I devoted the first part of my speech on the Budget to the inadequacy of the social welfare provisions. I suggested to the Minister that he might over the weekend look at the questions raised by Deputy L'Estrange and myself about the increase in the consumer price index because in my view the quoted figure of a 10 per cent increase in the cost of living was less than what, in fact, it would be. I am sure the Minister has looked at that over the weekend. I do not intend wearying the House by reading out a long list but when the Minister is replying he can refute me if he wishes.
It is quite clear that the Minister cannot refute under any circumstance the position in relation to the advances given to unfortunate social welfare recipients. In pages 3 and 4 of the document circulated with the Budget the principal social welfare increases are given which, by and large, show an increase of 10 per cent. In my view the social welfare provisions are the greatest failure in this Budget. This Budget is not a "stay as poor as you are" Budget because social welfare recipients as from 1st August, unless there is a further increase in the cost of living, will not be as poor as they are today but, if one relates it directly to the 1970 Budget and writes in the increase in the cost of living one finds it is a "stay as poor as you were" Budget in relation to the 1970 Budget. That means that in this Budget we have not moved one iota towards bringing our social welfare recipients up to a comparable level with Europe or Britain. When we look at the whole social welfare spectrum and at the peculiar debacle of the withdrawal of the dole, which shows three different moves towards chaos on the part of the Government, we find the Government have failed and there is no excuse for them.
The only way we can justify our advances towards freer trade is by being a bit kinder each year to our poor people. In this we have not succeeded. Why have we not succeeded? In the Review of 1970 and Outlook for 1971 we find that whereas the Third Programme for Economic Expansion hoped for an increase of 4 per cent, all we can hope for now, according to the Minister's Budget Statement is an increase of 3 per cent. We did not succeed in achieving our object during the financial year 1969-70. In fact, we were 1½ per cent behind the projection for that year. I remember the Minister's predecessor, Deputy Haughey, when we failed to reach the objectives in the Second Programme complaining about the “excessive quantification therein”. He made quite sure that in the Third Programme there would not be “excessive quantification therein”. We were not going to be told what the targets were but, of course, there were the ordinary simple increases in gross national product and things like that which we had to be told, even if we were to have only the barest outline of a statistical programme. The figures we were provided with showed that we were going to fail in 1970-71 and that we failed in the financial year 1969-70.
I want to draw the attention of the House to the fact that this failure is far more spectacular than one might regard at first sight. The failure to achieve 1 per cent in the gross national product is rather like increasing interest from 6 to 8 per cent which looks like an increase of 2 per cent, but when one comes to pay the increase in the interest one finds the charge to the purchaser represents an increase not of 2 per cent but of 33? per cent.
If one looks at the simple statistics and remembers that the Minister's predecessor made quite certain that there would not be "excessive quantification" one finds the Minister's projection for this financial year is that gross national product will be 25 per cent under the Third Programe for Economic Expansion projection and was more than 25 per cent under the increase in the previous year. Deputies on all sides of the House know that we have to provide new jobs to offset those we are going to lose in modern agriculture. The increase in the gross national product is a very important factor and if there is a 25 per cent reduction in the gross national product projection the provision of new jobs will not improve.
The advice of the Central Bank shortly before the Budget was announced, but in my opinion after much of the documentation we were given on Budget day had been typed and printed, was that taxation should not be spectacularly increased. The Central Bank also advised that the increase in bank lending in the private sector should remain at the same figure as last year but that personal overdrafts and personal loans should be severely restricted and that the money available should be devoted to productive purposes. This was the advice of a Central Bank which quite clearly saw that the patient was no longer capable of being cured by bloodletting and that what the patient, in this case the Irish economy, wanted was nourishment, not punishment. At the end of every credit squeeze—I do not think we have yet reached the end of this one—that is the pattern. So much harm was done by the sort of "Stop-Go" economy that it is difficult to see what the final result would be. This is the only economy one can have when there is a Government which relates everything to the next general election or the next by-election. When a "Stop-Go" has been applied for a period and a few things have gone against one, the insistence by the financiers and the experts of tightening belts, spending less and deflating the economy changes into a fear that the deflation will result in the destruction of a great part of that economy. That is one of the reasons why this Budget can be regarded by some as a soft Budget. There was no other way in which the country could continue on its way without the most spectacular and the most all-enveloping ills, taking unemployment as the first major ill and the collapse of companies as the second, the second, of course, a corollary of the first.
