Dáil Éireann debate -
Thursday, 8 May 1969

Vol. 240 No. 6

Committee on Finance. - Resolution No. 13—General (Resumed).

Debate resumed on the following motion:—

That it is expendient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.—(Minister for Finance.)

Mr. Donegan

I always thought my gibes at the Minister were kind and gentle, but his remark just now was not.

When I reported progress I was dealing with the extremely serious situation in relation to the ratio of the accommodation given by banks to the money they have on short call. I told the House that I had been informed by certain people in both banking groups that the ratio of lending is far higher than the permissible limit as seen by them. That means we are at the beginning of a credit squeeze. Added to that, I understand that £50 million worth of Exchequer Bills have not been redeemed by the Central Bank. This means, of course, that one way of getting this £50 million would be for the commercial banks to look for it back from their customers. This would cause unemployment and disrupt industry. There is no mention of this in the Minister's statement. We had a Budget Statement of some 80 pages and in the course of that statement no mention was made of bank credit or of the availability of money.

It appears to me that these two things, availability of credit and capital spending by the Government, are extremely serious financial matters. They usually receive not one but two or three pages in the Minister's Budget Statement. Yet, there was no mention of them. But we know the position is that bank lending in relation to cash on short call is far higher than the banks feel it should be. We know the Central Bank have not redeemed £50 million issued in Exchequer Bills— and that in the last month. That means we are starting off on a credit squeeze. The Minister should have adverted to this in his statement and dealt with it in his financial proposals. Nothing is being done in his financial proposals to alleviate that situation and I seriously suggest it is something that should have been dealt with.

As I understand the position since the 18th March when the Minister cried "wolf", nobody has said that there is a pay pause. I think the Minister for Industry and Commerce verified this. Apparently the Minister believes, according to his Budget Statement, that the unions will not press forward with further demands related in size to the maintenance workers' settlement. If that is so, it does not stop the unions from proceeding with demands of ordinary dimensions and this will also increase prices and costs.

One item in the tax proposals that will increase costs spectacularly is the increase in petrol and diesel oil prices, particularly the latter. Almost all goods, and particularly heavy goods, are carried on diesel lorries. There is exemption for buses and public transport but not for commercial lorries. This 3d per gallon extra is a heavy impost on the cost of transport. Motoring today is no longer a weekend luxury but for most of us an absolute necessity and part of the costs of our business or profession. This 3d increase will increase the cost of goods.

The Minister for Industry and Commerce indicated that rigid price control is being and would be imposed. The statement was also contained in the Budget Statement by the Minister for Finance, but everybody knows that no matter what the activity of the Prices Section of the Department of Industry and Commerce, price control is not possible for a very wide range of articles. If I go to a tailor to buy a suit now and again six months later to buy another suit the question of the cloth and the lining and all these things comes into it. There may be 50 different patterns from which I select one. How does the Prices Section relate the price I pay for the suit now to the price I will pay for the suit six months later when there may be different cloth or a different pattern——

Mr. Haughey

The Deputy may even have expanded a little in the meantime.

Mr. Donegan

He may have, but, in fact, he has not. Apart from that, if I buy a pair of shoes now and a similar pair six months later, they will be different models. The factory will given them different names, one name now and a different name in the next six months. The prices can be different. We can do nothing about that. Men's suits stay more or less the same but ladies' wear changes as time goes on and the price for such articles cannot be controlled by any means. The Minister for Industry and Commerce obviously has very little business experience when he says that strict price control will be applied.

Take things that can be controlled, such as the price of bread, because the two-pound or the four-pound loaf is a standard commodity. You can also control the price of Guinness stout. You can control the price of certain things like that but you cannot control the price of food. If a housewife buys rib-steak or sirloin steak or any cut of meat, the place where the butcher stops cutting that particular cut and begins on another is a matter for himself. Even how he describes the cuts differs from one part of the country to another. We cannot do anything about bacon or meat or a wide variety of articles. The Minister for Industry and Commerce, in suggesting that we could control and would control prices and that we would not have increases because of this Budget, was being extremely innocent.

A shop in the west of Ireland had to buy eggs from people who came in because there was nobody else in the place from whom they could buy. There was always a loss on the eggs but when the loss on the eggs became intolerable they increased the price of tea. Does that make the Minister for Industry and Commerce understand that you cannot have price control? You may try but you will fail. Therefore, the imposts put on in this Budget will result in increased costs.

Of course this is an election Budget and the Minister for Industry and Commerce tried to make a virtue of this by suggesting that if it was a Budget that the people liked it was therefore a good Budget. I believe some of the things that have been done are a little bit shady. I think the Minister has little or no control on the eventual out-turn of the financial year but when he comes to what is above the line and what is below the line in expenditure he has very considerable control.

I was in the office of a local authority not so long ago when a phone call came through from the Department in connection with a project costing £400,000, for which tenders were out. The man at the end of the phone asked when it was expected to have the contractor in and he was told "Around about August." The voice at the other end said: "Then you will not spend the whole of the £400,000 and we shall make that £200,000." The truth is that if a contractor completes the work by the end of the financial year he will draw his £400,000 because the manner in which he will be paid will be written into his contract and if he gets a certificate that the work is done he will draw the money, and more luck to him. Yet, the pruning of the capital Budget is being done in this manner.

You have, also, as I said, the question of what is above the line and what is below the line. There is a certain advantage that can be taken here by the Minister and in relation to the coming general election I believe he has taken it to utilise it for the benefit of the Fianna Fáil Party.

The Second Programme has gone: it failed. In the Minister's glorious phrase, which he invented, there was excessive qualification in the Second Programme. So, in the Third Programme there will not be excessive quantification. This means that in the Second Programme the Minister was hoist on his own petard and he will not allow that to happen again. We shall find the Third Programme more vague and we shall have far less detail in it. In fact, it will be a programme that we will not be able to pin on the Government when it fails.

