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Dáil Éireann debate -
Thursday, 27 Apr 1972

Vol. 260 No. 8

Committee on Finance. - Financial Resolution No. 3: 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).

Having dealt briefly with some aspects of the budget, I want to go into detail on some matters, because it is necessary and desirable that a little more information would be made available so that the public would have a clearer picture of what is involved in the budget provisions.

In relation to the EEC, with which the Minister dealt in page 7 of his speech, I should like to ask a few questions. I should like to know why the party that claims to support the workers are putting in jeopardy the jobs of workers in a variety of manufacturing concerns. The Echo Plant at Dundalk employs 900 workers and exports to the United Kingdom and Common Market countries. A firm called Core Memories in Coolock also exports to the EEC countries. Why should the employees of these firms be asked to vote themselves out of their jobs? Why should the workers of Technicom in Swords, Dublin, who are engaged in the manufacture of electronics be asked to vote themselves out of a job by the Irish Congress of Trade Unions and the members of the Labour Party? The same question could be asked about the employees of Nuclear Data, Limited, Cork, the EI Company at Shannon and other factories in Dundalk and Mallow. All these firms are mentioned in the book I have here, Export, volume 6, No. 1, 1972. Why should the workers of the Castlemahon Co-operative Society, who are exporting to the United Kingdom and Common Market countries, be asked to deprive themselves of a job by voting against entry into the EEC? The firm of Edwards and Sons, Clones, County Monaghan, also export to Common Market countries. Could Deputy Tully tell us why Navan Carpets, Youghal Carpets or Curragh Carpets should go out of existence? Perhaps the Labour Party feel that the more people there are on the labour exchange the better position they will be in to exploit such an unfortunate situation. Seeing that financial provision has been made over the years to enable industry to adapt itself to freer trade, it would be interesting to know why employees of the following firms should vote themselves out of a job: McGees of Donegal, Lairds, who won the 1971 export award. Rolon Caravans, who export to Common Market countries. Techtonics Research (Ireland), Erin Foods, Gouldings Fertilisers, Irish Biscuits Limited and Verolme Dockyard.

Why should thousands of workers be asked to vote themselves out of employment, notwithstanding the fact that over the years the Labour Party have consistently supported measures for the modernising of industry to meet greater competition? Why should the workers of the Shannon Free Airport Development Company, who also export to Common Market countries, be asked to take this drastic decision? This company has, under its five year plan, set itself a job-creation target of 7,500 by 1975: the first year, 500 and so on.

Bush (Ireland) also export to the United Kingdom and the European countries. The employees of Nítrigin Éireann would also put their jobs in jeopardy by voting against entry to the EEC. There are also firms like Arklow Pottery, Fleetwood Ltd., in my own area, Macroom Tapes, Wavin Pipes. It states here in relation to the Shannon Free Airport that all the firms who have aid, with one possible exception, a small firm, would welcome entry into the EEC as leading to greater expansion opportunities. Exports from the industrial estates, excluding warehouses, came to £36.7 million in 1970 and £32.9 million in 1969. With an allowance made for imports there was a remaining net balance of £19.4 million in 1970 and £13.7 million in 1969. All of these people are now being asked to dispossess themselves of employment.

This is what happens. These are only some of the very many industries that are being asked to dispossess themselves. Let us take the £6 million concern of Semperit in Ballyfermot. Why should the workers in Ballyfermot be asked to dispossess themselves of employment, to get on the labour exchange? Is it because the Labour Party or the Irish Congress of Trade Unions say so? Why should those employed in Guinness dispossess themselves just because the Labour Party tell them to vote "No"? Guinness are not dependent on James's Gate to supply the British market. If they have to overcome tariff barriers they will not produce here and their employees will lose their employment. The same applies to Dunlop in Cork. If these employees lose their employment those who supply them with foodstuffs, clothing, footwear and other commodities will also lose their employment. Building workers will lose their employment. There will be large-scale unemployment if workers accede to the request to vote themselves out of employment. The building industry will go to the wall again as it did in 1957 but, of course, the Labour Party have no love for the building workers. When on a previous occasion they had an opportunity of maintaining employment they sent them to Birmingham and elsewhere. The list I have read is only one of many. The remarks I have made apply also to the workers in Cadbury and Urney.

The firms I have mentioned are only a few of the firms exporting to the European market and the British market. Over the years and in this year every effort was made to ensure that we would be in a viable position to meet the freer trade. Other Deputies may have more detailed knowledge of factories in their constituencies. These are just a few to indicate what the people are being asked to do in the referendum in relation to their employment.

The strategy of the budget is to ensure expansion of industries and the creation of job opportunities. It does not ask people to cut their own throats and to put themselves on the dole to ensure that there will be no family income.

This anti-farm workers' party, the Labour Party, want to ensure that farm workers will have no employment, that the many farm workers who could find good employment within the Common Market will find themselves unemployed. I should like to hear what Deputy Murphy has to say about this. Why does he want to put farm labourers on the labour exchange? We want every possible job. We want to ensure that jobs will be available. Irish workers are being asked to cut their own throats. They did that before at the request of the trade union movement and the Labour Party. The Labour Party on a previous occasion showed no love for Irish workers when it came to a question of closing down industries and selling the equipment necessary to provide jobs. Now they are showing the same irresponsibility in relation to the EEC.

Congress has indicated in the document issued that we are a very viable community and that, in fact, over the years, the Government have made wonderful efforts far beyond what is indicated by the Labour Party or anyone else. They tell us in one breath of the highly vulnerable textile and clothing industries. Before I deal with that I want to deal with the position in general. They have asked Irish workers to cut their own throats, to throw themselves on the labour exchange just because they say so. They have given no indication that there will be jobs for the people employed in Guinness, Irish Biscuits and the various concerns I have mentioned. They have told us that every provision was made, that we are viable and can meet any type of competition. The gross national product increased from 1958 to 1969 in Ireland by 58.5 per cent and in Britain by 40 per cent.

I quote from the document Economic Freedom:

It is an extraordinary fact that in an Irish Government document no reference is made to economic growth in Ireland for comparative purposes.

To repair this omission we give in this article a table, constructed on the same basis and showing growth in GNP in the European Economic Community, the United States, Ireland and the United Kingdom. It will be noted that while the EEC occupies the lead position in this decade with an increase of 78.9 per cent. Ireland compares with the United States with a GNP growth of 58.5 per cent (United States 61 per cent) the United Kingdom follows on with a growth of 40 per cent.

This is the great country across the water that when a Labour Government is in is the greatest country in the world but when there is a Conservative Government in it is not worth a curse. It is clear that congress has done some research and acknowledged that the Government have over the years made an excellent effort and have equipped us and have been doing their job and have brought us to the pitch that the GNP has increased. However, that is not the whole story. I quote congress's document again:

The implication of the Department's document is that by joining the Common Market we are joining one of the fastest growing economies in the world.

No attempt is made to analyse the structure of the GNP in each country. In our second graph we break down the GNP and give the figure of average annual growth in industry. It will be noted that Irish industrial growth in 1958/1968 was exceeded by only one other country, Italy. Industrial growth in Ireland was as high as that of the Netherlands, 6.8 per cent; higher than Denmark, 6.5 per cent, or Germany, 5.9 per cent, or France, 5.5 per cent, or Belguim 5.5 per cent, or Norway, 5.3 per cent, or Britain, 3.3 per cent.

It shows the considerable progress in development of the average growth rate in industry. This is very important. We are told that nothing had been done over the years, that no effort had been made but congress tells us that we have done a marvellous job, have equipped ourselves and are in a position to compete with almost anybody.

I quote:

The third table compares average annual growth in the agricultural sector and it will be seen that here, while the growth was respectable by agricultural standards, we did not head the list, being superseded by Britain, France, Netherlands and Germany. Why then was our overall growth rate lower than the growth rate of the EEC countries? There are two reasons. The first and by far the most important is the fact that our agricultural sector is so much larger than the agricultural sector in any of the OECD countries or any of the applicant countries. Italy has 23 per cent engaged in agriculture, which makes an 11.1 per cent contribution to GNP. Denmark has 13 per cent of its population engaged in agriculture, which makes a contribution of 9 per cent to their GNP, but Ireland has over 28 per cent employed in agriculture, which makes a contribution of 19.7 per cent to our GNP.

Again, they go on to indicate the wonderful advances we have made here, how we have equipped ourselves, and how we have equipped ourselves in various budgets by making money available for incentives of all types in order to ensure that we would be viable.

As we have seen from the second and third graphs, the lowest industrial growth rate in any of the ten countries is still higher than the highest agricultural growth rate. Our industrial growth rate was nearly three times as much as our agricultural growth rate, but countries like Belgium with only 5.6 per cent of its population engaged in agriculture, or like Germany with 10.2 per cent of its population engaged in agriculture, end up with a higher growth rate than we do, simply because of the higher proportion of industry as compared with agriculture in these countries.

There is one other factor. The contribution of services. Our contribution in this sector is low at 3.3 per cent, but the services sector very largely depends either directly or indirectly through taxes and Government expenditure on the other sector.

Ireland from 1958 to 1968 had a 97.7 per cent industrial growth rate against 84.4 per cent in EEC countries.

In order to meet European competition we have taken measures in various budgets and have provided the necessary incentives to industry. This document to which I have referred is important but is contradictory to what we have been told by the Labour Party during this debate. Credit has been given by the ICTU to the industrial development that has been carried out but the Labour Party tell us we will not be able to compete. There is reference to the cost of women's clothing in this document:

Women's clothing prices include two medium-priced summer dresses off-the-peg from a multiple store, a pair of medium-priced nylons, a pair of day shoes. As in the case of men's clothes we selected mass-produced, well-known makes so we are not considering high fashion wear in this context, but the ordinary popular quality in common use.

We are told that in Brussels the clothes selected cost 124 per cent above the Dublin price. The price in Dublin was 21.85 dollars, in Brussels it was 62.80 dollars, in Paris it was 85.40 dollars and in Dusseldorf it was 64.33 dollars. If we have an advantage in the price of women's clothing of 124 per cent, surely it must be obvious that we will be successful in the EEC. One page of this document contradicts what is said in another page—probably one page was written by a member of the Labour Party and the other page by a trade union official. If we have such an advantage over the other EEC countries, it would indicate that we will come out on top when we enter the Community. These facts are stated in the document entitled Economic Freedom issued by the Campaign Committee of the ICTU.

It referred to price increases. The statements made by the Labour Party speakers are in total contradiction to statements made in this document. This shows the campaign that is being conducted in order to ensure that the money we have provided in the present budget and in other budgets in relation to equipping ourselves for the EEC will be wasted. The ICTU document states that the trade union movement would insist that price increases arising from membership would be compensated by increased wages. It is quite right that the trade union movement should seek increases to offset any disadvantage the workers might suffer. This document indicates that we will be able to carry on and expand our exports. The sentiments expressed about dumping are completely different from those expressed in this document.

The document refers to a study carried out by The Financial Times: the ICTU are getting sophisticated lately and they have changed from The Irish Times. The survey compared the cost of a suit off-the-peg and a good pair of shoes purchased in several cities. In Dublin the price was 89 dollars; the price in Brussels was 84 per cent higher than in Dublin; the price in Dusseldorf was practically the same as that in Brussels; in Paris it was higher, and in Rome—the cheapest of the Common Market countries—it was 52 per cent above the Irish price. This shows that in relation to men's clothing and footwear we have a tremendous advantage over the Common Market countries.

