. The people who talk in terms of the inadvisability of increasing wages are the people who have already got these increases themselves. The people who broke the National Wage Agreement are the people who are now dictating policy and telling the workers they are not entitled to an increase of more than 3 per cent. There is the glaring example of how the banks fared during last year, and yet working-class people are expected to stay quiet and to make sacrifices. If there are to be any sacrifices made they should be made first at the top. If those who talk about making sacrifices and getting the country out of the economic morass in which it is start at the top, the people on the lowest rung of the ladder will certainly follow.

The Minister for Finance and, subsequently, the Taoiseach described this Budget as an honest Budget. I do not want to quarrel with their description of it but it seems to be becoming the custom to christen each Budget as it arrives. Last year we had talk of the Social Welfare Budget, and so on. To my mind, the correct description of this would be the unnecessary Budget. This is a Budget that could have been avoided and that should have been avoided. It is a Budget that should never have been introduced and which it would not have been necessary to introduce if the Government had heeded the warnings which they were given and had taken corrective measures in time.

I imagine every Deputy, and particularly Fianna Fáil Deputies, will remember the manner in which the warnings given by Deputy James Dillon, then Leader of the Fine Gael Party, and other Deputies in these benches, were greeted, practically with jeers and cries of derision, by Fianna Fáil spokesmen. We were told that it was all nonsense, that we were preaching a gospel of gloom and despair, and that we were trying to undermine the people's confidence in the Government. In face of that kind of talk, it was difficult, and it took political courage on the part of Deputy Dillon and others, to insist that we were right, that we were reading the signs correctly and that it was the Government who were wrong.

What is the position now? We find this Budget—this, as I say, unnecessary Budget—being introduced with a solemn speech by the Minister for Finance, acknowledging in every line that every word spoken by Deputy Dillon and the others was quite correct and that the Government were wrong, that they were wrong in the policies they pursued, wrong in refusing to check these policies, and that they were wrong in refusing to restrain themselves over the past few years. I have before me a copy of the Irish Times of 23rd November, 1964, on the occasion of the East Galway by-election. There are two speeches headlined and they are rather significant because they underscore what I have been saying. The heading over one is: “Dillon Warns of Economic Danger”. This, as I say, was on 23rd November, 1964. Side by side with that, in the same paper, on the same page, and on the same day, is quoted a speech by the Minister for Agriculture, a speech which attracted this headline: “We are realists, says Haughey. Fine Gael are spreading despair”. That was the theme that ran right through the speeches and the propaganda of the Fianna Fáil Party during those days.

They were warned—heavens knows, they got enough warnings—that we were in a situation of economic danger and that we were rushing headlong into an inflationary position. Their reply was: "Fine Gael are spreading despair". That quotation is only one of many. I may yet refer to others, if I am tempted. It is acknowledged now in this Budget that the inflation of which Deputy Dillon warned in that speech in November, 1964, is now upon us. In the course of his speech, Deputy Dillon said: "The Fianna Fáil policy of taxing the necessaries of life and thereby raising the cost of living reduced our competitive position in our export markets and created a deficit in our balance of trade of £129 million last year and a balance of payments deficit of £40 million. If this continued, it would create an economic crisis here in Ireland just as great as that with which the British were at present struggling". Earlier he said that "the economic crisis which had overtaken Britain and forced her to break her trade agreements with us and with her EFTA partners was a direct result of inflationary pressures in that country".

The warning of coming inflation was ignored so far as taking any effective action by the Government was concerned and, in the course of his Budget Statement at column 1289 of the Official Report of 9th March, we find the Minister for Finance saying with regard to the position: "...the one thing that all the recent economic commentaries emphasise is that we are suffering not from economic depression, but from inflation—from such pressure of spending by Government and people that we have outrun our resources and are incurring too big a deficit in our balance of payments". I am sure it was attractive for the Government in the rolling days of 1964 to have to gather in the easy money. That money is no longer available to them. It was not available to them last year. The bubble burst.

I am very glad—I join with other Deputies in saying this—that Deputy MacEntee has come out of his selfimposed silence and has once more shown his ability with the pen in the columns of the Irish Times. Like an expert witness—mark you, he was an expert witness because he was right in the middle of the Government during this period; he was sitting around the table with them—like an expert witness, Deputy MacEntee, first of all gives his qualifications; he sets out the reasons why he should be regarded as an expert on the topic of budgets and he reminds the people that he was Minister for Finance from 1932 to 1939 and again from 1951 to 1954 and that he was responsible for 11 budgets. He then proceeds to answer a question which he says in his letter to the Editor of the Irish Times had been posed in the editorial columns criticising the Budget asking how we got “into the mess that ties Mr. Lynch's hands so firmly”. He then goes on to give the reasons, in his capacity as an expert witness, in his capacity as a man who had introduced 11 budgets, in his capacity as a man who had been sitting right in the middle of the mess when it was being created by the Fianna Fáil Government. He says: “Outstanding amongst the chief culprits I place the economic astrologers and soothsayers who deluded our people with fantasies of the affluence which awaited when they got to the end of the rainbow some years hence. Unfortunately we converted that roseate future into an opulent but fleeting present and spent prematurely the wealth which we had not produced and even today are not beginning to produce.”

I wonder at whom is Deputy MacEntee getting when he talks about economic astrologers and soothsayers. He can hardly now be turning his guns against the men who were accused not of deluding our people with fantasies of affluence but of preaching a gospel of gloom and despair when they were warning the Government against the course on which the Government had set their feet. I think it is a reasonable assumption now that Deputy MacEntee is not firing these bullets at anyone on these benches. Where then is he firing them? Can he be firing them anywhere else except into the ranks of the Fianna Fáil Party? Can he be talking about anyone else except the people who were his colleagues in the last Fianna Fáil Government when he talks about "soothsayers who deluded our people with fantasies of the affluence which awaited when they got to the end of the rainbow some years hence"?

I wonder, when Deputy MacEntee wrote in that vein, if he could have been thinking of the remarks of the Taoiseach when he was kicking off during the last general election campaign in a telecast which was reported in the Irish Independent of 19th March, 1965, just one year ago. Remember what Deputy MacEntee had to say four days ago about these soothsayers who were deluding our people with dreams of opulence and affluence at the end of the rainbow. Bearing in mind Deputy MacEntee's colourful phrases, let us see what the Taoiseach had to say, just 12 months ago, when he was leading on, into battle, for the members of the Fianna Fáil Party. According to the report in the Irish Independent of 19th March, 1965, the Taoiseach had this to say:

The tide in Ireland's affairs had reached the flood and we must sail out to new horizons. There comes a tide in the affairs of every nation which must be taken at the flood. The tide is with us now. It is at the flood. We must not leave our ship of State in the harbour to people who do not know how to operate it and who would not know where to take it.

Of course, the headline was set: nobody else knew where to take the ship of State—Let Lemass Lead On.

Later on, in this report, the Taoiseach had this to say, and here he seems to be fitting very much into the picture Deputy MacEntee painted when he wrote his letter to the Irish Times on the 12th of this month:

The most important thing for the next Government was to maintain the momentum of national economic development. This was vital to the country's future since it was by economic development that social needs could be fulfilled in education and housing.

Who was the prophet of gloom and despair? Who was the soothsayer, deluding the people—to use Deputy MacEntee's descriptive phrase? Again, I ask if Deputy MacEntee could conceivably be referring to anyone outside the Fianna Fáil Party when he speaks of people who deluded our people with fantasies of the affluence which awaited them when they got to the end of the rainbow. These words I quoted were the words of the Taoiseach when he opened the general election campaign for the Fianna Fáil Party.

A few days later, as reported in the Irish Times of 25th March, 1965, the Taoiseach went on to emphasise the case he had been making and, according to this report, he said:

Ireland is now entering a time of great opportunity and the issue in the general election is whether this is going to be fully used in a determined and consistent way or neglected. The progress which this country can make in the years which are immediately ahead will far surpass all that has yet been accomplished.