I am not usually a harbinger of bad news or a doleful Johnny, but before passing from this I want to say that the position in relation to bank lending appears to me, according to any information I could get in the last few days, to be parlous, to say the least of it, and that the situation is that, if the ratio of money lent to money on call is as high as is indicated, then we are in trouble. Those of us who run businesses on large overdrafts are in serious trouble. This is because, of course, of mismanagement by the Govenrment.

Much play has been made this morning in relation to the Anglo-Irish Free Trade Area Agreement and there was a sort of antidote produced for the fact that our trading balance with Britain had deteriorated. It was said that we are taking more from Britain and less from other countries. When I asked what about the £50 million deficit, the Minister for Industry and Commerce retorted that the £50 million included a very large measure of capital goods and capital goods were nonrecurring in a lot of cases and were for the good of the country in regard to the creation of employment here. I do not accept that.

The situation is that in 1965 a balance of payments deficit of £41.8 million resulted in a credit squeeze, in a slowing up of economic activity, in a slowing up of activity by the local authorities, in a slowing up of our whole economic and active life here. Such a deficit now which on March 18th, when the Minister wanted to go to the trade unions and make a bargain, was a national catastrophe is not a catastrophe at all. It is tweedle-dum and tweedledee in many things in relation to the Minister. He is on two sides of the see-saw trying to balance himself with his weight on each side at the same time when he cannot be in two places at the same time. He cannot say that the economy of the country was in a dreadful condition on 18th March and then say last week in the Dáil that everything in the garden was rosy and be reported in the Evening Herald last night as saying it was the best year of our lives. If there is a scarcity of money in the banks, if there is a situation whereby the Central Bank cannot redeem £50 million worth of Exchequer Bills, then we have a financial crisis on our hands. If we have, then this Budget should have done something about it; or, even if very little was done about it, the Minister should have taken the opportunity of his Financial Statement to tell the people what to do about it. Neither was done because there is an election in the offing and Fianna Fáil desire to get themselves back into office.

The small helps for agriculture pinpoint the fact that Fianna Fáil sincerely believe, as they always did— and there may be some truth in what they think—that the farmers are extremely loyal to their political Parties and there is not much sign of a swing in farmers' votes. They may be wrong because I think the farmers have taken enough from Fianna Fáil. The very small advantage they get in relation to lambs is related entirely to mountain sheep farmers. It is not of any use to the ordinary farmers. The 3s per barrel on feeding barley, which was mentioned as an advantage of this Budget, is just like feeding a dog with his own tail. If the Government underwrite the price of feeding barley, because of the system of buying the barley from An Bord Gráin itself, what will happen is that if farmers get 3s more per barrel, other farmers will pay 3s more per barrel when they buy it back as feed or as an ingredient of compound feed for their livestock.

The claim made by the Minister this morning that the fact that the price of cattle was never better was because of the Anglo-Irish Free Trade Area Agreement is, of course, all cod. The truth is that the fact that the price was never better is because of the foot and mouth disease and the slaughter policy in Britain and this may carry on for another six or nine months. The truth also is that anybody buying store cattle at present could not make money unless there was a spectacular increase in price or unless it stood at a level never reached before. It does not seem as if that would be possible. Therefore, while certain farmers could be getting an advantage at the moment, certain others are not. It is not the Minister's fault or the Government's fault. It just happened because of the foot and mouth disease in Britain and the fact that the numbers in Britain were reduced by the slaughter policy. He cannot take credit for it and no one should blame him either. It is just one of those things that happen. It had nothing to do with the Anglo-Irish Free Trade Area Agreement. All that Agreement did for us was to give us a subsidy on 25,000 tons of beef. That I freely accept as an advantage. When that outlet is done, then that is the end of the Anglo-Irish Free Trade Area Agreement as far as cattle go because, whatever may be said about 68,000 head of stores, the fact is we had access for 1,068,000, if you like, before the Agreement and that without reducing tariffs against British industrial goods.

Let us face the fact—and I agree completely with the Minister for Industry and Commerce—that you must look forward to free trade, that, in 1975, 72 per cent of our industrial production will be open to the full blast of free competition, with no tariff, if there is no change in the Agreement. We heard from the Minister for Industry and Commerce this morning that we are looking towards the Common Market again. Of course, we are looking towards the Common Market. But let me say that I believe that de Gaulle is not alone in France in not wanting Britain in, which means we do not get in, and that the opposition in France to the entry of Britain to the Common Market, and therefore to our entry, may well be just as strong as it was before de Gaulle left office.

I sincerely believe that there is a very strong view in France that if Britain gets in an enormous number of Britain's difficulties will be transferred to France because of the difference in price level in the two countries. That is the reason France wants Britain kept out. The fact that there is a lower price level for commodities in Britain would give Britain an advantage which would remove a lot of her troubles at the moment and transfer them straight into France's lap. This is a personal opinion. I think, if you examine it, it does hold water. One way or the other, whatever you say about it, the position simply is that the Minister or the Government cannot take credit for the present high price of cattle.

Mr. Haughey

You would certainly blame us, though, if it were down.

Mr. Donegan

Three sentences ago I said no blame either. No blame. That is all that is to it. I do not think we could blame the Government because the Agreement, with the exception I cited in relation to 25,000 tons of beef, made no change. The man who got us access for store cattle into Britain was Deputy Dillon, in 1948, and you can be as slick as you like.

Mr. Haughey

The Deputy would at least admit that we reduced the waiting period?

