As we have had a second Budget this year, so now we have Finance (No. 2) Bill. As the Taoiseach indicated, this is the legislative proposal under which Deputies will vote new taxation on beer, spirits and tobacco, increase the wholesale tax and generally carry out the details of the Budget recently introduced.
It is worth recalling and noting that once again in this Finance Bill, as has so often happened in the past, fresh taxation is being imposed on beer, spirits and tobacco. Deputies who were in the House in 1963 can no doubt recall, perhaps with some irony, the case then made by the Minister for Finance in regard to the old standbys of beer, tobacco and spirits. They will recall that the Minister for Finance then made the case that these sources of taxation had dried up — that so much taxation had been imposed on beer, spirits and tobacco that saturation point had been reached.
It was in those circumstances, in that year, in that Budget, that a new form of taxation known as the turnover tax was introduced. I wonder, recalling that, recalling those views expressed nearly six years ago, what credence can be attached by Deputies and people generally to considered statements by a Minister for Finance. Six years ago, saturation point had been reached in relation to beer, spirits, tobacco and petrol, but despite that, in almost each year since, new burdens by way of taxation have been imposed on these commodities.
This year, this Finance Bill will have the effect in a full year of increasing taxation by close on £20 million. In any one year, indeed, in any group of years, an increase in taxation of that extent would be regarded as significant and burdensome. To have an increase of this size imposed by what was canvassed as a mini-budget—almost an afterthought, a by-the-way at the end of the financial year—is surely indicative of the gravest possible disarray in Government planning and Government thinking. Increases in taxation to the extent of £20 million, imposed in the second half of the financial year, seem to indicate that the Government have no ability to foresee the budgetary requirements of this country in the short space of 12 months.
It would be no harm to remind Deputies that in the first Budget of this year the Minister for Finance, concluding his Financial Statement, had this to say:
The budget underlines the Government's confidence in the nation's ability to maintain a high rate of economic progress even in difficult international conditions. At a time when many countries whose economies are much stronger and more diversified than ours have had to accept severe budgetary measures and stiff economic policies, we are placing our faith in expansion and in the capacity of our people to meet from their own resources any challenges the year may bring.
They were fine phrases, fine sentiments, indicative of an optimistic expansionist approach as far as the economy of this country is concerned—indicative of an aim and a will and a desire to get this country punching forward to meet the competition and the difficulties of trade and commerce.
Now, what credence is to be attached to these sentiments that only appear to be fine, lofty, imaginative? Is it the truth that they were, in fact, so much froth and bubbles with nothing behind them by way of Government plan or Government will? It certainly so appears when, a few months later, this second Budget has to be introduced imposing £20 million in extra taxation, in damping down the fires of commerce, of business activity, in giving the people and the economy a fresh, bitter dose of deflation. and in so doing extinguishing any optimism that was beginning to be felt this year, optimism that we had got out of the bleak, difficult period of the last 18 months and were beginning to move forward again.
I notice that in this morning's paper the Federated Union of Employers expressed their view on the current economic situation and on the necessity for this second Budget. They criticised Government planning which led to the increases and they referred in particular to a lack of foresight in respect of national finances. They went on to charge that the Government should have known last April the cost of wage and salary increases in the public services within one or two percentage points; the acreage under wheat; the probable size of the deficit in the Post Office; the demands and possible concessions to the agricultural community, and the gap between wages and salary awards and the growth in productivity. Having referred to the announcement of the Third Programme for Economic Expansion, they go on to say:
The Autumn Budget is a poor prelude for it. Many will ask what is the purpose of planning for four years if Budget policies, designed for a period of one year, have to be torn up after six months.
After the early retirement of the Second Programme cynicism about the value of national planning has been mounting.
That is a serious indictment, coming from a responsible source, of this Government, of the way they have been managing our affairs and of their standing with the business community.
We were always concerned or we should always have been concerned in this country with the building up of confidence among our own people in our own ability to survive. Two major political Parties in this Dáil sprung from the idealism of the late President Arthur Griffith and from his movement, Sinn Féin. Sinn Féin taught the message that it was by our own efforts eventually we would and could survive. That philosophy of Sinn Féin had, and I hope will continue to have, an important effect on our character and on the way we shape up to our national problems.
One of the difficulties and problems in the last decade or so has been to convince people here at home who are engaged in any form of production or taking any part in the economic development of the country to have confidence in the plans and long-term programmes laid down and in the attainment of the targets set out in these plans. That necessity was fully recognised in this House when the First Programme was announced some seven years ago. It has been one of the problems in the last seven years to get people to realise that if there were continued efforts we could survive as a viable economic unit.
From time to time in relation to the Second Programme we indicated certain areas in which the targets and the aims were not being achieved and could not be achieved because the methods and policies being adopted were unsound. We advocated consistently that, for the Second Programme to move forward, permeating confidence among the people, it was essential to have periodic, realistic reviews of the progress being made and of the methods and policies being adopted. Our representations in that regard were spurned and refused by the Government. The result was that in the early part of this year the Second Programme, which had been creaking and tottering, finally collapsed leaving nothing in its place. It collapsed to such an extent that it sent out with its collapse waves of dismay, of suspicion and of discontent throughout the business community. It confirmed many weak people in the lack of confidence which they had in their own country and in their own country's ability to survive. Here today we have the Federated Union of Employers coming out and instancing as another example of failure to plan and lack of foresight and lack of ability and efficiency in Government the fact that the Government are incapable of carrying out even the simple task of the national housekeeping for a period of 12 months. It is a serious indictment and it is one which, regrettably, is perfectly and amply justified in present circumstances.