Last night I dealt in detail with the cost of foodstuffs but there are a few points on which I should like to elaborate. The price of entertainment is important from our tourist point of view. The document issued by the ICTU refers directly to workers—the workers who have been asked to put themselves out of employment. The document takes an instance of four people going out for a meal. They each have two aperitifs, and two bottles of vintage wine. They go to see a cabaret and travel five miles in a taxi. They have a bottle of champagne while watching the cabaret. All this costs 165 per cent more in Brussels than in Dublin; in Paris it is a little cheaper than in Brussels Dusseldorf is cheaper than either place but still is 50 per cent higher than in Dublin. This shows that it will be possible for the workers to treat themselves to an evening out at a much smaller cost than that obtaining in Common Market countries. This will have a tremendous effect on our tourist industry. It will be a tremendous encouragement to visitors to realise that they can have an enjoyable evening for a comparatively small amount of money. I wonder how many workers in Ireland could enjoy such an evening out at present? I think this list must have been compiled by a trade union official with a fabulous salary. The workers will be comforted by the fact that they will be paying 165 per cent less. If the congress figures are correct, we have a distinct advantage here which is what we are told we have not got by members of the Labour Party. Either the Labour Party are wrong or congress are wrong. Apparently, congress got these figures with the aid of The Financial Times and they are set out in great detail to convince the people that the situation in the Common Market will be different. If we have all these advantages at present we cannot lose them. We should get cheaper wine and champagne.

This document goes on to say:

One would expect a considerable variation in a field of this kind but it is interesting to note that although an evening out involved the consumption of wine and champagne notably dearer in Dublin than on the Continent, in every case the cost in the Common Market is substantially higher than in Dublin.

The tourists will be glad to hear this. We are told we have priced ourselves out of the market but The Financial Times which appears to be the bible of congress now tells us we are in a very important position and that we can measure up to any competition.

On the other hand, Irish workers are being told to get out of their jobs, to close down Cadburys, Guinness's, Youghal Carpets, Navan Carpets, Curragh Carpets, put the building trade out of operation and close all the factories I have mentioned which are exporting. If the workers do that they will not be able to have a night out.

I should like to deal in a little more detail with the dishonesty in relation to foodstuffs. Again The Financial Times is the paper that congress adopts as its bible from which it quotes. I said last night that the items in this food basket which amused me were the aspirins—no doubt they would need them if they vote themselves out of a job because they will have plenty of headaches—and the roll of toilet paper which would be cheaper if we do not go into the Common Market. This would be a terrible burden no doubt on the people if we do enter the EEC. Then they tell us we would have to eat tinned beef. Irish people do not eat tinned beef; we have the best beef in the world and that is what we eat. But congress indicates that we would be on bully beef if they had their way. They also speak of the litre of table wine. I know all the Irish people will have a litre of table wine if we do not go into the Common Market. We are told about ground coffee which is not affected in any way by Common Market prices as it does not come from Common Market countries. It is tins of Nescafe that come in here. There is talk of the white loaf or its equivalent, whatever that is. Is it a bread-and-water diet that is envisaged? We are told of the kilogram of sugar, a litre of the best quality cooking oil, a kilogram of butter, a kilogram of rice, a kilogram of potatoes, twelve eggs, two kilograms of chicken and a kilogram of steak. Apparently, you have the steak and tinned beef at the same meal.

It is interesting to note that this is the type of propaganda that is being put out. On another list we are told of the increase in the price of tea to £1.20. Of course, tea is not affected. Mr. Ó Loinsigh, chairman of the defence committee for the EEC, admitted the other night that this food basket they had presented to the people is a little different from that presented in The Financial Times. The Financial Times man must have a few bob more than the man dealing with the Common Market Defence Committee. We have then two food baskets, one that will be 20 per cent dearer and the one Deputy Corish spoke of that will be 23 per cent more. The one that is up by 23 per cent includes the pound of tea at £1.20, which does not go up, the sauce which does not go up, and the ground coffee which does not go up. This type of dishonesty is being used despite the fact that over the years we have been building up our economy to meet this situation.

We can see how dishonest the campaign is. The Labour Party have been engaging in a dishonest campaign against entry to the EEC and this must be exposed. In due course I hope to have a fairly comprehensive list of factories and workshops where workers are being asked to vote themselves out of employment. I hope in this debate the Labour Party will tell us, when workers in Counties Louth and Sligo, in Coolock and Swords and at Shannon vote themselves out of a job, what employment will be available to them. I cannot see any result except that there will be many more people at the labour exchanges. At the same time, we must remember that we have equipped ourselves with all the advantages required to enter the EEC and we have the growth rate indicated by congress to back up the other wonderful contributions that have been made through the years.

What is a growth rate?

I shall be dealing with those. I dealt with them here from the congress point of view. They said that they have taken another course, that they have examined available information in respect of each of the industries, and that they had asked their unions to comment on the information and that they had taken into account the comments both by the unions and others engaged in industry. I was never asked to comment and neither were many of the trade unions to which I spoke.

A competition is being run in relation to the EEC in which £100 must be won. Congress have about 500,000 words in this document in relation to the EEC. This competition is very important, well worth noting and advertising. It is in three parts. For Part One, you must write in not more than 50 words your views on the long-term prospects of Irish agriculture in or out of the EEC. They take about 2½ million words to explain the difference between being in and out of the EEC.

Even on the budget. I do not think this is in order.

References were made by the Minister to the EEC and I feel Deputies should be entitled to comment also.

I would not object. This is so stupid that it is very beneficial to us.

(Interruptions.)

Let me make the simple point that references to a competition which is not being run by the Government—although they are running plenty of competitions with prizes of various sorts at present, for their own friends, of course; that would be relevant, but this is a different matter— are surely not in order.

Deputies should not go into too much detail.

I do not want to go into very much detail but I want to mention one or two aspects which I think worthy of note.

The Deputy is doing well. Talking about workers going to a cabaret, if they came in to listen to the Deputy——

They will not be able to go to any cabaret if they believe the Labour Party. I have dealt with the article headed "Industrial Review" but I want to comment on it again. It says:

Fill in the form headed "Count the Cost". Write down your reason for any change you make in our estimates. Let us know what you think to be the argument for or against entry to the EEC. This statement must not exceed 50 words.

In the course of this debate most of the Labour Deputies did not exceed the 50 words. The statement made by them have bordered on the ridiculous. This anti-farmers' party, anti-farm workers' party, the Labour Party, think there should be no place for people in agriculture, that the country should be devoid of all agriculture.

What has been given to farm workers in this budget? Not a penny.

The situation in relation to the lower paid workers has been covered in a comprehensive way. I will deal with that. I have time before questions to say a few more words. This anti-farm worker tendency has developed. The farm workers will be glad to know exactly where they stand, that the Government are making every effort to ensure that the farmers and their workers will have increased benefits from the budget and from entry to the EEC, but that we have in this country a group of people who are completely hostile to this section, who do not want this section to prosper, who do not want to see agriculture develop, who want to see farmers and their workers having the poorest possible return. Again it boils down to the fact that they try to cash in on human misery all the time. This is the type of campaign directed against the EEC. The Minister covered this in his speech.

He did not make any money available.

He covered the benefits that will come automatically from membership of the EEC, those for which a vigorous effort will have to be made, the assistance that is given to the industry, the economic planning that has gone into it, the various concessions that have been given over the years to ensure that we are fully equipped for freer trade.

The Chair is glad to be relieved at the moment.

I would say the Deputy will be very relieved when I have finished.

That is an understatement.

We have, unfortunately, a number of groups who have come together in this anti-farmer campaign. It is interesting to look at them. The agricultural sector is so important that it just cannot be passed over. All the doctors in the Labour Party have quoted the same documents and the same newspaper—The Financial Times. They remind me of doctors who treat their patients out of medical books and a whole lot of patients die as a result of a misprint or where there is something left out. Apparently this is the way they are conducting their anti-EEC campaign—from The Financial Times and a few other documents.

At least we are using our own money and not the taxpayers', like the Government.

I wonder did you use your own money?

Of course we did.

I wonder is it coming out of the workers' contributions.

Blaney and Boland have not got our money tied up. We are able to use our own.

Will Deputies address the Chair? We cannot conduct the debate in this fashion.

How much of the political levy was used?

Blaney or Boland have not got us by the throat. They are squeezing now.

The Deputy need not worry.

Deputy Dowling on the Financial Resolution.

Do not upset me.

The Deputy would have to be intelligent to be upset.

There have been a number of people campaigning.

How are you going to persuade Blaney to sign the cheque?

I will tell the Deputy all about the political levy in a minute and how the workers have been robbed over the years.

What the Chair wants to hear is the Deputy on the Financial Resolution.

There is not much more I want to say. I have not got very much time.

There is plenty of time. No pressure.

The question of our entry to the EEC and the industrial and other opportunities that are available to us cannot be overlooked and I am glad that the necessary action was taken in the budget to ensure the availability of more jobs.

Tell us how you are going to get at the money.

We did not look for any money in this budget.

You did not have to. You used the taxpayers' money.

Would Deputy Dowling be permitted to make his contribution?

It is fair to say that money that was got by the budget has been used to sell the EEC by the Government.

(Interruptions.)

We are not discussing any of these things. We are trying to discuss a Financial Resolution.

We do not need Neil Blaney's signature or Kevin Boland's. We are able to use our money.

Apparently the only issue now is that you have free access to the robberies that have taken place from the workers' pay packets.

God bless us.

The whole scene is becoming disorderly. The Chair is going to preserve the order of the House and therefore we must stick to the Financial Resolutions.

(Interruptions.)

I want to move away from the job losses that have to be explained away, and come to the question of agriculture. I am very interested in the farmer. At the moment there is a group in this country which is anti-farmer and anti-farm worker. In the document issued with the budget it is stated:

Increases in creamery milk prices averaging over 2p per gallon worth about £10 million a year to producers.

Increases in export subsidy for beef and lamb, and special loan scheme for meat industry; gross cost £2.65 million; net cost £2.0 million.

Capital grants for farm improvement and disease eradication were increased by £4 million. The amount of credit was increased by £7 million last year and by a further £4.5 million for this year.

The small farm bonus scheme was increased from £375 to £500 for new participants.

The price of barley was increased by £1 per ton and the acreage of sugar beet by 10,000 acres.

This shows that the agricultural sector is being equipped. In the same document the additional assistance being provided in the budget is set out:

The guaranteed prices for pigs will be increased by 60p per cwt dead weight. Cost in 1972-73: £1 million. The mountain lamb subsidy will be increased by an average of £1 per head on fat wether lambs of mountain breeds exported by meat factories, or alive, between next October and March, 1973. Cost in 1972-73: about £250,000.

Various measures in regard to production, storage, grading and marketing in the horticultural sector. Cost in 1972-73: £100,000.

Sum to enable a start to be made with the implementation of the EEC directives on agricultural reform including an interest rebate on loans for retention and expansion of livestock numbers. Cost in 1972-73: £350,000.

Improvements in small farm bonus scheme for existing participants and for small farmers in western areas. Cost in 1972-73: £525,000 of which £425,000 has already been provided in the Volume of Estimates and balance of £100,000 in the budget.