Mr. Donegan

The waiting period, may I inform the Minister, was two months and three months twice during the period from 1948 to the present day and all that happened was that you got that little advantage. Agreed, it was there before, and was forced back to four months during the tenure of office of a Fianna Fáil Government. The Minister will not find that he will pick me up on too much detail in relation to the export cattle trade on which he will find me in error.

It is true that the Anglo-Irish Free Trade Area Agreement was not carried out by Britain as to the letter of the law and the Minister blandly, in his Financial Statement, says that to get past this difficulty of deposits the banks and the Government produced a scheme which did the job. Let us face it, the banks and the Government have had to give free money to Britain for six months in respect of the exports of industrial goods that are going to Britain. That means we lost the interest for six months and a large portion of our reserves. If the Anglo-Irish Free Trade Area Agreement had been tied as tightly as it should have been tied, that could not have happened. Similarly, in relation to butter it appears as if voluntary restriction is demanded from us. We gave a lot. Deputy Tully this morning was capable of saying that our balance of trade with Britain had altered to the extent of £25½ million, that Britain was sending far more of her exports here to us because of the working of the Agreement. We were entitled to a lot back. It is becoming increasingly difficult to find the advantages if one takes into account advantages that were there before. However, in this debate there is not much point in dwelling for long periods of time on just the Anglo-Irish Free Trade Area Agreement.

The Minister is the best gimmick raiser in the business. When one looks at the provision in relation to triplets one realises the sort of thinking that is in the Minister's mind. The Minister would chase a vote from where he lives right across the city to Dún Laoghaire. This provision in the case of triplets is not likely to cost even £1,000 per year. It is typical of the Minister's approach to life and politics.

Mr. Haughey

The Deputy will admit that I had no personal motivation in making this provision.

Mr. Donegan

I am never personal. In fact, I found it necessary to take the Minister for Local Government to task on that matter the other day and after I have sent a report to the Committee on Procedure and Privileges that gentleman will be taught a lesson. However, we shall move on from that and talk about rates. Some alleviations have been granted to farmers and in particular to small farmers in regard to rates. This had to be done because the rates had increased to such an extent that the farmers would not have been able to pay them. It would have been better for them to vacate their few acres and to let the county council take them over so that it is about time that this alleviation was granted.

All the statistics given here have been on the basis of the amount of money that is now being given to farmers by way of rate alleviation. This, of course, is not the last statistic because the last statistic is arrived at when, having left the small farmer, we consider the slightly larger farmer who must pay rates. This man is being crucified by rates. In the bigger counties the rate in the £ is 90/- and in other places it is from 60/- to 65/-.

Twenty-five years ago the only hospitals in Louth were two district hospitals where a surgeon operated and one slightly larger hospital which we call the Louth Infirmary. We now have a hospital that was opened by Deputy MacEntee when he was Minister for Health and which cost between £½ million and £¾ million. Services have expanded out of all knowing and this trend has been reflected all over the country. Fifty per cent of this cost is going on the rates. We realise, of course, that we must provide these services for the people who are entitled to them but they should be provided by way of a charges on central taxation.

There is no basis whatsoever for the argument that more money is being provided for the relief of rates because it was devoted only towards the worst off, but there was no alleviation for the person who is referred to in the country as the middling-sized farmer and even the slightly larger one who finds himself paying far more in rates than he would ever have to pay by way of taxation if he were taxed as other people are.

In conclusion, I repeat that I regard this Budget as an election Budget. Increases have been given where they should be given and taxation has been increased on the things which it will hit least, but in relation to the other aspect of the Budget, which is the direction of policy towards the good of the country, towards the future of the economy, towards the building up of industries and the creation of new jobs as well as the retention of those we have, nothing has been done.

The only good thing that has been done is the continuation of the exporters' tax holiday. That, of course, is Fine Gael policy. It was produced in the Finance (Miscellaneous Provisions) Act of 1956. It was then spoken against by Deputy Seán Lemass. However, it was to be later operated by him when he came back to power and realised that it was probably the best thing that could be done for the country.

That is the only provision in the Budget which bears any relation to the shaping of our economy. No other action has been taken in this direction simply because any further action might not prove popular at election time. I suggest, therefore, that this Budget is a failure. We have not fought against the financial provisions to increase social welfare benefits and we have not fought against the means of providing the money but that does not mean that the Opposition are satisfied with the Budget. The Opposition are not satisfied with it because it does not endeavour to shape our economy. The ratio of bank advances to the money on call is far above what is regarded as being the proper and manageable level. This Budget was framed with a view to securing votes. I ask the Government to declare an election tonight because the sooner they are out of office the better for all of us.

Mr. Tierney

I should like to congratulate the Minister in bringing in what I consider to be a fair and a good Budget in so far as it helps a lot of people whom I represent but, at the same time, there are others whom it does not help.

One thing for which I am grateful is that the Minister has recognised the group of people who made the existence of this House possible and without whose help none of us would be here. I refer to the Old IRA. It took many years before the various Governments even thought of giving them some measure of compensation for the work they did for the country.

While the Minister has helped these people to some extent, they deserve a little more. It is very galling to be in any part of rural Ireland when one of those men dies and to see his comrades passing around a hat in order to raise enough money to give him a decent burial. Therefore I am very glad the Minister has provided that a sum of £25 be paid for this purpose. I know it is a rather small amount but it is a step in the right direction.

I note, too, that the Minister is bringing the service pensions up to £25. Many of those people are getting much less than that figure. When the military service pensions were first given some of my comrades got only from 2s to 2s 6d per week but of course they have gradually been increased. In so far as I understand it, it is only those people who are receiving special allowances and who are getting less than £25 who will be brought up to the £25 mark. The Minister is aware that there is a means test for special allowances and everything is taken into consideration in determining eligibility. Everything is taken into consideration by the pension board when they are allocating the amount of this special allowance. I wonder would the Minister in his reply clarify what the situation is? Will the increase given to those pensioners bringing it up to £25 mean that their special allowances will be reduced? We will say for the sake of argument that it was £15 and he now gets an increase of £10 from the Minister's Budget bringing this up to £25. When the special allowance people come around to reassess, will his allowance be reduced by that amount? Does the Minister not intend to take the £25 into consideration? This was not very clear in the Budget Statement.

