The Government, by their mismanagement of the nation's affairs, are now creating a situation in which the problems are becoming more and more difficult of solution. These problems have now come to the sorry pass that the people can see the chaotic state of affairs behind the smokescreen of the alleged progress of the past year or two. In this year the truth has become clearer and clearer to the ordinary people and all around the country they are beginning to see through the Government's smokescreen. The most educational exercise the Irish people have ever undergone is these two Budgets brought in by the Fianna Fáil Government. These Budgets have shown the Government to be growing reckless in the application of their policies to the country; they have shown them to be a Government grown arrogant in power. A Government who have been in office for ten years are apt to lose touch with reality and this is what has happened to this Government.
This foreign borrowing to which the Government seem to have committed themselves is expensive, and will be found to be more expensive as time goes by. The repayment period is shorter than for domestic loans and the repayments of the principal are onerous to our particular economy. Added to this particular policy of borrowing from abroad is the undeniable fact that there does not seem to be any sign of an effective improvement in our economy, any evidence that the Government know where they are going or any hope that we can see our way out of this particular spiral.
This wholesale tax the Government have brought in is selective to the extent that it has avoided some of the pitfalls which we feared at the time would occur when the turnover tax was introduced. It excludes certain items on which at that time we warned against the imposition of that tax. We pointed to the effect it would have on the vast majority of working people at that time. I do not think there is any guarantee that the wholesale tax now being imposed will not result in the end in affecting the retail or consumer level. The Government, by tampering once more with the retail price level, may make out of date the particular struggle now going on for the £1 increase which the trade unions have been fighting in the past few months. It may give the final push to the shaky structure of prices and wages and this interference with retail levels may occur as a result of the wholesale tax.
I know the Government have been anxious to avoid interfering with items which appear most prominently in the Consumer Price Index but I feel that items, even excluding the imposition of extra tax on these items, that come in at wholesale level, may find a way to transfer their increases to the retail level and give an extra push to inflation because, as others have pointed out, this country is in the grip, if not of galloping inflation, of inflation which is going at a steady trot and which needs to be arrested very rapidly.
We have argued for a stay on prices. We have pointed to the dizzy procession of rising prices which occurred in the past year and a half and which has brought the people out on the streets in strikes of one kind or another. We felt some sort of prices machinery was necessary and the Government, in one of the reports available on this matter, acknowledged that prices since the period of bringing in the actual price control machinery have not risen at the same rate as in the period before that. The price control machinery, as we pointed out, was brought in by the Government very near the end of the lifetime of the late National Wage Agreement and so was not as powerful an instrument as it could have been at the start of that National Wage Agreement in stabilising prices.
All this travelling abroad by Government Ministers and this dependence on foreign sources of revenue to finance our capital programme occurs against the background of an economy in which employment has been dropping, and catastrophically in agriculture. Industrial employment has not risen at the rate envisaged two or three years ago by NIEC. This is a severe disappointment to all of us because of the very thin partition, economically speaking, dividing this part of the country from becoming a tourist resort for European countries. I am thinking now of population figures because if this country follows a downward course once more in its population, just one more drop in that direction will mean that we have passed the point of no return. If our population is rising and job opportunities increasing, one can see hope for the economy in the future, but against a background of inflation, falling employ-ployment and emigration that is very difficult.
Government Ministers during this debate have been at pains to assure us that regimes in Europe and elsewhere that have a left-wing look have to cope with this problem of inflation but we must point out the unique position of this country in that inflation takes place in a situation in which you have unemployment and emigration and where there is a general growth of depression about the possibility of bettering ourselves economically in the future.
