Before reporting progress, I was dealing with the policy of the Government for the past six or seven years. It is the inflationary policy of the Government in that period which has got the country into the mess in which it is today. As I said, all the indicators were pointing in the wrong direction. The danger signs were on the horizon. The Government should have taken note of them.
In 1956, we had a deficit in our balance of payments of £30 million; in 1963, it was £23 million; in 1964, it was £31 million; and in 1965, it was £45 million. Can the country survive unless the Government change their policy? Many people claim it cannot survive. Unless there is a change of policy, the country is doomed. Is it the policy of the Government to make the rich richer and the poor poorer? Is it the policy of the Government to permit our population to dwindle? That is what is happening. In 1965, the Taoiseach— he was then Minister for Finance— innocently asked what went wrong. He should have known. It was the inflationary policy of the Government. It had reduced the country to the plight in which it was then. We are living on borrowed money and on borrowed time. All the signs were there and the chaos in which the country finds itself today was brought about by Fianna Fáil mismanagement.
As a constructive Opposition, with the national interest at heart, it is not only our right but our duty to ask ourselves what lasting value have we got from the huge Government expenditure over the years and from the financial policy of the Government. Where is this country heading? In 1965 the Minister for Finance, Deputy Jack Lynch, told us he was going to reduce taxation to the 1953 level. Remembering the huge outlay of public money since, if we were in a position to say that emigration had stopped and that unemployment had been substantially reduced, we would have some grounds for satisfaction. Unfortunately that is not the case. In 1956, wives were exhorted to get their husbands back to work. There was a promise of 100,000 new jobs. That promise was made to get the people's votes. I do not blame the people for voting for Fianna Fáil on foot of that promise.
What has happened? In the past ten years, 400,000 of the youth of the country have been driven out of the country because of Fianna Fáil financial policy. Homes have been sold and whole families have emigrated. We are still exporting close on 30,000 young people a year, and that despite this huge expenditure of over £300 million of the people's money. We have 10,000 more people unemployed as compared with this time last year. That figure will increase now as a result of devaluation. It will increase ever further because of the 25 per cent cut in road grants to county councils. That cut was made despite the fact that taxation on cars was increased by 25 per cent in 1966. That cut means that many county councils will have to give their workers a Christmas box of three months at home. That is not right in a Christian country. If there is a shortage of money, I see no reason why the Government should cause the weaker sections of the community more suffering. Others will be paid for 52 weeks in the year. Already some county councils have let workers go. The majority will have to let them go from now until the end of the year. That is absolutely wrong. But this is the result of the Government's financial policy and the result of the vast outlay of public money in the last few years. If there were more people in employment today we could say the country was on the right road.
I remember Deputy Let-Lemass-Lead-On stating that the acid test by which the Fianna Fáil Government could be judged would be by the number of people they put into productive employment. What are the facts? Last week I asked a question and I was told by the Parliamentary Secretary to the Taoiseach that there are 163,000 fewer people at work today than there were in 1951. Is that what the 1916 men died for? These are the people who pay lip service to the Proclamation and who hang up over their Árd Fheis that they cherish all our children equally. The Taoiseach said Fianna Fáil always tell the people the truth and that is why they are in government. Did they tell them the truth when they promised them 100,000 new jobs ten years ago? Did they keep that promise by having 163,000 fewer people at work in Ireland today?
Fianna Fáil do not seem to be concerned with the ordinary people. There was a time when they were perhaps, but they no longer seem to be concerned. Their idea seems to be to export them; if they emigrate they cannot be dissatisfied at home; they cannot organise against Fianna Fáil; they cannot vote against them. The Government should remember that the safety valve of emigration may not always be there. What would happen were Britain to close her doors to our emigrants? Had Britain closed her doors ten years ago, we would have 450,000 unemployed in this country at the moment. So long as the Government can get rid of people by exporting them they seem to be quite happy and content to pursue a policy of making the rich richer and the poor poorer.