Military service pensioners deserve an increase and really what was wrong with their pensions all along was that they were too low. If they got five per cent, six per cent, ten per cent or 12 per cent increase as the years went by and the amount of the increases were so small taking present day standards into account, they got very little. I congratulate the Minister on recognising this group of people and at least giving them some little concession. I should like to see him giving them more because they are getting fewer and fewer each year. I should like the Minister, if he is here next year, to try to help those people along the road a little more than he has done in the Budget.

I should like to draw the Minister's attention to one particular aspect in relation to small farmers, particularly the small farmers in North Tipperary. About five or six weeks ago I went into a supermarket in North Tipperary. My wife bought some canned carrots and a couple of days afterwards I looked at those cans and I discovered they were all foreign. They are being sold in supermarkets all over Ireland. I went back to that supermarket again and I bought beetroot. It also was foreign grown and foreign packed like the carrots. I then said to myself that I would have a case where I would have a hit at some Minister in the House. I put a question down to the Minister for Agriculture and Fisheries and I was told that it was no concern of his. When the question went to the Minister for Finance I was told it was no concern of his. I cannot find anyone at all to tell me if there is anyone responsible in the Government for permitting every shelf in supermarkets in Ireland to be stocked with agricultural produce that we could grow and market at home.

Mr. Haughey

What is a decent farmer like yourself doing eating tinned vegetables?

Mr. Tierney

That is what is wrong with Irish farmers. They will not grow them. If they want to eat them they still go buy Dutch or Belgian vegetables. I am not blaming the Government for this. I think the farmer is wrong when he allows the supermarkets to sell foreign-grown vegetables when he could grow them here himself. If the foreign vegetables were not sold in those supermarkets the Irish farmers would have to grow them. I would ask the Minister, if he can, to find out who is responsible for allowing this to happen or if there is any control that can be brought in to prevent this sort of thing happening. If he can do that it would be a good day's work.

While I congratulate the Minister on many things there are some matters upon which I cannot congratulate him. I know I will be very unpopular for condemning the increase in the price of drink. I condemn the Minister for putting up the price of the pint. I do not drink pints so I am not talking on behalf of myself. I think the pint is the poor man's drink, whether he is in North Tipperary or the city of Dublin. The average working man in Ireland, whether it is for his lunch or for his recreation when he goes out to the local in the city or country, drinks a pint. Such people are usually fond of the pint.

I have no hesitation in telling the Minister to put on something on whiskey or any of the spirits but the Minister should not have put anything on the pint. I would not increase the price of draught stout and draught ale and I do not think you would lose a lot by that. The pint always seems to get the hammer. I am sure the reason for doing this is that it is the average working man's drink and, perhaps, more of it is consumed than any other drink. That is probably the reason why it is a good target for another twopence or threepence. I still think the Minister could have left it alone.

Another question which was raised by the previous speaker is the price of barley. I cannot understand how the price of barley is worked out. I was a barley grower in 1948 when malting barley sold at 84s a barrel in North Tipperary. Last year's crop, and I am sure this year's will be the same, sold at £3 15s and less. Everything else is going up substantially but the price of barley has gone down. Machinery, wages and fertilisers have gone up but the price of barley has not. The previous speaker spoke also about cattle prices.

Mr. Haughey

If you want to put up the price of barley, you can always put up the price of the pint.

Mr. Tierney

There is a very important point I was leaving out about that. In 1948 when the price of barley was 84s a barrel the price of the pint was tenpence.

Mr. Haughey

When was it tenpence? It was before my time.

Mr. Tierney

The Minister was born before 1948. Of course, he might not be drinking pints. I forgot about the difference in regard to the price of the pint in 1948 and now. Talking about cattle prices, I admit that at present they are very good and they are likely to be even better but, as the previous speaker pointed out, we need not thank the Government, the Minister for Agriculture and Fisheries, or any one of them for that. England are our best customers. They really want all the beef and store cattle that we can produce. They are prepared to pay a price for all the beef, pork and mutton they can get. I am glad that the situation is like this.

I myself know of hundreds of cases where girls have had to stay at home to look after aged parents. These girls have never got a chance of going out to work. On many occasions I have asked the authorities in North Tipperary for some help for these girls. I have failed to get help for them, even though I made representations to the county manager. At present I am trying to get assistance for these people who must stay at home to look after an aged parent. The Minister's assistance to them is a move in the right direction. If an old person is sent to a county home he costs the ratepayers £7 or £8 per week. The amount which the Minister is now giving is small. Even if the Minister doubled it it would still be small. However, it will save many old people from going to the county homes. It is hard on a girl who may be earning good money in Dublin, Manchester or Liverpool to come home to assist an aged father or mother. Such a girl may be earning £9 or £10 per week. She may even have a few shillings saved. She spends her savings and then you will find that two or three people are living on the old age pension. The county manager may say that these people can get home assistance, but when the home assistance officer comes to investigate he may turn down their claim for home assistance. I welcome this provision which the Minister has made. It will save the ratepayers' money because old people will not be put into homes. The Minister could, perhaps, increase the amount being given, if he is here, for the next Budget.

Mr. S.D. Barrett

The Minister is a reasonable man and I am quite sure that he will understand the difficulty which we, on this side of the House, have experienced as a result of his public statements over the last two months. I do not wish to traverse the ground which, naturally and reasonably, has been traversed by fellow members of my Party since the Minister introduced his Budget yesterday. At the Fianna Fáil Ard-Fheis a short while ago the Minister gave a gloomy forecast of what was going to happen on Budget day.