This has been the result of seven years of political expediency on the part of Fianna Fáil. Every financial and every economic decision was related to either a by-election or a general election. After seven years of such behaviour there have been almost precisely two years of utter dereliction, not because they would not, perhaps, have wished to attend to the economy, would not, perhaps, have wished to spend their time considering the economy, but because, when they had done the normal work of their offices of State, taken the day-to-day decisions which must be taken apart from any policy or major change, there was time left only for the discussion of their own sad and sorry political party plight. That left no time for the constant attention a modern economy requires.
Whether or not one agrees with what is happening in Britain either under a conservative administration or a Labour administration one can take these two periods of British politics and compare them with our administration here. One can say, without fear of contradiction, that in Britain over that period there was constant attention paid to the economy. Under the Labour Party administration there were changes that could be said to have been opposed to traditional democratic Labour policy. The same thing applied under the Conservative administration. The reason is quite clear. This afternoon four or five of us here have been discussing a Bill embracing all sorts of changes in the lending of money by our Industrial Credit Company both inside and outside the State. The House has agreed that this Bill is necessary. Over that period the economy should have been given a slight deflation in certain areas because of an upsurge in some direction which would ultimately hurt the economy generally. At the same time there should have been a slight in flation in another direction so that, as we went along, we could take our chances, acting more in the role of professional economic observers, well advised, rather than as politicans in a particular political party.
The last two years have, of course, been disastrous. The Minister's predecessor had the kind of ideas I have promulgated. It is quite clear he addressed a considerable amount of expertise towards their fruition. The fault here lies with the whole Cabinet. The Government have always been prepared to prostitute their duty to their political aims and ambitions. All the expertise in the world, all the knowledge and all the advice cannot substitute for an honest man. I make nothing but a political charge against anybody on the far side of the House.
In the position in which we find ourselves today we will have to take serious risks in order to keep our economy from partial collapse. One of the risks is the production of this Budget, a Budget I have already described as a Sweet Fanny Adams Budget, a Budget that does nothing for anybody. I have given my reasons in relation to social welfare and the Minister has the option of refuting my arguments when he comes to reply: people on social welfare may be as well off on 1st August next as they were on 1st August last.
During the year we had a financial measure passed in this House, the infamous Finance (No. 2) (Miscellaneous Provisions) Act which imposed 58 per cent taxation on companies here. The Minister went to some considerable trouble to give one or two specific examples to show that this would not be the case and he asked us to compare our system with the system in Britain. He says our dividends here are not taxed. That, of course, is not the case. If a person gets a dividend here he pays full unearned income tax on that dividend and the specific example given by the Minister does not apply in 90 per cent of the cases. There is, too, the fact that we have a much smaller economic base than Britain has and an enormous number of our companies are subsidiaries of British companies.
Our protective tariffs encouraged the setting up of such subsidiaries here, producing the same kind of goods under the same trade mark and with precisely the same specification. These companies are inter-related and the raw material comes from the parent company. Like every other company, from year to year their profits, gross and net, vary and their costs vary when taken into their profit and loss accounts.
I have no hesitation in telling the House that I know of many companies whose auditors and accountants have now found that it would pay them better to pay their taxes in Britain than here and that it is as easy as kissing hands for them to make a higher service charge and by increasing the price of raw materials from the parent company in Britain to create a situation where the profits are made in Britain and not here, because the rate of taxation is lower in Britain than here in the case of the particular instances I know of.
There is no doubt that against the extra moneys the Minister has specified as being necessary, the £3½ million got retrospectively by this infamous legislation and the £6 million which he estimates will fall to his maw in this financial year, he will have to set a sizeable sum in respect of the money that will not be collected here because it will pay companies very well to pay their tax in Britain instead of here.