Additional budgetary cost in the current year: £1.8 million; corresponding cost in full year: £2.25 million.

These aids are desirable. We want to ensure that the agricultural workers will not be thrown on the labour exchanges. The Labour Party are now known throughout the country as the anti-farm labourers' party. They have campaigned against the farmers. In their leaflets they have indicated that the farmers do not count. During the war this section of the community maintained a supply of foodstuffs for the nation in those dark and difficult days.

Under Fianna Fáil policy it is getting much easier to count them.

So far as the Labour Party are concerned, they do not count any more. The aids provided in the budget will assist the farming community and will also assist the lower paid workers. The sick, the disabled, the unemployed, the widow and the orphan are all helped in the budget. The budget will ensure that our economy will expand and we can take our place amongst the nations of Europe.

Thousands of workers have been asked by the anti-Marketeers to throw up their jobs. They want to know what the alternative will be when they lose their jobs in exporting industries. In the EI company in Shannon the workers have been told to vote "No" and throw themselves out of employment. I should like Deputy Tully to tell us where he thinks the people employed in Navan Carpets will get employment. Why is he asking the workers in Navan Carpets, Youghal Carpets and Curragh Carpets to vote "No" and lose their employment, because the 20 per cent barrier cannot be surmounted? We can rely on the intelligence of the Irish people on this occasion.

The workers in McGees in Donegal are being asked to vote "No" and put themselves out of employment. The same thing happened in the tannery in Dungarvan and the leather concern in Gorey. If they vote "No" and these factories close down, where will they get employment? I have here a list of firms who received awards for exports. The products of these firms have stood up to competition on the European market. Now the workers are asked to vote "No" and lose their jobs. I wonder how many of them will take the advice of the anti-Marketeers. An effort was made in this budget, as in previous budgets, to ensure that the industries are equipped and the various adaptation grants are available. In Tallaght we have what is one of the largest and most modern biscuit factories in the world, Irish Biscuits Limited. This factory has been adapted to meet the challenges of the future. I do not believe that the thousands of workers employed by this firm will vote themselves out of jobs. The grants for the adaptation of factories in anticipation of the EEC and which have been made available in the various budgets were supported by the Labour Party despite their propaganda campaign now.

Workers in such places as Verolme dockyard are being asked to vote themselves out of jobs, but I do not believe that they will vote "No" in the referendum and neither will the people who are employed at the large industrial plant at Sligo or at the Shannon Industrial Estate. These workers will not vote themselves out of jobs.

The Deputy should avoid repetition.

Hear, hear. The Deputy would talk himself out of a job.

The survey carried out in respect of Shannon showed that there was only one firm, a small one, which indicated that they would be better off outside the EEC. All the other concerns there believed there were great possibilities for expansion and development of industry within the Common Market. Could one imagine the workers of, say, Guinness's or Dunlops voting themselves out of jobs? The people will realise what the Common Market means in terms of a decent future for their children. In conclusion, I congratulate the Minister on having helped every sector in this budget.

He forgot about the agricultural workers.

No doubt the farm workers will benefit from EEC membership but if they take the advice of the Labour Party, there will not even be any farms for them to work on.

At the outset I should like to thank the Labour Party for allowing me to come in in the order of speakers at this stage. I should like to address myself briefly and I hope to the point on the resolution before the House and to make a few comments on the budget proposals. Detailed comment will have to await publication of the Finance Bill but the points I wish to make are as a result of inquiries which I received from constituents.

The Minister promised a review at some undisclosed future date in regard to children's allowances under the Social Welfare Acts. I wish to relate this to the tax matters before us. Between now and the date of this review parents who have the task of rearing children must continue without any assistance from this budget. The impression has been created that rich and poor benefit alike from increases given under the Social Welfare Acts. I submit that that is an incorrect impression. The Minister or his predecessor have so arranged matters in the past few years that families who are taxpayers do not benefit at all from increases in children's allowances. The reason for this is that the Minister, by reducing the tax free allowances of a husband, collects from him in tax the amount of the increase that would be given by way of increased children's allowances under the Social Welfare Acts. Therefore, any increases that the Minister could have given would have gone to those outside the tax net. These would be the bigger families and the poorer families, the ones who suffer most from increases in food prices. It is not much consolation to a family in want to know that at some future date somebody is to make a study of their problem.

The Minister referred to credit unions. Deputies will be aware that the credit union movement in this country is relatively new but anybody who has a passing acquaintance with the subject will concede that the credit unions are doing tremendous work in fostering and encouraging thrift and self-help. These credit unions are providing a very valuable service to their members by way of grants for houses or, in rural areas, for the vesting of cottages and so on. It is a pity that the Minister cannot see his way to giving an income tax allowance to the man who is paying interest on a credit union housing loan in the same way as relief is given to a person who obtains his loan from a bank, building society or insurance company.

The Minister's proposal to give relief to the credit unions on their surplus will meet with approval. However, he will need to make sure that the relief is given only to genuine credit unions. I understand that it is not very difficult for seven or eight people to have themselves registered as an industrial or provident society. If they were registered as an industrial society, it would be a fairly simple matter to bring the society within the kind of activity set out in section 2 of the Credit Union Act of 1966. I draw the attention of the Minister to this point because it is important. Section 2 of that Act states that:

.... a society which may be registered under those Acts shall include a co-operative society which consists of persons each of whom has, in relation to all the other members of the society, not less than one of the common bonds set out in paragraph (b) of this subsection, and is formed for the following objects—

(i) the promotion of thrift among its members by the accumulation of their savings,

(ii) the creation of sources of credit for the benefit of its members at a fair and reasonable rate of interest, and

(iii) the use and control of members' savings for their mutual benefit.

The paragraph (b) referred to relates to the common bonds which are:

(i) the common bond of association (other than for the purpose of forming or conducting a credit union);

(ii) the common bond of occupation;

(iii) the common bond of residence or employment within a particular locality;

(iv) the common bond of employment by a common employer;

(v) the common bond of membership of a bona fide organisation.

Most business people are interested in the promotion of thrift among members of the society. Any group or collection of businessmen would be able to satisfy the requirements about a common bond of association or a common bond of occupation or a common bond of residence and so on. I have no doubt that the Minister's advisers are well aware of this, but I mention the matter only because some members of the credit union movement are afraid that the concessions on the tax in the statement for genuine credit union activities would be frustrated if the relief was available to those who cannot be regarded as genuine credit unions.

In regard to dependent relative allowances most Deputies will have had the experience of being consulted by their constituents as to whether the allowance for tax can be granted for supporting an aged father or mother. On looking up the records I find that the allowance for dependent relatives remained at £50 for the 7 years from 1949-50 to 1956-57. In 1956-57 it was increased by £10 to £60 and it has remained at that figure for the 16 years since then. If £60 is the measure of the encouragement which the Minister can give to the taxpayers for the maintenance of their aged relatives, is it any wonder that the county homes all over the country are so full of our senior citizens? Perhaps something could be done about this.

In regard to the personal allowances, the allowance for income tax has shown little or no improvement. For example, a married man got an allowance of £394 for the year 1960-61 and the allowance remained unchanged for about nine years until it was increased by £30. In the case of a single taxpayer the allowance given in 1960-61 remained unchanged until it was increased after nine years by £15. While the increases of £70 in the married allowance and £50 in the single allowance are welcome, I do not think there is any reason why they should be greeted with enthusiasm by the overburdened taxpayers. After all, if inflation has gone up at the rate of 7, 8 or 9 per cent per annum, then the increases given in the present budget do not compensate for the decline in the value of money in the period, let alone take into account the rate of tax which went up from 6s 4d to 7s in the £ some time ago.

While planning the change in the personal allowance, why did the Minister have to end up with such an awkward figure as £299? Could he not have increased the single allowance by £51 so as to make the allowance £300, a rounded figure? We are trying to encourage decimalisation and we have more than enough awkward calculations in regard to the various proposed rates of value-added tax, so I would suggest this figure could have been rounded up to make things a little easier for everybody.

Now we come to the question of taxation for working wives. In the social planning of the forties and fifties, the idea of people like Pius XII was that the ideal place for the woman was in the home. It is no slur on anybody to say that there are many in the community who still look favourably on that point of view. Every Deputy will have encountered cases of hardship or poverty where the wife is forced to take up employment to supplement the earnings of her husband. It is a pity that the Minister made no provision in his budget for the working wives. Perhaps it is not in order, but I should like him to have second thoughts about it and try to do something about it at a later stage.

In the budget of two years ago the Minister increased the wife's earned income relief to £74, and this when added to the married allowance of £424 gave the husband and working wife a total allowance of £498, £424 plus £74. Whether by design or not, this figure of £498 was exactly twice the married allowance; in other words, the husband and working wife had the same allowance as they would have had if they had remained single. This measure of equality of allowances has disappeared because in giving the single person an increase of £50 and the married man an increase of only £70, there is a difference now of £30. I would appeal to the Minister to see whether or not this increase could be given. It would not involve much of a loss to the Exchequer, especially if the allowance were given only to the wife who could properly be regarded as a working wife. Perhaps the test might be whether or not a social welfare card was being stamped or some such requirement.

The Minister and his Department have already granted exemption from income tax to a wide variety of persons, trades and associations, for example, hospitals, charities, friendly societies, harbour authorities, golf clubs, rugby clubs, farmers, mining undertakings, Shannon Free Airport, playwrights, authors, musicians, painters and sculptors. I want to suggest to the Minister that he should look at the possibility of granting some kind of exemption to the teaching members of religious orders of all denominations. Perhaps "order" is not the appropriate word there, but the Minister will know what I am driving at, and I mean all.

The members of this House will be familiar with the work being carried out by the teaching orders, most of whom have mortgaged their present and their future to raise money to build the convents and monastery schools where our children are educated. I understand that the deductions for income tax out of the salaries paid to members of religious orders are causing considerable hardship. These salaries are regarded as the personal income of those on the State payroll but, as the House will realise, there are many nuns, brothers and priests engaged in administrative or organisational work for whom no income tax allowance is given by the State in deciding to tax those members who are on salaries. It is hard enough on those orders to pay off their mortgages and plan for expansion without having to pay the mortgages out of income which has suffered tax. The earnings of the religious are as much deserving of consideration as those of any of the groups I have mentioned earlier, hospitals, charities, playwrights, authors, musicians, painters, sculptors and so on.

I should like now to refer to the treatment handed out by successive Governments to the widows. The woman who overnight is deprived of her husband's earnings is expected to pay her full share of rates to local authorities when most such people find it hard enough to scrape enough money to pay the funeral expenses. Many young widows are forced to take up employment because of the small amount of the widow's pension, and it is a severe hardship on those working widows when they have to pay tax to the Minister's Department on the amount of the contributory pension which they are getting. The tax collected on these widows' pensions must surely look like the biblical widow's mite when it reaches the Exchequer, but the tax represents a heavy burden on the widow struggling to keep body and soul together.