He gave this gloomy forecast at the most important meeting of the year for his own Party. He forecast inflation and stated that we would have curbs and controls of all descriptions. Shortly before the Budget, the Minister took a special opportunity to avail of the most widespread media of communication—he availed of both radio and television, obviously at the wish of the Government—to say that we were the most distressful country ever seen and that a serious situation would prevail shortly. The following morning there were panic headlines in every newspaper in the country. There was every justification for the newspapers taking up the message of gloom and warning which the Minister had broadcast, specially at his own wish and the wish of the Government.

What do we now find here on May 7th? We find a revenue surplus of nearly £1 million. The Minister will not blame us if we ask him what sort of economy are we living in? One month we are told that the country is in a most distressful state, and the following month we are told that we are on the crest of the wave. What sort of Government have we got? Its moods fluctuate. Despite what the Minister told the Fianna Fáil Ard-Fheis and despite the warnings he gave on television and radio, now, according to the Minister in his Budget Statement, we can look forward to steady economic advance for the next 12 months. I do not know what has happened in the short period which intervened between the gloomy broadcast and this Budget speech. The Minister will not blame me or any cynic who might read between the lines of the relatively cheerful Budget Statement, and might see the imminence of a general election. The Minister said in his Budget Statement:

The indications are that the growth rate will be about 4½ per cent. This means that 1969 will be our third successive year of satisfactory growth.

Something similar was said on the 5th November 1968 when the Suplementary Budget was introduced. This Supplementary Budget was being introduced on behalf of the Minister for Finance.

Ireland has enjoyed two excellent years. In 1967 the rate of growth was about four per cent and this year it is likely to be between four and a half and five per cent.

Increased industrial production has made a big contribution to national progress in both years. The volume of output of transportable goods industries rose by nine per cent in 1967 and even faster in the first half of 1968. Activity in building and construction has been much greater in both years, while agricultural output, which had fallen between 1964 and 1966, rose by two per cent in 1967 and should show a similar increase this year.

All this cheerful news was given to the House and on the next page the Taoiseach, standing in as Minister for Finance at the time, put more taxes on whiskey, stout, cigarettes, telephone charges and every other thing one could think of.

There is a dreadful similarity between the document which was presented to the House on the occasion of the Supplementary Budget of 5th November, 1968, and the document which the Minister read to the House yesterday. All the cheerful news was given first and then the document of 5th November, 1968 went on to say:

While the economy shows many satisfactory features which it is important to safeguard, there are clouds on the horizon and these cannot in prudence be ignored.

That was November, 1968. What did we get yesterday? At page 10 of the Minister's speech we read:

The indications are that the growth rate will be about 4½ per cent. This means that 1969 will be our third successive year of satisfactory growth.

Then:

There are, however, some warning signals. Export expansion is likely to be slower than last year because of less favourable conditions in our main export markets, and the recent interruption of industrial production has probably lost us a number of export opportunities. At the same time, the pressures carried over from last year are likely to cause a large rise in imports of consumer goods and raw materials for further processing. Capital imports will be swollen by exceptionally heavy purchases of aircraft. Allowing for a rise in net invisible earnings, the likelihood is that the balance of payments deficit will be about £55 million. Even if aircraft imports are excluded on the basis that they will be financed in the first instance by foreign borrowing, the deficit is likely to be £40 to £45 million.

Mr. James Tully

Deputy Childers is having second thoughts about the foreign borrowing.

Mr. S.D. Barrett

The Minister continued:

This is still large but must be viewed against our strong reserves position...

I could not help thinking that there is a fairish probability, which has reached in my mind the status of a certainty, that if this Government is back around November, 1969, we will have the Minister, or whoever is then Minister, coming along and saying: "We are terribly sorry. We were so terribly easy on the country on May 7th, 1969, and look what has happened". All the Minister needs to do is to read again pages 10 and 11 of yesterday's speech as a satisfactory reason for curbing expenditure by the people.

I feel that the Minister's speech has been almost completely conditioned by the fact that he knows that sooner or later this year almost certainly he and his Party must stand at the bar of Irish public opinion. The Minister knows that he and his Party stand as low in the estimation of the Irish people now as it is possible for a Government Party to stand. I regard the long delayed, and in my view inadequate, increases in the social services not so much as coming from the heart of the Fianna Fáil Party, not as expressing the Fianna Fáil philosophy towards those who are less fortunate than most of us, but as an effort, belatedly made, to recover the popularity which the Government have lost since they went back into office in 1965.

This Budget, in so far as it is being used to bribe the Irish people, is a dishonest Budget. Like Deputy Tierney, I welcome the small reliefs which have been given to pensioners and others who need them but I believe that, but for the fact that we of the Fine Gael Party had made public our social welfare policy and had told the people what we would do and told the people that we wanted to get into office to do this, even at this stage the increased allowances which have been given by the Fianna Fáil Party in this Budget would not be as good as they are.

Another part of the Minister's speech which I find most unsatisfactory is that which deals with local authority finances. It is not so long ago since almost every Deputy in this House, including some of those who sit behind the Minister as backbenchers of his Party, were expressing their feelings on the question of the financing of local authorities. There was up and down this country an almost unanimous call on the Government drastically to alter the manner in which local authority finances are collected, an almost unanimous call to the Minister and to the Minister for Local Government to do something to remove from the local purse the responsibility for paying more than half of the health charges.

