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Dáil Éireann debate -
Wednesday, 14 May 1969

Vol. 240 No. 8

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

Debate resumed on the following motion:
That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.
—(Minister for Finance).

(Cavan): Last night I made the point that, in introducing his Budget, the Minister for Finance should give a fair history or record of the year just ended and an accurate forecast of the likely position in the ensuing 12 months in order that industry and commerce and agriculture might know where they stand and that people might plan accordingly. I pointed out that this Budget speech had failed to provide guidelines or to indicate to the people accurately the state of the economy. As a matter of fact, the speech of the Minister for Finance on 18th March last, coupled with his Budget speech, has simply bewildered the people and left them in the position that they do not know where they stand. However, I dealt with that fairly fully last night and I do not intend to repeat it.

The gloomy forecast about a grim Budget and the necessity for it made by the Minister for Finance on 18th March last was corroborated by the action of the Taoiseach on the following day, or the day after, when he announced his intention of reducing ministerial salaries by 15 per cent as an example to the rest of the community and to encourage them to exercise restraint. Surely, Sir, that was an unprecedented step taken by the Taoiseach? Surely it was evidence that the grim Budget speech made by the Minister for Finance on 18th March was justified. That was the position as we found it in March last.

On 22nd March, the Leader of this Party, Deputy Cosgrave, announced that, in view of the statement by the Minister for Finance and the action of the Taoiseach, he, Deputy Cosgrave, would propose to the Fine Gael Party that they should follow the example of the Taoiseach and accept a reduction in salary—indeed, that all Deputies in the House should follow the example of the Taoiseach and accept a reduction in salaries and, in that way, give an example to the country to cut back on spending and to try to right the economy which, according to the Minister for Finance, was in an extremely dangerous state.

The announcement of Deputy Cosgrave was welcomed and approved of by the Taoiseach. He said it was a worthwhile gesture, a good example to the rest of the country and in keeping with Government thinking at that time. Now, Sir, that is the position as we know it, and as the country was led to believe it, towards the end of March last. In face of that, the Minister for Finance came along on 7th May, 1969, and told the House that the year 1968 was the best year in our economic history. He said, to use his own words, that industrial production increased at the remarkable rate of 11 per cent and reached a record level in 1968. He said 1968 was the best year in our economic history.

Hear, hear.

(Cavan): I find it very difficult to understand this right about turn. The people find it very difficult to understand the change in tune between 18th March, 1969, and 7th May, 1969. Not alone did the Minister for Finance change his tune between March and May but, indeed, the Taoiseach and the Fianna Fáil Party followed suit. Following the announcement by Deputy Cosgrave that he would propose to the Party and to the House that they should follow the Government's example of a cut-back in salaries, the Taoiseach approved of that gesture, welcomed it and said that the matter would be discussed by the Fianna Fáil Party. It was discussed by the Fianna Fáil Party, as we know, but they decided they knew more about the state of the economy than the Minister for Finance or the Taoiseach. They decided that there was no necessity to cut back on salaries.

Indeed, we had the extraordinary performance here within the past week or so, that when the Fine Gael Bill to reduce Deputies' salaries was introduced in this House it was opposed by the Government and put back into Private Members' time in the knowledge that there would be no Private Members' time before the dissolution of this Dáil and that it will never be reached. I understand that the Taoiseach is likely to speak today. I want him to explain this change of tune. I want him to explain to the House and to the country this change of attitude. I want him to tell this House and the country and, indeed, now, to tell the electorate whether the Minister for Finance was serious on 18th March last when he went on television, as I said, grim-faced and serious looking, and warned the people in the terms which I put on the record of the House last night, and whether the Taoiseach was serious when he announced that the Government intended to reduce their salaries; and whether the Taoiseach was serious and meant what he said when he complimented Deputy Cosgrave on saying that he, Deputy Cosgrave, would recommend to the House that all Deputies should reduce their salaries.

I want to ask the Taoiseach to explain his attitude in opposing the Bill which Deputy Cosgrave brought in. I want to know what has taken place between March and May to justify this complete somersault, this extraordinary change of attitude. If the Taoiseach does not give an answer, I will suggest one to him. In my opinion, the Government have been getting ready for an election——

For the past 12 years.

(Cavan): This Budget has been framed in an election atmosphere. Apparently, in March last, the Minister for Finance and the Cabinet decided that the economy was going wrong, that we were in the throes of a financial crisis, and they decided that they would fight the election on that basis and on the basis that only Fianna Fáil could save the country from further deterioration and that only Fianna Fáil could correct the economy and put the country back on its feet again. Then I think it must have dawned on some of the more realistic Members of the Government that if they adopted that attitude they would certainly be asked by the people: “If the country is in the mess that you say it is, who put it into that mess?” They knew they would be reminded that they would have to take responsibility for the financial and economic crisis which they were saying existed, because the Government have been in office, as the Parliamentary Secretary has reminded me, during the past 12 years.

Of course, they did not get away with the story "Do not hit me now with the child in my arms, the country is in an awful mess but we will get it out of it, and we alone can do it". They realised that there were no votes in that. They realised they would have to take responsibility for the economic and financial state of the country and that the other would be a bad election platform. Then they had another think. Mind you, it was a gradual switch-over.

I happened to be in the House when the Agricultural Bill was going through. On that day, the Minister for Finance paved the way for the complete somersault by saying he would soon have to explain that his 18th March speech did not justify the headlines which it got—"Grim Budget Forecast by Minister for Finance"—and that he really meant something else and that he would have to take an early opportunity to clarify the position. That is what he said in the House.

There was a change of mind about the election platform and the Government decided that instead of going to the country with the hairshirt policy, they would introduce a giveaway Budget—little bits and scraps here and there—and that they would go to the country on a full and plenty basis. I want an explanation from the Taoiseach about that, if he is speaking. I want an explanation from him about the change in attitude towards ministerial salaries, towards Parliamentary salaries, towards the state of the economy in general. Just to conclude on this aspect of it, the Budget we were led to expect on 18th March by the Minister for Finance, as reported in the Irish Times of 19th March, was this sort of Budget:

To frame a Budget to meet this situation was clearly going to be a formidable task. There would have to be increases in taxation, with small, if any, increases in benefits for those who would normally be expecting them.

That is what we were led to believe. That is what we were promised, and I want an explanation from the Taoiseach, if he has any, as to the change in attitude, the change in assessment of the position since 18th March.

This Budget can be assessed only if one has a look at the history of this Government in respect of Budgets in the last few years. I do not think the country will accept this Budget as an honest one. I do not believe the country trusts this Government. I believe we have abundant evidence that the country lost faith and trust in the Government during the referendum campaign last year when the Government asked the people for a blank cheque to run the country as they liked indefinitely. They were rebuffed to the extent of a quarter of a million votes. In view of the budget-making history of the Government, is it any wonder that the people have no trust in them and that they are not prepared to trust them any longer?

The year 1969 has one thing in common with the years 1966 and 1968. We had a national election in 1966; we had a national referendum in 1968 and we are to have a general election in 1969. We must look to see how the Government behaved, Budgetwise, in 1966 and 1968 before we pass judgment on the Budget of 1969. In 1966, on 9th March, the Taoiseach, as Minister for Finance, introduced a Budget and it will be remembered for his opening phrase in the speech introducing that Budget:

What went wrong with the Budget introduced last May?

He proceeded, on 9th March, 1966, to introduce a fairly mild Budget, imposing some taxation, giving some reliefs. In introducing that Budget with the opening remark "What went wrong with the Budget introduced last May?" the Taoiseach indicated that his Budget of 1965 had been a failure, had been inadequate and had not done the job it was supposed to do. One would have thought that the Taoiseach, then Minister for Finance, on 9th March, 1966, would have made sure he would do the job adequately then—that he would introduce a Budget that would serve the country adequately during the following 12 months.

Whatever about the Budget introduced in May, 1965, at least it lasted or was able to carry us on from May, 1965, to 9th March, 1966; but the Budget that was to cure the defects in the May, 1965, Budget, lasted for how long? It lasted until 14th June, 1966, during April, May and June, just quarter of the year. At least, the May, 1965, Budget lasted until March, 1966, nearly 12 months.

You are getting us all mixed up.

The present one lasted only a week. Deputy Blaney mended it within a week.

(Cavan): The 1966 Budget lasted only four months, sufficient to carry the Fianna Fáil Party over the Presidential election of June, 1966. So much for that year.

What we want to speak about are the by-elections of 1966.

(Cavan): The result of one of them is here. The Deputy might be interested in the by-elections.

What about the 1969 Budget?

(Cavan): We will get to the 1969 Budget.

It is a bit of an embarrassment to you.

(Cavan): Not a bit. We will deal with the 1969 Budget No. 1 in due course and——

Is the Deputy telling us that if there is a change of Government there will have to be a second one? Is that it?

(Cavan): I will come to that in my own way. I know the Parliamentary Secretary does not like to be reminded about what went wrong with the Budget introduced on the 9th March, 1966. It was an election gimmick, a dishonest Budget, a fraudulent instrument introduced to carry the Fianna Fáil Party over the Presidential election held on 1st June, 1966. It just did that because we had the second Budget on the 14th June, just a fortnight after the Presidential election. If that is honest budgeting, if that is honest politics, I do not know what to say. Is it any wonder that the people will not accept this Budget as a fair housekeeping instrument, as a fair financial measure? They will regard it for what it is, a gimmick.

A good Budget.

£5½ million on social welfare is no mere gimmick.

(Cavan): I intend to speak for a few minutes, Deputy, and I intend to deal with the 1969 Budget when I have alerted the people to what happened in 1966.

The Deputy has spoken for an hour and a half and he is still getting around to the 1969 Budget— an hour last night and half an hour this morning and he still has not got to the Budget.

(Cavan): Let us get the record straight and see how much weight we can attach to Fianna Fáil statements whether at ministerial level or at Parliamentary Secretary level. We have just been told by the Parliamentary Secretary that he listened to me for an hour last night, and he was in the House all the time, but the records will show that Deputy Foley concluded at 10.15 p.m. and that I then spoke for 15 minutes. The Parliamentary Secretary has converted that 15 minutes into an hour.

It seemed like an hour.

(Cavan): It is typical of the exaggeration we will have from the Fianna Fáil Party during the election campaign. That is why it is necessary for me to go back and deal with the Budgets of 1966 and 1968 because the Parliamentary Secretary will tell the people that there was only one Budget in those years. On the 23rd April, 1968, we had a Budget which doled out social welfare benefits, little bits here and there all over the place, and imposed taxation at the rate of twopence on cigarettes, twopence on petrol, one penny on the pint but nothing on spirits. Then for the next six months we were expecting a referendum and the Government were seeking a blank cheque from the people, asking them for 100 seats in Dáil Éireann. We know that the people did not fall for that. Of course, 1966 was fresh in their minds. The referendum was held on 16th October and the Government were disgracefully beaten to the tune of 250,000 votes. The referendum count was hardly over when back we came with a Budget on the 5th November, 1968. It was a Budget which imposed fourpence on 20 cigarettes, twopence on the pint of beer, twopence on the glass of whiskey and it was described by some people as a mini-Budget but was, in fact, a brutal Budget, the most severe Budget introduced for some years.

That is the recent history of the Fianna Fáil Party in relation to Budgets in election years: you have a fairly favourable Budget before the contest and the real Budget afterwards. I have been asked to deal with this Budget and I propose to deal with it. We have certain social welfare benefits contained in this Budget and we are grateful for them. We advocated them both in the recent past and in the not so recent past. They were advocated in the Fine Gael policy on social welfare which was published on the 16th January last, some considerable time before the Minister for Finance made the speech in which he said that in this Budget there would be plenty of taxation and no social welfare benefits. I cannot help thinking that if we had not published that policy and advocated these increases he would have introduced the Budget he promised, the hairshirt one with all take and no give.