I am, therefore, urging the Minister to exempt from income tax the contributory pensions of those widows who are caught in the tax net. Let nobody tell me it is correct to tax the contributory widow's pension by reason of the fact that the husband got an allowance for the contributions when he stamped the card. Assuming that the husband stamped a card for ten years and his widow gets the widow's pension for ten years, the husband would have got an income tax relief of £26, but the widow will suffer income tax to a total of £702. If you take the case where the husband dies young, say, after stamping a card for ten years, and his widow draws a pension for 30 years, you then get the extraordinary situation where the Revenue gave the husband tax relief of £26 during his ten years and collects £2,106 from the widow during her 30 years of taxable earnings. This must be among the most unjust provisions in the Finance Acts, especially for a country which for so long has taken a Christian stance towards these matters.

To summarise my points briefly, first the cost of keeping a dependent relative has been upped by more than £10 in 23 years since the year 1949-50 and the Minister should take that into account. Secondly, the working wife should be given some extra allowance in her tax bill. Thirdly, there should have been some increase in the children's allowance under the Social Welfare Acts. People with large families depend very much on this allowance. The Minister is not telling the whole story when he calculates the cost of an increase in this allowance without at the same time telling us how much of the increase is clawed back by the Department of Finance in extra income tax. If the Minister for Social Welfare finds that some children's allowances are not collected at the correct time he should not be unduly worried because his Department obviously has the use of these funds in the meantime. A lot more publicity should be given to the fact that for families within the taxable income bracket the increases given to the family under the Social Welfare Acts are recovered immediately by the Department of Finance. By restricting the tax free allowances, therefore, those who benefit are those outside the tax bracket, in other words, those in need. Fourthly, the Minister should look into the question of exempting from tax the salaries of teaching members of religious orders of all denominations. Fifthly, the Minister should try to balance his budget without taking 26 per cent out of the contributory pensions of working widows and, finally, the Minister will be aware of the quotation that it is a long night that does not have a dawn. It sometimes seems to me that for the overburdened taxpayers and the social welfare classes the night is very dark and there is no sign of the dawn.

I should like to place on the record of the House my gratitude for the co-operation which all Members of all parties gave to me while I was in the position which I held until recently of being Chief Whip of the Opposition. I want to thank them very much for their co-operation.

May I welcome the efforts of the Minister for Finance to produce this year an expansionist budget and to wish him well in his efforts? We in the Labour Party are pleased to note the significant change in Government policy and in general budgetary strategy. This also is very welcome. May I also welcome, as one of the principal Opposition spokesmen on Finance the appointment of Deputy Garret FitzGerald as spokesman on Finance for the Fine Gael Party? This is a welcome development. Deputy FitzGerald's appointment represents progressive thinking on the part of the Fine Gael Party and it will be of general benefit to the country, to the economy and to political life.

The Finance Bill is not yet before us. The financial statement by the Minister for Finance should be the most important political indicator of the year. It is unfortunate and it is wrong that we should have drifted into the undesirable situation that each year the budget is regarded as an occasion simply to announce certain tax changes and certain changes in social security measures and, that having been done, one is supposed to spend one's time talking about these changes. The purpose of the budget is to show how the governing party intend to govern, to manage the economy in the 12 months ahead. We did not get very much indication from the Minister's statement of the intentions of the Government in that regard.

There is no real indication in the financial statement as to the political or social objectives of the Cabinet for the 12 months ahead. I am appalled that all one gets from the Government benches are statements which indicate that this is a budget which gets them off the hook politically, a budget which is good when you want to tell people at the chapel gates that they will get an increase of 50p or 70p or £1, that this is a good budget in terms of the referendum, a good budget in terms of the general election which we shall see quite shortly. This is not what I would call the governing of a country by a Cabinet. Are we merely getting from the Minister for Finance, Deputy Colley, ad hoc decisions of the administrators of the Department of Finance and passed on by him in what might be described as a semi-conscious manner?

There is no indication in the financial statement of the kind of society we want to construct in Ireland. We in the Republic have an appalling nerve to talk, as we do talk, so patronisingly to the people of Northern Ireland. We are politically naïve about the matter of a new Ireland. There is not much evidence in this budget of a new Ireland which the politicians in the Republic talk about in terms of a united Ireland. There is very little indication of the future programme or the policy that will be applied to make the country an egalitarian kind of society in which to live, to make ours the kind of society where the disparities of wealth are not evident. There is no indication of Government thinking in that regard.

The budget is and should be the strongest weapon for constructive, far-reaching, radical social action. This should be the purpose of the budget. In that regard this budget is singularly deficient and defective. We welcome the benefits that have been given but they are not adequate.

One must be very critical of the budgetary strategy of the Government. The amount of advice available to the Government in the sixties was much more extensive than that available in the fifties. Apart from the magnificent effort of Dr. Whitaker in the late fifties, there was no periodic advice given from sources such as the NIEC. The Central Bank in the fifties was in an extraordinarily reticent position. The Department of Finance had not any real development division— this emerged in the sixties. There has been tremendously sound advice given to the Government and there have been valuable commentaries from the NIEC, from the Economic and Social Research Institute, from the Central Bank and from within the Department of Finance. However, after three years as a Deputy I have a growing suspicion that these reports and advice are not read by more than two or three members of the Cabinet. I would take it that the Minister for Finance reads the reports. I think the Taoiseach is a tired man. Politically he would be a good candidate in the next presidential election and this is where his sights should be set at this stage. I do not think he will provide a great deal of political leadership between now and next April when he will be the Fianna Fáil candidate in the presidential election. It will be an interesting contest.

There is no conscious effort being made at Cabinet level to think out the various alternative strategies open to the Government. There is the rather moronic anticipation of Ministers who say that we will get £30 million next January and we will have a bonanza budget. They will give everyone £3 or £4 per week in social security benefits; they will go to the country and be reelected. This is the level of economic thinking of the Government. If it is pointed out to them that we will only get between £20 million and £25 million they do not seem to take any notice. At the moment the current budget is running in the region of £650 million and £20 million is not very much in this context. However, one gets a reaction of blank incomprehension from the Cabinet whose sole purpose in life is to get themselves re-elected.

There is a volume of evidence available to any perceptive elector to demonstrate that Fianna Fáil do not deserve the confidence of the people. There is a dire need for an alternative Government in order to restore the confidence and respect of the people, not only in the Dáil but also with regard to our economy. The move taken by Fine Gael to appoint Deputy FitzGerald as spokesman for Finance is the kind of move that gives hope that the Opposition have the capacity to put forward an alternative Government which, even at their poorest, would have little difficulty in being a substantial improvement on the present Cabinet. The political independence of the country and our right to have our own Cabinet were too dearly fought for to be destroyed by the electorate wishing simply to have a perpetuation of Fianna Fáil domination throughout the seventies. The budget must be regarded as the product of Cabinet thinking. So far as I am concerned the Cabinet is a rather tattered collection of individuals who never thought they would be Ministers and many of whom wish that they should no longer be burdened with the obligations and responsibilities of their office.

This debate highlights the fact that the functions of a budget have not been dealt with effectively in the Minister's speech. The purpose of a budget is to see how a Government can influence or shape general economic trends. It is by no means certain that the increased social welfare benefits and the expansionary measures taken will lead in the near future to an expansion in the economy. I recall the bitter experience of the British Conservative Government—and of Mr. Barber in particular —in 1971. Notwithstanding the massive attempts he made to inflate the British economy there was a long delay in achieving this. Mr. Barber confidently predicted that in a few months there would be a massive downturn in unemployment, but it was subsequently found that it was from nine to 18 months before the effects were felt in many sectors.

I am not confident that it will be possible to reflate the economy without at the same time destroying its internal competitiveness. I am not happy that this shaping of general economic trends is worthy of approval. I do not think the Government have done enough soon enough, and I am extremely concerned about the level of unemployment we may have to face next October or November. I do not think anyone here can accuse me of being hysterical about the level of unemployment. Last October I did not think there would be 100,000 unemployed and I considered some of the statements then made to be grossly exaggerated. Nevertheless, a high number of people are still in receipt of unemployment benefit—to me that is the key indicator with regard to unemployment. At the moment that rate is running at a level of 6,000 or 7,000 higher than last year. There is the possibility of more unemployment as a result of the decline in the tourist industry; there will be the 10 per cent reduction in tariffs in July, with the result that some sensitive industries may be hit. Therefore, one might talk in terms of 80,000 or 85,000 unemployed next October, notwithstanding the substantial injection of £20 million last January and the later injection recently. Therefore, I think that in terms of economic and budgetary planning and, optimistically, planning for normal employment as distinct from full employment, this budget, even in terms of indicative planning, merely an attempt to keep the steering wheel turning in the right direction, is inadequate. Certainly, the social measures are not such as will bring about a more equitable situation in our society.

The Labour Party have on many occasions called for investment particularly in the capital programme and have suggested deficit budgeting. When we did so we were told we were irresponsible and that we would bankrupt the country. We were regarded as being half-baked, naïve, unsophisticated, pseudo-socialists. Yet, the Minister in this budget has adopted that deficit approach which we feel is the correct one. In the past 12 months there has been frightening indifference and frightening confusion in the Fianna Fáil Party in regard to what they want to do and the means by which the State could raise revenue to meet its commitments and, above all, to enable it to effect a redistribution of income among the different sectors of the community. This fact is very evident from the taxation measures imposed in the budget. In making these criticisms I do not want to be classified as a Jeremiah. To the credit, not so much of politicians as to that of industrial workers and farmers, we emerged as a strong, vigorous, dynamic exporting nation in the sixties and we have proved that we are quite capable of meeting the challenge of free trade. We have 35,000 people engaged in exporting industries. In this campaign that has become a magic figure and it would be interesting to know exactly how it has been computed because even if one goes through the old CIO reports and the recent reports of the new committee on industrial organisation it is not easy to be precise. However, whether the figure is 30,000, 35,000 or 40,000 there are tens of thousands of our workers engaged in industries exporting to foreign markets and we want to see growth of employment based on exports.

Our main difference and main argument with the Government is in regard to the means by which we can maintain such workers in employment and the policies to be pursued at national level and the political framework within which these measures are to be achieved. This is what the debate should be about. I hope to throw out some of the ideas in this debate which we in the Labour Party and the trade union movement have shown would produce a good national economic policy in the first half of the seventies and I hope to outline some of the measures which I think should be adopted if we are to maintain full employment when we enter the EEC and if also we are to have the rise in living standards that is expected.

The most important point one could make to the Government is that they completely axed any attempt at a two-year or three-year or, preferably, five-year economic strategy. I do not favour five-year plans merely because they sound nice but I am generally appalled at the perpetual stop-go, inflate-deflate policy with, one might say, three annual budgets which we are getting. I get a very distinct impression from the economic thinking of the Minister that he is a man who reacts to events with no conscious sense of development of the economy. When one looks back to, say, 1970, one finds that the quarterly report of the Central Bank made very strong criticism of the management of the economy. It spoke of the impact of inflation on exports and tourism, employment and economic growth. Immediately the Minister was galvanised into action and we had the Prices and Incomes Bill introduced in this House. The Minister was photographed in his shirt sleeves with a telephone to his ear giving the impression that he had no time to take it away even for a photograph. He read the riot act to the nation. Within about ten months he had a totally different strategy: he went expansionist. After a rise in the level of unemployment in 1971, after strong criticism from the trade union movement he gave a further injection of £20 million to the capital programme. Now, we have an entirely different budgetary strategy at the beginning of 1972. One is driven to the conclusion that in dealing with questions of inflation, budgetary management, employment and adaptation of the economy, the Minister is certainly not very effective.