That is the position we have got ourselves into. I make no apology for saying that a proper housekeeping approach to the financial problems of this country during the decades when Fianna Fáil were in power could have created an excellent economic situation for us in which goods produced at home would have been cheaper and in which the industrial worker, the small farmer, the self-employed person in the middle income group, might be earning a bit less than their counterparts in Britain but the money would buy more because it would have meant that our people would have been living better and that our export opportunities would have been enhanced.
What is the truth? It is that not only are a great number of goods which we require more expensive here than in England but also that the taxation payable by those companies whom we need to employ our people leaving agriculture, is in most cases higher than in Britain. Therefore, we are left with the worst of both worlds because of an Administration who thought only of their own political selves.
Where is the silver lining? The free depreciation provision in the Budget is welcome for those people who can afford to engage in capital expenditure. There are a large number of firms producing goods for home consumption— some of them are shoe factories and many of them are well known to me —who will have capital to invest and who will, therefore, enjoy the free depreciation clause. There has been freedom from tax in respect of export companies. There is more joy in Fianna Fáil ranks about the opening of one small factory employing six people than in the protection of 200 jobs. I remember the present Tánaiste taking off in his State car, coming down to Drogheda and there opening what was stated to be a factory—I must not use names—to press moss peat into bales for export to Britain. It had a hopper, a grinder and a thing for compressing the peat, but the sum total of employment was two. They are gone now and the premises are used as storage for another plant. There was more joy in the Government Information Bureau's headlines and in the speech of the present Tánaiste than if an existing factory have been saved from extinction. I am not saying that some factories have not been saved but this would not have been necessary if the country's economy had been handled properly.
Before I conclude I intend to deal with another matter which is far from being a silver lining, but before that I must refer to the part of his Budget Statement in which the Minister said that he is relying on new taxation this year to the extent of £9.2 million. As well, he is relying on buoyancy to the extent of £16 million. Where will the buoyancy come from? It will come from the second stage of the 12th round wage increase and from the first stage of the 13th round which will fall into this financial year, from 1st October next. It will come from every subscriber by way of PAYE, the unfortunates who have to look after wives and families. If such a man has a car in which to get to work he will not be allowed one penny travelling expenses. That is the law of the land. If the company which employ him send out a chauffcur driven limousine to bring a director for his morning coffee that company will claim that as an expense. Unless a worker has three or four children—even then, if he does some overtime, he will be caught—he will have to pay 7s in the £. I can give an example in respect of a company in which I am interested. From 4th April, 1970, the workers were paid 15s, from 1st October they were paid another 15s and from April, 1971, they were paid another 15s. That agreement terminates on 1st October next. There is the period from 1st October until March 31st in which to collect revenue from another £2, if the 13th round is adhered to. That is where the Minister's buoyancy of £16 million comes from. The people will not be any better off. Let us consider the figure of £3. At this stage people have reached the tax bracket, because all their allowances are gone. Out of that will come three times 35p, that is 105p. If they drink two pints a further 17½ will be deducted, that is 122½p; and if the wife happens to have two sherries the deduction will not be very far from the same. As a result of this Budget the people, even though they do not know it, will stay exactly where they are. At the same time there is no fillip for agriculture or industry.
The trade union agreement to which I have referred does not take into account the various changes in hours, service pay or anything like that. Leave all those things aside and just consider the main items. The industry concerned is not one in which the workers are highly paid; they will have very little left over when these provisions are implemented. If a person wanted to live as a monk or a hermit he might be a few shillings better off, but living a normal existance he will be worse off, even after the termination of the 12th round agreement and the application of the 13th round. Since the Irish people will be as badly off as they were in a time of rising prices— and the consumer price index will not stay where it is; I have not brought that into the argument at all—I would have hoped there would have been in the Budget speech not only a statement of the reason why but a statement of the advantage around the corner. I have heard Fianna Fáil refer to this advantage around the corner many times when it was not there. It would have been better to give the country a lead than to produce a spate of changes which are of no real consequence and which, if examined in any depth, will be found to leave the people worse off without, at the same time, doing anything for the economy.