The Minister repeated yesterday something which I consider to be inaccurate, that is that the Central Fund contributes about 56 per cent of the health charges to local authorities. I am pretty certain that is not so in Cork. I know from figures I saw in respect of Dublin that it is not so in Dublin. If the Minister wishes to deny this I would prefer if he would wait until he is replying to the debate. It has been stated here more than once, and I have seen figures which indicate it, that Dublin is not getting 56 per cent from the Central Fund in respect of its health charges.

All the Minister did in his speech yesterday was to recapitulate the situation under which we grew up in respect of local authority finances without making any suggestion of any description as to what reforms he intended to introduce. This completely disregards the public demand which was so vocal recently when estimates in respect of the striking of rates were engaging local authorities. I regret that the Government did not find it possible to do something to listen to the almost united voice of local authorities in this country, backed by those who elected the members of those local authorities.

The Minister has something to say about price increases. He promised this House and he promised the country:

...The Government will subject applications for price increases to the most rigorous scrutiny. Apart from the economic necessity of mini-mising price increases, we are determined to ensure that the large sums now being set aside to improve the position of the less prosperous amongst us are not eaten up by unjustifiable price rises.

I do not know if the Minister considers this to be a continuation of the policy of the Minister for Industry and Commerce last year, but I should like him to realise that a large majority of the citizenry of this country, regards the price control machinery of the Department of Industry and Commerce as being absolutely inadequate and most unsatisfactory.

Week after week you open your newspaper and find new lists, getting longer each time a list is published, of commodities in respect of which reliefs have been given to the producers by way of allowing them to increase their price. I should like to draw the attention of the Government to the fact that the producers of many of these things were not only allowed to increase their prices, but things like bars of chocolate were reduced in size, which is tantamount to an increase in price. I do not know if the price control machinery at present operated is sufficient to deal with stratagems of that nature. If it goes on in the way it is going, one will not be able to see the bar of chocolate one is buying for 7d. I should like to draw the attention of the Minister to that.

Yesterday Deputy T.F. O'Higgins was criticising the Minister and the Government for their long neglect of the social welfare services of this country. He was contrasting the long history of Fianna Fáil neglect in that regard with the forward-looking policy of the Party to which he and I have the honour to belong when, over from the Fianna Fáil front benches, came the voice of the Minister for Education and, in his most derisive tones, he shouted: "Chapel gate stuff". Very shortly the Minister for Education, the Minister for Finance, and every Minister of the Government, because of the democratic process which we employ here to form our Governments, will have to go to the chapel gates. It ill-befits any Minister of State to walk into this House and deride what he calls chapel gate stuff. I was not surprised to hear it coming from the Minister for Education. It is indicative of something which most people in the country know only too well, that the Government are completely out of touch with the people. Might I suggest to the Minister and to the Minister for Education and their colleagues that, if they went more often to the chapel gates and heard what the people said there, and tried to get into the minds and hearts of the people, they might not have found themselves in the very sorry straits in which they now find themselves publicity-wise.

I do not intend to keep the House very much longer. I deeply regretted it when I heard the Minister telling the House yesterday that the cost of servicing our debt was increasing by another £11½ million this year. I agree with the Minister that many of the things we are now spending money on are not just for the immediate relief of the present generation and that posterity will enjoy many of the things which we are now providing. For that reason I agree that we must avail of credit and that interest will have to be paid by future generations who will be enjoying the fruits.

At the same time, it is depressing that in one year there should be such a remarkable increase in the cost of repaying the interest on our national debts. The Minister said:

The estimated cost of the service of debt shows an increase of £11½ million over last year because of the additional borrowing required for the capital programme and the very high level of interest rates now prevailing. There is continued advocacy for the provision of more money for housing and sanitary services, for rural electricity and for telephone development, to mention but a few items of the programme.

I would commend to the Minister something that appeared in the March, 1969, Quarterly Issue of the Irish Banking Review. The writer foresaw a development of the nature which has eventuated and was made public by the Minister in his speech yesterday. It states:

To the extent to which additional public expenditure cannot be covered by taxation more public borrowing will be necessary. This would be an undesirable development for several reasons. Public borrowing has been growing rapidly in recent years, interest rates are very high and an increase in the public debt would act as a competition for the savings of the public which, as has been said above, are in danger of being reduced and which are vitally necessary for private investment.

The Minister's reference to the fact that there is "continued advocacy for the provision of more money for housing and sanitary services" is a gross under-statement of what is happening. There is not just "continued advocacy" for more housing. The people are shouting and screaming for the elementary right to live under circumstances which befit any Christian family. The Minister knows as well as I do that there are still in this country men and women living under animal conditions which would be a disgrace not only in a Christian country but also in a pagan country. The Minister also knows that that is entirely due to the deliberate policy of the Party to which he belongs.

Mr. Haughey

The day is saved. The Deputy can sit down now.

Mr. S.D. Barrett

The Minister knows as well as I do that it was a deliberate part of his First and Second Programmes for Economic Expansion that the Fianna Fáil Party considered that enough money had already been spent on housing and hospitals, and they were damned if they would spend any more where is was needed, for what the Fianna Fáil Party call productive purposes. The outcome of that was that, year after year, the number of houses built decreased and, year after year, the number of homeless and houseless up and down the length of the country, in every centre of population, great and small, increased until——

Mr. Haughey

Go bhfóire Dia orainn.

Mr. S.D. Barrett

The Minister may like to be derisive about this but, if he looks at the statistics, he will see that in the last year the inter-Party Government were in power 491 houses were built in my constituency and, after five years of what the Minister's Party call a policy for expansion, the number of houses built in Cork city was 138 in one year. Since then annual increases have been almost minimal. Eventually the Minister's colleague, the Minister for Local Government, had to have recourse to the National Building Agency to build houses in places like the city of Cork. Eventually the Fianna Fáil Government had to listen to the pressure of organised bodies such as the Fine Gael Party here and in local authorities and the pressure of the unfortunate people who found themselves in such need in Cork, Dublin and other centres of population.