I think there has also been an underestimation in the public mind of the effect of the serious political strife in Northern Ireland on our economy. We tend to play this down. There is at the moment a slump in tourism. It is serious and I do not think we should deny that. That slump is not less than £20 million and in cumulative effect is regarded as being approximately £34 million. The Baker and Neary comment from the ESRI said that the net direct impact effects on GNP of the loss in income due to the political situation is £34 million. This was the quarterly economic commentary. That is quite substantial.

The loss of tourist revenue is certainly felt in the constituency I represent—Dún Laoghaire/Rathdown. It can be seen already in the hotels, guesthouses and even the licensed premises. The loss of revenue has had a considerable impact on spending power in the economy and will have an impact in the months ahead on employment. We know that the level of industrial development inquiries from abroad has declined. This is a matter of concern and I do not think the Government and the Minister for Finance have a sufficient understanding of the impact of developments on the economy. I do not think the Government are doing that much about it apart from the reinflationary policy we have seen in the budget. We have had a policy of deflate and inflate, a policy of stop-go in a very short period of two years. This is reasonably convincing evidence that the economy has been very far from effectively managed. Indeed, there is an innate incapacity in the Cabinet to manage the economy. Even in this budget the measures adopted have been of an ad hoc piecemeal nature and they are not very impressive.

One must comment on the Review of 1971 and Outlook for 1972 published by the Government through the Department of Finance. There are many indications in this of the lack of policy on the part of the Government. They are now three years in office and in respect of economic management, budgetary strategy, regional policy, taxation policy and social policy not very much has emerged in terms of a change of outlook and a change of policies. One sees the evidence in the economy itself. In this review it is stated:

The pace of economic growth slackened between 1968 and 1971. In 1968, national production rose at a record rate of 8 per cent. This was followed by a lower but more sustainable growth rate of 4 per cent in 1969. In 1970, this rate declined 2½ per cent. The slowdown in the growth of national output in that year was partly attributable to strikes in the cement and banking sectors which had a net retarding effect. Economic activity recovered somewhat in the course of 1971, and it is estimated that over the year as a whole national production expanded by 3 per cent.

This is a general decline in growth in the economy and one cannot shrug it off and over-estimate the impact of the cement and banking strikes. One cannot dismiss it on the grounds that there has been a general recession in Britain. This report comes to the overall conclusion that the growth rate in 1972 could be in the region of 2 to 2½ per cent. One would not wish to see the Fianna Fáil Party getting any thanks or kudos for their efforts over the past three years. The review contains a further indictment of the efforts of the Government. It says:

Both in manufacturing industry and transportable goods industries the volume of output was about 4 per cent higher than in 1970. At the same time, the level of activity in building and construction is estimated to have risen by about 11 per cent. The volume of net agricultural output (including livestock changes) is estimated to have increased by about 6 per cent in 1971.

In terms of previous increases in manufacturing output and so on the net improvement has been very poor and is not encouraging in relation to future development. One must judge the future, therefore, not merely in the party political sense of being a Jeremiah. Some Opposition Deputies have a disease of pure negativism and pure depression and pessimism which is evident in almost everything they say. This occurs largely because of being too long in Opposition. My criticism of this budget can be summed up by saying that the indications for 1972 are quite serious and the efforts of this budget to meet the defects which are now becoming evident are minimal at best.

We should not under-estimate either the continuing employment difficulties in Britain. We have had a flow of industrial workers to this country. In the past 12 months 800 to 1,000 people have returned because of the employment situation in Britain. Even with the expansionist budget of Mr. Barber in Britain, and even with a growth in output of 4 to 4½ per cent in Britain, unemployment is not expected to fall dramatically there. It looks as if with normal weather the seasonal peak next winter in Britain will be between 800,000 and 900,000 as against the million in the past winter. I would concur with the statement made by Alan Day in the Business Observer of 26th March. He said, and I would accept his argument:

If growth of output is at about 4 to 4½ per cent, unemployment should fall over the next year, but not dramatically. With normal weather the seasonal peak next winter might be 800,000 to 900,000 rather than this year's million. This prediction will for many people be a condemnation of the Chancellor's measures. But it is now pretty clear that if we are to maintain our mixed economy and avoid intolerable inflation, the unemployment percentage cannot be allowed to fall to levels as low as those we enjoyed in the fifties and sixties.

He went on to quote the work done in Sheffield University in the latest issue of the Economic Journal. He said, and I agree with him:

This strongly suggests that the balance between unemployment and job vacancies was shifted by about 44 per cent by the Labour Government's changes in social security arrangements (such as the wage related unemployment benefits) which made unemployment less intolerable to the individual. Thus if the absolute peak of full capacity was 1½ per cent unemployed before 1966, it is now nearly half as high again at practically 2¼ per cent.

He finished up by saying that the country might well have to live with a minimum unemployment winter figure of 600,000 to 700,000. This development in Britain means for us that many potential emigrants will be much more selective about going to Britain. Many of them may decide to stay at home and live on subsistence level rural incomes, or to come home and live on unemployment assistance. That economic climate in Britain will not be very helpful to us in the next 12 months. I do not think the Government have taken it into account adequately.

I am sure many Members of the House are aware of the very constructive and detailed predictions made for the Irish economy in 1972 by Dr. Kennedy the Director of the Economic and Social Research Institute. At the recent national economic conference, admittedly before the budgetary measures were anticipated, he pointed out that the difficulties now facing the country on the economic front were endemic and likely to persist into at least the first half of 1972. On reading the data which he made available, I felt that the Government seemed to be very complacent and very smug about future economic trends, and that they were relying excessively on the domestic consumer impetus now given in the budget, but which is not adequate in my opinion.

Irrespective of the employment situation in Britain and irrespective of the economic difficulties facing us here, we have an underestimation by the Government of the international recessive impact on the textiles and footwear industries. Both of these sectors are undergoing considerable economic difficulties. Both are heavy employment industries. While they have already contributed in substantial measure to the redundancies in the Republic, there is a danger that they may contribute even more in the 1972-73 period. I am extremely concerned about the impact of the tariff situation on both of these industries. While the Minister for Industry and Commerce has set up fire brigade consultancy exercises to try to offset the worst effects of the textiles recession, I do not think the Government fully appreciate the impact both these industries will have in the next 12 months.

The real test is the extent to which the Government have by their policies encouraged the growth in employment during the past two years. That growth has been abnormally slow. Frankly, I am too embarrassed to quote at undue length the projections in the Second Programme for employment and compare them with the actual outturn. I will just quote one paragraph and the point will be seen to be made. On page 32 of the review document at paragraph 18 it is stated:

Having regard to the ground already lost and to the prospects for 1972 as outlined in the first part of this review, it is now expected that overall growth in the period 1969-72 will be of the order of 12 per cent compared with the 17 per cent originally projected. The increase in overall employment also seems likely to fall short of expectations and it is expected to be of the order of a 6,000 increase as compared with an increase of 16,000 originally projected.

I do not know what consolation the Government might derive from the fact that they are 5 or 6 per cent short on the Third Programme projections for output and about 10,000 short on the employment projections in the Second Programme. This is not in any way to denigrate the forecasters or those involved in the projections. They are not the possessors of all the economic wisdom. While the projections were relatively modest and while of necessity they were targets, there seems to have been very little conscious effort by the Government to strive towards attaining those objectives. It is on that score that I fault the Government. I fault them very severely for a lack of initiative and a lack of effort to attain the objectives and targets of the Third Programme. I do not think that any Government speaker can get over that criticism.

Having made these criticisms I would strongly suggest to the Department of Finance and the Minister that, in the next two or three months, a very careful review should be made of the extent to which the current budgetary measures have any real impact on the economy. We cannot wait until next September or October before deciding to have a further review of the State capital programme. The State capital programme must be kept under continuous and thorough review, even on a monthly basis. It may be necessary to decide to bring forward shelved departmental plans for housing, for schools, for regional colleges, for hospitals and roads construction. It will be necessary in the second half of the year to review the State capital programme. I say that because we are all aware that between February, 1970, and October, 1971, there was an appalling mess in the State capital programme. There were substantial cutbacks but these were restored later when the Government realised they were getting into very deep water. If the construction and building industries encounter any difficulties, in terms of industrial disputes, which are unlikely, or more particularly as a result of cut-backs in terms of the capital programme, the consequences will be great and could lead to tremendous difficulty for the country as a whole.

I am pleased to note that the Department of Finance seem to be in regular and constant consultation now with the Central Bank. I am not so sure that the same liaison exists in respect of the commercial banks, the building societies and the insurance companies. These are three areas in respect of which it should be ensured that further capital funds are released, even at very short notice if necessary, in the months ahead. The Central Bank has been very bountiful to the Government this year. Their co-operation is to be welcomed but I hope that in respect of the other institutions a financial injection in the months ahead will be forthcoming.

As spokesman for this party on Posts and Telegraphs I make a further plea to the Government in this respect. There is no reason why the level of the capital financing of that Department should not be increased substantially. I know that they did receive an injection earlier but there exists a severe shortage of telephones. In many areas, indeed in many urban areas, many of the telephone networks are grossly overloaded and in my opinion are becoming increasingly defective. There is a high employment content in this service. The Government should make available more capital to enable the deficit in telephone connections to be reduced. Such a step would be welcomed, too, by those seeking employment with the Post Office.

There has not been sufficient analysis by the Government of what will confront us in July when there will be a further review of the tariff provisions under the Anglo-Irish Free Trade Area Agreement. I would point out that the final four of the ten annual tariff cuts are still due under the agreement, from July, 1972 to July, 1975. These will have a critical impact on industry. The final two-fifths of this agreement have the real bite. In the light of the unemployment situation I would suggest that there should be another review of the agreement. The force of the impact of the further 10 per cent cut could be measured effectively by the Government.

I wish to commend the efforts of the Department of Industry and Commerce towards implementing the recommendation of the Committee on Industrial Progress. Members of the House have now received the reports for the agreed sectors and these are excellent. Needless to say, most Deputies will not read them. Indeed, most members of the Cabinet will probably not read them. Even if the Minister for Industry and Commerce were to read them, he is so thick that he would not understand them.

That is not a very fair comment to make about anybody.

A major effort should be made by the industrial reorganisation branch of the Department of Industry and Commerce to have these recommendations implemented as soon as possible. There are many constructive and effective recommendations in these key sectors which should be implemented. It would be a pity if the excellent work done by the committee should remain merely on paper. That brings me to the point of ministerial meetings with the representatives of industry, particularly with the leaders of industry. The Ministers for Finance and Industry and Commerce have far too few of these meetings and the ones they have are desultory. For all practical purposes the extent to which the Cabinet have any real contact with entrepreneurs or with industrialists is extremely limited. My impression is that Fianna Fáil approach industry only when either a referendum or an election is imminent and when they want money for that referendum or election.

If there was any real contact between the Government and industry, the Government would realise that at Chamber of Commerce level and at the opening of garages and so on, the new "in joke" is to wait for the Minister for Industry and Commerce to be present and to open a score board on the back of the menu and bet as to the number of clichés that will be used by the Minister, particularly on the need for adaptation in industry. Of course, the business community have not much confidence in the capacity of the Government to come to grips with industrial problems.