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

For the benefit of some of the Fianna Fáil Deputies who, in the words of Deputy Corish, will be forced to listen, even if they will not talk, perhaps I had better explain that I was referring to a letter which Deputy MacEntee had published in the Irish Times a few days ago in which he was apportioning blame for the present situation and for the difficulties of the Minister for Finance in introducing this Budget, in the course of which he blamed those to whom he referred as economic astrologers and soothsayers who deluded our people with fantasies of the affluence which awaited them when they got to the end of the rainbow some years hence. I was posing the question as to whom Deputy MacEntee intended his bullets to hit. It was clearly not those of us on these benches who were warning the Government of the dangers of the course on which they had set their feet.

I was just about to refer to a speech made by the Taoiseach, and reported in the Irish Times of 25th March, 1965, just a year ago. I would invite Fianna Fáil Deputies and, in particular, the Minister for Finance, to see if these words fit appropriately, as I believe they do, into the framework of the picture which Deputy MacEntee was painting in his letter to the Irish Times. According to this newspaper report of 25th March, 1965, just a year ago, the Taoiseach said:

Ireland is now entering a time of great opportunity and the issue in the general election is whether this is going to be fully used in a determined and consistent way or neglected. The progress which this country can make in the years which are immediately ahead will far surpass all that has yet been accomplished provided we, as a nation, follow a consistent and coherent policy under a competent and united government backed by a Dáil majority.

At the time the Taoiseach was speaking, remember that Deputy MacEntee was still a member of that Government—Deputy MacEntee who now, only during the course of the past few days, has given voice to the strictures I have been reading out. He was a member of that Government, that united government, of which the Taoiseach spoke.

Again, according to the Sunday Independent of 4th April, 1965, less than a year ago, the Taoiseach had this to say—and again I invite the Minister for Finance and the Deputies sitting behind him to see how this particular speech of the Taoiseach fits into the picture painted by Deputy MacEntee—the Taoiseach had this to say to the voters at the time of the last general election:

The only prospect now in sight of future difficulty, and of a slowing down of the momentum of the nation's advance would be a temporary interruption of Government leadership by reason of an interlude of ineffective minority Government which might survice for a few months at most; and then only if they did nothing. There is a danger which the people can eliminate by the manner in which they use their votes next Wednesday.

Less than a year ago the Leader of the Government was telling the people that everything in the garden was lovely, that there was only one prospect in sight of any future difficulty, or of a slowing down of the momentum of the nation's advance. What was that only prospect? The only prospect the Taoiseach could see of any future difficulty or of a slowing down of the momentum of the nation's advance was if Fianna Fáil were defeated. I am quite sure many people were influenced—listening to a person like the Taoiseach holding a responsible position and uttering words of that description—not to take the chance of changing the Government and fully accepted the assurance given by the Taoiseach in that speech that there was no difficulty in sight, bar one: the prospect of Fianna Fáil being defeated.

Once more I would ask the Minister for Finance to think over the words I have quoted from Deputy MacEntee's letter published in the Irish Times of the 12th of this month. Perhaps Deputy MacEntee had not got the Taoiseach in mind when he was talking about soothsayers who deluded our people with fantasies of the affluence which awaited them when they got to the end of the rainbow. Perhaps he was not thinking of the Taoiseach at all. If that is so, maybe there were others of his colleagues in the then Fianna Fáil Government who sprang more readily to his mind.

I have already referred to a speech made by the Minister for Agriculture when he was referring to the Fine Gael Party as spreading despair when they warned the Government of the dangers on the road which they were treading. In that same speech, which was published in the Irish Times of 23rd November, 1964, the Minister for Agriculture—referring to the introduction of the Fianna Fáil First Programme for Economic Expansion— said this:

Fine Gael, on the other hand, had said that our targets were too ambitious. Once again they were proved wrong. But then, Fine Gael were always purveyors of pessimism and, even now, when it is obvious to all that we exceeded the targets which we set ourselves, Fine Gael are still spreading ideas of fear and despair.

Then the Minister went on with these brave words:

We reject any notion of failure. We have seen what can be done in a few short years and this has merely encouraged us to redouble our efforts.

That was the type of speech which was quite common from Fianna Fáil spokesmen when they were warned that things were going wrong, when they were warned that their policies would go wrong.

Now we find that Deputy MacEntee, who was Tánaiste in the Government of those days, writes a letter containing the words I have quoted in which he castigates those who deluded our people with fantasies of the affluence which awaited them when they got to the end of the rainbow some years hence. That was the first category of persons who, according to Deputy MacEntee, deserved to be blamed for the present situation and for the mess which has been created. He went on then in this letter to say:

Next in order of malign influences I rate those who were responsible for what has been euphemistically styled a National Wage Agreement. It is true that this instrument did not initiate the inflationary trend— that was done by a long series of deficit Budgets——

We know, of course, that for some years past Fianna Fáil Governments have failed to balance their Budgets. As I have already pointed out, before he wrote those words at the very commencement of his letter, Deputy MacEntee, like an expert witness, first of all stated openly what his qualifications were and pointed out that he had introduced 11 Budgets. I am sure he is not referring to any of his 11 Budgets when he refers to a long series of deficit Budgets; but can he be referring to any Budgets other than those introduced in the past five or six years by his colleagues in the Fianna Fáil Government?

In that same letter he went on to say:

It is true that this instrument did not initiate the inflationary trend— that was done by a long series of deficit Budgets—but it accelerated it enormously. The agreement—or in view of the differences which arose in regard to its interpretation, should it be disagreement?—injected an enormous quantum of new purchasing power, uncovered by production, into the consumption sector of the economy. Moreover, far from encouraging an increase in production it retarded one. Tied up as the workers felt themselves to be, it led to demands for shorter hours and for uncovenanted, sometimes even previously unthought of, benefits of one sort and another, resulting in prolonged strikes in essential industries.

We have now two classes of culprits named by Deputy MacEntee: first of all, the economic astrologers and soothsayers who deluded the people with talk of affluence and, secondly, those who were responsible for the National Wage Agreement. I may be wrong in this but I do not ever recall any Fianna Fáil Deputy or Minister up to now disowning some responsibility for the National Wage Agreement. If my recollection is correct, Fianna Fáil spokesmen strutted around like peacocks with their chests stuck out on many a platform claiming credit for that Agreement. The last Minister for Finance, Dr. Ryan—now Senator Ryan — referred to the National Wage Agreement about a year ago in this House, on 23rd February, 1965. I am referring now to column 937 of the Dáil Debates of that day and, at that column, the then Minister for Finance had this to say:

The Taoiseach had the idea very strongly, and we all had the same idea——

Remember, Deputy MacEntee was a member of the Government on whose behalf the Minister for Finance was talking—

——that it would be a very good thing if we could have a regulated increase, that the employers and employees should meet and try to agree on a percentage increase to be applied all round, that as a result of that we would not have a long drawn out agitation by workers here and workers there, and perhaps strikes in many cases, but in any event, a lot of industrial trouble, where they would always be leap-frogging; the first people come along and get an increase and then when all the other groups have got an increase, the first people must come back to get level with the others.

To avoid all that, the Taoiseach suggested that the employers and employees should meet and try to arrange for some uniform increase. They did meet and they agreed on 12 per cent. Everybody agreed—at least everybody I came across agreed —that the idea of a uniform increase was a good one. As well as avoiding industrial trouble, it meant that it would be possible to lay down a certain period before another adjustment in wages would be made.

That was the former Minister for Finance, the man who was Minister for Finance at the time the National Wage Agreement was reached. He told the Dáil that the Taoiseach had the idea very strongly, and that they all had the same idea, that it would be a very good thing if there could be a regulated increase. Now we find Deputy MacEntee listing as second in order of priority as culprits in the present mess those who were responsible for the National Wage Agreement. Surely what I have read out from the speech made by the former Minister for Finance was a claim for Fianna Fáil Government percentage of the National Wage Agreement. There was no question then of blaming anyone for having a National Wage Agreement. The former Minister for Finance stated quite bluntly that the Taoiseach had the idea very strongly and that they all agreed with him that it would be a good thing if they could have a regulated increase.

I am quite sure that if anyone went to the trouble of doing a bit of research through the Dáil debates on the economic situation, and on other matters which were discussed within the past few months, references such as those which I have given from the speech of the former Minister for Finance could be found. Speaking in this House on 16th February, 1965, the Minister for Justice also referred to the National Wage Agreement, and he is reported at column 408 of the Official Report of that date as saying that everybody in the country welcomed the agreement.