Let us consider this Budget on the give and on the take side. The taxes imposed are twopence on cigarettes, twopence on beer, fourpence on spirits and threepence on petrol and against that the people are expected to believe that old age pensioners will get in return an increase of 10/- a week and that there will be increases in children's allowances, but that is not so because the increases to pay for the reliefs I have spoken about will come from the twopence on cigarettes imposed in this Budget plus the fourpence imposed last November, which is a total of sixpence, and from the twopence imposed on beer this time plus the twopence imposed last November, which is fourpence, and the fourpence on spirits plus the twopence imposed last November, which makes sixpence, plus the threepence imposed on petrol this time. That is the position because since old age pensioners and the social welfare classes received any increases in their benefits we have had the increases I have spoken about—the sixpence on cigarettes, between the November Budget and this Budget, the fourpence on the pint of beer, the sixpence on spirits and the threepence on petrol. I should like to ask the Taoiseach to work out how much of these social welfare benefits will have already been gobbled up before the people get them at all.

We are told in this Budget that £81 million has been provided for agriculture and of that £27 million goes to subsidise creamery milk. Is this £27 million necessary to support the price of creamery milk? It is necessary as a direct result of Government policy, an ill-thought-out and universally applied Government scheme introduced a few years ago to increase milk supplies all over the country. Had not the heifer scheme the effect of driving wide areas that were traditionally meat-producing into milk? That cannot be denied. If £27 million is necessary to support the price of milk surely the Government cannot complain because they drove people into milk; now they are trying to drive them out.

We are also told that £19 million of the £81 million is attributable to the relief of rates on agricultural land. The Government must either say that they have derated agricultural land up to £20 valuation or they have not. If the land is derated is it reasonable to debit this £19 million against the agricultural Estimate each year? That is what they appear to be doing. They say the money required to subsidise rates has gone up by £2 million on last year. Of course, it has because items such as health are charges on rates which should not be charges on rates. Health charges should be removed from rates long ago. One might as well say that the money necessary to pay old age pensioners should be raised from rates because these pensions are a necessary social service and so are health services.

There is nothing of any account for agriculture in this Budget, nothing for the farmers, nothing worthwhile to encourage them to produce more. We had the beef cattle incentive scheme introduced a month before the Budget. Was that deliberate? I think it was because if it had appeared in the Budget it would have highlighted how little there was in the Budget for the agricultural community, especially for the small farmers in the poorer counties when we find the first two cows are excluded. What is to be done with their milk? It cannot be sold in the creameries or the towns and nobody knows the answer. But there is no subsidy for the first two cows.

After the Budget the Minister for Agriculture and Fisheries made an announcement which nobody seems to understand and the effect of which is to increase the price of milk in the Dublin milk area and reduce it in the country. Apparently, he is going to tax margarine on people who cannot afford to buy butter. It seems to me that will increase the cost of living in a matter of days after the Budget.

It is high time that the Government evolved a planned policy on agriculture that would let farmers know where they stand for a reasonable period ahead so that they could plan accordingly. The policy of the Government on agriculture seems to change from Minister to Minister. When Deputy Smith was Minister we had compulsion all over the place—filling the fields with inspectors. In the more recent times of Deputy Haughey as Minister and the present Minister the policy is to fill the jails with farmers. There is no realistic policy in agriculture. The very suggestion that all our ills are attributable in the agricultural sphere to overproduction of milk is a classic example of the lack of a longterm plan in the Department of Agriculture and Fisheries. In 1965 and 1966 and up to last year they were encouraging people into milch cows: they say now there is no market for milk and that people must change over to dry cattle.

This Budget will increase the cost of living. The day is gone when one can judge the cost of living by the price of things necessary to keep body and soul together. Will not the increase in the price of petrol increase the cost of living? Is there not a tax on such things as radios and television sets? Can they be regarded as luxuries in 1969? Of course, not.

Scooters and mopeds.

(Cavan): There is increased taxation on scooters and mopeds which are necessary to bring people to work as a means of transport. Both the transport and the fuel necessary for it is being taxed. Surely that will put up the cost of living and will mean that the net value of the pay-packet will be reduced

The Parliamentary Secretary to the Minister for Posts and Telegraphs reminded me that the Government have been in office for 12 years. In that time they have driven up the cost of living by one means or another. Immediately they came back to power they removed the food subsidies at a cost of £9 million and they imposed direct taxation on food and the necessaries of life on several occasions since.

Income tax has become an unjust and immoral tax since the PAYE system was introduced. The personal allowance has stood at about £300 for years and people earning £6 to £10 a week must pay substantial income tax. In this Budget an alleged relief is being given by an addition to the personal allowance of £15. That is grossly inadequate. The lower income groups should be exempt from income tax up to a reasonable figure and certainly £6 a week is not a reasonable figure. The PAYE system, with the very low personal allowance, is not doing the country any service. It is impossible to get men to work overtime when overtime is necessary because they say that if they do they are not paid for it as the inspector of taxes invades their pay packets and the extra work is not worthwhile. Income tax in days gone by when some people paid and some people did not was one thing but under the present system whereby the last penny is extracted from the lower income groups, it is unfair and unjust. I call on the Government to increase substantially the personal allowance.

I have dealt briefly already with health charges. The Minister for Finance, in his Financial Statement, says that no part of the cost of the new health services or further extensions of existing health services should fall on the rates. Where is the justification for that? Does the Minister for Finance who made that statement in the Dáil on the 7th of this month forget that we are discussing at the moment a Health Bill which consolidates the health charges on the rates as they are at the present time at 50 per cent? If the intention is that no further increases for health charges should fall on the rates why do the Government not write that into the Health Bill which we are dealing with at the present time?

This is supposed to be regarded as a social welfare Budget. I say there is nothing in this Budget in the line of social welfare that is not due and overdue. Before the Taoiseach came into the House I pointed out that on 16th January last the Fine Gael Party published its policy on social welfare, made it clear what its intentions are, made it clear that the present rate of old age pension at £3 5s a week is totally inadequate and should be increased to £5 a week and that the pension should be payable at 67 years of age as an instalment towards reducing the qualifying age to 65. How did the Taoiseach receive that suggestion? The Minister for Social Welfare, here, yesterday, said that there is more in this Budget for social welfare than Fine Gael had promised in five years. If that is so, let us throw our mind back and ask ourselves how did the Taoiseach and his Government receive the Fine Gael proposals? The Taoiseach said they were pie in the sky.

They still are.

(Cavan): By that, the Taoiseach meant to indicate that they were something that no Government could give. Yet, the Minister for Social Welfare says that he is giving more. Whom are the people to believe? I do not believe that it is pie in the sky, as the Taoiseach says, to offer the old age pension at 65 years of age in the year 1969. When the social welfare code was introduced in this country in 1908 or 1909 the qualifying age was 70 and it is still 70 notwithstanding the fact that the whole standard of living has changed, that we have a five-day week, that people have to retire from Government positions and local government positions at 65. Notwithstanding that, the qualifying age for the old age pension is still 70. Of course, ministerial salaries have jumped several times and the whole standard of living and the whole approach to life have changed. Yet, the Taoiseach says it is pie in the sky to talk about old age pensions at 65 years of age.

There is a provision in the Budget for the payment of a birth grant of £100 in the case of triplets and £150 in the case of quads. How farfetched can the Minister for Finance and the Taoiseach be?

That has happened.

(Cavan): Would the Taoiseach like to tell us how many cases of quads were there in the last 12 months or the preceding 12 months and, indeed, how many cases of triplets occurred?

I am all in favour of doing something for children and looking after the weaker sections of the community but I would think that instead of writing into his Financial Statement that he would give £100 for triplets and £150 for quads the Minister for Finance would have been doing a far better job if he had said that the Government intended within the next 12 months to clear up the position regarding mentally retarded children which is a crying scandal in this country. We are told in the Budget that we are educating practically ¾ million children. They are ¾ million healthy children. Why is the waiting list of up to five years in the case of mentally retarded children not abolished and why are there not proper homes provided for mentally retarded children now—immediately? There is not a word about that in the Budget.

The Minister for Finance stated that £48 million has been lopped off the Estimates in this Budget, that he himself and the other Ministers have got to work and have cut back to the extent of £48 million. I should like to know what did they attack, where did they effect this saving of £48 million because we have not been told. Did they cut back on regional water schemes that Deputy Treacy spoke about here yesterday evening? Regional water schemes were introduced here a few years ago and people were led to believe that there would be piped water provided in all rural areas but that scheme never got off the ground. In my own constituency there is not one regional water scheme in operation yet. The documents and the proposals are moving up from Cavan to the Department of Local Government, being sent back for alteration, revised plans are being asked for. This sort of nonsense is going on but not one regional water scheme has even commenced in County Cavan. I wonder is this where some of the £48 million was saved?

We are talking about rates. It is admitted that the system of financing local services out of rates is unjust and unfair. The Minister for Health, some time ago, said in this House that the money would have to be found somewhere. Of course, it will have to be found somewhere. He went on to say that the only advantage in shifting the health charges from the rates to the national Exchequer was that the latter was a fairer system of raising money. Surely, that is an unanswerable argument in favour of it? The Govvernment have been tinkering with this question of rates for years and doing nothing about it.

Now there is something in the Budget for pensioners. They are to have parity with those who retired in 1964. I ask the Taoiseach if that is fair? Are these pensioners who retired before 1964 expected to live on until there is another general election, if the Government are returned to power, in the hope that they will still then get another increase? How many increases have there been in salaries since 1964? It is unfair that those people who retired before 1964 are only now being brought up to the 1964 level which is five years out of date and, apparently, they are expected to be very thankful for it.

If we were to discuss all the things that should be discussed under this Budget, we should be here for a long time. I understand that the Third Programme for Economic Expansion is in order for discussion under this debate. I do not intend to deal with the programme in detail but representing as I do a rural constituency, I am alarmed with the forecast that yet another 36,000 people are to leave the land between now and 1972. It is stated in the programme that these 36,000 are to be absorbed in industries in rural Ireland. I hope they will. It is also stated that 40,000 of them are to be absorbed in new industries. I hope that is so but I am doubtful that this will happen if this Government are allowed remain in office and if they do not exercise more discretion over the type of industry which they sponsor.

I put down a Parliamentary question to the Minister for Industry and Commerce asking him to tell the House the total amount of grants actually paid to Messrs Potez Ltd; the maximum employment estimated by the company when these grants were applied for; and the present employment in the company. In the reply which I got on the 20th March, 1969, no answer was given to the part of the question asking about grants and loans. The Minister stated that he had already dealt with that but it is well known that between guarantees, grants and loans to Messrs Potez Ltd., this company has benefited to the extent of about £3 million.

In reply to the second part of the question the Minister for Industry and Commerce stated:

The maximum employment envisaged in the applications for grants in respect of these two companies was 700 in the case of the Galway factory and 1,700 at Baldonnel.

The Minister went on to tell me that:

The factory at Baldonnel has been closed since August last when a liquidator was appointed. The factory at Galway is still in the hands of a receiver and I understand that the number of workers now employed is 18.

Is it any wonder that I am rather doubtful about the proposal to absorb 36,000 people who are to be driven out of agriculture in new industries when I am told by the Minister for Industry and Commerce that an undertaking which benefited to the extent of £3 million from State funds and which promised to employ 2,400 people has now years after it has got the money, employed not 2,400 but 18 people?

If the Deputy had his way there would be another thousand short by the closing down of Verolme Cork Dockyard.

(Cavan): The Taoiseach's colleague, Deputy Martin Corry, used to talk a lot about that but for one reason or another we have heard nothing from Deputy Corry about Verolme Dockyard and neither have we heard from him any reference to me. Perhaps, the Taoiseach had better keep quiet, too, or I might say something that would not be good for him.

This is an old Fine Gael tactic. Out with whatever you have to say, if you have anything to say. I challenge the Deputy to say whatever he has to say.

(Cavan): I shall deal with it in my own way.

The Deputy should say it here. I will be speaking next and I will answer it then. I will not be a bit embarrassed. I am used to being attacked.

(Cavan): I will put the document in the Taoiseach's hands. He knows all about it.

What document? Name the document you are speaking about?

(Cavan): I am dealing with Potez industries at the moment and the Taoiseach wants to get me away from it.

It is not the first time that the Deputy ran away. I wish to take him up on this charge.