When I was a trade union official it struck me forcibly that when we had meetings during the 1964-69 period with the senior economists of the Department of Finance, many of whom were extremely competent, and with employers, one never saw a Minister. I was representing the Irish Congress of Trade Unions at many of these meetings in Finance, Industry and Commerce and Agriculture and Fisheries when the prospects for the coming year would be discussed, but the idea of a Minister sitting down and talking to us about the problems facing industry did not arise. Perhaps the Minister was at a Fianna Fáil cumann meeting or in the House here, but anyway there was no contact at these meetings.

The occasions when, say, the Minister for Agriculture and Fisheries, Deputy Gibbons, would meet the Irish Farmers Union or the ICMSA would be mostly concerned with a budget review, not with any far-reaching policy innovations. The occasions when the Minister for Lands, Deputy Seán Flanagan, would meet rural organisations to discuss land policy would be virtually nil. The Minister for Finance, Deputy Colley, thinks he is doing a great thing when he meets the leaders of the credit union movement, but how many of the top Irish industrialists has he met in the past 12 months? I doubt if there has been very much contact, apart from his trotting off to the IMI conference down in Killarney and delivering a verbose contribution on the need for entry into the EEC, a predictable contribution prepared by the staff of his Department.

I do not think this can be regarded as running the country, which is not a big country. You could put the names and addresses of the top Irish industrialists on three sheets of foolscap paper. You could put the names and addresses of the top Irish firms on 30 pages of foolscap. While there is no great necessity for a Minister to trot around to every factory, one does feel that the extent to which, for instance, the Minister for Industry and Commerce is aware of the problems of industry and capable of coping with them is very limited.

The mental approach of the Minister for Finance is illustrated very clearly in his attitude to the National Industrial and Economic Council. I knew the Minister, Deputy Colley, before he ever became a politician, when he was a solicitor, when he was chairman of the Joint Labour Committee in the Labour Court, getting three or four guineas a week, a day or an hour, for whatever length the meeting lasted. He was an aspiring politician, and I suppose so was I. The then Minister for Industry and Commerce drifted from that setting into becoming a major national political figure without any contact with Irish industry and very little contact with Irish economists or economic institutions. Therefore, the Minister for Finance and most of the Cabinet have a total inferiority when it comes to understanding the economic viewpoints put forward by the staffs of the Economic and Social Research Institute or of their own Department, or dealing with the reports prepared by the National Industrial and Economic Council or in adhering to the strictures of the Central Bank.

There is an inbuilt defensive reaction almost every time one approaches the Minister on the National Economic Council. There are political reasons for this. There has been a tremendous reservoir of resentment built up within the Fianna Fáil Party, particularly at ministerial level, about the work which was done by the NIEC. These reports were regarded by many members of the Cabinet in the late 1960s and early 1970s as an affront to their political intuition and competence, whether those reports were laudatory to the Government's policy, as many of them were, or were critical or suggested changes here and there. The Minister has shown this defensive mechanism and his appalling negative reaction when he states, for example, that he will not allow the work of the NIEC to be continued simply because the Irish Congress of Trade Unions might nominate a Senator as its representative on the new National Economic Council.

The Minister's attitude is appalling. I have described it in this House as a dog-in-the-manger attitude. There was tremendous resentment in the Fianna Fáil Party when Deputy FitzGerald was a member of the NIEC. It so happened that he was nominated by the old Federation of Irish Industries or the Confederation of Irish Industry as it is at the moment. When I was in the trade union movement I remember certain politicians "doing their nut" because they thought that the then Senator Garret FitzGerald might have had some advance access to the NIEC reports.

So reluctant is the Minister for Finance to come to grips with the need to establish this council, that he is falling back on the old ploys, and time has almost run out for setting up this council. I do not think that the Confederation of Employer Organisations or other organisations would prove to be obdurate about the right of the ICTU to nominate on to the National Economic Council representatives of their own choice without dictation from the Minister for Finance or the Cabinet as to who they may or may not select. If the economic development of this country is to be discussed objectively and constructively by all the representative economic groups in the State under the aegis of the National Economic Council, then the Government must give way on their current dog-in-the-manger attitude to the setting up of this council. I accuse the Minister for Finance, Deputy Colley, of sabotaging the National Economic Council for his own narrow party political purposes. That National Economic Council meant that the employers, trade unionists and agriculturists, for the first time in the history of the State, would be able to sit down together around the table to discuss economic policies and remedies for economic ills. They could have made a decisive contribution to the development of the economy.

There is propaganda at the moment that there is a farmers' lobby, a trade union lobby, an employers' lobby and all sorts individual lobbies operating. I still think that the farmers' organisations would wish to sit down with the Irish Congress of Trade Unions and with employers' organisations and have joint discussions. Such a council could at this moment play an invaluable role in expressing joint views on vital matters, the joint views of men like T.J. Maher, the ICTU and the employers —tripartite views which would bring about fusion and cohesion in political expression. That council could now be playing an invaluable role in expressing views as to the principles which ought be applied for the development of the economy and for the realisation and maintenance of full employment. That council could make that kind of contribution.

Economic wisdom and political wisdom is not the preserve of any Member of this House. If the direction of the national economy had to be entrusted to the personnel of Dáil Éireann we would be in "Queer Street". I am in a good position to make this comment because I am a Member of the House. I resent the proposition that the other major representative organisations of the State do not have the right to be consulted formally on the formulation and review of economic policy. I am quite certain that we could have this matter reviewed if the Minister for Finance were to climb down from his high horse and stopped dictating to the Irish Congress of Trade Unions as to whom they should nominate to the economic council.

Brian Faulkner in Northern Ireland when Minister for Commerce was infinitely more progressive in regard to such nominations than is the Minister for Finance in the Republic. In Northern Ireland Senator Norman Kennedy, regional officer of the Amalgamated Transport and General Workers Union, a respected member of the Northern Ireland Committee of the Irish Congress of Trade Unions, was nominated to the Northern Ireland Economic Council and there was no fuss or bother about it by any Northern politician of any political party. But here, because of the fear that a Senator would finish up on the National Economic Council as a result of the nomination of the ICTU, and that somebody in the Fianna Fáil Party might be upset about that, we have not got a national economic council. This, of course, is the typical stupid, narrow attitude.

There is a further complication facing the Government in this regard. We do have a Seanad. The Irish Congress of Trade Unions is a nominating body to the Seanad. The employer organisations are nominating bodies also. In effect what the Minister is saying is that if any senior officer from the executive or, say, the president, of the ICTU or the president of an employers' organisation, were nominated to the Seanad and were elected, automatically, he cannot represent his organisation on the National Economic Council. I do not know what kind of perverse logic this is or what internal jealousy exists in the Department of Finance of Members of the Oireachtas being on such a consultative body.

One would imagine that the members of the National Economic Council were in receipt of a salary. This work, as we envisage it, would be entirely voluntary. There is no suggestion that anybody would be paid for acting on the council. The case would be quite different if it were a semi-State body or had statutory status. I can see no reason for the Government's reluctance to have such a body.

Now I come to a matter that is perhaps a follow through from these suggestions in regard to a national economic council. There seems to be a general impression, certainly within the Fianna Fáil Party, that economic stability and economic expansion occur on the basis of a budget and that as long as you have a good budget everything will flow along quite merrily. This is not the case. Economic stability and expansion do not occur spontaneously and are not the result of a few decisions made in a budget. Economic expansion occurs as a result of the quality of decisions which are made by politicians, public servants, managers, the trade unions and their representatives. This point was made by the former National Industrial and Economic Council as far back as June, 1966, when they issued their first report on economic planning. That council said that economic planning was a method by which the quantity and the quality of economic decisions can be improved and a faster economic growth rate achieved, and that it consists essentially of formulating future objectives indicating the means which must be used to achieve them and providing for the systematic study of economic prospects.

It should be said that that would be the function of the National Economic Council. At the moment there is no organ of State, even of a general consultative nature, which would undertake this kind of work. Certainly, the Fianna Fáil Party do not carry out that kind of work. Not only do we need such a council to be established but, at the level of industry, with a critical transitional period facing us, the period 1972 to 1978, on entry to the EEC, many industries do not understand the relevance of the decisions taken by the Government. They have only a vague awareness of the industrial targets set out in the various economic programmes. I would strongly suggest to the Government that as a logical parallel development to the National Economic Council there should be established economic development councils for individual industries.

I know that in the early sixties this country went through a great vogue of planning. Many people were convinced that planning would automatically lead to economic growth, but this was not so. I recommend that employers and trade unions should be represented on the development councils that might be established in each industrial sector.

There is nothing particularly novel about this suggestion—in fact, it is about ten years old. In August, 1962, the Committee on Industrial Organisation in their third interim report suggested the setting up of adaptation councils. The report stated that they were strongly of the opinion that where the circumstances of an industry were such as to point to the need for the creation of an adaptation council that action should be undertaken as soon as possible. The report urged that each industrial association should consider as a matter of urgency the establishment of such councils. The idea was that the adaptation councils would implement the recommendations of the CIO.

A large number of such councils were established from August, 1962, until the period 1963-64 when the industrial reorganisation branch was established in the Department of Industry and Commerce and the Confederation of Irish Industry appointed a director of industrial organisation. Having regard to the fact that we shall face free trade in the next few years, it is essential that economic development councils should be set up, particularly in the sensitive sectors.

These councils would be of help in coping with the problems that will arise in free trade conditions. The councils could stimulate individual firms to make realistic plans to cope with such problems. It is accepted that we will have to have further adaptation of industry irrespective of free trade and the councils could promote orderly adaptation inside these industries.

An effort was made by the Labour Government in Britain to establish various economic development councils. A number of them developed and they acted as the basis for the co-ordination of industrial effort. If the Government, under the aegis of the National Economic Council, set up development councils for each industry it would lead to the development of co-operative action within industry. This action could help individual firms to cope with the challenges of free trade and it would help them to make the best use of the trading opportunities that are anticipated in the years ahead. This is a matter that might be considered by the Minister for Finance and the Minister for Industry and Commerce.

It will be necessary in the future for each industry to have expansion plans and this cannot be done on an ad hoc basis; otherwise the work being done by the IDA and Córas Tráchtála in the marketing end will be dissipated in different sectors. Economic development councils could formulate expansion plans for each industry and these could be worked out in consultation with employers and workers. In this way one would have a loosely-knit national plan without any of the trappings of organised planning and without undue rigidity.

I am reasonably certain that the IDA and Córas Tráchtála would welcome such an approach. I might refer to the work of Mr. Michael Killeen in the IDA, the experience he had in CTT and his experience of the old adaptation councils. I am certain that if this kind of progressive approach were made by the Minister it would be welcomed by many semi-State bodies. I am sure they would allocate whatever resources were necessary towards getting the work off the ground.

Unfortunately, the ideas regarding economic planning mechanisms prepared in the sixties have fallen into relative unpopularity. Whether economic activities are based on private or public enterprise, they must be coordinated in any kind of planned development. A great deal of the thinking behind economic planning in the different sectors is still as valid as it was in the sixties. Otherwise, expensive national resources would be wasted or lie idle in the future. We can ill afford waste in our small economy. There is great need for co-ordination and planning under what we might term loose public direction. I am certain the various economic groups and trading organisations will fully assist and they deserve to be fully consulted in any changes the Government may have in mind.