Throughout the year we have been eliciting the rather gloomy information on the housing position and no city Deputy can avoid knowing the pretty horrible situation that obtains in Dublin. I have many families in my constituency of six in one room living in deplorable conditions and many families living in what I might almost call dangerous building conditions. These people find themselves in a situation of rising prices coupled with inability of their working members to get reasonable wage increases and they are beginning to see through the official line that the country is going forward under purposeful leadership. I know many families where people with what we would regard as more or less secure jobs in other days have emigrated. This is something we must consider more seriously when we have wage rates dropping dramatically below similar rates elsewhere because that is when the workers begin to leave. A Government who are so keen on reminding us of our economic ties with Britain and considering their own efforts to make these ties even closer should appreciate that we share our labour market with Britain, and if we cannot preserve some rough wage parity with standards in Britain we will not hold key professional and industrial men here.
I should like to see social welfare recipients left out of the arena of the Budget debate. The entire social welfare code should be brought out of this position. It has been brought out a little more often this year than in other years because we have had more Budgets and in fact social welfare recipients are only mentioned in this House at Budget time, Budgets in which the Government more or less decide on a patchwork approach to social welfare, giving an increase only at Budget time in an attempt to soften the blow of imposing taxation in other areas. It is time the grants and the benefits of social welfare recipients bore some relationship to the increase in incomes in other sections of the community. That is one part of the incomes policy to which this Government have not given much attention. The thoughts of this Government on the whole subject of an incomes policy amount merely to a convenient cliché.
This Government should have been able to approach the different income group interests in this country quite some time ago, certainly before the £1 increase and certainly before the end of the lifetime of the National Wage Agreement. They should have been able to say: "This is how we see an incomes policy figuring out in the different income groups", and then let the matter be open to the free winds of discussion.
When the Minister for Finance introduces his Budget, I should like him to leave aside the fig leaf of the social welfare recipients — this policy of pointing out what they are doing in other parts of their Budget programme — and concentrate, instead, on the economic issues in the Budget. I should like to see left to the Minister for Social Welfare, on an agreed annual basis, the treatment of the social welfare recipients and to have the matter dealt with in a constructive fashion.
This second increase this year in the tax on petrol is very alarming. If the cost of motoring in this country is not the highest in Europe, then we must certainly be amongst the countries in which it is extremely expensive. Today, the motor car is not the privilege of a very small section. The number of motorists in this country is increasing year by year. It is a problem for another day but it appears to be a trend in every European country and one which this country will not escape. Therefore, this second increase in taxation on petrol this year must be very dangerous. It is certainly overloading this particular item in the ordinary citizen's budget. I should imagine that our tourist interests must be extremely worried by this development. It certainly affects our economy.
A Budget which adversely affects our economy also has an adverse effect on our tourism. Year by year, we are steadily pricing ourselves out of that particular market in hotel costs and now in motoring costs and in many other costs which the tourists to this country hitherto had at a reasonable rate. This country is steadily becoming an exotic possibility for many tourists.
In future Budgets, mini-Budgets or otherwise, we would hope to see something done by the Government to even out the incidence of taxation amongst the different sections in our community: that is something we urged during this debate. This is not something for the large farmers. We pointed out pretty clearly in this debate that, while the great majority of our farmers are up against extreme hardship and must work extremely hard to make ends meet, quite a sizable minority of large farmers are getting away with murder. It is time the Government appreciated that there is no more burning subject than that to the ordinary people of this country.
The Minister cannot call for the co-operation of different elements in our community in the matter of taxation unless justice is seen to be done in the matter of taxation. At the moment, justice in taxation is not seen to be done in certain sections of our community. Take, for example, a farmer in County Dublin who has 40 acres and who is catering for a market-garden produce demand in Dublin city. How much money is that man getting away with at the moment without coming within the net of taxation? Consider the farm labourer on that farmer's land and how he is being taxed under PAYE. That is only one example. We can think of many others throughout the country. Surely this is an example where justice is not seen to be done and where one section in our community can feel justifiably aggrieved at the way our taxation operates?