(Cavan): The Taoiseach is only trying to get me away from Potez. I should like the Taoiseach to deal with the statement made by the Minister for Finance on the 18th March when he appeared on television to tell us in his forecast about the Budget that to frame a Budget to meet this situation would clearly be a formidable task. The Minister said that there would have to be increases in taxation with small, if any, increases in benefits for those who would normally be expecting them.

To meet what situation? The Deputy should be accurate.

(Cavan): That statement was followed by an announcement by the Taoiseach to the effect that he proposed to reduce his own and ministerial salaries to meet the situation which was described by the Minister for Finance as a serious financial crisis and which was confirmed by the Minister for Industry and Commerce a few days afterwards.

They fixed the computer after that.

(Cavan): I want the Taoiseach to explain the change in attitude in regard to the statement of the 18th March and the statement contained in the Budget the other day that 1968 was the best year in our economic history and, further, I want him to explain the change in his own attitude between March and now. In March he announced a reduction in ministerial salaries and said it was necessary. He applauded Deputy Cosgrave's suggestion that Parliamentary salaries should be reduced.

That was in March. Within the last week he has come into the House and opposed a Bill introduced by Deputy Cosgrave to reduce Parliamentary salaries, in accordance with the Taoiseach's own wishes and desire in March last. What is the change? Was he being honest with the people in March? Was the Minister for Finance being honest with the people or are the Government being honest now? Finally, I want to pose this question. If the Taoiseach gets back into power will we have another Budget? The House should get an unqualified guarantee if he is returned to power there will not be a repetition of 1966 when we had a Budget introduced before the Presidential election and another one afterwards. Will he give the House a guarantee there will not be a repetition of 1968 when we had the Budget introduced before the referendum and another Budget introduced after it?

Those are the questions I am asking the Taoiseach. Those are the questions which the people and the country want to know the answers to. I think the people are entitled to answers to those questions before passing judgment on the Budget. They are entitled to have regard to the recent Budget-making history of the Fianna Fáil Party in 1966 and 1968. They are entitled to ask if they are going to have a repetition of that. When the people get that information they will be in a better position to pass judgment on the Taoiseach.

The suggestions or allegations, or whatever they were, just made by Deputy Fitzpatrick are typical of what we have been having in this House for years past from those Benches — allegations unsupportable and unsupported. However, I am going to pass from that. I will not embarrass the Deputy any further.

(Cavan): I do not intend to interrupt the Taoiseach. I have a letter and I will pass it on to the Taoiseach.

I challenged the Deputy to produce the letter or to recite what is in it and he has failed to do so. If he has a letter I will deal with it in good time. I hope the Deputy does not deal with it as he did in Cavan through a pamphlet when he tried to denounce the employment given at Verolme Dockyard.

We regard the Budget as well suited to the state of the economy at the present time and as well designed to encourage a high rate of growth in employment, a high rate of investment in national production. The prospect of continued progress at a good and satisfactory rate involves no excessive risks on the balance of payments provided the pace of the increase in money incomes and in bank credit is not as fast as it was in 1968. All in all, as I said in my broadcast last Saturday, the Government are taking a progressive and confident line favouring economic expansion and social equity through the medium of this Budget. We are relying on the good sense and co-operation of the public not to act in any way which would spoil the country's prospects, by making our products less competitive or by running us into balance of payments difficulties.

Those are, I think, two of the main fundamental matters we have to face up to whether in the Budget or in the ordinary course of administration. On the social side, the Budget carries forward to a marked extent the Government's policy of looking after the less fortunate members of our community. The net increases in taxation it imposes, all of which are on less essential expenditure, go almost entirely to help the larger families, the old, the widowed and those dependent on social welfare payments generally. The children's allowance scheme, for example, which was introduced by Fianna Fáil in the first instance, has been improved substantially so as to give a significant increase to the second and later children of all but the best off families.

The old age pensioners and other recipients of social welfare benefits are getting an extra 10/- a week and, I might remind the Opposition, not for the first time. However, I will refer to that again later. Public service pensioners are again brought closer to present day standards and for the first time provision is being made for the widows of public servants who died in office before the contributory pension scheme was effective. The tax increases, therefore, are a means of redistributing part of the substantially increased incomes of those in a position to negotiate and receive them in the interests of social equity. As a community, I feel, we will recognise the justice of this and that we will neither resent nor react against the means by which it must be accomplished. We surely want to have a society in which fair play dominates. Indeed, as a Government, we were gratified at the reaction of the public generally to the taxes that were imposed in order to make available the substantial benefits that are provided for in the Budget.

On the economic side, the Government's policy is to maintain a high rate of growth. A steady upward trend in production mainly for sale abroad is the condition of all progress, social as well as economical. I think we can look forward to 1969 as being a year of significant advance, a year in which we will add four and a half per cent of new output and wealth to the ten per cent gain that we have enjoyed in the last two years provided we manage our affairs well, provided we keep on working together and provided also we accept the disciplines necessary to any reasonable progress.

As in all growing economies there are risks associated with growth and development, particularly the risk of claims and expectations running ahead of resources but those risks, which can be summed up as those of inflation, if faced up to and contained, are much less frightening than the consequences of stagnation. Goodness knows we have plenty of cause to know what stagnation meant during the Coalition years.

We have entered 1969 with a strong impulse of growth behind us but also, it must be admitted, with some inflationary dangers to contend with. The gross national product rose about five and a half per cent in 1968 and employment in services and industry increased by some 11,000. Incomes generally rose by about five and a half per cent in real terms after allowing for the increase in the cost of living. In Ireland more than elsewhere sustained growth must have for its basis an increase in exports of goods and of services.

It is, therefore, particularly encouraging that the growth in output in 1968 was largely due to a substantial rise in the volume of sales abroad.

In part, however, the growth in output was generated by an expansion of domestic demand which was inflationary in the sense that money incomes grew much faster than output and which, besides causing price increases of five per cent, caused the balance of payments position to worsen by £35 million. It was always evident that the inflationary implications of excessive increases in domestic demand in 1968 were unlikely to be confined to that year if only because further high rates of increase in incomes were contracted for 1969 as well and the full effects on expenditure of increases in incomes are not felt all at once. The prospect, therefore, had to be faced of the deficit on external account growing larger during 1969 and, perhaps, running beyond £50 million.

To help contain this excessive deficit, it was necessary to reduce the expansionary impact of Government borrowing. Special efforts were made this year to curb the rise in current expenditure and so eliminate the deficit in the current Budget. Public capital expenditure was sheltered as far as possible from this campaign because of the vital importance it has in laying foundations for future development. The reductions in current expansion to which I have referred amounted to £25 million in all. Nevertheless, the current bill without any improvements or increases in benefits represented £41 million over and above last year's figure. This was met— and it was a substantial sum to meet— without any extra taxation. I might say that three-quarters of this £41 million extra current expenditure was made up of increases in agriculture and in social services.

The Government's aim is to move gradually in a way which will not disrupt economic activity and progress towards a more manageable balance of payments position. I want to make it absolutely clear that the choice is between, on the one hand, maintenance of growth through a planned and a phased return to a more manageable state of the external account and, on the other hand, a setback to national production and employment should persistent inflation force us to take corrective measures again. Happily, we have adequate external monetary reserves to sustain us through a process of readjustment without recession or stagnation. The purpose of external reserves is to permit occasional overall deficits in the interests of greater stability and growth but we cannot afford to forget that the reserves are not such as to permit, with impunity, a long succession of overall deficits.

In the first quarter of 1969 domestic demand continued to expand rapidly having significant effects on both prices and external trade. The increase in consumer prices was substantial even when allowance is made for the addition to the wholesale tax, while the rise in merchandise imports was roughly twice that in exports, so that there was an increase of more than £12 million in our imports excess. This development suggests that the tendency may be towards a deficit in 1969 even greater than we had originally anticipated. It may be argued that the worsening in the balance of trade in the first quarter of this year can be attributed in part, at least, to the effects of the maintenance strike. The situation will have to be watched and the maintenance strike is by no means the whole story. At present, therefore, the outlook for external trade and payments continues to be the main cause for concern. Provided, however, no further inflationary elements are introduced into the situation the probability is that the adverse trend may be reversed adequately, and in time. In the formulation of budgetary policy great pains were taken to avoid measures which would have an inflationary effect, either directly or indirectly, and in this respect I suggest that the Budget has been highly successful.

It will be the task of the Government, however, to ensure that, so far as the forces of competition fail to do so, avoidable increases in prices do not take place. Nonetheless, the prospect of a balance of payments deficit of the order of £50 million—the second highest on record—cannot be viewed with equanimity. Indeed, we must now be working for a substantial reduction in that deficit, and with all reasonable speed. The principal danger of a worsening of the situation is the possibility of an excessive increase in money incomes. These include not only wages and salaries but also profits and professional earnings. A slowing-down of the recent rate of increase is absolutely vital. So far as the immediate future is concerned the problem of keeping aggregate increases in incomes within the limits which the economy can afford concerns primarily wages and salaries, not only because they constitute the largest proportion of incomes but because they directly affect export competitiveness.

I want to advert particularly to developments in this sphere. Even if there were no general increase in rates of remuneration, employee incomes would record a big increase in 1969 as a result of growth in employment, wage drift and the "carry-over" from 1968, where the rise in wage and salary rates did not apply for the whole of that year. To this must be added the 1969 increases provided for in existing agreements. In such a situation it is very encouraging to note the recent statement of the general secretary of the Irish Transport and General Workers' Union to the effect that, in the case of existing agreements, no revisions will be sought until they have run their course. This is a most understanding and responsible attitude.

The next problem will be to try to set new agreements, as they arise, on the course which the national interest requires. I cannot emphasise too strongly that not only are the terms of settlement of the maintenance strike irrelevant as an indication of the increases in incomes which the economy can afford, but so too are annual rates of increases which have lately become the standard. The issue which we are facing has been stated before in this very simple, but inescapable, piece of arithmetic. If our rate of growth is 4 per cent and prices abroad are rising by say 2 per cent, we cannot have money incomes rising by more than 6 per cent without danger to the competitiveness of our products. Even 6 per cent gives too high an indication of the sustainable rate of increase for purposes of negotiations, because it does not allow for any increase in the volume of employment, or for the inevitable wage drift which is built into modern economic systems such as ours. Without going into further arithmetic in detail, it must be obvious that the sustainable rate of increase which should guide future wage negotiations is close to the attainable real rate of economic growth. It is high time that the community faced up honestly to the task of providing greater opportunities for employment, recognising that these depend ultimately on a reasonable rate of increase in individual money incomes. I do not pretend that it will ever be easy to arrange our economic affairs in accordance with this arithmetic but I can see no escape from the need for trying, from the need for seeking the understanding and the co-operation of all in so arranging them.

We can take the risk of permitting a rise in the deficit on external account this year only if we believe that we shall manage from now on to bring the increase in money incomes more closely into line with real growth. I do not think any real sacrifice is involved in this. Workers will benefit just as much in their standards of living from an annual 5 per cent increase in money incomes related to a 5 per cent growth in national production and no rise in prices, as would arise from a greater increase which is cut down by an inevitable rise in prices.

At this point, perhaps, I could deal with what Deputy Fitzpatrick and other Deputies have said about the speech made by the Minister for Finance on radio and television about the middle of last month. When he spoke on these media he did so with the object of warning the people of the gravity of the situation which was likely to develop if the settlement in the maintenance craftsmen's dispute were to set a headline for pay increases in the economy generally in this current year. If the craftsmen's settlement were to be followed by similar claims on a nationwide basis it would price us out of the home and export markets and result in serious inflation at home.

The Minister spoke then, not of an existing crisis, but of a possible one in the light of that situation. Even before the craftsmen's dispute there was evidence of inflation, growing expenditure and bank credit. Imports were growing faster and exports were growing more slowly than last year. Therefore, there was a prospect of a widening of the trade gap but this, of itself, did not amount to a crisis calling for drastic budgetary action as was taken in the supplementary Budget of last November. In the weeks following the craftsmen's dispute the Government had consultations with the leaders of the trade union movement and employers' representatives on the situation.