Such relief as the Minister has given to pensioners and others is miserable enough. And I certainly would not join in congratulating the Minister on doing something which he simply did because he believes he and his colleagues will have to face the bar of public opinion and solicit the suffrage of people to whom they have been less than generous, less than fair and less than just over so many years of government.

Mr. Nolan

I should like to be associated with the Deputies on both sides of the House who paid the Minister for Finance the finest tribute that was ever paid to any Minister since the foundation of the State. For the first time ever there was no opposition to the Financial Resolutions of the Budget to provide relief of hardship for those most in need. That is a tribute to the Minister and to Fianna Fáil that has never been accorded to any other Government in this House up to now.

Agriculture comes reasonably early in the Minister's speech under Index 16. The comment has been made in the press and elsewhere that there was not a lot in the Budget for agriculture. It has been the situation in recent years that, when money is provided in the Budget for concessions to agriculture, the concessions have already been given. This year we have had the beef subsidy scheme which is one of the best schemes introduced by the Government for agriculture. We who come from areas where there is milk production and beef production have discovered that this scheme has stopped the trend towards milk. The farmers who are in the cattle industry and were thinking of going into milk production because there was more money in it than either beef or sheep, have remained in beef production. Only last Sunday I visited a farm where there were 12 cows. Eleven of those cows had two calves each being suckled, and one cow was retained for milk for the home. This is a desirable trend from milk to beef and will avoid surpluses of butter, milk and so on.

A few years ago sheep numbers dropped considerably; they levelled off subsequently, and during the past year there has also been a decline in sheep numbers. The Young Farmer of the Year, who was selected again from my own county this year, said after he had received the prize from the Taoiseach: "If you had a little bit of early grass you would prefer to have a cow on it than sheep." As far as agriculture is concerned in this Budget, there is the hogget ewe subsidy scheme as an addition to the mountain lamb subsidy scheme introduced last year. The view has been expressed in various quarters that this should be extended to all hogget ewe lambs. This may be so but again finance and many other problems are involved.

However, possibly next year an extension of this scheme would enable our sheep industry to be built up. As an aspect of agriculture the sheep industry has not been getting the same amount of money relative to its importance in the national economy as, say, milk, beef, wheat or beet. It is desirable to increase sheep numbers and this scheme should achieve that. The hogget ewe which is retained by the farmer as a hogget, when it comes to weaning time creates the same problem. They would have only a single lamb or maybe no lamb at all and need far more attention than the ordinary two-or three-year-old ewe.

This Budget is certainly one for the poorer sections of the community and, again, the Minister must be complimented. Never before did any Minister for Finance come near to giving the increases the present Minister for Finance come near to giving the increases the present Minister has given. He has covered every aspect of social welfare, including disabled persons maintenance, widows', orphans' and old age non-contributory allowances. Somebody did remark that £2 for a girl who remains at home to look after her aged parents is a small amount, but up to this the daughter who remained at home to look after her parents who might be living on £6 10s 0d old age pension would have no income except possibly home assistance at the rate of 10s or £1. This proposal is a desirable improvement for those girls who remain at home to care for their parents. This allowance was introduced in last year's Budget but was given only to those who have been in employment and who have contributions for 156 weeks. The Minister must have thousands of letters from public representatives and others asking for this concession for the social welfare classes, and he is to be congratulated on granting it.

Every Deputy likes to see something more being given. In the debate on the Health Bill I, amongst others, referred to the mentally and physically handicapped from birth and I mentioned that, when they reach 16 years of age, they lose the children's allowances and become a heavy financial burden on their families. There is a means test. We should introduce in the social welfare code an allowance for those who are physically or mentally handicapped from birth, who have no source of income, who can never work in order to qualify for contributory benefits and who are a burden on their families, on the rates or someone else. I should like to see assistance given to these without any means test so that they would have something they could call their own. Voluntary organisations are doing wonderful work and that in itself is proof, if proof be needed, that we should do something in regard to this kind of assistance. I have no doubt that none of us, irrespective of income, would refuse a little extra taxation to provide assistance for these people.

Last year the Minister mentioned that he might consider the introduction of a means test for children's allowances. Those of us who deal with social welfare matters in which a means test is involved know the very high cost of administration of that means test. The Minister has introduced a means test this year which, from the point of view of administration, will cost practically nothing. This is very desirable because, while it involves no extra cost of administration, it ensures that those who do not pay income tax will get the full benefit while those who are paying income tax will not reap the full benefit.

The Minister must have spent a prodigious amount of time on preparing his Budget. He has covered every section of the community in it. Anywhere the shoe pinched he has given relief. Widows of civil servants who did not qualify under the new pension scheme will now receive a pension; they will get the Exchequer contribution by way of pension. There was a big demand for something like this from these widows. It was difficult for the Minister to bring them into the scheme, because it is a contributory scheme and their late husbands had not contributed to the scheme, but the Minister has been generous by giving them approximately half the pension their husbands would have enjoyed.

Income tax reliefs have been given —£15 for a single person and £30 for a married couple. It is not a very big allowance, but I understand that the relief costs something in the region of £3.9 million. The Minister has done as he promised last year; he has given relief to the tune of almost £4 million. He has also mentioned the fact that legislation will be introduced for the purpose of reforming the income tax code.

Again, the dependent relative's allowance is increased to £195. I think it was only a couple of Budgets back that, as the pension increased, the dependant's allowance also increased.

Mr. Haughey

The Deputy is the first man to draw attention to that. The Deputy put down a Motion many years ago.