We find now that in the spring of this year this Government were incapable of foreseeing the result on the Public Service of the wage and salary increases which had been commenced. We find also that, although the Budget statement of the spring of this year refers to wheat and milk and dairy increases, it was not possible for the Government accurately and reasonably to anticipate what the cost would be to the Exchequer. Budgeting is no more than a reasonable exercise in foresight. We find that, in these respects again, the Government failed to measure up to what was required. That would be tolerable, it would be perhaps something that could be borne by the people, were it not for the fact that in present circumstances this Budget and this Finance Bill contrived to bring about a very profound dampening effect on the general economy.
We are at a time when the Taoiseach has had the lot of experiencing, particularly in recent weeks, that our economic circumstances and needs require that we should be pushing forward vigorously and with determination to win new markets for our products. We certainly cannot continue to be tied to the sick man of Europe. If that is to remain our horizon then our people will not find a way of life in their own country. We have got to get out beyond the English market. We have got to think with optimism and enthusiasm, have fresh peaks to climb and fresh areas to try.
That should have been our disposition now. Had we a Government that were doing their job we should have had a vibrant, determined business community working in co-operation with the trade unions, helping to push the things we have to sell over wider and wider areas. Instead, what have we? We have a tattered free trade agreement with the sick economy of England, an arrangement which permits us no room for manoeuvre, an arrangement which causes problems and difficulties for our people and our country from time to time. Not only that but by our own positive action, by Government error, lack of foresight and mistake we are actually depressing business activity in our own country at this very time.
The situation is so serious that the interests of the country would be much better served by a general election and the possibility at least of a new Government being selected forthwith. There are £20 million in increased taxation. Leaving aside the broader questions of economics and all the rest of it which are bandied about so glibly by so many Deputies in this House in language not frequently understood, even, by the ordinary man in the street, what does £20 million mean to the ordinary man? The price of his beer and tobacco has gone up. If he drives a car it will cost him more. The wholesale tax is increased so that the price of goods will go up.
What effect will this have? The cost of living will be forced up significantly by those Budget increases. It will be just another part of the long war of attrition which successive Governments in this country have waged on the real value of money. The cost of living is going up. That, perhaps, will be tolerated by those in the higher salary brackets and by those classes who, in any event, apparently have the power to shake some golden apples from the tree and recompense themselves for any rise in living or other costs but there are people who cannot do that. The social welfare recipient, the old age pensioner, the person who is sick and in need and who has to depend on unemployment benefit of one kind or another or, indeed, on unemployment assistance receive no cushioning in this Budget. There is no benefit for the social welfare recipient to compensate for this new spiral in costs which will be set up with regard to living costs.
That is unjust. Not only is it unjust but it is dangerous. It is wrong to have a situation in this country in which once a mistake has been made and new taxes are imposed the poor, the underprivileged and the distressed have to be the one section who will have to pay and who will have no means whatsoever of compensating for what is involved although others will. An increase in the price of beer, spirits and so on will hit the worker. He will feel the pinch of rising prices if it affects his pay packet. Is it to be suggested that the worker is to bear that patriotically and with tolerance and do nothing about it? Even if it is so suggested it will not happen.
As a result of those blunders, this lack of foresight or whatever it is and whatever the reason, I can see a situation in which we will have a fresh spiral of wages chasing prices until our competitive position in the markets to which we should have been aspiring becomes worse and worse. However, although we can speak here at length, we are merely confronting a Parliament, two sides, the Government side and the Opposition and nobody will be open to conviction or the votes cannot be changed. I wanted merely to say what I have said so that it may be regarded as a protest on behalf of my own Party, on behalf of the main Opposition Party here, to the deplorable bungling which has gone on in this financial year.
What the next Budget will bring no one knows. I sincerely hope that this has not been another exercise in politics, gimmickry. I sincerely hope it has not been any Machiavellian scheme to bear taxation now so as to appear in the role of the fairy godmother in a few months time. If that has been done, then political expediency will have taken the place of patriotism and responsibility because what is being done now, what has been done in this Budget, will have caused serious harm throughout the country, to the economy and it will take us a considerable time to recover from that.
I hope that this latest example of stop-go financing will be the last and that sooner or later we can have a broad economic plan, a plan which will contain recognisable and attainable targets, a plan which will command the confidence of our people because it will be something that they will understand. It is only when we get our policies along that kind of lines that we can make the steady systematic progress which is so essential for a small country like ours in the world as it is.
We cannot afford to have a repetition of what has taken place over recent years—the sun shining one moment and the black clouds blotting it out the next. We cannot afford to have the situation in which a movement towards greater employment is reversed with more and more unemployment. We cannot afford to have a repetition of the series of recessions and advances that our economy has been subjected to. It all stems from the fact that this Government have been there too long, have been in office for far too long. They have grown stale in relation to their duties. They lack a plan. They lack a policy. They have no idea even in relation to a 12-month period where exactly they are going. That has caused harm to the country. The people have been made to suffer. I hope it will not be continued for very much longer.