There have been welcome signs that our warnings given then are likely to be heeded and that we can proceed cautiously towards improving the relative position of lower paid workers provided the better off classes, including the better paid employees, are prepared to accept income increases within the growth of national production. The talks which have been held with the trade union movement reinforced our belief that the Budget could play an important part in implementing this policy. We, therefore, drastically pruned current expenditure and had to, as a result, postpone many desirable schemes that could have been put under way this year. In this way we hope to avoid those inflationary pressures to which I have referred and as a result we were able to devote the new taxes to helping the less well off sections of the community.

This is the philosophy behind the Budget and I want to say that it is an honest Budget, carefully planned having regard to current and expected income and that——

And a general election.

——there is no intention of introducing a supplementary Budget.

We heard that before.

If I did not say it, I would be accused of not saying it.

You would. Well prepared for a general election.

I am not finished at all about the election yet. We will have a few words about the election in a minute.

About time.

The Taoiseach is welcome at any time.

You will not learn too much either. However——

The sooner the better.

Let me go back to the balance of payments. This is a serious matter that I want to put on record and I will not indulge in any polemics or histrionics about it. To obtain a significant reduction in the balance of payments deficit in 1970 and thereafter it is not sufficient merely to avoid adding to the inflationary pressures which are present in 1969. There must be a substantial lessening of these pressures. To this end it is essential not only that reason should prevail in wage negotiations in 1969 but that it should also prevail in 1970 and, indeed, subsequently. I believe that the economy can withstand the inflationary impact of the already contracted wage and salary increases in 1969 without the introduction of corrective measures. The foundations for further economic advance will, however, be undermined unless it is clearly recognised that the new wage and salary agreements must be divorced from the rates of increase which have obtained in recent years and must be kept close to the real rate of national growth. This demands a great change in present attitudes. A recent report of the NIEC notes that, and I quote:

"...the existing income structures and practices and the working of demand and supply which is reflected, for example, in wage and salary drift at firm and industry level, seem such as virtually to ensure that total money incomes keep on rising at much the same rate as national production...".

Yet, despite that statement from the combined representatives of employers, workers and the Government, we have in the past become accustomed to adding to increases of this nature further increases derived from key settlements which tend to become generalised as other employees strive to maintain existing differentials. The result of all this is that increases in money incomes have become increasingly unrelated to the overall rise in productivity. This the community must learn to change if sustained advances are to be made in the field of output and employment. It is essential that there be a constant awareness of and adherence to the basic relationship between money incomes and real growth. Indeed, to impress this need on the public consciousness is a fundamental element in any incomes policy.

For an incomes policy to be successful the reasoning that underlies it must be generally understood and accepted. Taking the average increase in productivity in the economy as the standard merely recognises the fact that the growth of productivity in any occupation is, to an important extent, a function of growth in the economy as a whole and that today the interdependence of different groups of workers is such that an increase in output per head by any group cannot be attributed solely to its own efforts. In part it will normally be due to the provision of improved or expanded services by the remainder of the community and to that extent the rest of the community is entitled to share in the growth of output. Furthermore, even if the nature or magnitude of the community's contribution is not always evident, from the point of view of equity it is desirable that there should be some apportionment of the benefits arising from an increase in output in a particular sector. The position of particular groups of workers in the economy is to an important extent due to such fortunate factors as education, training and other environmental influences. While steps are being taken to ensure that, in the long run, these benefits will be equally available to all, in the meantime it would be unjust if they were to give rise to greater differentials between occupations than are needed to promote the efficient working of the economy. Such considerations of equity lie behind the preferential proposals in favour of the lower-paid workers in the public service which the Government have made this year. They also, of course, have a wider application.

It is a national aim to reduce emigration rapidly and comprehensively. It would be difficult to over-emphasise the obligation which this imposes on those who are already in employment. There can be no significant improvement in employment or emigration unless those employed are willing to limit demands for increased money incomes so as to ensure a firm basis for a steady growth in output in the only way open to us, namely, by improving the cost competitiveness of industry, and expanding our exports of goods and services. As I have already stressed, this need involve no real sacrifice for those already in employment. Even if some slight sacrifice were involved, I feel sure that most of the workers would feel it eminently worthwhile if it were seen, as it should be seen, as a means of hastening the day of full employment and negligible emigration.

The difficulties facing the economy in 1969 are difficulties associated with dynamism and growth. They are not peculiar to Ireland. They are, to a considerable extent, self-induced and capable of being remedied by our own good sense and responsible behaviour. In framing the Budget this year it was assumed—and this was the only assumption that would justify running a large balance of payments deficit— that a substantial degree of restraint would be exercised regarding wage and salary claims during the remainder of 1969.

I want to come now to a few other matters which were raised in the course of the debate. Before doing so, I should like to put on record the kind of improvements which the economy and the country generally have been enjoying over the past decade. It is worthwhile recording—and Deputy L'Estrange may see fit to put some of these facts in his archives in Hume Street——

The first shots in the election. I should like to hear them.

——for recounting from that seat after the election——

No. The Taoiseach will be taunting from here.

——and the first is the gross national product. In November, 1958, the First Programme for Economic Expansion was introduced and, over the ten-year period, covered by the programmes to date, 1959 to 1968, inclusive, there was an overall increase of 45 per cent in the volume of national production, or an annual average increase of nearly 4 per cent. Compare that with the increase which was enjoyed, if that is the word, during the unfortunate Coalition years. In 1968, a record 5½ per cent in the volume of national production was achieved. The rate of economic advance in 1969 should be about 4½ per cent, assuming production is not disrupted by further prolonged labour disputes and that prices and costs are not raised by the breaching of existing wage and salary agreements.

On the national income side, this has risen by 112 per cent in the period 1957 to 1968, the average annual growth rate being seven per cent. The national income per head amounted to £343 in 1968, and it was £163 in 1957. National income per person at work was £937 in 1968 compared with £434 in 1957. The extent to which people can improve their savings is a good indication of the soundness of the economy and the wellbeing of the people generally. Taking the same period, total savings as a percentage of gross national production increased from 8.8 per cent in 1957 to 12.4 per cent in 1968. The figure of 12.4 per cent, which is the highest yet achieved, confirms the strong upward trend in the savings ratio which has become manifest in recent years.

Another indicator is fixed investment as a percentage of gross national product. Between 1957 and 1968, this rose from 13.8 per cent to 20.2 per cent. With the exception of two years, 1966 and 1967, fixed investment as a percentage of the gross national product rose continuously throughout the 1960s. The investment ratio of 20.2 per cent registered in 1968 was the highest ever recorded. It is expected that this performance will be excelled in 1969 when the ratio is expected to be close to 22 per cent.

Hear, hear.

I will have more good news.


Industrial production is another indicator of the economy's progress generally. Between 1957 and 1968 the volume of production in the manufacturing industries and the transportable goods industries more than doubled. For the manufacturing industries the increase was over 105 per cent and for the transportable goods industries 110 per cent, the average annual rate for both groups being respectively 6¾ per cent and 7 per cent. In 1968 the volume of output of the manufacturing industries rose by almost 11 per cent and for the transportable goods industries by 11½ per cent. These are the highest rates ever achieved since the post-war years of 1945 to 1950 when the economy was, of course, recovering from the stagnation of the effects of the war.

I now come to weekly earnings. In the same period, 1957 to 1968, nominal weekly earnings in the transportable goods industries rose by 7 per cent a year on average and, at the same time, the consumer price index went up on average by 3½ per cent per year. Thus, the real wages of the workers in the industries concerned are found to have risen by 3½ per cent per annum on average. Over the whole period the real wages of the workers in question increased by 45 per cent.

Agricultural production also increased. For various reasons agricultural production has not been very buoyant up to now, but in 1968 the volume increase was almost 6 per cent following an increase of 2 per cent in 1967. Cattle stocks, in which I am sure Deputy L'Estrange is interested——

I remember the time when you were cutting their throats from ear to ear. "The British market has gone, and gone forever, thanks be to God". John Bull.

Deputy L'Estrange should allow the Taoiseach to make his statement.

You are selling Irish butter in Britain for 2s 6d.

If Deputy L'Estrange will get his pencil and paper he will get more facts for his files.

Tell us about the number at work.

Between 1967 and 1968 cattle numbers increased——

Thanks be to God.

——by 26 per cent——

And sheep are down by 25 per cent.

——up to 5.6 million. At the same time the number of milch cows and heifers in calf increased by 32 per cent, that is, up to 1.79 million.

Tell us about sheep.

Deputy L'Estrange should allow the Taoiseach to make his statement.

Sheep are down by one million and he will not tell us anything about that.

The Deputy is not a sheep. He is only a goat.


Taking the number of heifers in calf separately, we find that their numbers have increased by 58 per cent in the period from 1957. This marked increase in number in the 11 year period is due mainly I think—I will not say I think—I am confident——

To Deputy Dillon's 1948 Trade Agreement.

——to the incentive schemes introduced in recent years with the objective of increasing cattle stocks. It has nothing whatever to do with Deputy James Dillon.

It has everything to do with him.


Would Deputies allow the Taoiseach to make a statement?

He is not telling us sheep numbers are down by one million. We were told we could do without England and the rest of the world. Fianna Fáil did not agree about exports then. They have been converted.

The Taoiseach should be allowed to make his statement without interruption.

He is inviting them.

The Deputy should restrain himself.

I am inviting the Deputy to listen. He does not want to listen or to note because he does not like the facts he is hearing. Let us come to external trade. In 1968 the value of exports was over two and a half times the level of 1957. The rise of 153 per cent represents an annual average increase of nearly 9 per cent. The composition of exports has changed over the period, and I think changed for the better, in that we have moved away from over-dependence on agricultural exports.

In 1958, the first year in which the classification was used, agriculture, forestry, and fishing accounted for 64½ per cent of domestic exports. This proportion had fallen to 48½ per cent in 1968. The corresponding figures for industrial exports are 26 per cent and 46¼ per cent respectively; in other words, in that period the percentage of industrial exports rose from 26 per cent to 46¼ per cent of the total exports. Thus, industry last year came very close to outstripping agriculture as the main source of exports. This increase is largely due to the diversification of markets policy which the Government introduced. In 1957, for example, the United Kingdom took 77 per cent of Irish exports. By 1968 this proportion had fallen to below 70 per cent. Exports of goods and services for 1968 constituted 35¼ per cent of gross national product as against 29¼ per cent in 1957.

In regard to employment, nobody here denies that there has been a decline in the numbers engaged on the the land. To what extent those engaged in what might be described as gainful employment represent individual heads of families who left the land is not known nor is it capable of being known. We have, of course, the overall figure for production, but it is true that between April, 1957, and April, 1968, employment in agriculture, forestry and fishing declined by about 100,000 or something over 9,000 a year. In the same period employment in non-agricultural activity increased by 82,000 or by about 7,500 a year; consequently the total number at work decreased by 19,000 or approximately 1,700 a year over the period as a whole. I am giving the Deputies opposite a present of those figures because I have some good news to follow.

The Taoiseach did not tell us about the sheep population.

In the period April, 1961, to April, 1964, total employment advanced by 18,000 or by 6,000 a year, although minor setbacks were encountered in the period April, 1965, to April, 1967, as a result of the slowing down in economic activity at this time. However, between April, 1967, and April, 1968, the increase in employment in the non-agricultural sector exceeded by 2,000 the decrease in employment in the agricultural sector. The overall increase is likely to have been greater in 1968, so Deputy L'Estrange will be happy to know that the withdrawal from the land is more than being absorbed in industry.

Coming to perhaps one of the important indicators of what progress is being made, that is, unemployment, in 1957 unemployment, as measured by the percentage of insured persons on the Live Register, was at the very high level of over 9 per cent. In 1968 the corresponding figure was 6.7 per cent. One of the most important and significant factors of all is that between the bad year of 1957 and 1961, the population had declined by 16,000, on average, each year, and in the period since then it has shown a continuous increase totalling 92,000 people; the annual average rise in that period was 13,000. Therefore, that many people a year are adding to our population, which in April, 1968, stood at 2.9 million. That is the best indication of all of the maintenance of steady progress, the kind of progress the people are looking for and can confidently expect the Fianna Fáil Government to provide.