Now we find that Deputy MacEntee, the Tánaiste in the then Fianna Fáil Government, lists as culprits in the present mess those who were responsible for the National Wage Agreement. It seems to me that if there were doubts in the mind of the Government at the time the wage agreement was entered into, at the time the Taoiseach was encouraging this agreement, this House should have been told about them. It seems extraordinary to me that it is only now that the former Tánaiste, now a backbencher of the Fianna Fáil Party, should burst into print to castigate those who were responsible for the National Wage Agreement.

However, we had all those speeches from Fianna Fáil spokesmen, and we had warnings given to them from Deputy Dillon and others on these benches, but those warnings were brushed aside as merely being Fine Gael spreading gloom and despair. Now the Minister for Finance, in his Budget statement, acknowledged in virtually every line of his statement that the Deputies who then warned the Government were right, and the Government were wrong, but apparently carried away by their own speeches in those days the Government, in that atmosphere, did not do anything effective in time to remedy the situation, and we have gone deeper and deeper into the mire.

Whatever criticisms might be directed against the Government for the policies which they pursued that set the country on the wrong road, I think those criticisms would be diminished and minimised to a very large extent if the Government had decided to heed the warnings which were given to them, and take action in time, but they did not do that, and we are entitled to complain about and to criticise their tardiness in taking any effective steps to remedy the situation.

Whatever we as politicians might say might possibly be dismissed and waved aside as merely the talk of politicians, but these criticisms about the delay by the Government in taking effective action are not merely the criticisms of politicians. I have here a copy of a journal called Irish Industry, November, 1965. I do not think anyone can claim that this journal is particularly hostile to the Fianna Fáil Government or the Fianna Fáil Party. In an editorial headed: “Who is to blame?”, they say:

Surely a lot of valuable time was allowed to slip by since the first warning clouds of a forthcoming economic depression appeared on our horizon.

Government spokesmen over the last year have drawn attention to the developments which would, in their opinion, lead to difficulties. Strangely enough, nothing was done about it until the position reached its present critical stage

That is not a criticism levelled against the Government by politicians. It is a criticism in the editorial columns of a business journal, concerned with the particular section of the people they represent. They are not talking as politicians, but they are saying, in effect, that the Government did not do anything in time, although they were warned that it was necessary that they should take action.

Later on in this editorial, the writer says:

In important matters like this the business community looks to the Government for guidance. Surely it should have been possible to regulate national spending to national income. No doubt, the position was patently obvious to the Department of Finance at all stages, and the Central Bank repeatedly issued its grave warnings. Why then do we have to have every few years these apparently avoidable terms of high financial crisis?

They went on to compliment the present Minister for Finance and said:

The Minister for Finance, in a recent statement, admitted that the Government felt that it was, to some extent, not entirely blameless.

Deputy MacEntee in his letter used the word "euphemism". He could possibly attribute that to the statement credited to the Minister for Finance:

Mr. Lynch is to be complimented for this admission. We feel, however, that the Government must shoulder, not portion of, but the full responsibility.

Again, I want to emphasise that this is not a criticism by a group of politicians. That is a serious article written in a serious journal by people who are concerned about the situation into which the Government allowed the country to drift. Even if the Minister, or any of his Deputies, do not agree with me and if they feel that that is not an independent standpoint but that the standpoint is coloured by a political outlook——

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

The point I was making was that whatever view the Government may take regarding the particular journal, from which I was quoting, they certainly cannot suggest that the Irish Banking Review is a political journal or that it has any political axe to grind. I find in the December, 1965, issue of the Irish Banking Review exactly the same criticism and the same complaint is made against the Government. On page 4 of the Banking Review of December, 1965, there appears the following paragraph:

The deterioration of the balance of payments has led to many warnings and some corrective measures. The Government may fairly be asked if some of those warnings should not have been pronounced some time ago and some of the remedies applied earlier. Delay in facing up to difficulties may make their corrections more severe and more prolonged.

I think the truth of that can be seen in the fruits of the Minister's cogitations about the Budget which he has introduced. We have the picture of the Government having been repeatedly warned of the dangers into which they were leading this country. Those warnings were one by one brushed aside by Government spokesmen who said that it was merely Fine Gael preaching a gospel of despair.

We have now the accuracy of the warning and the reading of the signs by Deputy Dillon and others confirmed and we have the present situation which necessitated this Budget. I want to ask the Minister a few questions with regard to the Budget. He has pointed out in his Budget Statement that this year he has made no allowance whatever for errors of estimation. It has become quite normal practice to allow a matter of millions of pounds for errors of estimation. In the particular situation facing us now, where the Minister was looking for more than £12 million in new taxation, it would seem to me, at any rate, to be reasonable that the traditional practice of allowing for errors of estimation should have been adhered to.

The Minister, in the statistics issued some days before the Budget, shows that the estimates for the coming year for revenue buoyancy have been about half as against the previous year. I wonder do the Deputies sitting behind the Government realise what that means? Either the Government are accurate in their estimate that revenue is only going to be about half as buoyant as it was previously or they are wrong. If they are right, it means that the Government, by their actions over the past few years, have created a situation of depression and slump in which the revenue will only be half as buoyant as it was previously. If the Government are wrong in that estimate —I put this as a question to the Minister—if they are wrong and if revenue will, in fact show a greater buoyancy than they estimate, then there will be more money going into the Exchequer and, on the basis of the estimate for the return in the taxes, which the Minister has announced, it would seem to me that if there is a greater buoyancy than estimated there will be a surplus on foot of this Budget.

The Minister has warned the people there may be another budget. I believe there is virtually certain to be another budget. As I understand the position, the Minister, in this Budget, has made no allowance whatever for any increase in wages. He has by the taxation being imposed brought about a situation in which there must be some increase in wages.

I understand the Government concede that there should be a wage increase limited, I think, to something like three per cent but, there is no provision in the Budget for paying a three per cent increase and I invite any Deputy to correct me if I am wrong in that. If there is to be a wage increase, how is it to be paid for? It will not be paid out of this Budget. It will be paid out of a supplementary Budget which the Minister for Finance will have to introduce later in the year. As far as some of the taxes are concerned—income tax, petrol tax and motor taxation increases, for example —they are the same thing as wage cuts for many people. With the operation of PAYE, when income tax is increased, the pay packet goes down. As far as commercial travellers are concerned, when they have to pay 4d a gallon more for petrol and 25 per cent more car tax, it is the equivalent of a wage cut.

The Minister announced in his Budget Statement that he will raise £240,000 by way of increased law charges. At column 1294 of the Dáil Debates for 9th March last, we read:

The fees charged in court offices and the Land Registry are being reviewed to take a part of increased operational costs since they were last fixed several years ago. The additional receipts from this source are estimated at £240,000 in the coming financial year.

Speaking for a moment as a lawyer, I wish to underline that paragraph of the Minister's statement because I have not the slightest doubt that speeches will be made in this House criticising the legal profession when these charges go up and we will be told that legal fees are far too high and that there should be a reduction. When these fees go up, people should remember it is because of increases imposed by the Government and planned in this Budget—£240,000 additional money will be taken from the people in additional court fees and Land Registry fees.

Reference to the Land Registry is particularly disturbing. During the past few years, the Registration of Title Act has gone through the House designed to make all titles to land registerable in the Land Registry in the course of time. It will be put into operation step by step. At the same time as that is being done and as people are being forced to have their titles registered in the Land Registry, whether they like it or not, the Government are planning to increase the fees they will have to pay for registering in the Land Registry, so the people are caught both ways; they will have to register and at the same time, the Land Registry fees are being forced up by the Government. I wish to refer to this matter specifically because, as I have said, I have no doubt that when the increases take place, there will be those who will criticise the legal profession and blame it on them.

The final matter I wish to ask the Minister about is the question of foreign borrowing. I do not know if he is aware that many people are very disturbed by the fact that the Government have decided to borrow abroad at a particularly high rate of interest. I do not know if he is aware there is a view that had the Government made up their mind in time, had they stopped dithering and got on with the work, a dollar loan might have been raised some time ago at as low a rate of interest as five per cent. The Minister should tell the House about the dollar loan. On 19th February, an article appeared in the Irish Times dealing with the high cost of the Deutschmark loan which the Government had undertaken and stated:

Such bungling and vacillation from camp to camp have only resulted in Ireland's first international loan costing much more than was necessary if steps had been taken a year ago at the time when the idea was first mooted. A far greater sum could have been borrowed in New York at a rate of no more than 5 per cent, action which would have done much to avert the financial pressure during the past 12 months.