We have a record low population. Deputy Crinion said that, for the first time in 100 years, our population showed an increase at the last census. There was an increase of 55,000 between 1945 and 1951 and there was a very small increase at the last census. The financial policy of this Government has driven and still continues to drive people out of the country. The £ has become a jet propellor: if you change it it is gone immediately. It is worth only 13/- or 14/- compared with its value ten years ago.
When Fianna Fáil were promising 100,000 new jobs and saying to our Irish women: "Wives, get your husbands out to work" they did not explain that the work would be in London, Birmingham or Coventry. They did not explain that the £, in ten years, would be worth only half what it was then worth. Our people are ground down by taxation, national and local. Not since the days of the Economic War has there been such poverty among a certain section of our people —small farmers and small businessmen. We are pricing ourselves out of markets. If this policy continues, our industries will not be able to hold their own even on the Irish market when tariffs are reduced or abolished. That is a very real danger.
The eyes of the Government are closed to our plight. They said, for example, that the reason for the catastrophic drop in cattle prices last year was the closing of EEC markets. Those markets were closed on 1st April, 1966. Yet, at the end of May of that year, the Minister for Finance said the price of cattle would increase by £5 or £7 a head. Did he not know that the EEC markets were closed six weeks before that or were the Government deliberately trying to keep the truth from the Irish people?
The Taoiseach said at the Fianna Fáil Árd Fheis that Fianna Fáil always tell the truth to the people. In fact, they have misled and fooled the Irish people as best they could and especially at election time when they wanted their votes. A very real danger is the Government's high taxation and the position of our industries in the light of the Free Trade Area Agreement. I do not know if we have an agreement with Britain about tariff reductions. We were reducing our tariffs in preparation for entry into EEC and the reduction so far brought about is definitely harming our industries. Many people are losing their employment. A further reduction is due in January. Already, the reduction is steep.
General de Gaulle has made it clear that we shall not get into the Common Market in the next five or seven years and, that being so, the Government should review the policy of tariff reductions and discuss the matter with Britain with a view to obtaining a longer term for the protection of our industries. If we have a further tariff reduction in January the jobs of many of our kith and kin will be jeopardised because certain industries will seriously be affected. To continue with this present financial policy is the road to disaster. It is essential that this warning be heeded. If it is not heeded, we are surely committing hara-kiri.
With the loss of value in the £ and the fact that we purchase in non-devaluing countries, it is essential that our people realise that it is in all our interests to "buy Irish" whenever possible. That should be emphasised at every opportunity. As the Minister for Finance is in charge, he should give the lead in this connection. It is the duty of the Government to control the economy and to balance all factors one with the other. They are the only people who can see the full picture. It is their duty to extract our people from the financial morass in which we find ourselves today.
The more we study events in this country in the past few years the more we are made to realise that the Government respond to every wind that blows. They are always trying to do what they believe will get them votes. They use the people's money to buy votes for themselves. The inflation we have had for the past few years has been due to the fact that, election after election, the Government inject money into the economy to bribe the people into voting for them.
There are difficult days ahead. Certainly devaluation will hit us. It behoves the Government to give the country a better lead than they have done in the past. It is the duty of employers to ensure that there is better management. Indeed, many of them should work harder. In the national interest, and in their own interest, employers and unions should accept certain changes.
Whenever Fianna Fáil were in Opposition, the financial policy enunciated by them seemed excellent but what they preached to the people when in Opposition and what they perform when in Government are two completely different things. The moment they get back into power, public expenditure and local expenditure start careering upwards. Indeed, in our present dilemma I suppose they are merely running true to form. Many people now believe that, despite the continued upward swing in Government taxation, it fails to reflect the real gravity of the crisis. I want to recall what Deputy Seán Lemass stated when in Opposition. He said in 1956 he would not allow taxation to increase beyond the 1953 level. When he got into office, taxation increased from £108 million to £300 million and the national debt was doubled from £400 million to £800 million.