I said I would deal with some remarks made in the course of the debate. First, I should like to refer to remarks made by Deputy Dillon here yesterday, and not for the first time did he make contributions of this nature which I see as tending to undermine the confidence of our people in their own country and in their public representatives. During the course of the debate on the Supplementary Budget last year and during the time when we were floating a National Loan, Deputy Dillon made what I consider damaging statements in this House with whatever authority he assumed he had. I think they were made deliberately to damage the National Loan at that time.

In the course of that debate he also referred to statements or whisperings that he heard in the clubs around St. Stephen's Green about speculation in property by members of the Government. He said he was told these things by bankers, by solicitors and by auctioneers. I let him off lightly and simply said I had investigated the matter and found the allegations to be grossly untrue. But Deputy Dillon is surely not naïve enough, even if people were to believe the allegations, to expect them to believe that solicitors, bankers and auctioneers would disclose the business transactions of their customers. I challenged him to prove the allegations and they were not proved. I denied them categorically and that denial has been accepted.

In the course of the same debate he tried to undermine, for the first time as far as I can remember, the issue of a National Loan in this country. Yesterday he repeated charges of this nature and said that it would not be possible for us to float a National Loan in the coming autumn, that the insurance companies would refuse to contribute to it. I want to reject completely this prognostication by Deputy Dillon. It is not usual to announce the date of a National Loan until a week before the issue, that is when the terms, etc. have been agreed with the banks who act as the main underwriters. The National Loan is normally issued in the autumn and the terms are determined having regard to the market conditions at that time. I can assure the Deputy that it is with confidence that we face the issue of the next National Loan.

Deputy Dillon suggested, too, last week as well as this week, that we owed the Associated Banks money that we cannot afford to pay. I should like to deal with this allegation here and now. The amount due to the Associated Banks through Exchequer Bills at 31st March was £67 million. It has been normal practice for many years for the banks to contribute to the financing of the Government's capital programme. I think that is only right and proper because the banks are the main custodians of the nation's savings. The banks' contribution is, in the first instance, taken up by subscriptions to Exchequer Bills which are subsequently funded into short-term loans to suit the banks' own portfolio requirements. Last year the banks' subscription to the capital programme was £47 million. During the year £40 million in Bills due by 31st March were funded into two short-term loans. Discussions are at present proceeding with the banks as to the form which their contribution to this year's capital programme will take and as to the type of loans into which this year's Exchequer Bills will be funded.

Is not that exactly what I said?

That is normal practice, but the Deputy tried to suggest it was something nefarious and something that ought not to be done. There was never any question of repayment of these Bills. The banks have accepted they must play their part in procuring the finances necessary for the capital requirements of the State.

I shall not interrupt the Taoiseach, because he is entitled to that courtesy, but I am not assenting to his propositions.

Pending the funding of Exchequer Bills the Central Bank is prepared to rediscount these Bills to the extent the banks may need.

Coming now to the Electricity Supply Board loan, the Deputy suggested that the Electricity Supply Board raised money and that this Government, for its own purposes, took the money or, at least, used the Electricity Supply Board money.

They planned to do it.

The Deputy suggested this was something new and something which never happened before. He suggested that, because of our financial position, we had to do it. That was the implication. That was what I understood from the Deputy's remarks. But the Deputy must know that this is a regular feature of Government financing and has been for many years. Is there anything wrong in that? Did not the Deputy suggest there was something wrong in it, something unbecoming of a Government?

The Electricity Supply Board have for many years raised part of the income required to finance their own capital programme by a public stock issue. They normally raise this money in the Spring. This year, because of the unsettled state of the fixed interest markets, they did not make a Spring issue, but preliminary inquiries as to the possibility of making such an issue were made in April. It was clear then that, because of the international monetary crisis, the prospects of a successful issue were not good and the Board decided not to proceed with their proposal even though the Associated Banks had agreed to underwrite it.


If the Electricity Supply Board had made an issue at that time they would not have required the money raised until later in the year, until the Autumn, and, in the meantime, they would have lent it to the Exchequer, as is the practice and as has been the normal practice with public loans since as far back as 1957. This practice is not intended to facilitate the Exchequer as much as to facilitate the Board by providing the Board with a suitable investment medium for funds that are not immediately required.

Do I hear the Fianna Fáil Benches shouting?


Hear, hear.

That was a little overdue.

I want to put on record the practice in this respect in order to indicate clearly that it has not got the undertones or the implications Deputy Dillon tried to suggest it had. I do not know what Deputy Dillon meant by this exercise at trying to undermine confidence in our finances. It may have been his legacy to the Fine Gael Party, but it is a legacy which will not pay any dividends.


Hear, hear.

We have been accused of bringing in an election Budget. If it is an election Budget it is because it is a Budget in an election year.

Now we know the election will be held this year anyhow.

It could be the financial year.

The Taoiseach did not qualify it.

I am talking in fiscal terms and the Budget usually covers the financial year.

In other words, the Taoiseach will be as vague as ever.

The Budget has been described as an election Budget, no doubt because it does good for a great number of our people and, as well as that, because it is intended to provide, and provide adequately, for the needs of our time, for the expansion of our economy. It was described as an election Budget by the Opposition because we made available substantial social welfare benefits, the most significant of which was the 10/-increase in old age pensions and other welfare benefits. Deputies opposite will recall that in 1965, just after the General Election of that year, similar increases were provided and similar taxation was imposed. We were far from an election then, but we made these benefits available because we found the economy had been so well managed and the finances were so sound we could afford to pay these benefits and we continued to pay increased social welfare benefits in all the years since 1957, the year in which we resumed government.

1965 was the year in which there had to be a second Budget.

That year cannot be described as an election year. Every year we had what Deputies opposite would like to described as an election Budget. Let me deal with the sequence of events though, perhaps, I should not take up all the time——

The Taoiseach is very welcome to all the time he wants.

That is very kind of the Deputy.

The Deputy is kind of good natured in his old age.

Come to the dissolution of the 17th Dáil in March, 1965. In May of that year we presented the Budget to which I have just referred. This Budget gave generous increases to recipients of social welfare benefits. A sum of £3.2 million was made available for that purpose and a further £.8 million was given by way of assistance to agriculture and to public service pensioners. We had to raise additional taxation of about £5½ million, again from the usual sources, but that Budget was generally welcomed as making a positive contribution to improving the lot of the less well off members of the community. Despite the additional taxation a deficit of £7.8 million emerged on current account for the year. The situation demanded corrective action and this was taken in the Budget of March, 1966. Taxation estimated to yield £12½ million was imposed, and that at a time when the Presidential Election was pending, an indication again that we are not afraid to impose taxation when it is necessary to do so. Later, after the Presidential Election, we found there were unforeseen expenses arising mainly in order to provide extra money for farmers' incomes, to the order of almost £2½ million, and we were not afraid to bring in a Supplementary Budget. The April 1968 Budget was recognised by impartial commentators at the time as a reasonably good and responsible instrument.

The Taoiseach missed a few of the mini-Budgets there.

I am coming now to the one in the Autumn of last year. That was introduced because of the conditions at the time, because of the increased cost of subsidy for farmers' milk and because of the considerable increases in the salaries of public servants during the year.

The Government knew about those before the referendum.

We did not.

They certainly did.

It is obvious that, in criticising this Budget and describing it as an election Budget, Deputies opposite are hopping mad because we have been able so to manage our affairs as to produce a Budget so well suited to the needs of the Irish nation——


Hear, hear.

——that we have, in the past ten years, been able so to manage our affairs that we have been able to override economic interruptions and depressions that were common to every country in Europe practically and from which many countries in Europe still suffer and have not been able to recover. We have been able to recover successfully from these depressions.

Connacht will never recover from these depressions.

Fianna Fáil Governments are used to facing challenges of this nature. We are used to standing up to crises and to meeting situations with the confidence and the conviction that the people trust us to do their business, a confidence born of the cohesion and unity of purpose that have always characterised Fianna Fáil Governments and the Fianna Fáil Party—a unity of purpose that it is impossible for any of the Parties opposite, either individually or combined, to achieve. Let me talk about this cohesion for a moment.

Whom is the Taoiseach codding?

Attempts have been made, in recent years in particular, to separate this Party, to divide this Party in one way or another. I first saw evidence of it the second time I was returned to this House and when a Fianna Fáil Government was in office. Deputy Dillon, speaking from the Opposition benches, was asking a supplementary question at Question Time. The front bench here was full with only one Minister absent who usually occupied the centre seat: he was in the Seanad. Deputy Dillon pointed his finger across viciously and said: "Look, there is a rift down the middle": he tried to create that rift before and since.

It was a good interjection, was it not?

Fair enough. Deputies opposite have vainly been trying to disrupt this cohesion to which I have referred and that is especially so in recent years. First of all, they tried to undermine our confidence, tried to isolate individual Ministers. About four years ago, not only was the personal integrity of the then Minister for Agriculture and Fisheries assailed but he was accused of being autocratic and stubborn in relation to farmers' problems. Deputy Haughey outrode magnificently these allegations.


Hear, hear.

Then it came to the Minister for Industry and Commerce who was accused of gathering around him a power-hungry clique within this Party. That not having washed, this other attempt at dividing and conquering not having succeeded, that little interlude disappeared. Latterly, it has been the present Minister for Agriculture and Fisheries who is accused of flouting Government authority in relation to his dealings with farmers and who is accused also of having a power complex. I want to assure Deputies opposite that Deputy Neil Blaney as Minister for Agriculture and Fisheries does exactly what he agrees with his colleagues in the Cabinet to do and there is no division whatever between us as to his policies or statements——


Hear, hear.

What about his speeches on Partition?

More recently—I was going to say this during the course of this debate irrespective of recent articles submitted by the political correspondent and the sub-leader writers in the Irish Independent—the attacks have been directed against Deputy Kevin Boland, who was elected Minister for Local Government by this House, because he saw fit to carry out his duty as this House ordered him to do. Because he performed the functions required of him under the Managerial Acts—which were first introduced by a Cumann na nGaedheal Government in the 1920s—now he is being accused of being autocratic, dictatorial, and God knows what else, by representatives of the Party opposite—why?— because he did his duty which the members of the Opposition obliged him to do by legislation which they put through this House and, of course, which they did themselves. I want to assure the Deputies opposite that the attacks of puny politicians, motivated by whatever desires they have themselves, will roll off this rock of integrity and dedication that Deputy Kevin Boland is.


Hear, hear.

Did Deputy Booth agree with the statements of the Minister for Agriculture and Fisheries on Partition?

Will Deputy L'Estrange please allow the Taoiseach to make his statement without interruption?

They are not unanimous. The Taoiseach had to reprimand him for his speech on Partition.

The Minister for Local Government does not need any help from me to defend him in this respect. I want to say publicly that he has the full support of this Party behind him on the action he has taken in relation to Dublin Corporation and on whatever action it will fall to his duty to take in the weeks to come. If members of Dublin Corporation, who decide to provide services, refuse to vote the moneys to pay for these services then it is they who should be accused of irresponsibility——

Tell us about Lemass now.

This all deals with the question of rates, so far as the Minister for Local Government is concerned. We recognise that there are inequities under the present rates system. There is a series of reports from an inter-Departmental committee which was specially set up to examine the rates position. We have acted on some of the recommendations in the three interim reports already to hand. There is another report which is not yet to hand and which will be examined in conjunction with the others.

I want to ask the House to understand that it will be no easy task to shift the burden of local taxation on to central taxation. Nobody can wave a magic wand and say that the health services will have to be paid entirely by the Exchequer—or any other service. The same kinds of people will have to pay. If the burden is transferred from one source to the other, then that amount of money will have to be provided, in any event. I do not pretend that it is a matter easy of solution. It will be a difficult job for whatever Minister for Local Government will have to handle it. It will not be easy to ease the burden in one direction—it will be impossible—without loading it on in another direction.