Mr. Nolan

I did because of the situation of the son who stays at home with his parents. They are old age pensioners and he has to provide a great deal more than a single man has to provide living in digs or something like that. He has to meet rates and possibly rent. He has to contribute towards their upkeep. In other words, he is a householder. Prior to this he had only £6 10/- or £7 a week tax free allowance. Under this he will get a certain extra allowance for his parents. I think it is about 30s a week. It is small enough but it does at least ensure that, if the pension goes up, the dependent relative's allowance will not be reduced.

With regard to medical expenses, the Minister accepted last year that medical expenses in excess of £50 per annum could be calculated for income tax relief. There has now been a desirable extension of this. Any concession that can be made where health is concerned is a welcome concession.

The allowances for the Old IRA are being increased. The Minister referred to the fact that representations had been made to him for a grant of £25 towards burial expenses. This is an extension of the social welfare code which is very desirable because, unfortunately, some of these Old IRA people die in very poor circumstances indeed. This contribution to the family for funeral expenses is desirable. As well as that, of course, they are getting the normal increases in pension that are being made available to the other recipients of social welfare benefits.

In general, on this Budget, it must be accepted that when we take into account the problems that exist in Europe today—the general trends in Britain where there is an unemployment situation, the troubles in France, in America and all over—it is a great tribute that we can forecast a growth rate in this country of 4½ per cent. I really do not want to say this but I think we shall have a greater growth rate than 4½ per cent. Our capital Budget, which shows an increase of £30 million or £40 million, is really the pulse of the economy. With a high capital Budget, a housing programme, a programme of school building, and where all Government activity is being increased, there must be an increase, naturally, in the private sector too because they are far more closely linked than people imagine.

A few years ago, when the building industry and the house-building industries collapsed, people right down along the line were affected—the builders' providers, the workers, the shopkeepers and others right down along the line. That caused unnecessary hardship. There is no doubt in my mind that a capital Budget of the amount mentioned in our present capital Budget, speaks well for the future of our economy.

There was mention in this debate— sometimes there is mention of it in this House—of the fact that our social welfare benefits are not equal to those paid in Northern Ireland or in Great Britain. Nobody ever mentions that taxation pro rata in Britain and elsewhere is far higher than it is in this country. Take the insurance stamp. I have not checked the figure recently but the most recent check I have on the stamp is that its price in Britain is in the region of £3 3s 6d. One may say that this includes the selective employment tax, but, whatever amount is paid individually, between the employer and employee together they pay £3 3s 6d. It is very easy for a Government, particularly a Government in Britain, therefore, to pay high social welfare benefits if there is such a contribution per worker. How it is divided up, what percentage, I do not know. Possibly the worker contributes 14s or 15s and probably the remainder is contributed by the employer. It is easy to give out benefits if one has that type of money to play around with.

I do not think we in this country have been really aware of the advantages and of the grants available for industry. Questions on the subject are sometimes asked here in the Dáil and in the country. I remember attending a kind of "open house" one time and somebody asked why it was that the Government would not give the same grants to an Irish person starting an industry as to a foreigner. A lot of people think that an Irishman who is setting up an industry will not get the same grants as a foreigner. We often wonder why these questions are asked. Is it that somebody is trying to undermine the State in matters like this by making such statements or asking such questions? Maybe it is because, generally speaking, an Irishman who looks for a grant generally does so to extend an industry and can qualify therefore only for an adaptation grant. In other words, he qualifies for something like 25 per cent while what we regard as foreigners, setting up an industry here for the first time, will not be looking for an adaptation grant. I sincerely hope we shall have many more foreigners coming here to set up industries in this country, thus qualifying for certain grants, industries which will provide good employment for our people. No matter on which side of the House we may be, we want it to be known that an Irishman who is setting up a new industry will qualify for the same grants as a foreigner. Possibly, most people who set up industry here have foreign connections and build factories from the ground up and all the machinery is new and we have a completely new job. With an established Irish-owned industry, those who apply for grants do so for an extension of the industry.

We are fortunate in my constituency of County Kilkenny that it was one of those constituencies selected for development as a pilot area for the small industries scheme. I was personally disappointed with the reaction of people to this wonderful scheme because I always felt that small industries had a lot to recommend them, particularly in rural areas, and also satellite industries to bigger industries. A small industry might employ five, six, seven or eight people. There are many people who would ask: "What is the good of an industry that employs only six or seven people? We want an industry which will employ 300 or 600 people." It would be better to have several small industries, each employing seven or eight people, than one large industry employing 700 or 800 people but which would not last too long. My colleague, Deputy James Gibbons, Parliamentary Secretary to the Minister for Finance, will agree with me that, within the past 12 or 18 months, there has been a realisation that these grants are available.

In Carlow, Muine Bheag, Tullow, Rathvilly, Borris, and so on, small industries are being set up. Under the same scheme, we have extensions of existing industries. We must realise that they are starting off by employing six or eight people. Some of the finest industries in Carlow which are now employing up to 200 people started maybe in a back yard and without the aid of any State grant. I know of an industry which is only 20 years old and which is now employing over 250 people which was set up by two or three brothers. It has grown into one of the finest industries in the south-east today and it was started without any State assistance.

Mr. James Tully

They are good at building.

Mr. Nolan

They are not.

Mr. James Tully

Then at steel erecting.

Mr. Nolan

They might be and good luck to them. There is another one in Carlow—the very same: we do not want to start advertising. It was founded a few years ago. It was a family industry.

Mr. James Tully

I was glad to get them a big contract in my constituency a few years ago.

Mr. Nolan

Thank you very much. Let us face this fact. If you go to any town in County Meath or any part of Ireland and look back on industries there, you will find that a great many of them grew from family industries.

Progress reported; Committee to sit again.

The Dáil adjourned at 5 p.m. until 3 p.m. on Tuesday, 13th May, 1969.