Let us learn from the mistakes made by Britain. The large amount of money which Britain borrowed has got her into her present crisis. It should be remembered that the honeymoon is over. You can borrow for a certain length of time but now it is costing as much to service the national and local debt—£90 million—as it cost to run the country 12 years ago. It is time for the Government to sit up and take notice. If they continue with their present financial policy and continue running to England, Germany, America and the Bank of Nova Scotia, we will be in the same position as England was a few months ago, in the position of a man who borrows too much money. It is time the Government realised that.
Never before in the history of the country was it more necessary to have a period of stability for our producers, whether they are farmers or industrialists, so that they can equip themselves for the more competitive period that lies ahead. Even if we do not enter the EEC in the next five or six years, with the reduction in tariffs that has taken place because of the Free Trade Agreement, that competitive period will be there. When the Government increase taxation the producers must increase their costs and when costs are increased, the cost of living is increased. Then the workers are entitled to seek more wages and you have wages chasing prices and prices chasing wages. If we are to have a period of stability, the Government's financial policy will have to be changed.
The only way in which tax revenue can be increased without increasing the cost of living, without causing inflation, without having bad industrial relations, is by a growth in national production which will provide a larger taxable income. If the Government give the lead to the people to work harder and increase production, then we can bake a larger national cake and from such a larger cake the Government can, without increasing taxation, get more revenue and the different sections of the people, whether they are workers or farmers, can and should get a just share. All sections of the community are entitled to organise to demand their rights and to get them. The workers are entitled to do it and the farmers should be entitled to do it. However, we do not want to see increased taxation if we can help it because it will do untold harm to our people in the years ahead.
The Government should be more careful to ensure that we do not price ourselves out of existing markets. The inescapable fact is, as the Government must know, if public spending maintains its upward course, it will outstrip the real growth in the economy. A flabby cost structure has been inflated like a balloon over the past few years by the Government and there is a grave danger that the balloon will collapse. It cannot be denied that Government policy has been calculated, both in regard to its timing and its general direction, to raise prices and costs. The time has come for the Government to endeavour to have a period of stability in the years ahead. There is no denying the fact that small shopkeepers, business people, small farmers and people on fixed incomes are heavily and unfairly penalised because of Government financial policy, because of the turn-over tax, etc., and now they are being further hit because of devaluation. The Government are making a grave error in believing that a man can always find the money to pay his taxes or rates. It reminds me of the time when I heard the Taoiseach saying that they always told the people the truth. I remember when Mr. de Valera spoke in Mullingar and promised complete de-rating to the people. At that time the rates were between 5/- and 6/- in the £ and we all know what they are today. That is another example of how they always told the people the truth and kept their promises.
This country has at its disposal a highly effective weapon in taxation which, if properly used, can create and expand wealth internally and attract wealth from foreign sources as well. So far, however, taxation has been used by the Fianna Fáil Government as an instrument for dissipating, destroying and discouraging wealth instead of attracting it and building it up. In that regard I welcome the Government's conversion to the idea of using taxation to encourage industrial enterprise. Full credit is due to Deputy Sweetman and the late Deputy Norton for introducing in 1956 two Bills which were designed to provide incentives to manufacturers from abroad to come here and start factories and to invest here. The Government of that day believed that instead of boys having to emigrate to Birmingham, Coventry, or London to look for work, it would be much better if we could get industrialists with money and the technical know-how to come here, to start factories here and provide employment for our people. Deputy Costello, Deputy Norton and Deputy Sweetman were on that side of the House when those Bills were introduced and Deputy Seán Lemass was on this side. He bitterly opposed both Bills and voted against them. He said that at some time in the future his Party would be in a position to alter those laws and that he would knock them off the Statute Book. The Minister is looking at me as if he doubted me. I have not got the quotations but I can give the Minister the references and——