We are facing a general election. I am not going to make an election speech. I place some facts on record which will be of benefit to our prospects of increasing our majority after the election. Deputies will recall that the last election saw the greatest influx of young Deputies to this House almost since the foundation of the State: most of these young Deputies are sitting on these benches. Some of the older men will not be sitting on them after the next election. There will be a further influx of young, intelligent Deputies. When the election is over, there will be available to me to choose from as fine a bunch of men and brains as it has ever been the privilege of an incoming Taoiseach to have at his disposal.

You are getting rid of the oldest Cabinet in Europe. Charlie, you are getting old. What about Deputy Aiken?

A Deputy

What about Deputy MacEntee?

The purpose of the next general election will be to elect a Government in which the people can have confidence; a Government which will be able to produce the same kinds of results as we have produced over the past ten years and which I have recounted in detail. The people will want a Government that will have confidence in the Third Programme for Economic and Social Development. They will want a Government that will carry forward the impetus we have already given to this country's development through the medium of this Budget. The people will want to elect a Government that is capable of governing, in the first instance; a Government that will stay together that will act with that co-operation and unity of purpose to which I have referred.

I ask the people whether they can get such a Government from the benches opposite—whether from one Party, and I do not see much hope of that, or a combination of both. That is the question I should like to leave with Deputies opposite. Deputy Corish has denied there will be another coalition, but the soundings are there again. The people ought to be told before the election. If something is to become of this suggested coalition, the people should not have to wait until after the election to be told about it. Please tell us something about it, so that——

Tell us the date of the election.

This Budget debate will proceed next week. The Fine Gael Árd Fheis can proceed as usual. They can go through their resolutions. Let the young tigers wag their tails again this year. Let the Fine Gael Deputies come back to the House again next week and we will continue the Budget debate. We will continue to do the business that has been ordered. We will carry on with our work as well as we can do it and the election will come in its own good time.


Hear, hear.

Can the Taoiseach make up his mind on anything? He cannot make it up on that simple question. The Cabinet are divided on it. Half of them want an October election and the Taoiseach cannot make up his mind.

The country wants leadership

Now he can be called Stonewall Jack, Sir.

Mr. Haughey rose.

He is trying it on again. Fugitives from public opinion.

I was about to preface my remarks on the Budget by saying it was rather a strange affair, and I had made that note before the intervention of the Taoiseach. Now, there will be others who will deal with the Taoiseach's intervention more adequately than me, but nevertheless there are some remarks I cannot help making about it. I do not quite know what the Minister for Local Government and his general character have to do with the Budget but I am sure the Chair will forgive me if I follow the lead of the Taoiseach in this respect. The Taoiseach complained that the Minister for Local Government had got a bad Press particularly from the Irish Independent. I seem to remember, however, during the past few days reading an article in the Irish Independent, a long one, on the Minister for Local Government. The gist of it was that he is not such a bad fellow, after all. The article stated that he is a man of tenacity of purpose and of integrity.

I am sure he is a man of integrity, and we had an example of his tenacity of purpose in the referendum last year. On this side of the House, and indeed in the country in general, we think that that tenacity of purpose was extremely ill-advised on that occasion. I mention that only to show that, when the Press praise a Minister somewhat, the Party opposite hug their insult to themselves and pretend to appear as if they were being insulted. So much for that aspect of the Taoiseach's speech.

The Taoiseach gave close argument on figures and so on, and without the printed word I cannot follow the various figures given. However, the gist of a great deal of the Taoiseach's speech is that the Government are taking steps to resist the inflationary tendencies and inflationary pressures which arise and have arisen in the country's economy. He made particular reference to the trade unions, and so on. One of the greatest reasons for the inflationary tendencies which exist at present is the very large measure of Government expenditure which we have. In fact, the Government could, if they so wished, do away with a great deal of the inflationary tendencies because those tendencies have come largely, indeed mainly, through the enormous volume of Government expenditure—I hope I am not making a nonsensical speech. These inflationary tendencies which exist in our economy are measured in the economies of many countries in Europe today. Therefore I do not expect the Minister for Finance to stand up and with one wave of his hand to sweep away a lot of those inflationary tendencies.

What I do expect him and the Government to do is to exercise a great deal more care than is being exercised in Government expenditure. There was a time when Government expenditure was considered, not entirely but largely, from the point of view of the capacity of the country in general, of industry and commerce in general, to withstand the rate of taxation. Now, one seldom hears that mentioned: in Budget speeches most Deputies do not take it into consideration. As a result of this pressure of public opinion, we have an inflationary tendency all the time and I urge on the Minister the very real danger that is being brought nearer and nearer through increasing Government expenditure.

There is little point in appealing to the community to exercise spending restraints in view of the fact that the direct opposite is being done by the Government in relation to their expenditure. Very often that is expenditure which is undertaken or appears to be undertaken largely for political purposes.

The Taoiseach also said that this was not an election Budget, that of course it was a Budget in an election year and therefore that criticism would be levelled at it. Of course, it is very largely an election Budget. Can anybody really pretend that £100 for triplets or £150 for quadruplets——

I have been thinking of doing this for years. I meant to do it last year.

I do not object to it and I do not want to sneer at it, but it is just a little gimmick.

It is a very humanitarian thing to do. Admit it.

Quite honestly, I meant to do it last year.

But it is hardly worthy of inclusion in a Budget. In fact, what I was going to say was that if triplets warrant £100 quads would really warrant about £1,000. Have we any quads in Ireland at all?

I do not think so.

No, we have not. Very few quads survive. However, the point I am making is that the inclusion of this is more in the nature of an election gimmick than a real alleviation of the expenses incurred for triplets. The expenses for triplets must be crushing for the average family and, happily, there are many sets of triplets in the country. While on items in the Budget which are small in themselves, I am glad to see what the Minister has done in relation to works of cultural merit and that he is not subjecting these people who produce such works to ordinary taxation. However, I can see very great difficulties arising in interpreting what is a work of cultural merit. It will be extremely difficult to differentiate between, say, journalists and journalism and writing for artistic purposes. Also, what is going to happen if a work is banned here and yet the writer can claim that it is a work of cultural merit and claim from the Revenue Commissioners? Will there be a conflict between the policies of different sections of the Government? However, I suppose that can be sorted out in time, but it is something over the interpretation of which there will be difficulty.

The Taoiseach referred again and again to the increase in exports. In regard to the welcome increases in exports which has taken place in the last few years I would point out that they have come about largely as a result of the tax concessions given to firms engaged in exporting. That policy of giving tax concessions was brought in by the inter-Party Government. Through the help afforded by these concessions many firms have been able to undertake market research and to spend money on developing in fields abroad and the country has reaped a very great reward. This policy was introduced by Deputy Sweetman when he was Minister for Finance.

The benefit that has come from these tax concessions shows what benefits could arise from any alleviation of taxation afforded to firms engaged in ordinary internal trade. In fact, there would be a great upsurge in industrial employment of all sorts if such tax concessions could be introduced and the benefits would be far greater even than the benefits that have accrued from the concessions given to firms engaged in exporting. If we could do that we would get a big increase in our gross national product.

In connection with the gross national product, the figures relating to general taxation given in the Current Budget Tables are very interesting. Since 1963 the total expenditure, which was then £186 million, has more than doubled to £386 million odd, so that over double the taxation is being taken from the citizens. It is interesting to see, under current Government expenditure expressed as a percentage of gross national product, that in 1963 the Government expenditure was 22.3 per cent of the GNP and now it is 28.1 per cent; in other words, that taxation has gone up by 5.8 per cent or nearly 6 per cent, which is a very big increase and is, in fact, more than an increase of 25 per cent. That shows that taxation is reaching levels which both individuals and businesses find completely crushing. I am not exaggerating. I have not the figures for comparable taxation in other countries—I am sure the Minister has—but I imagine the level of taxation here ranks amongst the highest in Europe and possibly in the world.

It is good to see what we do for our less fortunate citizens and to find that any Government here is active in that field, but I should like to see at the same time more emphasis on producing wealth which can go to these people. We are coming dangerously close to a situation in which we shall harmfully affect our wealth-producing units if we do not cut down national expenditure. We must do so. We have seen the effect of the rise in rates and the outcry that has resulted. As the House is aware, the Dublin City Council is now dissolved. I shall not go into that situation but it has arisen because of the enormous expenditure which our local authorities are obliged to make.

We live next door to a very large trading nation. Such nations have wealth that small nations such as ours, which in the past has been mainly an agricultural country, cannot command. Are we cutting our cloth too expensively? I think we are. I have no easy solution to offer the Minister as to the exact ways in which Government expenditure can be pruned but it is something that may prove a great danger to us if we do not solve the problem of production in relation to taxation.

The Taoiseach spoke of an incomes policy and much of his speech was about inflationary pressures. He urged us to keep income increases in line with productivity, something with which we all agree. The difficulty is to bring about that situation. The Government, as a whole, have not given any particular lead in that respect. We had all the difficulties of the maintenance strike which went on for weeks and affected the trade of this country. Many businesses are still feeling the effects of it and neither the Taoiseach nor the Government gave any great lead while it was going on.

Other speakers on this side of the House, as well as the Taoiseach, mentioned the mini-Budget of last autumn. I think it was the Banking Review which commented on the autumn Budget and said that it was of such severity that they could only conclude that there were factors actuating the Government of that time other than the financial position. Of course, the other factors motivating the Government then were that they were entering an election year and that the Budget of 1969 would be a comparatively easy one since the tough Budget was the Autumn one. I mention that to support statements on this side of the House about the present Budget and to point out that banking circles last autumn felt that the Budget then was unduly severe.

I want to reiterate that the burden of taxation falls very heavily on a great many individuals and businesses. There would be a real upsurge in employment if the taxation level could be lowered. That is not easy but it is something that Irish Governments must bear in mind. It is easy to injure, or even kill, the goose that lays the golden eggs.

There is another matter to which I wish to refer in connection with the Budget. I hope I am relevant in doing so. It concerns a man who belongs to an insurance scheme in a business. He dies and his widow then gets the money. She can draw something like two-thirds, as he could if he had reached retiring age before he died. She gets, I think, one-third of the sum with which she can do what she likes. The remaining two-thirds must be invested; an annuity must be purchased. I am thinking of a case which has come to my notice of a widow who is roughly about 50 or 51 years of age. She can purchase an annuity but cannot get as high a rate of annuity as she could get if she bought National Loan. The return on many Government stocks at the moment is 9 per cent. She cannot get 9 per cent in an annuity because she is a middle-aged woman. Is it not rather harsh that she should not only lose the capital, which she does when she purchases an annuity, but is getting a smaller rate of annuity than would be the case if she were free to purchase Government stocks?

Why does she have to buy an annuity?

She has to because that is part of the regulations or of the law in connection with the scheme.

Is this a private insurance scheme?

Yes, a business insurance scheme.

A private firm has an insurance scheme?

A public company, actually.

Has a scheme——?

——for its employees, yes. An employee dies and on account of tax concessions having been given in the building up of the sum of money which the widow will get, she is not allowed to take it all out and the high interest rates which operate at the present moment are bound in the circumstances to mean that the woman will get less.

The Deputy had better send me particulars of it. I do not know if I can do anything to help.

I do not know if the Minister can.

It seems to be outside the scope of public administration.

It is more a matter of the regulations, possibly, and the Commissioners. It is an unusual situation which has arisen through high interest rates. I shall look into it and will send the Minister particulars.

That is all I have to say on the Budget. It is an election Budget. It has made small concessions to a number of people. The rate of taxation is mounting every year and I urge on the Minister the very grave necessity of pruning public expenditure as far as possible in order to reduce the burden of this taxation on businesses and individuals.

This Budget has been properly described as an election Budget. We welcome the reliefs given in social welfare. The only trouble here is that they are not as large as we would like to see them. If this were not an election year, would these reliefs have been introduced by the Minister in the Budget? It seems extraordinary that having prepared the country for a harsh Budget, when he came on television last March and spoke of crises, within two months the Minister waves his magic wand and the sun starts to shine again. The only reason that this has happened is that we are on the eve of a general election. The experience is that during election years Ministers for Finance introduce the normal spring Budget and then apply the harsh does in a supplementary autumn Budget. We had a particular case of this 12 months ago when we were facing the referendum. Subsequent to the referendum, in which the people had given their answer, we got the medicine in November. I am afraid that this Budget is another election gimmick on the part of the Fianna Fáil Government.