I referred, in passing, to the dole. There is no need to refer to it after the speech of Deputy Joseph Lenehan. When it comes to wondering what is an island or whether the Mullet of Belmullet is an island, whether Achill or Valentia is an island, it is merely a question of wriggling by the Government. The Taoiseach is responsible for all this wriggling. Do not think he is the lily white gentleman in the background. He is responsible for the action of each of his Ministers. In the Book of Estimates there was printed a reduction of £1,500,000, and an order was made implementing that decision. A Parliamentary Question extracted the information that £1,500,000 was the amount of money involved. Then there has to be a definition of what is an island. When one considers the state of chaos to which the country has been reduced, one must ask how was it possible to get any sort of serious economic discussion going at Cabinet meetings over the past 24 months. I sincerely believe that it was not so possible.
I now want to refute, and do so in my capacity as chairman of Louth County Council, the Minister's statement in his Budget speech that the rates were being relieved by extra money towards meeting health expenditure. My phraseology in that sentence is deliberate. Of course, the Minister has to give something more for health in relief of rates. I had to study in detail the position in my county, and I do not require any file to recount to the House precisely what that position is. Last year we received a supplementary grant of £69,854. Then we received a supplementary grant in respect of our over-expenditure for the financial year that has just passed, estimated about a week or a fortnight before the end of that year at £39,000. This year our State grant will be 54.7 per cent of our health expenditure based on the arrangements made with the new health authorities. There will be no second supplementary grant in respect of over-expenditure. The rate has been struck on that basis and has been increased by over 14s and some new pence in the £. Health expenditure keeps going up, and the £ is worth less.
I would be obliged if the Minister would indicate to me when he is replying if, in fact, he intends to give supplementary grants next year, if the circular sent by the Minister for Local Government to local authorities was in error, and if, therefore, the local authorities have struck a rate greater than they need strike. Those are the alternatives open to the Minister. He has informed us we are getting the same as we got before without the supplementary grant for over-expenditure. It will not, I am sure, be very difficult for him to contact his colleague, the Minister for Local Government, to obtain this circular, if it is not already in his own Department, and look at it.
As a farmer I have for many years been irritated by Table V, which has appeared in the Current Budget Tables, for about ten years. It refers to "State Expenditure in relation to Agriculture" and according to the asterisk note it includes both capital and non-capital expenditure. Agriculture, of course, is a big industry but this is just as if one were to charge up the cost of law enforcement to some Department other than the Department of Justice. Surely we as an agricultural nation building up our industry should not be printing these lists which include such things as arterial drainage—a figure of almost £1½ million—payments related to the Anglo-Irish Free Trade Area Agreement—which is not the fault of the farmer—agricultural education—as if perhaps somebody living in Terenure could not avail of agricultural education and enter agriculture for the rest of his or her life. This charging up of items to agriculture, based on everything that has anything to do with the land is a mistake; it is setting family against family and it is creating an urban versus rural bias and, as it is there, why is the expenditure in relation to Industry and Commerce not similarly tabulated?
This table was produced at a time when an ex-Minister for Agriculture, who is still a member of the Fianna Fáil Party, was at loggerheads with the farmers. He produced it to stuff it down their necks and let everybody know that they were getting something like £50 million, which has now become £100 million. This, however, has no more to do with what is being done for the individual farmer than "Sweet Fanny Adams" has. In regard to the claims of the Minister in relation to agriculture I will turn to his extremely useful and abbreviated document, "Principal Features of the Budget". Item No. 1 is for £1.4 million to meet the extra cost to the Exchequer of the export support payment for carcase beef. This sum may be paid or it may not be paid. The position is that under the Anglo-Irish Free Trade Area Agreement the British have agreed to pay a subsidy on a figure of 25,000 tons of beef, some lamb, mutton and so on, and above that we have to pay it ourselves. If the market price for beef in Britain falls at certain times of the year below the price specified as proper for the English farmer then the British pay the subsidy up to 25,000 tons and from there on we pay it.