I want to make other comments on the budget and a particular comment on regional policy. The failure of the Government to come to grips with regional policy will go down in history as one of the most scandalous examples of lack of moral political courage of any Government in the history of the State to face its responsibilities. No criticism can be harsh enough or strong enough of the cavalier attitude of successive Fianna Fáil Ministers confronted with a need for regional planning, administration and development. We have had the apalling spectacle of a multiplication of regional planning developments. One need only look at the health services to see regionalism rampant. A great deal of it is not unwelcome; it is necessary to have effective regional co-ordination and I do not oppose regional health boards as such. They could be much more effectively administered and their resources more effectively used.

We see a particular effort at regional development in the Shannon area which I welcome and strongly support. I have the greatest confidence in men such as Paul Quigley and those in charge of the regional development in the Shannon-Limerick region. The Industrial Development Authority has its own regional plans and, again, I have the greatest confidence in their efforts. CIE, the major national transport authority, has already regionalised itself with area managers, and so on. We have Bord Fáilte which commendably has decided to rationalise its activities and has regionalised itself. The Department of Local Government has split up the country into its own futuristic regional divisions. But what do we get from all this? There is a map of Ireland in the Library which, perhaps, I should have brought up but if anybody wants to see it, it is there. It is issued through the Institute of Public Administration. You can draw a map of Ireland and superimpose on it the different regional areas of local government, CIE, Bord Fáilte, IDA and the health boards and you get a crazy patchwork quilt of total confusion. Now we have a situation where, on top of all that, in the next ten days the Taoiseach will be announcing a major regional development strategy for the Irish nation.

This is total hypocrisy and electoral gimmickry of the highest order. Deputy Hillery is in Rome at the moment assuring us that the nation is about to have a regional development plan announced. I do not know what Deputy Hillery is announcing. If one takes the current Review for 1971 and Outlook for 1972, one finds this statement:

The Industrial Development Authority has now been reorganised. In January, 1971 the authority opened regional offices in eight of the nine planning regions. In the remaining region, the mid-west, the Shannon Free Airport Development Company acts as agents for the IDA. These regional offices are now fully operational. Their fundamental objective is to promote the industrial development of the region and they provide a comprehensive information and advisory service to local industry.

As far as industrial development is concerned, the country is regionalised, small thanks to Fianna Fáil. I know from my own knowledge, experience and contacts that the IDA had to do this job itself because not one Government Minister had the moral courage to say: "We should have Waterford as an advance factory area; we may have Sligo but we shall not have Letterkenny and if Neil Blaney `does his nut'—to use the current phrase— about Letterkenny being a minor growth area, he must be told to buzz off. He is not going to run the Cabinet yet." This is the kind of rubbish that went on in the Cabinet all through 1969 and early 1970, individual Ministers riding their own hobbyhorses.

We had the appalling situation of the Minister for Finance, as Minister for the Gaeltacht, determined to have a regional development centre in every small village in the Gaeltacht. He, also, was completely caught up in confusion of his own making and the whole business is now in a shambles. There is no regional policy in the Republic and notwithstanding Buchanan and all the reports made available to the Government by the IDA. An Foras Forbartha, the Economic and Social Research Institute, the National Industrial and Economic Council as far back as 1964, no effort whatever was made by the Government to have a regional policy apart from a good deal of general waffle.

Deputy Hillery is our present Minister for Foreign Affairs and is now I gather in Luxembourg. In 1969, he read a paper which I resurrected recently on "Social Values in Regional Development" at the mid-west regional conference of the Irish Management Institute in Limerick on Tuesday, 25th March, 1969. On page 7 of that document three years ago, Deputy Hillery who is now preoccupied about regional policy said:

The Government recognise that it is not practicable to have new industries established in every small area but its aim is that every region should share in the benefits of the industrial drive. The national tendency has been for development to be attracted towards the eastern seaboard and especially to the Dublin area. This is creating an imbalance in our whole economic structure. It is imposing a severe strain on the facilities available in the Dublin area while facilities elsewhere are under-employed. Thus on purely economic grounds policies of regional development are sensible and practicable but they are even more justifiable on social grounds.

Throughout that speech no indication was given that there might be in any part of the ensuing three years a regional policy announced. That statement just stood as it was and since 1969 absolutely nothing has been done by the Government in relation to a regional policy.

What about the advance factories?

Can the Parliamentary Secretary tell me where any firm Government decision was taken on regional policy over the past three years?

The advance factories in the west of Ireland. There are two in my constituency. The county development teams and the IDA are working together and there are advance factories planned for the whole western seaboard.

Would the Parliamentary Secretary be annoyed to hear that it was the IDA and not the Government who decided on the advance factories for Waterford and Galway?

I am not talking about the big industrial estates. I am talking about places like Mountbellew and Ballygar.

The Government took no conscious decision about Mountbellew or the other areas. These were due to the throw-up of ideas within the IDA and were brought to fruition by the IDA very often in the teeth of total conflict. Even in respect of Mountbellew I remember the conflicting claims of Government Ministers as to where those small industries should have gone to.

I was born there. There it one in my home town anyway. We had some little say in it in spite of the Deputy's protests to the contrary.

The trouble is that the Minister for Industry and Commerce cannot make up his mind whether he wants Edenderry, Tullamore or Stradbally as the growth centre in his constituency. Deputy Blaney did his thing about Letterkenny being the growth centre and, of course, Deputy Charles Haughey favoured Sligo because of connections with that town. Deputy George Colley became the new Minister and he decided he would have a little industry in every advanced town of every unadvanced area in the Gaeltacht.

Mr. O'Donnell

The role of party politics in industrial development is interesting.

If one talks to any of the regional managers of the IDA and most of them are fairly tight lipped individuals when it comes to politics, most of them are extremely reluctant to have anything to do with any politician of any party because they do not trust any of us and I do not blame them but if you get them quietly into a corner they will express absolute horror that the Departments of Finance. Local Government and Industry and Commerce have not the foggiest idea as to what should be done in respect of regional development. Deputy Paddy Hillery is talking a lot of unadulterated rubbish—I suppose rubbish is adulterated anyway—when he alleges abroad that the Taoiseach in the next few days is about to unveil the grand strategy of the Fianna Fáil Party in relation to industrial development. I shall give one further illustration of this. Thank God we have the IDA and Córas Tráchtála. I quote:

The programme for advanced factory construction was continued on the industrial estates at Galway and Waterford. At the end of the year 698 workers were employed in the Galway estate and 575 on the Waterford estate.

The IDA have been building houses. One is not quite sure whether these houses were authorised by the Department of Finance or Industry and Commerce on the basis of needs for workers or the Department of Local Government on the basis of population changes in given areas. Such was the frantic attempt of the IDA in the past two or three years to get into different areas of industry related to housing that it finally took the bit between its teeth, went ahead and built a few houses itself. It says in the report:

The Authority continues to review housing needs in areas where industrial development is taking place. Two hundred and fifty-four houses were completed and a further 132 are under construction in a number of centres throughout the country.

Yet the Fianna Fáil Party is about to announce its strategy on regional development.

They are building them through the building agency.

I shall give one further illustration of the Taoiseach's initiative, the sense of innovation that is evident in Fianna Fáil, the sense of straining at the leash to announce their plans. One would imagine that regional development includes not only industrial development but also industrial training so one would imagine that the Taoiseach's announcement would include further statements in respect of industrial training. But meanwhile to its credit the Industrial Training Authority have gone ahead and done the job and to hell with the politicians. I quote:

AnCO will have five permanent training centres in Dublin. Cork, Shannon, Galway and Waterford in operation during 1972. A further centre with 50 places will be set up during the year in Gweedore.

The regional strategy for the Gaeltacht is now developing. We now have an industrial training centre in Gweedore. Fair enough, but it was not the decision of the Government. It was a decision of the Industrial Training Authority who decided it was time to do something for the Gaeltacht areas and proceeded on their own initiative. If the Parliamentary Secretary does not believe me, he should go away and ask Jack Agnew, the Director General of the Industrial Training Authority.

This is all part of Government policy.

If it is, it has been the best kept secret of the seventies. I never heard of it. The Fianna Fáil Government have been so busy trying to curb the dissidents, trying to sort out the internal dissensions, in fairness preoccupied with Northern Ireland, that they have not held the necessary meetings in the past 12 months. In the year 2,000, when some future undergraduate gets access to the State papers and if we ever see the Cabinet minutes the confusion and the conflicting political demands and the non-discussion of regional policy will be strikingly evident. That is not to say that they have the slightest excuse in that regard. As far back as July, 1965, in the comments on the Report of the Committee on Development Centres and Industrial Estates, which I do not propose to quote, the benefits available to local areas were outlined if they had a decent regional policy in operation.

The choices are not easy. One has to tell certain major towns that from the point of view of the State it is too expensive in terms of capital allocation, it is too costly in terms of educational investment, that in terms of housing availability, and so on, it is impractical, and in terms of transport it is not "on", to give them the factories they are demanding. It is simply not "on" that large industrial units should be set up in many of the rural towns. It is very unpopular to say this in many parts of the country. but we must have growth areas and, in many cases, these will be areas which will cater for towns within a 30-mile radius.

If we are ever to have industrial development, workers from the surrounding townlands, the surrounding villages and towns will have to travel into those areas to work. This has happened in Galway in the industrial estate. This has happened in Shannon and in the Waterford area. It is about time the Irish people realised that this is the pattern of industrial development and that it will be the pattern in the future. One cannot give to each area its own regional college, its own technical college, its own hospital facilities, its own housing development, its own road construction, its own electricity transformers. This just is not "on" in terms of the allocation of national resources. The Government have failed singularly to talk like that to the electorate. The Minister for Finance was not honest with people.

The Minister for Industry and Commerce says: "We lost a factory in Clara. By hook or by crook we must convince some continental entrepreneur that if he arrives at the IDA offices he will have to take a factory by the scruff of the neck and put it into Clara because there was unemployment in Clara recently." That is not industrial development. That is a stop gap, fill-a-gap-here and fill-a-gap-there policy. It might be better for the factory to go to Tullamore and for the workers in Clara to go to work in Tullamore on a daily basis. That kind of strategy might be better. It might be more effective in the long term and in the short term. There is political dishonesty about industrial development which I found nauseating when I travelled around the country outside Dublin and talked to Irish men and women who want jobs, and who want jobs for their sons near their own homes preferably.

I want to deal briefly with some of the taxation measures introduced by the Government and I want to criticise them. I want to criticise the income tax relief given. The Minister has given across the board children's allowances to everybody irrespective of size of income. It could be said that this approach is not as egalitarian, not as just, and not as effectively redistributive as it could be. At the moment the average industrial earnings of an Irish worker would be about £28 a week. Last September the figure was £27.11s. If that industrial worker with £28 a week has three or four children, has insurance and so on, and if he has a small house and is paying off a mortgage, the odds are that he is paying almost no income tax.

Many industrial workers have less than £28 a week and, if they have a family, they are not liable to income tax. They get absolutely nothing out of the budget in relative terms. I have submitted a question about the tabulated tax table published in 1970 after Deputy Haughey introduced the relief on the first £100 of taxable income. I have asked for that table to be brought up-to-date to show the tax liability for each group of workers. I am reasonably certain that, when we come to examine it next week, it will show that the so-called income tax concessions in the budget do not benefit the relatively lower paid industrial workers to any great extent. I do not understand why there is all this hoo-ha in the Fianna Fáil Party about the income tax reliefs. By no stretch of the imagination can this be called a radical measure of change.