I am disappointed that the Minister has not seen fit to increase the tax free income of £6 10s. I referred to this matter last year. As prices rise and the cost of living increases, nothing has been done to give relief by way of increased personal allowance.

In this Budget we have the usual hardy annuals. I remember when Deputy Dr. Ryan, now Senator Ryan, was Minister for Finance and was introducing the turnover tax he told us that the taxes on beer, spirits, wines and tobacco had reached saturation point. Yet, in his Financial Statement the present Minister says that as long as these items keep on coming up smiling he is satisfied. I wonder whether the Minister, when giving benefits in this Budget, really gave away anything at all. The old age pensioners got an increase of 10/- a week but many of these people take a pint of stout, which is nourishment for them in their old age, and many of them enjoy a smoke of hard pressed tobacco or cigarettes. If we take into account the amount spent by old age pensioners on such items we find that the Minister is taking back in taxation most of what he has given.

With regard to the increased taxes on petrol and diesel oil perhaps when the Minister thought of taxing these things he thought in terms of people using their cars for pleasure, people using their Mercedes with diesel oil just for pleasure. The Minister should realise that, apart from increasing expenses in industry with this tax, he is also affecting the ordinary working man. Many builders labourers and factory workers must use cars to get to work. They will be hit by this taxation. I know people in my constituency who drive daily from Carlow to Dublin to work on building sites. It will be a hardship on them to pay this increase.

Much has been said about the increase in children's allowances. It is welcome; but, at the same time, where people are in the tax category they are affected and the Minister is giving with one hand and taking back with the other.

We have the increases in taxation that I have mentioned on beer, spirits, tobacco and petrol and yet we have a further increase in the wholesale tax. I admit that the items which have been included under that heading could be described as luxuries but we have apparently reached the point where, no matter what tax is introduced, it must be increased each year.

In this Budget, apart from some small concession to the farming community by way of the mountain lamb subsidy, there is practically nothing in it for the farmers. I know there has been this addition of £1 per hogget ewe introduced. This will be a help but it will affect only certain areas. I hope it will not be as hard for people to get the Department to pay these subsidies as it has been in some other cases. I had a case of a person who had qualified formerly but was told by the Department he did not come within the scheme. These mountain lambs had been raised in the same place as the year before. It was eventually paid but it took a long time.

The Deputy will admit that it is the first Government ever to reach a hand to help the sheep farmer?

Does the Minister not think it is about time after 40 years in office?

This Government are not 40 years in office.

The Minister can have his ideas on that but it is high time and we have been preaching this long enough.

Preaching is all you ever do.

I do not think anybody needs to be told that the sheep industry had been run down by the Fianna Fáil Government.

Nonsense. We are the first Government to help the sheep farmers and there were plenty of Fine Gael and Cumann na nGaedheal Governments in this country and they never did a single thing.

This is the only Government that ever did anything for them.

I wish to put the record straight.

What is the Deputy putting on the record? Tripe.

It is not tripe.

Deputy Harte's whole contribution to this House is ignorant interruptions. Let Deputy Governey go on.

We cannot all be intellectuals. The Ministers, when he was in Agriculture, was such an intellectual I wonder why they put him out of it.

I welcome this small incentive and I hope that there will not be difficulty or too much red tape in the Department in paying these subsidies.

The beef incentive, which was increased from £8 to £12, is a step in the right direction and is generally welcomed.

I must say, in fairness, that to budget is not an easy task and the benefits that have been given are welcome. This has been proved by the fact that we did not vote against any of the Money Resolutions. However, I am sceptical about whether the Minister was sincere when he spoke in March. I listened to him that night on television and he struck me as being sincere. I cannot for the life of me understand how, the Minister having issued those warnings and warned the country of a tough Budget, within two months things can have changed so rapidly. We are now on the eve of a general election. This is the type of election gimmickry which is carried on by the Fianna Fáil Party and I hope the people will see through it when the general election comes. There is an old saying: "You can fool some of the people some of the time, but cannot fool all of the people all of the time".

In the referendum last October when the Government Party wasted £100,000 of the taxpayers' money to fight a losing battle, they got their answer from the electorate.

Would the Deputy agree with me that it does seem as if one cannot win a constitutional referendum? This has been proved in France, in Australia, here and in Switzerland?

Why did the Government try it?

Why did Fianna Fáil and some of their Ministers, as we were led to believe, try to push it through.

We tried in all good faith.

If they knew so much, why were they prepared to waste £100,000 of the taxpayers' money?

The Deputy will appreciate that we are not discussing the referendum now.

I am merely pointing out that in respect of the Budget, as in the case of the referendum, the public will not be fooled. The benefits have been proposed and the Money Resolutions have been passed, but I wonder are the Minister and the Government living in the belief and the hope that they will be back in office next autumn——

Hope springs eternal.

——so that they can bring in a harsh budget, as they did last year? The Minister says that hope springs eternal but I am convinced that by next autumn we will be sitting in the benches opposite.

Go bfoire Dia orainn.

In his statement the Minister referred to recreational facilities. I should like to hear from the Minister if the money which he is allocating under the heading of recreational facilities is purely for indoor facilities or is there any specification in regard to youth clubs?

There are two provisions in the Budget about recreational facilities. One is an income tax incentive to firms to provide them for their employees. That is not what the Deputy is speaking about.

He is speaking about the sum of money allocated for recreational purposes. The general idea is that it will help to provide recreational facilities for younger people mainly, through youth clubs and in other ways.

That is what I am interested in because we have approached the Minister for Education about a new club in Carlow run by the Society of St. Vincent de Paul. I am not sure if it would come in under this scheme. It has to do with basket ball and indoor sports.

The Deputy will appreciate that I cannot give an indication with regard to any individual case. The general idea is to help all forms of sport and recreation for young people mainly, but not exclusively for young, people.

The Minister referred in his statement to handicapped children. It is high time that some assistance was provided in this regard. Indeed, tribute should be paid in this House to the many voluntary organisations who are helping in this direction. Any allowance that can be given is very welcome.

I hope I am wrong but I am still suspicious that this is purely an election Budget. I wanted to ask the Minister if, under the heading of social welfare benefits, there will be an increase in insurance stamps. Will this follow, and can the Minister give any indication of what the increase may be? So far as I remember, it was not mentioned in his Budget speech. While we talk of the benefits which come through the Budget, if there is to be an increase in insurance stamps, apart from taxation, the people are entitled to know about it at this stage.

I trust that the public will not fall for the Budget which has been introduced in an election year and that, when the general election is called, they will not be fooled by the Government or by a Minister who one month warns of the state of the economy, of the dangers that lie ahead, of a tough Budget and prepares the people for a shock and, in the next month, comes to the House and performs, to my mind, a political exercise in the interests of the Party to which he belongs. When the general election is called, be polling day in June or not——

What day would the Deputy like the election?

As soon as possible.

——the people will not fall for it. The Deputy would like the election any time Fianna Fáil like to call the day, and he will be only too anxious to have it in the month of June——

Fourth June. Dissolve the Dáil today.

——because we are convinced that we shall be returned and will be sitting on that side of the House.

I should like to congratulate the Minister on this Budget which is a typical Fianna Fáil Budget. I have the greatest sympathy in the world for the Opposition Parties who had been looking forward to Fianna Fáil having difficulties in regard to bringing in this Budget.

We believed the Minister for Finance.

They thought the economy was such that we would not be able to continue on our usual road of bringing benefits to the neediest sections of the community, namely, the social welfare recipients. It has been welcomed as a good and sound Budget not only by the public but by the Opposition here.

Who said that?

The Opposition Deputies are jealous of our position and of the fact that the economy is so sound that we are able to bring in these necessary improvements. The very fact that they did not vote against the Budget is an admission on their part that it is a good Budget. Deputy Tierney made that clear in his speech here when he praised the Budget and gave due credit to the Minister for the reliefs he gave to the social welfare section and the farming section of the community as well.

The only course open to the Opposition is to describe this as an election Budget, as a gimmick, to enable Fianna Fáil to win votes and be returned here after the next general election, whenever that might be. We have never attempted to win elections by this method, because we know full well if we did succeed in holding on to office or winning an election, whether it was a Presidential election, local elections, a referendum or anything else, the public would then see that the Fianna Fáil Party was no different from the Opposition Parties, because this is the type of gimmick they have always adopted and relied on to bring them into office. The fundamental difference between Fianna Fáil and the other Parties is that the public have come to realise that we as a Party have always been honest in our approach. They know exactly where they stand with us. We tell them how the economy is progressing. We tell them if we have difficulties and we ask for their co-operation and we have always got it.

In 1966—I was not very long in the House at the time—there were two by-elections pending in Waterford and Kerry. 1966 was a very difficult year for this country as well as for many other countries of the world far bigger and wealthier than ourselves. Unpopular tasks had to be faced up to in order to put the economy on a sound footing. These two by-elections were on the horizon and, on account of the difficulties, the Opposition said that this was an opportune time to have a general election. A challenge came to Fianna Fáil from the benches over there to face the country in a general election in 1966. However, Fianna Fáil faced up to their responsibilities and took the necessary economic steps on the eve of the by-elections. Having taken them, we went before the people of Waterford and Kerry; they gave their verdict in our favour and returned two more Fianna Fáil Deputies to this House. They were, in the main, two rural constituencies, Kerry in particular. At that time there were tremendous difficulties in regard to cattle prices, and so forth; nevertheless, the people, realising that Fianna Fáil was a Government that would stand with them in difficult times as well as in good times, supported that Government. After that we heard very little about a general election nor were we challenged to go to the country. Now the challenge is thrown out again, but it is like whistling going past a graveyard. Their challenge was more sincere a couple of months ago when they thought we were not making the progress we have made and that there would not be the tremendous growth in the economy of five and a half per cent which has taken place in the last year. Now they do not feel too sure of themselves. They know full well that when the general election comes, whether it is in June, October or April, 1970, the people will again stand behind Fianna Fáil and will not be led away by this attempt of the Opposition to treat this Budget as an election Budget.

The year that has just gone, 1968, was, as described by the Minister for Finance, one of the best years of economic growth for this country. Industrial production increased by 11 per cent; the figure for employment in manufacturing industry was 6,400 higher than a year earlier. Of course, employment in agriculture continues to fall. This is due to modern farming methods, up-to-date machinery and better management on the farms. However, we can be glad of the fact that the rise in employment in industry is greater than the fall in employment in agriculture. We are finding jobs for our people here at home and coming nearer the day when nobody will be forced to emigrate due to economic circumstances, when those who go will go only of their own free will. That is the road along which Fianna Fáil is leading, and this is the road from which the people will not want to be diverted.

Social welfare recipients have once again been looked after by Fianna Fáil. Listening to the previous speakers one would imagine this was the first time Fianna Fáil gave increases to this section. That is, of course, very far from the truth. This Government have always looked after the weakest and neediest sections of the community, irrespective of whether or not it is an election year. The governing factor is not, of course, the fact that it may be an election year; the governing factor is the expansion that has taken place in the economy during the year and the estimated growth in the following year. These are the factors which dictate whether the increase to social welfare recipients will be a big one or a small one.

Since Fianna Fáil resumed Government in 1957 they have given increases every year. In some years the increases have been bigger than in other years. Last year there was an increase of 7s 6d. This year it is 10s. There is an increase also in the maintenance allowance in the case of infectious diseases. We are proud to be in a position to give these increases to the neediest sections of our community.

The people realise that what the Government can afford to give them depends on the expansion that has taken place in the economy and they also realise that it is only under a Fianna Fáil Government the economy will expand. They realise that expansion cannot and will not take place under a Coalition Government or any other Government of that type. We had evidence of that on two occasions and the people remember what happened. There was only one increase in social welfare benefits; the non-contributory old age pensioner was given an increase of 2s 6d over a period of three years. That works out at 10d per year. I know this is a sore point with the Opposition. They would like us to forget about that. They would like us not to remind the public about that. But we have a duty to remind the people. We have a duty to keep their record before the people. A general election is a very important occasion and the people should be in a position to assess the records of Coalition Governments and the record of the Fianna Fáil Government with regard to the less well-off sections of the community. We do not like speaking about these things, but we have a duty to remind the people and, if we did not remind them, we would be failing in our duty.