In the same article of the same agreement we undertake to provide 638,000 head of store cattle. I have not got the figure to mind whether we have so done but if the store beast went to England it could very well, and most probably would, make the same price as paid here for killing in a factory two or three months later. The stay in Britain for gaining the subsidy was three months but now it is two months. Therefore, the price to the farmer in relation to the £1.4 million is not affected and that is the mildest way one can put it. Unlike my colleagues in the Labour Party I hold the view that the Anglo-Irish Free Trade Area Agreement was inevitable once we went towards Europe, and that we had to go in; my argument with the Government about our accession to Europe is not as to whether we should or should not go in—I say we have to go in if Britain goes in—but my argument, and here I come pretty close to my colleagues in the Labour Party in this matter, is that they are not bargaining hard enough. Our beef factories got the opportunity to increase production and were, in fact, underwritten by this section of the agreement, and instead of sending 25,000 tons we are sending something more, which approximates to a payment agreed within the agreement of £1.4 million, and therefore for any Minister to say that he is giving the farmer £1.4 million more for his beef is a complete travesty of the truth. I hasten to add that I am not suggesting that the Minister is telling a deliberate lie because I make every effort to be in order. What is happening is that we are sending more than 25,000 tons of beef and that is that. That is the only explanation for it.
In a certain section of the agreement it is possible to have a revision but we have had a Budget introduced here in which there is not a word about that. If it turns out that there is more beef and, I suspect, less store cattle going, and if we want to develop our beef factories then we should make representations to the British Government that if they want our beef, and a continuing supply of it, and that is one of the bases on which we got other very important advantages under the agreement, then they should jolly well pay for it. It is not for the Minister for Finance to suggest that he is giving an increase of £1.4 million to beef producers. He is doing nothing of the sort. In fact he is adhering to a provision of the agreement on which his Government have not sought any improvement by bargaining.
For the first time for many years butter is improving in price. We are not restricted in the amount we can send to the British market yet the best that can be done is for the Minister to say that he is producing £2.2 million to improve the position of the dairy farmers. I wonder, in the heel of the hunt, whether he will produce anything or not. I remember very well the year 1959. I was acting as spokesman for agriculture that year. It was an extremely dry year and it was the year of the GATT, to which we had not acceded at that time, if my memory is correct. Under that agreement Britain suggested to its partners, and to everybody outside the agreement, which included ourselves, that we should limit our supplies of butter to the British market and that that limitation should be based on what we supplied during 1959. Our meagre supply during that year was 12,000 tons. To the credit of Britain in every succeeding year when other partners or suppliers inside or outside the agreement did not supply their quota supplementary licences were given to Ireland. This was a very definite advantage to us because there is not much joy in selling butter at the sort of prices at which we sold to the Middle East not so very long ago and when the people at home would have bought it even if it were dyed purple for greasing cart wheels.
It was so small as to be hardly measurable in new pence. The position about butter and cheese is improving and I wonder whether, when the accounts of Bord Bainne are finally assessed, there will be the loss of £2.2 million which the Minister has suggested. The guaranteed minimum prices of top-grade pigs is to be increased by an average of 50 pence per cwt dead weight. The price of barley goes up by a figure which, on the basis of 3 lb. of meal fed per lb. of pig-meat produced, will more than wipe out the 50 new pence. An ordinary correction is taken as an advantage by the Minister. It is something for which he should be lauded at every agricultural meeting in the country. The hogget ewe subsidy is to be increased from £1.50 to £2.00 per head at a cost of £0.25 million. The small farm incentive bonus will be increased from £50 to £75 at a cost which is not mentioned. There will be higher grants for a new and more efficient type of forage harvester and an improvement in the grant rate for farm silos. If I went into the type of discussion which the Minister went into here on forage harvesters and the pig-farrowing equipment and dry sow stalling accommodation I would be ruled out of order, and told that I should wait for the Estimate for the Department of Agriculture and Fisheries.