Either that comment is valid or it is not. It is made in a responsible article in a responsible newspaper and the Dáil is entitled to hear from the Minister regarding it.

It is not good enough to have Government spokesmen day after day exhorting the people of the country to save money and then not to give good example themselves. If an opportunity of raising a dollar loan at five per cent existed, it has been lost by Government dithering and the people are entitled to know all about it.

There are other aspects of Government policy that might be commented upon but I do not wish to take up any more of the time of the House. I think this is a deplorably bad Budget, one that will cause very grea hardship to many sections of the community. The real tragedy of it is that it is an unnecessary Budget, a Budget that need never have happened if the Government had done their job properly.

I want to offer a few comments on the Budget, beginning by paying tribute to the Minister who, I think must be one of the most honest Ministers ever to produce a Budget here. In his opening remarks, he asked: What went wrong with last year's Budget? That is a very honest question and if this honesty were to permeate our public life, we would have a much better country and a happier people. I have listened to Opposition speakers talking of the imposition of taxes and giving the impression that nobody else ever imposed taxes. I have just looked at the Budget of 1956, the last one brought in by the inter-Party Government, and I find they taxed tobacco, petrol, motor cars, domestic oil, the box of matches, table waters, betting duty and dances. I agreed with many of those taxes even at that time but we have now reached the point when there is the cry of the old age pensions. In every Fianna Fáil Budget, there has been some provision for the old and for the destitute but this has not been the policy of previous Governments. Indeed, Fianna Fáil had to convert some of them to the fact that they lived in the twentieth century and that old age pensioners deserved some consideration. There was a time when it was the policy of a Party over there to cut the old age pension——

That was when the Shannon Scheme was a white elephant, and our industries also.

——by a shilling. However, we converted them. They are sorry for their sin now.

That was to pay for the Civil War.

Will the Deputy cease interrupting. Previous speakers were not interrupted. Deputy Moore is entitled to speak.

That is impossible.

The difficulties faced by the Minister and the country are not peculiar to us. Most European countries are facing similar problems and even the mighty United States have problems of deficits and trade balances. One thing which is sweeping the country at present is a horrible wave of pessimism, the idea that we are finished. We are not finished: the economy is sound and, please God, this time next year, the Minister will be able to bring in a much better Budget.

Hear, hear.

That would not be hard.

Even though this year's Budget has imposed new taxes, if the Deputies opposite look over their own record, they will see it is a vast improvement on some of their Budgets.

£160 million extra taxation.

The point is that the people will be ready and willing to make sacrifices so that we can have prosperity and bring our economy to the desired pitch of efficiency. We are very conscious that we can give much less of the total national productivity to social services than many other countries. This is something that must be corrected in the immediate future but it cannot be corrected so long as we have a hypocritical attitude to the imposition of taxes. If we want the old age pensioners to benefit, we should realise we cannot provide for them unless we pay taxes for such a worthwhile purpose.

Opposition speakers blame two things for our present problems, the 2½ per cent turnover tax and the 12 per cent wage increase. I listened to Deputy Corish on television the other night——

He was worth listening to.

I congratulate the Deputy.

It was Deputy Macentee who said this.

I did not say Deputy MacEntee.

Would Deputy L'Estrange cease interrupting?

Speakers over there were not interrupted, but so long as Deputy L'Estrange is present, nobody at this side is allowed to speak uninterruptedly.

Does Deputy Corish not agree with the wage increase?

The Deputy was heard to say that the Taoiseach had the audacity to say that he had given the 12 per cent wage increase and then that he had no power to do so.

No; if the Deputy will allow me, I can explain.

No, I shall not give way to the Deputy. He was on television and he got away with murder.

I was not interviewed by my pal.

Neither was I. The point is that you agreed with the 12 per cent wage increase or——

I do agree with it.

Then why criticise it?

I never criticised the 12 per cent——

Or the method by which it was given.

No. In just one sentence —what I objected to was the Taoiseach claiming credit for the 12 per cent when the trade unions got it.

You said he had no power to give it.

But you tried to give the impression around the country——

I did not.

Not the Deputy, but his Party. The Deputy is not a bad fellow.

All Fianna Fáil are good fellows.

But there are some "gooder" than others.

Including Deputy MacEntee.

The question we put to the Opposition here is: If you were in power, would you abolish the turnover tax?

We would not put it on.

(Interruptions.)

In common with many other countries, we have at present a serious problem in industrial relations. I wish the Minister had made greater provision for the extension of the Labour Court. There is a slight increase but I think all Parties would agree that the Court must be enlarged greatly so that we can solve more quickly some of the disputes which are costing the workers and the economy a lot of money. Some European countries pride themselves on having the best labour relations but last week we read that even these countries are having trouble. I believe the people are prepared to make sacrifices, once the case is put to them. I believe they will accept extra taxes in order to have better social services. The Opposition should remember their past in regard to social services and should stop being hypocritical and say to the Government: "Yes, we will back you in this because you are going to help those people who need help."

Forty-nine to one is our figure for backing that sort of horse.

(Interruptions.)

Deputy Moore should be allowed to speak. Deputies who spoke before him were not interrupted.

We are not accustomed to Fianna Fáil speakers today.

Why not give them a chance? When anybody is anxious to speak on this side, he is shouted down. Give them a chance of fair play as the Deputies opposite got fair play today.

This is an occasion on which we can consider many problems facing the country. People say the cost of living is high but so is the standard of living. Cynics remind us that affluence destroys idealism and it may be true that people in an affluent society are less willing to make sacrifices than those in a poorer society. While I do not entirely accept this, I do make the plea that higher-paid workers should remember the lowerpaid workers and the less well-off sections and come forward in the common good to make sacrifices, to have their pockets hit hard in order that we would cease to be hypocritical and would look after the destitute.

This is a year in which we are celebrating the Jubilee of the Rising. People talk glibly about Connolly, Pearse, Clarke, MacDiarmada and the sacrifices these men made. I begin to wonder are we really worth the sacrifice these men made when I look today at all sections, excluding no section. The men of 1916, without thought of reward, made the supreme sacrifice. This year, 50 years later, it is incumbent on us to show our sincerity in public life and to show by the sacrifices we are prepared to make that we are worthy of the men and women of 1916 and will build the country for which these men died.

I should like to commence by congratulating Deputy Moore. I understand he is the first speaker on the Government side of the House in this the most important debate of the year dealing with the budgetary proposals. It is peculiar, indeed, that a Party enjoying the majority in this House should, at 9 p.m. on this day, have had only one speaker in this debate so far today.

They have had four.

Not today—in the debate. I thought the Deputy said "to date".

One would imagine that Government Deputies would be very anxious to address themselves to the Budget proposals and to defend them, if possible. It is quite easy, of course, to find the reason for their silence. Government speakers can say nothing good about this Budget for the very reason that there is nothing good in it. The best description of the Budget has just been given to us by Deputy Moore when he said that there is a horrible outbreak of pessimism in the country today, implying that this horrible outbreak of pessimism was entirely due to the Budget. I do not blame the people for being pessimistic. Deputy Moore's description of the state of the public mind today is as apt as any that could be put forward. I agree with him that pessimism prevails because of a Budget which will take an additional £12½ million from the taxpaying community, without giving any benefits in return, save one bare £¼ million which we will refer to later towards supplementing social welfare services.

An additional£12½ million is being taken without anything being given for it. The farmer will not benefit by this Budget. There are no proposals in the Budget that will create additional employment. There are no proposals in the Budget which will give a new incentive to the agricultural community to improve their lands or to provide additional employment for members of their families on the land. There is nothing whatsoever in the Budget that will help to arrest emigration. One can only assume that as a result of this Budget and the proposals it seeks to implement, more people will leave the land.