I know that this was not the fault of those who took part in that Coalition Government. It was not the fault of the Labour Deputy who was Minister for Social Welfare. I am convinced he would have liked to have given them as much as he possibly could, but the governing factor was the state of the economy and, under that type of Government, the economy did not make any progress. There was utter stagnation. I am sure the Coalition Government regretted that stagnation just as much as we regretted it.

Did the Deputy hear about all the houses we built?

The Coalition Government were not in a position to give increases and the people know that, if there is a return to that type of Government, they will no longer be able to look forward to increases in social welfare benefits.

The Opposition have said that agriculture is neglected in this Budget. That is not true. We have never neglected agriculture. In particular, we have never neglected the small farmer. We appreciate his difficulties and we do everything we possibly can to help him. As proof of this I need only point to the fact that in the current financial year State aid to agriculture stands at £81 million. In the last year of the Coalition Government, with a Minister for Agriculture we have often heard praised, State aid to agriculture stood at £17 million. There is no comparison between £81 million and £17 million.

The Deputy is talking a lot of tommyrot.

Creamery milk is subsidised to the tune of £27 million. The subsidy has risen from £6 million in 1963-64 to £27 million in the current financial year. This is evidence, if evidence is needed, of the desire of Fianna Fáil to help the small farmer in particular. There is the two-tier price now for milk with an increase on the first 7,000 gallons. The Opposition tried to scoff at these increases and to run them down. There are difficulties with regard to the export market and that is why the taxpayer has to subsidise creamery milk. The time this man we hear praised so much was Minister for Agriculture——


Deputy Fahey is in possession and Deputies should allow him to speak.

When the Minister for Agriculture in the Coalition Government experienced difficulty with regard to the export market, instead of increasing the subsidy, as we have done, from £6 million in 1963-64 to £27 million in the current financial year, the only solution he could find was to ask the farmers to take a reduction in the price of milk and, mark you, the price of milk was then only 1s 2d a gallon. The farmers can be thankful that that Coalition Government and that Minister for Agriculture went out of office before that suggestion could be implemented. Again, as positive proof of our interest in the small farmer, there is now complete derating of agricultural land up to a valuation of £20. As a result of that only one farmer in three pays rates today.

Copying Fine Gael.


Deputy Harte must cease interrupting.

I am keeping the record straight.

Deputy Harte can straighten it later in his own direction.

Deputy Harte could not straighten anything.

We hear much talk about rates.


I have had more to do with farming and for a longer number of years than the Parliamentary Secretary.

Deputy O.J. Flanagan will see to Deputy Lalor in Clara.

Is that the Fine Gael Party?

I am in no hurry.

You are stretching the Deputy's speech greatly for him. You are helping him. Would you not allow him to finish?

I think I have lost heart.

Is he still there? Fine Gael will be losing Harte shortly.

So long as it is not a heart attack you are all right.

With regard to the estimates for county councils and corporations throughout the country, we hear a lot of talk from the Opposition Parties about the amount taken in rates and we note their efforts to create an agitation amongst the people in connection with this matter. Fianna Fáil is the only Party that has done anything to relieve this burden of rates on the small farming community. I am sure that, in the County of Donegal, at least 90 per cent of the farmers must be completely de-rated. In my county, over 80 per cent of them are de-rated. This is a wonderful concession which has been given by this Government and for which there is provision in this Budget.

Do they not pay rates at all?

Even Deputy Dunne is shocked at this concession which Fianna Fáil have given to the small farmers.

There are no farmers in Ballyfermot.

What about Kinsealy?

I do not think Deputy Dunne should grumble about the concession given to the Donegal farmers.

What concession? You did not give them a Minister who pleased them.

I just wanted the Deputy to inform me.

At this stage, I must urge Deputies to restrain themselves from interrupting. I would ask them to refrain from remarks and interruptions.

Provision is made for a beef incentive bonus. It has been said, again, that this is of no benefit to the small type of farmer. It has been said that it is something that will benefit the large ranch holder, the man of broad acres. I have heard it said by Opposition speakers——

Whatever suits the Deputy, he hears.

It is not a big enough bonus.

We have increased it from £8 to £12. It is typical of Deputy Harte and of Fine Gael to say that it is not big enough.

If you sell one pint of milk, you do not get it. It is only for a few farmers——

Anything given is not big enough.

For a Party that jeopardised the agricultural community in 1931 and 1932, you are not giving enough.

I want to deal with this beef incentive bonus scheme. I think this will be a tremendous help to the small dairy farmer as well as to the farmer on the broad acres. I have pointed out that creamery milk is subsidised to the extent of £27 million and this is a considerable contribution from the taxpayers. The beef incentive bonus scheme is brought in to encourage the farmer who is not in milk production to stay out of it. It is brought in, also, so that the farmer who is half in milk and half in beef will go over entirely to beef production. In turn, this means that there will be more money available to the small family farmer who has to supply milk—either the liquid milk trade or the creameries—in order to eke out a living for himself and his family. Of course, we hear a lot of lip service being paid to the small farmer: I have to say it again. However, it is an extraordinary thing that when any concession is given to the small farmer we immediately have an agitation to extend it to the larger farmer. A typical example is that when this provision is made for de-rating of agricultural land we have all sorts of requests to extend the concession to the larger farmer as well. It has also been suggested that there should be a £50 employment allowance rather than £17 at present.

This is the only country in Europe which pays rates on agricultural land.

Is the Deputy suggesting that all our farmers should be de-rated with a consequent change in the taxation system whereby they should be required to keep books and to have them audited and to pay income tax, the same as other sections of the community?

Mr. de Valera promised complete de-rating for years and years and years.

The second mischief-maker has arrived.

Surely the Parliamentary Secretary should be more orderly?

The Chair will have to insist that Deputies will refrain from these remarks and interjections.

Perhaps it is that I am annoying the Opposition too much by the facts which I am giving. After all, we know that last year—we do not know what they will do this year—they indicated their interest in the 100-cow farmer and forgot entirely about the small farmer to whom so much lip service is now being paid.

The Taoiseach against Colley.

That was their policy last year. We must wait and see what their policy will be this year.

The Parliamentary Secretary was not one of the nineteen.

I am sure they will change their policy so as to appeal to the masses in rural Ireland——

Hear, hear. That is what you did. "Minis" are becoming unpopular now.

They might be naked shortly.

The taxpayer will be naked before long.

A minor-mini.

A political "mini" is a very unattractive sight.

I am in no hurry whatsoever. I do not mind if I am speaking here in April, 1970.

The Deputy will probably be over here.

I want to point out that the concession to increase the employment allowance from £17 to £50 would cost £2 million. If we had this money, it would be much better to use it to try to encourage employment on agricultural land, such as by giving an exemption to the agricultural worker in respect of income tax. Employment on the land is falling drastically. We can be thankful that we have this Fianna Fáil policy which seeks to ensure that they are being absorbed into industry and which seeks to find employment for them in this country. We should also like to welcome the increase of 3s a barrel in the price of barley which plays a very important part in the economy of our working farmers——

More porter.

——in whom Fine Gael showed, at the last Ard Fheis, they are no longer interested. Fianna Fáil have always looked after the weaker sections in the community whether they be among the farming class, the social welfare class or any other class and we shall continue to look after their best interests. We will continue to do that.

You left them squatting outside Merrion Street for 21 days.

In their own interests.

They would love to hear that.

Order. Deputy Fahey.

The increase in the small farm incentive bonus scheme is also welcome. This scheme is proving to be of tremendous help to this particular type of farmer in whom we have an interest. We would like to see the scheme being availed of to a greater extent than it is. It has not been long in operation yet and perhaps it is not appreciated as much as it should be but interest will be created through the increased grant. This serves a twofold purpose, it brings the agricultural advisory service into close contact with the farmer and thus he will be able to make a reasonable living from his agricultural holdings. We have always tried to keep the incomes of the agricultural community in line with the incomes of those employed in industry and this is part of that policy being implemented.

The increases being given for buildings, silage and dry stock houses, as well as the increase in grants for the provision of water supplies, are also to be welcomed. These are all very necessary in order that the farmer may be able to expand to the point where he will be able to have increased numbers of stock on his farm. This will mean an improvement in farmers' incomes and it will also be to the national advantage to have this kind of activity created on the farms. I do not see how the Opposition will be successful in convincing the farming community that they have been neglected in this or in any other Fianna Fáil Budget.

The leader of the NFA, Mr. Maher, said it on the night of the Budget.

He is leading you. Everything he says you want to say it after him.

The agricultural community will also benefit from the tremendous increases in social welfare benefits that we have given once again, especially those with young families who are trying to bring them up on a limited number of acres.

It is a pity they are not all listening to the Deputy.

There is no need for me to say anything more about the benefits contained in the Budget for the agricultural community, as they will be appreciated. The farming community, just like social welfare recipients, have always appreciated what they have received from the Fianna Fáil Government. I should like now to deal with health services the provision for which this year is £30½ million, which is an increase from £9½ million in 1961-62. We can, therefore, see the tremendous expansion that has taken place and this is as it should be, because what could be more important than the health of the people? It is important that they should be adequately catered for and this has always been the policy of this Government and will continue to be. Again, the impression is being created that Fianna Fáil have done nothing to relieve the burden on the rates of the health charges. This is completely unfounded because we have set ourselves a policy of putting more and more of the cost on central funds each year and we will continue to do that. The Opposition Parties have made many suggestions about how the health services could be financed but their suggestions would mean that the lower paid people would be asked to contribute for some service which at present is being provided free.

That is not true.

It is absolutely true.

The Deputy should study these things. I will send the Deputy a copy of the Fine Gael policy on this.

Which one?

The one to which the Deputy is referring.

A Deputy

What about next week's one?

I have seen so many policies that I do not know to which one the Deputy is referring.


The farmers heard about the one at the Ard Fheis when your Party was talking about the 100-cow farmer and they will note the change in policy in 12 months. If we are to have an election this year they will have to play up again to the small farmer who is in the great majority, especially in constituencies like Donegal and Tipperary.

"What about the working man"—the Fianna Fáil catch-cry?

If my advice to the Fine Gael Party is worth anything they should continue to concentrate on the larger farmer, as they did at the Ard Fheis last year, and not turn around now and try to win over the small farmers who are in the vast majority because then they will not have the confidence of either the big farmers or the small farmers. By trying to play them both up they lose the confidence of both and——

As long as the Deputy keeps speaking for Fianna Fáil we will not have to worry.

——they will continue to lose and this suits us fine. Nevertheless, I do not like to see you going entirely wrong. If the health charges were taken over completely as a national charge, as advocated by the Opposition Parties, it would take a huge amount of money from central funds and this in turn would mean that there would have to be a huge increase in taxation; we would be unable to find the money to provide benefits for the less well off sections of the community in whom we are sincerely interested. You would also be relieving of rates the large farmer and the large business man. This is not our policy and it never will be.

It is not ours.

It is the policy of the Fine Gael Party but we will make sure that the people will see it for what it is. I do not think we will have a hard job getting this message across.

Keep him at it. Every time he opens his mouth he is getting us votes.

That could not be said for the Deputy.

The Parliamentary Secretary could not even get me a telephone.

I must also express thanks to the Minister and the Government for remembering that section of the community to which we all owe so much, the Old IRA, and we welcome the increase these people have got. We also welcome this £25 burial grant because we know that nothing is more disappointing than to find one of those who did so much for the country dying in distress and a collection having to be made for his burial. This will no longer be the case. It has always been Fianna Fáil policy to look after the Old IRA to whom we owe so much. We would like to do much more but we are the only Party to have done anything for them at any time and what we can do depends on the expansion that takes place in the economy. That must be the guideline for any Government.

The Government are subsidising their burial.

Progress reported; Committee to sit again.