It was a measure of how small a degree of advantage is given to the farmers in this Budget that these matters had to be mentioned. There was nothing of greater moment. It was said that these improvements would support farm incomes to the extent of about £12 million per year. A figure of £4.35 million is added to the Supply Services for agriculture in the Budget. I know there are items in the Book of Estimates. I know that the Department of Agriculture veterinary surgeons and inspectors must get more money and that the girls in the offices must get higher salaries, but I would like the Minister to explain how the improvements referred to would improve farm incomes to the extent of £12 million per year or is the phrase "will support farm incomes" just another trick phrase? Does the Minister mean that farm incomes will be improved by £12 million per year? I want to state categorically that farm incomes will not be improved by £12 million per year. The increase in milk prices is meagre. It is questionable whether or not it will cost the Exchequer anything. The beef price increase is connected with the Anglo-Irish Free Trade Area Agreement, the bargain made by the Government. This is the year for a review and no review has been asked for. The increase in the price of pigs is connected with the increase in the price of barley after the next harvest. The increase in the small farm subsidy scheme from £50 to £75 and the possible grant for silage or forage harvesters is mentioned. Agriculture is still perhaps the most important facet of our economy. If that is so, we have been sending a boy on a man's errand when these small improvements are all that have been obtained.
Coming now to the air companies, I wish to refer to the £25 million of scarce capital which is being given. I am not against air companies. The performance of Aer Lingus and Aerlinte has been spectacular. At this stage a halt should be called. The replacement of planes is extremely important even from the safety point of view, apart from prestige value. It is true to say that we probably kept the Viscounts too long. We have invested heavily in the Jumbo jets. We should ask ourselves whether or not some of the moneys so invested might not have been better employed down the long boreens of Ireland. The taking by the Minister of share capital in the British and Irish Steam Packet Company shows some wisdom. These things can be done by the stroke of a pen, but people at the top are hailed as national saviours, acclaimed as brilliant geniuses with mental ability far beyond that of anyone here or of anyone at the head of any Department of State or at the head of any university or other important institution. In my opinion most of these people are not so brilliant. There was one instance of a gentleman who was given so many jobs within nine months that a member of a teenage group on television mentioned him as the person he would send to the moon. Other teenagers said they would send the President, or the Leader of the Opposition, or the Taoiseach but this young lad said: "We might as well send Mr. A because he has been given every other job and we may as well give him this one also."
We should watch the national debt carefully bearing in mind the willingness of the Irish people to pay and the ability of our people to work, and their well-known honesty. We should be very particular that we do not incur debt for the advancement of a few and the payment by the many. In speaking about the national debt I may have a different view from some of my party on this subject and from many people in this House. This nation must have a large national debt relative to our earning population. I was born in 1923. That was the end of the Civil War when much damaged property had to be replaced. Forget who was wrong and who was right. Then came the economic war when there was no capital, no advancement—again forget who was right and who was wrong, it is all history—and then the war itself when we built up foreign reserves, that dissipated themselves by the fall in the value of money. There was the story of the man in Germany who papered his bedroom with bank notes at a certain stage because that was the cheapest way to do it. I do not say we ever suffered that way but it is not so very long ago—and in relation to the national debt this should be mentioned —since, in complete contravention of the Anglo-Irish Free Trade Area Agreement, the British imposed their deposit system on exports from this country and we felt we were lucky because we could sell a lot of foreign securities that we had, largely British securities, which were our external assets. Some of those which were sold had an interest bearing rate of 3½ per cent so the guardians of those coffers were not being so bright or the politicians who were the guardians of the guardians of those coffers were not being so bright either.
I accept the fact that the nation must have a large national debt for the very reason that there is no great colonial wealth. There is no great wealth here born of the ages past. A question was asked here some months ago about the number of surtax payers. I forget the figure. It was certainly fewer than 1,000 people anyway. The figure in my mind is 600. I may be wrong. If that is so then people in that category have not got—they may have the opportunity perhaps to have expense accounts or something like that which they should not have—the opportunities for tax avoidance.