We must try to find some reason for the introduction of such a Budget. Some 12 months ago an election campaign began asking the people to give Fianna Fáil an opportunity to let Lemass lead on. If the electorate were to do that, it was implied, we would get, so to speak, some kind of heaven on earth. Unfortunately, the electorate were misguided enough to accept that assertion, believing it was honest and just, and they gave the Government a majority. Now we find, 12 months later, what has accrued from this policy of letting Lemass lead on. We have got all sorts of schemes. Some of us are getting cross-eyed from reading them. There was the First Programme for Economic Expansion; the Second Programme for Economic Expansion; Capital Budgets; the pamphlet, Closing the Gap; a directory of State services; NIEC reports, and so on. We know that there was a group in the department on whom the Taoiseach and the members of his Government were leaning heavily, people who were supposed to be experienced economists and who had evolved some kind of policy that would give us a very affluent society. All their proposals have come to naught, as this Budget indicates. Just a bare 12 months after the election, again to use the words of Deputy Moore because I could not find a more apt phrase, there is a horrible outbreak of pessimism prevailing in the country.

It was there before the Budget.

We need only read today's papers to realise the industrial unrest that exists. Workers in Dublin, Cork, Limerick and everywhere are dissatisfied, and, I believe, rightly so. The farming community are dissatisfied, and, I believe, rightly so. Almost all sections of our people are dissatisfied at the present time. This Budget, in no small way, has contributed to that position.

Personally, I blame the Government for being too generous to some people when the state of our economy could not afford generosity. There have been proposals in recent years from the Government which, to my mind, were too far-fetched, so far as the economy is concerned. Some few years ago there was an all-round increase of 12 per cent to employees. Into the bargain, I do not know for what reason, status increases were introduced and in addition to giving a 12 per cent increase to some of our favoured employees a status increase of up to 20 per cent, in some cases £1,000, was given to the more favoured section of persons. In my view, these status increases are in no small measure responsible for the industrial unrest that prevails.

A local authority worker in receipt of £7-£8 a week, a worker with the Department of Lands on forestry schemes in receipt of £8-£9 a week or a worker in Dublin in receipt of £10, £13 or £14 per week, will not sit down quietly and say: "I have enough" when he sees other people, in much more favourable circumstances, getting a 20 per cent status increase. It was completely unfair to introduce a status increase. If there was additional money —and apparently people thought at the time this innovation was made that there were additional funds at our disposal—the people who required the biggest increase were the people in the lower income group.

There are thousands of workers living on wages far below what would give them and their families a reasonable existence. There are thousands of farmers living on from £6 to £10 a week. So far as farm incomes are concerned, that statement is substantiated by the report on the pilot scheme carried out in West Cork which indicates that in the case of the 375 farmers making up that pilot scheme area, the average income was less than £10 a week. Surely these people will not sit back quietly and say that everything is quite all right as far as they are concerned when they see this huge amount of money passed on to persons in the £4,000 and £5,000 income group?

A big number of business people, particularly small shopkeepers, are finding it very difficult to exist at the present time and undoubtedly need some additional help from public funds if the funds were available to give it to them. Everybody knows that many of our small shopkeepers are finding it very difficult to make a reasonable living at present, particularly in view of the many types of competition facing them, such as competition from supermarkets and combines of one sort or another. The Government have failed completely to draw up any kind of reasonable or just incomes policy. There is too much difference, too great a variation, in the incomes of the people in this small State. Our total population is no more than 2.8 million and in that number we find, as indicated in answer to some recent Parliamentary questions, that some thousands are in receipt of more than £2,500 a year, or more than £50 a week, even people in public employment or in semi-State employment. On the other hand, if we take employees in local authorities or in such Departments as the Department of Local Government, the Department of Posts and Telegraphs, or the Department of Lands, we find that there are thousands of workers with incomes of less than £10 a week.

I want to say to the Minister that the incomes of many of our workers, particularly of the type I have mentioned, are completely out of proportion at present. I maintain that having regard to the increased cost of living, and to the depreciation in the value of money down through the years, that it is impossible for a man to exist on the rate of wages paid by such bodies as the Cork County Council of £8 2s 6d, or a take home pay of £7 10s. How can you reconcile the position of a man earning £7 10s a week, who is trying to support a wife and family, living in a small town or in a cottage out in the country, or on a small farm, with the position of a man earning £50 a week? While I realise and appreciate that people who are talented and who have certain qualifications should be remunerated in accordance with these qualifications, I do think that the scale is out of proportion. I maintain that during the past two years, particularly since this new system of salary increases was initiated, if we had additional funds at our disposal then, instead of passing them on to the people earning £40, £50 or £60 a week, we should have passed them on to those earning £300, £400 or £500 a year, of whom we have several thousand.

Do you think that workers will sit down quietly and make no complaint about the smallness of their wage packets at this time in view of the Government's policy of favouring other sections of the community? I do not want to labour that point much further. I believe it is self-evident and I believe that from this scheme of salary increases a great deal of industrial unrest has grown up. I asked the Minister for Finance before, and I will now ask him again, to define the term "status increase". I could not ascertain from him when I asked him before what constitutes a status, what type of worker has a status and what type of worker has not got a status. I understand that in accordance with the terms of this system senior executive people are deemed to have a status but the ordinary worker, small farmer, the shopkeeper and others, have no status and consequently they are not entitled to a status increase. We have this system whereby some people are deemed to have a status and others are deemed not to have one. I hope, when the Minister is replying, that he will give us some idea about who has a status and who has not.

What help are these people getting from the Budget? The only help they are getting—and I am using the word in the opposite sense—is in the outline given on page 7 of the Budget proposals. The working man will have to pay 2d more for his pint as a result of these proposals. It is all very fine for the Government and the Taoiseach to say, as the Taoiseach did some time ago, that a man need not take a pint or take a drink if he does not want to. Everybody who is familiar with rural Ireland knows that having a drink in a public-house two or three times a week is the only social amenity of many people in the rural districts. They have little recreation beyond that and now we have an impost here which will make it more difficult for them to enjoy their recreation. So far as the other taxes are concerned, the 4d a glass on spirits and the tobacco tax of 2½d an ounce and the 2d on the packet of cigarettes, these indicate clearly, as I mentioned on Budget day, that the Government are leaning very much on the consumption of drink and on the smoking of cigarettes and tobacco for tax revenue. It is unfair to lean so heavily on these particular commodities. It is only a few years ago that the former Minister for Finance, Dr. Ryan, assured us that these commodities could not bear any additional tax. At that time he was making a case for the introduction of the turnover tax and the tax on food, on clothing and on everything you could buy. He made it on the basis that drink and cigarettes could not bear any additional tax. Now, a short two years later, we have the Minister coming along and leaning even more heavily on the drinking and smoking public.

I should like to know if the exhortations addressed to the public by the Government—and I mentioned this also on Budget day—to save, and save, and save, were obeyed and if there was a big reduction in the consumption of drink and a drop in the quantity of tobacco consumed what would the Government do? Is it not implied in the Government's statement that even though they have increased the tax on drink and tobacco they sincerely hope that the consumption of both will not decline? If the consumption were to decline it would be no advantage to have the additional taxation. We also have the increase in road tax on private vehicles. Speaking on the Resolution dealing with this, I said that the tax was completely out of place. The position is that the tax on vehicles up to 16 horse power, which are privately owned, will go up by 25 per cent. A car is essential now for almost every family, particularly for families in the country who need a car to go to church, or for their everyday business. A car is no longer a mark of affluence. It is essential. We know that many workers, indeed, workers in receipt of small wages, such as small farmers, shopkeepers and others, have cars. They are finding it very difficult at present to keep these cars going. What help do they get from the Minister in the Budget to ease that difficulty? Without any additional income to them, they are being asked to pay 25 per cent more tax per annum and in addition, for good measure, there is 4d per gallon extra on petrol.

I want to take grave umbrage in relation to the Minister's proposal concerning the £1.3 million he expects to get from motor taxation in the coming year. With the exception of one year, the money collected from motor taxation always went to the Road Fund to help local authorities provide better roads and create some additional employment. This year all this additional money is going to the Exchequer and none to the Road Fund. This is a departure for which the House should censure the Minister. There is no justification for it. With the number of extra vehicles on the roads and the problem of local authorities to provide sufficient money for roads, surely if additional taxation is imposed on motor vehicles, it should be passed on to the local authorities to provide improved roads?