Some political correspondents may think the suggestion of a capital gains tax amusing but we were serious in our suggestion. We consider that the sooner capital gains are brought under the taxation code the better, and the nearer the day that justice will be seen to be done in regard to this section in our community — those who have dividends, and so on. A Government intent on bringing the elements of an incomes policy home to the people would be anxious to see that all these sections in our community are brought within the taxation code. It is important from the point of view of the peace of mind of citizens who have no escape from taxation and, furthermore, it would help the Exchequer in the matter of the collection of taxes.
The Minister has admitted a principle that we have pointed out to him ad nauseam in the years since the turnover tax was introduced. We could see no reason that would debat a Government from being selective in any tax of this nature in the purchasing area. Now, at last, the Minister does admit the truth of what we have been saying. I suppose we should be grateful for admissions of wrong on the part of any Government Minister. The Minister for Finance and this Government now admit the possibility of a selective tax on purchases and have singled out particular items. The tragedy is that the turnover tax still exists in its blanket application and that added to it now is this wholesale tax which the Minister has introduced. At any rate, it is selective and this proves the point that a tax of this nature can be selective without adding needless complications. It was pointed out before now, on argument, that it would be impossible to operate a tax on a selective basis. It was found possible to do so in other countries and now, at wholesale levels, the Minister has seen it to be possible here.
The Minister is being pretty optimistic in his estimate of how far the Consumer Price Index will rise in the remaining months of this year. I feel that this wholesale tax will have the effect of tampering with the retail price and will give it one or two jumps too many in this year, certainly more than the Minister would seem to expect. When the turnover tax was introduced, the Taoiseach was extremely conservative about how far it would affect this country and how far it would interfere with the Consumer Price Index. This new tax is bound to have unfortunate effects in industrial relations and is bound to add fuel to an already dangerous situation there.
The working organisations have, this year, confined themselves to looking for merely £1. They have come under extreme pressure and criticism for that decision. Trade union members have been extremely critical of the Irish Congress of Trade Unions because of their restraint this year in looking merely for £1. It was quite obvious the £1 could not keep any kind of balance. It could certainly not keep pace with the cost of living. They have been under extreme pressure. This Government have added fuel to a dangerous situation in this Budget. Income tax under PAYE is already extremely heavy. Any further interference with the actual cost of living, adding to the imposition by tax measures or otherwise, is bound to worsen the trouble already existing in the country.
This is a Government, as a result of two Budgets, as a result of policies who appear to lurch along from day to day, who do not appear to be able to have any comprehensive policy for the betterment of the country. Certainly, their life expectancy has been seriously shortened. I know the Taoiseach has been flourishing a diary in the last week or so. We know the Taoiseach has flourished diaries before now and he has not been loth to push dates around before now. The local elections have been put off for so long that so far as Dublin Corporation are concerned, the people have practically forgotten when the last election was. In fact, there is a strong rumour in Dublin that Dublin Corporation is a hereditary institution which does not have to bother with elections. Unfortunately, this is not something the Government can get away with. However, what most people are asking is not when the local elections will be held but when a general election will take place.
The most hopeful thing that can happen at present is for those of us who are thinking constructively about the country's problems, who are battering out policies in our own ranks, hoping for an answer to the present situation, to come out more into the open and invite this Government to discuss their programmes more in the open so that the people can judge impartially between us. I have been heartened by the fact that the old-time supporter of Fianna Fáil is becoming a fast diminishing quantity. I think that the forward-looking members even of the Government would be rather scornful of the kind of support which their elders were glad to receive in the past, given on a kind of personal loyalty basis. They would be more interested in getting political support for constructive programmes. This will be the path of politics here in the future.
It is in this area that the Government are lacking. The programmes of civil servants lack one quality— contact with the people and contact with reality. The programmes which this Government, without understanding and comprehension, have been putting forward as their programmes do not answer our present problems. In consequence of the disastrous economic policies pursued by this Government, our Party have put down a motion of no confidence in the Government. We hope to bring into the open some of the really serious issues behind the Government's mishandling of our economic situation. We hope to muster every member of our Party in bringing into the open some of the skeletons which this Government have been hiding in their capacious cupboard.