There is no great source of old national wealth. If there is not and if our boys and girls must be provided with houses or flats when they get married at a reasonable rent, if we must improve our educational facilities, if we must improve our roads, if we must improve our hospital facilities, if we must keep abreast of Europe, then we must have, relative to the earning head of the population, a large national debt. My considered opinion is that at the moment our national debt is not disastrous but there is something else that is disastrous and that is the fact that the money borrowed is not being properly applied.
I remember one evening an economist giving a lecture in which he defined "saving" as wise spending, a very proper definition I thought. In relation to the national debt I do not think we have had wise spending here and, in the experience of every profligate, we must reap our wild oats. I think that the housekeeping of the Fianna Fáil Government over the past decades has not been sound. Considerable expenditures were entered into which should not have been entered into. That should not have meant a lesser involvement by the State in the affairs of the nation but a different involvement. The idea that the State should not go in and that private enterprise should have everything at its beck and call and that the old Manchester school of economics which was: "If you do not work you do not eat" should apply all over the place is as dead as mutton. Where the State involves itself it should involve itself wisely. It should borrow wisely. It should over the years by the management of its various budgets increase the desire on the part of the saver to save.
I once visited a man who has now been dead for a long time, a man hallowed in the halls of this House. He once refused the office of Minister for Local Government. He was a man called James Murphy from Drogheda. He was ill in bed and with him was another old friend who is also dead. The Budget had just come out. It was not a Fianna Fáil Budget. It was a Budget introduced by the late Gerard Sweetman. The old man who was visiting ex-Deputy Murphy said as I entered the room: "You robbed the savers and now you are asking them to save." The man in the bed said: “Panem et circenses” or “If you cannot give them bread make sure you give them plenty of circuses.” That has been the pattern of Fianna Fáil administration over the years. They create a hullabaloo to get themselves out of any serious economic difficulty that should really be talked about and thought about in every workingman's house in this country. Is it not true that if the value of our money is to be eroded those who have property will become richer and those who have not will become poorer? Is it not the worst situation that could possibly arise that we would have an Ireland in which there might be some hundreds of powerful, wealthy men controlling, as happens in banana republics, the very lives and the futures and the fortunes of the men who work? This is surely not the approach of any modern administration.
Go back to my opening statement which shows quite clearly that the social welfare recipient is no better off than a year ago and you find the utter weakness, the utter sterility of this Budget.
The Minister says that we will borrow here whatever we can and we will have more borrowing from abroad. We borrowed £200 million in the last two years and we applied it here and when the dividends are paid out, and the servicing of public debt is in this Budget as it is in every other Budget, the recipients will pay their income tax in West Germany, largely in West Germany. I think some of them will pay it in Holland. That makes the rate of interest which is paid factually by this Government one-third greater than if it could have been borrowed at home. There is the fault; there is where the correction is needed. We did not create an economy capable of producing the gross national product to provide the savings that could have obviated the necessity of going abroad. I believe that if the people are paid for their savings they will give them to you provided at the same time that you do not take away—as this Budget will take away from them—as much as you give them in the form of direct or indirect taxation related, of course, to the increase they may get in the 12th, 13th or any other round.
I want to address myself now to a specific item, that is, the increased expenditure of £4½ million on factory grants. Will this be spent? Will companies come here to pay higher taxation than they would pay at home? The answer is that if they are producing exclusively for export they will, because they will get a tax holiday. If they are producing in part goods for consumption on the Irish market then they certainly will not because, so far as I can see at the moment, the Irish market would be regarded as a contracting market. Will this £4.5 million be spent? I do not know how it was computed.
I do not know whether the Industrial Development Authority were in a position to tell the Minister that they had entered into commitments of a volume which would entail that extra expenditure. If that is so I am delighted, but I am extremely suspicious as to whether these plans will ever come to fruition, or whether this is more window-dressing to leave open all the political options so that they can go to the country now if they like, stick if they like, or go to the country at any other time they like. If they have themselves cemented together and if they have got over their own dreadful internal squabbles, they can let the country run until October or November. Then, if revenue is not right they can impose another Budget in the realisation that they still have a sufficient number of members with sufficiently thick political skins to stick it out.