In the Minister's county of Cork, a difficult position faces us this year. While we have not been notified of the road grant so far, it is reasonable to assume from the information available that despite the increase in the number of vehicles, the grants will not be any greater than they were last year. Irrespective of what is in the Budget and of the statements made by the Minister and other members of the Government in regard to wages, surely the men employed by local authorities on road work will get at least an increase of £1 per week this year? Surely the Government will allow local authorities to at least give them that? As far as this particular tax is concerned, if one were to speak on it for an hour, one would not have sufficient time to condemn it for the type of tax it is. As I mentioned, speaking on the earlier Resolution, I suppose the £1.3 million is needed to pay the big additional salaries for which the Minister sought authority here a few weeks ago.

There is a wide variation in agricultural incomes. People favoured with big holdings and with sufficient capital to develop them may be said to have a reasonably good standard of living. I referred earlier to the people in my own district which is a pilot scheme area typical of many districts in several counties. According to the statistics compiled by independent sources, those people, on the other hand, have to make do on incomes ranging from £6 to £10 weekly. Surely they are entitled to look for some increase in their incomes? What does the Budget contain for them? As I mentioned in my general comment, there is no additional advantage for them in this Budget. In fact, the farming community have been completely forgotten in the Budget. These farmers, particularly the small farmers who have to work day in and day out for seven days of the week often for an average of more than 12 hours a day, will have to do with the remuneration I mentioned compiled by independent agricultural experts—a remuneration on average less than £10 per week. If you take the pilot scheme calculations as a yard-stick for measuring agricultural income, it must be remembered that this income is not the individual earnings of the farmer but it is his family income—the income which the farmer and his family earn from working their farm. Surely, having regard to the standard of their income, that section of the community should be looking forward to this Budget, which imposes more than £12 million in taxation, for some relief? But no relief is given.

Further on we have something about the small western farms. The county development teams were set up, in my opinion, as a stalling effort, and I say that as a member of one myself. There was so much agitation by the people living in the western counties, so many were having to fly from the land—and there are more this year than ever before—that the Government had to find some plan. The plan they struck on was to establish these county development teams. As a member of the Cork team. I have a reasonable knowledge of the proposals and I put little value on them. In this Budget, out of £12½ million additional taxation £100,000 has been set aside for the 12 county development teams. I believe this £100,000 will be eaten up by the salaries and expenses of the teams, their secretaries and what follows and there will be no money to implement any proposal or recommendation made by the teams.

I was not clear where the money for the teams was to come from—there is no mention of it here save the £100,000 in the Budget statement—so I addressed a question to the Minister, which I hope he will answer tomorrow, as to where the teams are to get money for any development proposals. The Government could not answer the justifiable criticism made by the residents of the western counties and they thought of this plan. I believe it is a stalling effort, passing along for a few years while the teams compile and send schemes to the Department. I want the Minister when he comes to reply— possibly he may have an earlier opportunity at Question Time tomorrow—to tell us more about the moneys available for these development teams.

There is nothing in this Budget for farmers, big or small. So far as the small western farms are concerned, I thought that the Minister might give them by way of subsidy for milk the 6d per gallon he put on lemonade. I thought he might be generous enough to pass along that money he is taking from the children drinking the lemonade. I am sure Deputy Healy would agree with that if he did it.

I am not a child and I drink lemonade.

It is not easy to speak here with an air of pessimism but unfortunately one cannot do otherwise, having regard to the state of the country and, as Deputy Moore put it, the pessimism that prevails. There is nothing in this Budget for the farmers. There should be some additional help for small farmers and there should be some incentive by way of an increased price for milk. That is something to which the Government must give attention in the not too distant future. There are strikes enough now without additional ones which I believe the Govwise ernment will have on their hands if they do not cut down on the wanton extravagant administrative expenses being incurred at present.

Another section of the community whom I have just mentioned in general terms are the small shopkeepers. Estimates have been coming from the various county councils increasing the rates by 5/-, 8/- or 10/- in the £ in different counties. In most cases, these increases are not due to the provision of additional services. They mainly arise from administrative costs and are not providing any social or other benefits for the people of the counties concerned. These shopkeepers with £8, £20 or £25 valuation who have to pay anything from £3 to £4 in the £ are not in a position to do it. Certainly from travelling in the south-west of Cork, I know the shopkeepers there are not in a position to pay it. There is no help in this Budget for these people and no move to expand their business. In fact their business is going to contract on account of the competition they have to face at the present time. This House should not forget the role the small shopkeeper has played and is playing in this country. The Minister should bear in mind the difficulties these people will have to face, not only to meet the additional taxes being levied in the Budget but to meet the additional imposts being levied by the local authorities. It is a very bad year for that section of our people.

In regard to the old age pensioners, what they are being given in this Budget is an insult, and the Minister for Finance has made a mistake in bringing in this kind of proposal. The Minister has brought this Budget forward two months in order to get the benefit in respect of the petrol tax and other taxes, but the social welfare beneficiaries have to wait a further three months. It used to be 1st August and now it is put back to 1st November. Apparently it is only those who can show they are almost destitute, as I understand the Minister's statement, who will qualify for that 5/- for unemployment assistance, the infectious disease allowance and the old age pension. That is the sum total of the benefits in this Budget. As Deputy Corish said, it represents only one part in 50 of the additional taxation. In regard to employment, the position is not bright in any sphere, particularly in rural Ireland, and there is a steep fall in the number of people engaged in agriculture. Despite the fact that down through the years hundreds of thousands have left, certainly as a result of Fianna Fáil policy, there are still thousands going away steadily, and mainly from the land.

Do we intend to make any move to arrest emigration from the land? I do not believe this Government are capable of doing so. I do not believe the Government's planners and advisers are capable of providing any plans —as many plans and programmes as they have provided—that will help to arrest that emigration. It is a depressing feature of our economy that so many thousands of our people are leaving the land annually. The number leaving the land is steadily increasing from year to year. It is a peculiar feature that this should be so ten years after the announcement by the Taoiseach, before the 1957 election, about the 100,000 jobs. I would not mention that at all but for the fact that the previous speaker went back about 35 years, so I should be entitled to go back about ten years. It may be said it is not constructive criticism to make that point. At the same time, it indicates that Fianna Fáil planning has gone wrong again and again, a fact which is admitted in page one of the Budget statement when the Minister asked himself the question: "What went wrong with the Budget"? He said that instead of a balance being achieved, a deficit of as much as £8 million is now in sight. They are not able to plan for a year, not to mind ten years.

We have this position now obtaining and the question is: could it have been avoided? The Government should have known some few years ago that the position was not bright. Naturally, we forgive them for not telling us about it at election time, but, election time or otherwise, the Government cannot justify being as untruthful and deceitful as they were when things were as dark as they have proved to be. The Government's policy of increasing public administrative costs is one that should be avoided. For a small country, there is a huge number of public officials of all kinds, particularly senior officials, and, in my opinion, we could do with fewer. There are several cities in the world with a higher population than this country and I am sure the number of public officials per head of the population is not as high as it is here. Added to that there is the practice of giving officials thousands a year, which countries which are far better off than we are could scarcely pay to such officials. Deputy Moore said that what is happening here in Ireland is similar to what is happening in other countries. That is not so. The outlook in Western Europe was never so bright as it is at the moment. Despite the ravages of war, the economies of those countries are booming by comparison with ours. Why did the Minister and his Government let themselves in for all this difficulty by promoting schemes they had no money to pay for and by wild and wanton extravagance?

I do not wish to delay the House but I must point out that this is a negative Budget. There is nothing good that one can say about it because, if one did, one would only be untruthful. There is no incentive to any section of the community, no incentive to increased production, no hope of a higher standard of living as a result of additional taxation. In fact, the Minister concluded on a most pessimistic note, a much more pessimistic note than that on which I shall conclude: he warned of the likelihood of another Budget in the autumn and implied that this autumn Budget would take a further dip into the pockets of the taxpayers. I hope the Minister will be able to avoid that because the pockets of many of the taxpayers are almost empty at the moment. There is very little left in them.