We have always held that a justly administered form of direct taxation is more desirable than an excessive reliance on indirect taxation. As we know, direct taxation ensures that the individual taxpayer contributes according to his resources and the tax burden does not fall so heavily on those who are already badly off. Unfortunately, successive Fianna Fáil Ministers for Finance have relied very much on indirect taxation. Admittedly, in this Budget there has been no further development in that direction. In this country there is an extremely high reliance on indirect taxation. A very high proportion of our tax revenue is raised by indirect taxes like the turnover tax and the wholesale tax. The danger of this type of tax is that it is paid at the same rate by all citizens regardless of their means and it places a very heavy burden on the lower income groups. When these taxes are applied to essential goods such as foodstuffs and clothing, the regressive effect can be very considerable.

Therefore, it is high time that there was a full scale examination of the general taxation system with particular reference to the development of a more fair and just system of taxation. The present system is not equitable. The basis of taxation must be designed to secure a fair distribution of the burden of taxation according to the financial ability of each citizen to bear that tax. The trend has been for the rich to pay relatively less and for the less well-off to pay more. Any close examination of the impact of income tax will bear that out.

I suggest that this shift in the tax burden to the less well-off sections should be discontinued. Wage and salary earners must pay income tax to the last penny on their earnings, including overtime, incentive bonus payments and such like, but there are other sections of the community who, by various devices and systems of tax avoidance, dodge paying their share of tax. Not only that but I know of sections of the community who dodge paying their fair share of turnover and wholesale taxes. It is a very costly process for the Revenue Commissioners to catch up with these.

On a point of order I propose, with the permission of the Chair, to raise on the Adjournment today the subject matter of Question No. 45 of Tuesday, 18th April, 1972.

The Chair will communicate with the Deputy.

Therefore, I suggest that a revision of the income tax system is very necessary so that the current gaps in tax liability might be closed. There is no need for me to spell out for the House those sectors that have been avoiding the payment of their share of income tax. From the information we have had available to us I am convinced that wage and salary earners are carrying an excessive burden of the tax levy. For example, the number of persons effectively insured under the Social Welfare Acts as at 31st March, 1971, was 808,000. The Revenue Commissioners have stated that the number of effectively liable PAYE payers for the 1970-71 financial year is about 500,000. These are substantial figures. It is not possible to say how many insured wage and salary earners are liable for payment of taxation under the PAYE system. The review should be undertaken as a matter of urgency.

As I have said during previous budget debates, it is time that we had the setting up of a commission on taxation. The tax revenue, the relativity of buoyancy and the changes that have occurred were dramatic in the 1960s but there has been no formal review. It can be said to the credit of the previous commission on taxation that they made a very decisive and constructive contribution towards a reform of taxation in this country. Incidentally, they recommended the introduction of PAYE. Ironically, PAYE was a reform for which people are now paying through the nose.

Many married women in employment have a legitimate complaint in respect of income tax. At present there are about 50,000 married women liable for tax under PAYE. Many of these are at work, not so much because they want to go out to work but because they have no option in that they find it necessary to supplement family income. In many respects their incomes are penalised excessively. A change is needed in this regard.

I might mention also that the measure introduced by Deputy Haughey as Minister for Finance was in many respects a more egalitarian and distributive measure than that which was introduced by the Minister in the current budget in relation to the £20 across the board for family allowances. We know that when Deputy Haughey introduced that measure there was a net reduction in income tax yield because he allowed the first £100 of taxable income to be taxed at two-thirds of the standard rate. Considering that in terms of its impact on the lower income group, it can be regarded as having been a reasonably effective redistributive measure of justice. I know that if it were to be reintroduced, the cost would be about £7 million but the Minister for Finance could have done a better job when one considers the options that were open to him in relation to taxation during the past 12 months.

I would point out that if any wage or salary earner is under any illusion about what he has got from the current budget in terms of income tax relief, he should look at his PAYE docket on Fridays when he will realise that the weekly benefit to him is very small. PAYE has been in operation now for 12 years. During that time we have seen the rapid growth of contributions to the Exchequer by way of this system. It is logical that there should be set up a commission on taxation or, better still, that we would have a select committee of the House on taxation. This would be a welcome development. We are fortunate in having now the benefit of the expertise of Deputy FitzGerald on the Opposition benches as spokesman on finance. I notice that at last the Deputy has had his hair cut. Of course, I mention that out of jealousy. However, I am sure that Deputy FitzGerald and the Minister for Finance as well as many other members could contribute effectively on an all-party committee on taxation. Because of the changes that have taken place since the introduction of PAYE, and particularly because of the changes that will result from the value added tax system, it is necessary that there should be a select committee of the House on this whole question.

One major point I would make in regard to income tax is the old and valid one regarding the liability of farmers for income tax. Here I see Deputy L'Estrange becoming more tense.

No. I think they would be better off paying income tax. The majority would have much less to pay than paying rates at the present time.

I would accuse the Fianna Fáil Party of a total absence of any moral courage as politicians in not standing up and making a simple statement in this regard, the kind of statement I would make now, that is, that the Government should bring all sections of the community, including farmers, into the income tax net on the basis of actual income, so that other income tax payers can regard their contribution as being more equitable. I would make one major qualification to that: the vast majority of farmers would in any event be exempt under the current income tax limits. The important point is that there are some thousands of farmers, a minority of big farmers, who should pay tax on their income just like any other citizens. It is about time the Fianna Fáil Party told the very large farmers, those whose incomes are treble, in many cases, and even 20 times in some cases, the level of income of the highest paid industrial workers, that they must make a contribution.

They claim they are paying income tax. Does the Deputy mean there are no farmers at all paying income tax?

I am not saying that. I am saying there are several thousand farmers who, on the basis of their actual income, are not paying their fair share of national taxation.

Surely they do not pay it if they have not an income from another source. They do not pay income tax on the farm. The Parliamentary Secretary is not suggesting otherwise?

I see some of them getting income tax forms anyway.

They are probably getting them in respect of the investments they have in the Educational Building Society or something like that, which they probably can make from the profits they earn on the basis of the current price of cattle. However unpopular it may seem politically, the point must be made, and I would accuse the Government of being totally lacking in any moral courage. If I may scare some of the farmers—I am sure Deputy FitzGerald would agree with me—let me say, and it is not an EEC propaganda point, that if we are to have harmonisation of our tax laws vis-á-vis the EEC, and if we are to have the progressive fusion of our tax system into that of Britain and the Continent, it is only logical for farmers to expect—and most of them anticipate this anyway—that their liability for income tax must come about in the relatively near future. Therefore, why not be honest and get on with doing the job?

I would be very interested to hear Deputy FitzGerald's views on the value-added tax, but if I had the opportunity of tax distribution in the next twelve months, I would have considered seriously, because of their impact on the cost of living, exempting food items from the value-added tax. I know that the cost to the Exchequer is £14 million a year, but I am extremely fearful that, on the introduction of the value-added tax to this country later next year, we shall have another spiralling particularly in relation to retail food prices. The Government should consider the implications of having a zero rate of value-added tax in respect of food items.

Legitimate concern has been expressed about the value-added tax by certain sections of industry and trade. Retailers are very concerned about the clumsiness of the new proposal. I know that the Department of Industry and Commerce and the Prices Commission intend to keep a very close eye on any changes that might occur arising from the introduction of that tax, but there is a danger that the impact of retail price increases will be quite severe, and I would urge the Minister to have a fresh look at this question.

The next point I want to make is a very controversial one and one that has hit the headlines in recent months. There is valid reason for criticism of the Government for failure to introduce the reform of local government taxation, particularly in relation to rates. Time and again we have been assured by the Minister for Local Government that the report of the interdepartmental committee is coming, but it never comes. Meanwhile the inequities of the rating system become more and more severe and more and more difficult to defend as every year goes by. We have asked in this House and we ask again in the budget debate for a fundamental reappraisal of the structure of the rating system. It is time the Government took some initiative in that regard.

Rates are levied irrespective of the person's ability to pay and constitute an inequitable burden. Family circumstances, size of family, level of income, the incidence of sickness within a family, special family financial commitments may vary. None of these circumstances is taken into account under the rating system. The system is now outdated. There is no correspondence between income and taxation as there is in the case of income tax. There is no equality with the rating system There should be an immediate comprehensive review of the rating system. I would make a special plea to the Minister in respect of those of very limited income and very low income who are obliged to pay substantial amounts in rates.

I am sure that Deputy Burke and Deputy FitzGerald are aware of the fact that one has to be a pauper before one can get waiver of rates in the city and county of Dublin. A non-contributory old age pensioner or a recipient of home assistance or unemployment benefit, if living alone, may get waiver of rates. The system is completely unjust. The rates bill on ordinary houses can be £70 to £150. People on low incomes cannot afford to meet the bill. I know of a number of persons living on relatively low incomes who are in a very depressed financial position and who are suffering grave deprivation because they do not qualify for rates waiver. Some consideration should be given to the question of rates rebates in circumstances of low income or of prolonged sickness or in cases where there is a large number of dependants, and so on. In these cases there should be relief in the matter of rates. This is a matter of the utmost urgency.

Rates in County Dublin, as Deputy Burke is aware, have rocketed by the increase of £1.30 this year. This kind of burden cannot be borne by persons on an income of £10 or £15 a week. I have in mind retired school teachers, retired public servants. Although there is parity of pensions now the increase in pension is nullified by the substantial increase in prices.

I have found a great deal of fault with the Minister for Industry and Commerce in this debate. It gives me no pleasure to say that he is a very bad Minister for Industry and Commerce. I can think of only one worse than he, whom I will not name and who is not a member of Fianna Fáil. The most outstanding feature of the Department of Industry and Commerce in the last 12 months was the encouragement given to the National Prices Commission. The reports issued by that commission have been extremely good. The commission has done a great deal of constructive work on a voluntary basis. I know some of the staff serving the commission. I knew some of them since I was on the Prices Advisory Commission. Their work also has been good and in many respects outstanding.

I am not one who demands rigid, total price control. There is no such animal in economic strategy. At long last the Government have accepted many of the suggestions which have been made by the trade union movement, by the Labour Party and by the Fine Gael Party in regard to the introduction of a more effective system of price surveillance. We are now on the road to having a more effective system because of the fact that the National Prices Commission is doing its job. It deserves the commendation and support of this House for its constructive work and for acting as a watchdog for the community. That contribution will prove to be quite effective in the months ahead.

These are some of the points that I wanted to make before Question Time. I want to end on a note of support for the work that the Government have done in the matter of price investigation. I want to thank the Government and to commend them for the work the National Prices Commission have been asked to do, are doing and have been doing effectively for the past 12 months. The trade unionists and employers on that commission have been doing an extremely good job and they deserve the support of the House. Their reports have been far-reaching. Manufacturers and other trading organisations, quite rightly, have been forced to state their case publicly before the commission. In the case of the commission there are no punches pulled. In this way some degree of effective price control has been exercised.

Progress reported; Committee to sit again.
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