Enough expertise was not used in relation to the question of borrowing money at home. The ordinary lending houses in this city, and in every other city, employ an extraordinary amount of expertise in the way they gather money. They will take money on three months call and give half per cent extra. They will take money on seven days call and give half per cent less. They will take a proportion of money and say: "You can have one quarter of it back at such a time and one quarter at such a time, but give us six months notice for the whole lot and we will give you an extra rate of interest." They can do all these things. In my view this should have been done by the Minister. He had his agencies if he wanted to do it. He could do it through the Post Office, the Industrial Credit Company or the Agricultural Credit Company. He is not giving them very much encouragement to do anything. He merely makes up the deficit. He restricts them to £7 million or whatever it is. If they could by their own efforts induce Irish citizens to save, and if they had £12 million available, he would take £5 million from them. That does not seem to me to be the right way to do it.
It is all right for a politician to come in here and take the hide off the Government for about two hours and then sit down. I propose to do that. I propose to be a little more blunt than the Minister was in relation to the Budget. There is one ray of hope in this Budget. There is one silver lining, apart from the small silver lining I mentioned in relation to free depreciation for anybody who can get the money to invest in industry. Although the Minister did not say it, I think this Budget was framed on the basis that, if the agreement between the Irish Congress of Trade Unions and the employers on the pattern of the 13th round is adhered to, it will be possible to carry on for the rest of the financial year. If the Minister were a bolder man he might have gone a little nearer to making a promise in that regard.
It was my job as spokesman on Industry and Commerce for the Fine Gael Party to say quite clearly that the £2 suggested as the figure for the 13th round will be removed entirely by the Minister in taxation. I have instanced 7s in the £ and on £2 that is 14s gone. Then if a man takes two pints that is 3s 6d, making 17s 6d. If you add it up between 5 per cent turnover tax and 20 per cent selective wholesale tax, which includes an enormous number of household commodities which his wife might buy, his own personal purchases and his direct taxation, there is no doubt that the 13th round will be removed. That is the buoyancy in the Budget. That is, in fact, extra taxation. If the Irish nation are prepared to accept that—and at this point of time I think they should—then it is possible that the Government may be able to leave things as they are for this financial year. That would be a good thing in a diabolically bad situation created by the Government themselves. It might get us a little nearer to the road back.
There is in the offing one other silver lining. I suppose nobody should talk of a tax as a silver lining. Properly used and properly applied, there is some chance that the brutal blunt instrument of selective wholesale tax and turnover tax could be improved by the application of added value tax. If increased taxation has to be put on luxuries let it be indirect taxation. The necessaries of the housewife, of the young married couple and of the ordinary plain decent working people of Ireland should be left alone. If that is done, the argument as to whether the 13th and 12th round should be adhered to, the argument as to whether there has been a spectacular increase in the cost of living and that therefore they should not be adhered to, will be carried out in a kindlier atmosphere. That is the only hope for Ireland. I do not think the Minister has given any reason for that hope. He has merely left his political options open, and to blazes with the rest.
I have not mentioned the crushing burden of rates so far. I am glad I remembered it before I sat down. If, by the proper application of an added value tax, and the repeal of turnover tax and selective wholesale tax, the people could hope that the crushing burden of rates, rents and taxation would be shared more equitably and if, at the same time, they could be assured that if they want to live in a modest way and seek modest things in decency that will be available to them without going on strike constantly and having the nation at the top of the strikes league, something might come out of this morass. I have no confidence in Fianna Fáil doing that ever. I have considerable confidence that they will not get the chance.
I want to be quite clear and decided in what I say now. When a Taoiseach is being elected after the next election, which cannot be too long delayed, I hope the House, with the exception of the faithful few in Fianna Fáil, will vote for Deputy Liam Cosgrave on the basis of an unblemished record—a record embellished by the name and record of a proud father.