As a Deputy representing a rural constituency, I assert that there is no justification at all for the Government permitting the low rates of income on which so many of our people have to eke out an existence. I know people in my constituency, workers, farmers and others, who have to make do with incomes that are absolutely out of place at the present time. It is wrong to ask an unskilled worker to rear a family on a wage of £7 10.0. per week remembering that status increases of much more than £7 10.0. per week have been awarded to certain people; twice that amount has been handed out to some. It is unfair of the Government to assert that, if any increase takes place in the coming year, it will be tied to three per cent. What use is three per cent on £7 or £8 a week? It is only 4/- or 5/-.

I do not approve of this percentage system. All it does is widen the existing gap still further. An increase of one per cent would mean £5 to a man with £500; the same increase for a man with £2,000 would mean £20. I do not agree with this system of percentage increases. It militates against the man with the small income. His income is depressed enough already. If there will be any funds available to the Government, then any increases should be confined to those most in need of them. Force of circumstances is, I know, compelling the Minister now to that idea. It is a pity he did not conceive of this approach earlier.

I deplore the necessity for bringing in such a Budget and I sincerely hope that the statements by the Taoiseach, the Minister, and others in relation to an autumn Budget will not prove well founded. I ask the Government and the Minister to take note of the pessimism prevailing throughout the country and to stop the wanton extravagance upon which they have embarked in the past few years. I ask them to design a new policy. If they do not do so, I warn them we shall have much more to grumble about in this House in the not too distant future.

In his Estimates last year the Minister budgeted for £237 million. The actual revenue available to him was £240 million. That left him £3 million in hand. Despite that, we have this year a Budget two months ahead of the usual time. In other words, the moneys estimated last year fell short by two months. On top of that, the £3 million the Minister should have to play about with is not available. He is short another £8 million which he introduced in Supplementary Estimates. One could well pose the question as to what has gone wrong with the Minister's Budget and the financial position of the State.

Every Deputy knows that this Government have not been paying their debts. For the past two months, trying to get anything out of them has been akin to trying to get blood out of a stone. The fact is that, after ten months, the Government have no money whatsoever available to them. It is for that reason the Minister was forced to bring in this blistering Budget, the worst Budget in the history of this State. What is wrong? Why does the Minister find himself in the difficulties in which he is? I want to be fair to the Minister. He is not entirely responsible for the position. He inherited a great many of these disasters from his colleague predecessors. Of course, the root cause of all the financial troubles today is the turnover tax.

(South Tipperary): Hear, hear.

The turnover tax was imposed by the Minister's predecessor. It was imposed against the advice of practically everybody. It was imposed against the advice of the advisers available to the Minister, with the exception of one or two. I think it was Deputy Cosgrave who stressed the fact that the Minister has two sets of advisers at his disposal—financial advisers and economic advisers. It is the duty of a Minister to assess the advice he is given and strike a happy medium for the benefit of the country as a whole. What happened is that the advice of the financial advisers was taken and the Government are now governing on the principle of trying to get all the money they can and spend it, often very foolishly and without any consideration for the sound economic advice offered to them. That is the beginning of all their difficulties.

Another is that the turnover tax imposed a charge on every single section of the community. The turn-over tax started the economic spiral from which we are suffering today. The Minister's Budget is but a continuation of the idiocy of the imposition of that turn-over tax and his Budget will be responsible for a further spiral, so that, far from the economic position improving, far from its being any real help to the Minister to have money available only in as far as he can pay or help his other Minister to pay his debts from day to day the position will not improve. The position will deteriorate as time goes on. Until we have some Government soon who are strong enough to face facts and to face up to it that we cannot go on with the rake's progress of the past couple of years, this country will continue to head for complete, utter and total financial disaster.

There are other reasons besides the turnover tax. It is necessary in a new economy, or in a developing economy such as ours, that we should have available to us plenty of capital. By direct Government action, by direct action of the Minister's predecessor, legislation was passed whereby it was necessary to declare deposit accounts in banks. It was necessary, under the law of this country, that the bank officials should lay out for the Department of Finance and for the Minister for Finance the funds they controlled for private individuals. That was the greatest retrograde financial step ever taken in this country after the turnover tax.

I know that the present Minister has told people of his own party that he has no evidence of flight of capital from the country. The Minister takes his advice from his financial advisers. Are these financial advisers who advised his predecessor in office to impose that very stupid and harmful piece of legislation on this State, likely to admit to the Minister that it is responsible for the heavy flight of capital? It is a known fact that, after that legislation was passed, over £100 million in capital money went out of this country—and this is a country that cannot afford that sort of thing. That has been highlighted by the fact that this Government have had to go cap in hand looking for money outside the State which they are unable to get in the State itself, due to the total and utter lack of confidence in a weak, struggling Government. That is the only way one can describe them, and that is not all.

Apart from the capital outflow, apart from the turnover tax which imposed such difficulties, heretofore, in this country, a well-guided agricultural policy has enabled us to have enough livestock at our disposal to export so as to give us back the capital so necessary for the development of our industries. To a large extent, the livestock trade has been carrying the economy of this country on its back, but, by the short-sighted action of the Government, of the former Minister for Agriculture who retired and of the present Minister for Agriculture, they did not move in time nor did they take prompt action to see to it that our livestock was expanded so that we could carry on this plan for economic expansion which we hear so much about from the Taoiseach from morning till night. Every time he goes to a chamber of commerce dinner, every time he goes on television, he criticises the Opposition and says that we want to cut down on everything and to destroy his programme for economic expansion. The plain facts of the case are these.

By legislation imposed by this Fianna Fáil Government in this Dáil, and perhaps more so in the previous Dáil, they are directly responsible for landing us in the invidious financial position in which we now find ourselves so that they are unable to expand and carry on their programme of economic expansion and, that being so, we have all the ills that flow from it. We have emigration beginning again. We have the flight from the land and we have only a very small increase in industrial employment. Our population is dwindling.

All countries are facing a flight from the land. All countries face the difficulty that the standard of living of those who derive their income from the land is not on a par with that of those engaged in industry. But other countries have endeavoured to do something about it. When it is necessary, they have endeavoured to siphon employees from the land. They have endeavoured to make some contribution towards the stability of the particular area concerned. This Government have no plans to do that. Periodically, the Minister for Lands gets up and bleats about sounder farm structures, but that does not prevent the terrible flight from the land. In the countries of the OECD today, we are perhaps the only people who have not got sufficient employment on the land because the people have left it due to the standard of living prevailing there.

If I say these things, the Government may very well ask why the standards of living are so low on the land. My reply is that they are low for one simple reason, that is, that, although there are markets obtainable at the moment, and increasing markets, for two particular commodities we produce on every Irish farm, no attempt whatsoever has been made by the Government to market those commodities or to look for a market outside the British market which, in days gone by, they derided but now it is the be-all and end-all of their thoughts.

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

I was referring, for Deputy Allen's benefit, to the difficulties agriculturists were facing in Ireland today in parallel with the rest of the OECD countries and that we were the only OECD country which had not available to it agricultural labour. I was pointing out to the House that the reason we had not was that ours are the only Government in the OECD countries who have made no arrangements and have no plans or policy to retain the people in the area in which they were born and bred. That is the policy of the OECD to which we belong, to which we have civil servants attached, and on which advice is freely available to this Government. But, at the same time, they are not taking that advice and the result is that the flight from the land here has been so heavy that, in many parts of Ireland today, it is impossible to procure agricultural labour.

I was stressing the fact that our economy depends entirely on our power to export agricultural machinery, livestock, grain and so on; our power to import the raw materials to service our industries. That is what has gone wrong with our economy. That is why we have a balance of trade which is very high against us. If any Fianna Fáil Deputy feels that anything I am saying is not true, I would ask him to stand up and express an opinion afterwards. We have heard only one of them throughout the length of the day and he painted a very gloomy picture. But I should like some Deputies opposite to give us the benefit of their opinion, particularly rural Deputies, as to whether or not what I am saying is true and, if they can refute my arguments, I will be happy to accept their arguments if they are able to put them across properly, which I very much doubt.

Our position at the moment is not a happy one. As I was pointing out before my Fianna Fáil colleagues arrived, the reason our position is not a happy one is the financial policy of the Government in not accepting the economic advice, as against the financial advice. I was pointing out that you cannot govern a country by purely looking for further taxation, by purely trying to gather in the money and to struggle on from day to day. That is the overall policy of this Government at the moment, the overall policy of the Minister for Finance. I stressed the point, before my distinguished colleagues opposite arrived, that the present Minister for Finance inherited that situation from his predecessor and found himself in the position of having to struggle to keep the thing going. That is the simple fact in the country today—the country, financially, is in a bad way. It is no wonder we had to go with our hat in our hands seeking money at the highest rate of interest, perhaps, at which anyone has sought a loan in the world today when we had to go to Germany to get £7 million. What did we get £7 million for? So that this country could carry on for ten months, whereas they should have been able to carry on for 12 months.

We took more than 50 per cent of the money available to us from the International Monetary Fund. We went to the United States of America to look for a loan and that was bad business. But, although we were prepared to pay a high rate of interest, we could not get it. It is well for Deputies opposite to note that fact because they will suffer from the effects of bad government in this country just as much as anybody else. That is why in every town in Ireland today, and more so perhaps in the city of Dublin for which I personally—being a rural Deputy—have no responsibility, there are fewer houses being built.

Rubbish.

Deputy Allen says that is rubbish. That is what he said the other night, too. There is more money being spent and fewer houses being built and the reason more money is being spent is that this Fianna Fáil Government, by their policy, have depreciated the value of money. That is what is wrong in the country today and that is why they had to look for money after ten months—because they depreciated money, by every action they took, and the money did not go as far as it went previously.

What is our position at the moment? What is our position in the tourist trade? By Parliamentary Question today I found that, of the OECD countries, we are the fourth highest for petrol prices. Is that any advantage to the tourist industry? What about our motor taxation—private vehicles only? Does not everybody who owns a motor car in this country not go to work in that car? Is not it a part of their livelihood? Still they find themselves with a 25 per cent further tax imposed upon them. The diesel oil increase of 4d. per gallon is applicable to everything except the bus services and the only reason it was not put on to the bus services was that that would have had the effect of increasing the bus fares, when there would have been a greater outcry than usual. What about all the educational establishments; what about the hospitals which have to buy as much as 600 gallons of oil a week to keep the buildings heated, and the schools which have to buy it to keep the pupils warm? What about the taxation imposed upon them? Is it not likely that we will have a demand for higher school fees, higher hospital charges and so on? Those who advise the Minister for Finance did not think of those things but it is up to the Minister for Finance himself. It is he who has to assess the facts and, therefore, we are justified in criticising him in this House.

This is a Budget which will have serious repercussions. I myself believe we have not got the full story. With the charges which are to be imposed upon the community, I believe that the Government have not, possibly, collected enough money. Of course, we do not know the true position. We do know they were pinched before this Budget was brought in because nobody could get anything.

Rubbish.

If it is rubbish, there is something wrong. If Deputy Allen has been able to get it and I have not, it means there is not a system of fair play in this country. Deputy Allen knows perfectly well, as I do, that he cannot get paid.

Did we not have the Minister for Local Government here with the Housing Bill?

Deputy Allen knows perfectly well he has to write for payment. He went out and came back again because he was so interested in what I was saying.

(Cavan): Had not Deputy Kennedy saved Deputy Allen the other night, he would have been disgraced.

I was talking about the charges imposed on all those things and how the Government could not pay. Everybody looking for a heifer grant—and it is more than desirable that the heifer grants should be paid to encourage breeding in this country and to keep the country going even in a staggering way—had to write for these grants. In fact, we have writer's cramp from so doing. It is the same with the housing grants, with the Land Project, with every single thing. It is the same with the French's Field housing scheme in the town from which Deputy Allen and I come. This scheme has been held up, without any explanation whatsoever, except the explanation that there was no money to give sanction to it.

Rubbish.

That is the reason they came in two months beforehand and tried to collect a few pounds to carry on, before it became self-evident that the country was going burst. I hope that the few words I have said in my own simple way, which are annoying Deputy Allen so much, will be of inestimable benefit to the nation and to the Fianna Fáil Party.

(Interruptions).

We have now been able to get Fianna Fáil interested in this debate. I think a debt of gratitude is owed to Deputy Lindsay who called for a quorum to bring Fianna Fáil in and get them really interested in this debate. I have great hopes that Deputy Allen will become so interested that he will make a speech.

(Interruptions).

The Government recently made a trade agreement with the United Kingdom in which they guaranteed to export 862,000 head of store cattle per year. There is nothing about the price which the United Kingdom will pay. The price will be regulated by the United Kingdom and no one else. On top of that the Government guaranteed 25,000 tons of processed beef to the United Kingdom which is another 100,000 head of cattle. So, we have promised to export to the United Kingdom virtually one million head of cattle according to the terms of the trade agreement.

Threequarters of a million.

Assuming that the Government are able to pay their debts and that the heifer subsidy will now be paid to people other than Deputy Allen——

(Interruptions).

Deputy Allen seems to have been successful in getting it from the Government. I should like to draw the attention of the House to the fact that the price of cattle in Europe is approximately £20 per head above the best price we will get from the United Kingdom. A colleague of mine in the Council of Europe, a former President of the Council of Europe, Per Federspiel of Denmark, raised the point at the conference that the British were buying cattle from Ireland and exporting them to Europe at a profit. He objected strongly to that.

The Golden Boy had nothing to say about that.

That is one effect of the treaty we have made, the vaunted treaty which will lead us straight into the Common Market— with the Taoiseach at our head, we will walk into the Common Market in 1970 on the basis of the British agreement. At the moment there is a shortage of coarse grain. The evidence of these facts is available not only to me, but to the Government and to Deputy Allen.

(Interruptions).

If the Deputy would keep quiet and listen, he would learn that these facts are freely available.

(Interruptions).

The Deputy should confine himself to the Budget.

That is exactly what I am doing. I was going to ask you if you would protect me, because I was getting frightened of Deputy Allen. The fact is that we have made no attempt to increase agricultural exports to maintain our financial stability. In the free world markets today more and more markets for livestock are available, but we have done nothing to further our interests, because we have tied ourselves hand and foot to the British market. That is what I think about the recent trade agreement. Maybe there is something advantageous in it because there is some good in everything, but the overall policy should be to sell these products in greater quantity, and to keep up our supply of raw materials, to right our balance of trade and, above all, to right our balance of payments which are in such a dire condition.

I should like to say a few words about what the Governor of the Bank of Ireland said recently. As Deputies know, the Government are spending approximately one-third of the national income. They bank with the Bank of Ireland. When one is a good client of a bank it is unusual for the bank to say anything derogatory about one. The Governor of the Bank of Ireland said the other day that the Government were spending too much public money to the detriment of private enterprise. We have recently seen the dissolution of a very old Irish bank, the National Bank, which had a free rate of exchange between this country and the United Kingdom. It was one of the clearing banks across the water and it had to be divided up. The British half is retained in Britain with all the assets it commands. The Chairman of that Bank made no secret of the fact that this was due to the fact that there was too great a strain on the resources of the bank in the Republic of Ireland, and that it was not economic for them to go on meeting it. I am inclined to suspect that Deputy Allen does not believe what I am saying so I recommend that he should read the statement by Mr. Acton of the National Bank.

That was followed by the statement of the Governor of the Bank of Ireland, a very able young man, an industrialist in his own right. He is fully conversant with all the economic and financial problems of the country, and he said that the Government were spending money to the detriment of private enterprise. I should like an answer to that from the Minister for Finance. The Taoiseach has already spoken. Incidentally, I was disappointed that he did not get the usual round of applause from Deputy Allen and his colleagues over there when he finished. I should like the Minister for Finance to tell us whether the Government intend to give private enterprise its proper place again, because there is only one set of countries in the world that believe in a totally planned economy. Those countries are the dictatorships, and the polite phrase for communism is "planned economy". I do not believe that the bulk of the Fianna Fáil Deputies believe in a planned economy. I think they believe in the right of free enterprise. That is what we fought for. We fought for the right to be free and not to be controlled by groups of bureaucrats who would decide how and where we should spend our money.

When the Deputy talks about fighting, I should like to know——

Be careful now. The Taoiseach made a very important speech in the King's Inns lately and he was praised by the British Legion for it.

Progress reported; Committee to sit again.
The Dáil adjourned at 10.30 p.m. until 10.30 a.m. on Wednesday, 16th March, 1966.
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