With the permission of the Chair I should like to place on record an expression of thanks to the Parliamentary Secretary to the Minister for Local Government for the prompt reply he gave me this morning to a supplementary question I asked him yesterday. I should like to express my appreciation.
Financial Statement, 1974: Motion (Resumed).
Debate resumed on the following motion:
That Dáil Éireann takes note of the Financial Statement made by the Minister for Finance on 3rd April, 1974.
—(Minister for Finance).
I thank the Deputy.
Last night I dealt with social welfare. As the Minister is in the House at the moment I suggest he might look at the matter of decentralisation of payment. I am sure he is as aware as I am of the problems that have arisen in recent weeks with regard to payments. In Cork people who were entitled to disability or occupational injuries benefit have had the frustrating experience of not receiving their allowances before the weekend. When these people come to their public representatives late in the afternoon it is frequently difficult to contact the office in Dublin before it closes. I would ask the Minister to re-examine the possibility of having payments made locally so that they may be issued quickly. Delays have occurred in recent weeks; this happened over the Easter weekend in the Cork area.
Last night I referred at length to the price increases and to the fact that in one week there were 121 such increases. An extra assessment of VAT was included in every single item. At this stage the Minister for Industry and Commerce should either retract the decision to sweep under the carpet the advertising of price increases or to surrender and admit he has failed miserably to control prices. I have pointed out that although inspectors go from shop to shop, no matter how large their number they will not be able to watch every price increase in every shop. The public must be their own watchdogs and their own inspectors. They cannot do this if the advertisements are discontinued.
The Parliamentary Secretary tried to say last night that it was not an effort to stifle coverage of the increases in the Press, that they were still at liberty to discuss the contents of the document presented by the National Prices Commission. I repeat this is not adequate. The document has a circulation of 2,000 copies. The Press will have copies available but they cannot be expected to give in detail each commodity and its brand, the price increase and the amount of increase of every article. For that reason the advertisements are essential so that the public may be inspectors and watchdogs in their own right.
At the moment price increases are occurring so rapidly that it is not possible for a shopkeeper to mark his goods as he did formerly. Housewives are not sure from week to week what they will pay for any commodity. The situation is bad enough but it will get progressively worse if proper advertising space is not given in the daily papers. I have pointed out that extra VAT applies on every single price increase and I mentioned that the commodities varied from ice cream to turf. I said that ice-cream could not be regarded as a luxury, that every child appreciates sweets or a novelty such as ice-cream.
I understand that in many of our bogs turf has been lying there for a considerable period. Can the Minister for Industry and Commerce tell us if the price increase refers to the harvested turf in the bogs at the moment? As happened with coal, other fuels and fertilisers, has there been a hoarding operation? I have not heard any Government spokesman refer to this matter. Yesterday afternoon I heard two speeches that were totally lacking in conviction. They made no mention of price increases, the one item on everyone's lips and something that is a housewife's nightmare at the moment.
I have heard people from the Labour Party saying they want to eliminate poverty and I agree wholeheartedly with this, as does everyone on this side of the House. One would think at times that some of these people had a divine right to speak for the needy. I submit that I have a far greater right to speak on behalf of those people than many of the people on the Labour benches.
I have covered the field of income tax and the disappointment of the average worker, white collar or manual, the backbone of our economy, the long-suffering PAYE contributor. It is not enough for the Government or the Minister to say: "We have done something with income tax". This is not enough. We are in a completely different situation from what we were in in olden times. We are now in Europe. More money is required at budget time. More money is available through other funds. The penny on the pint and the halfpenny on the petrol is no longer relevant. Budgets such as this are being introduced each day of each week. The income tax allowances was a confidence trick on the workers of Ireland. There is the stifling of publicity in the case of price increases. I am sorry the Minister for Industry and Commerce is not here. I say shame on him. This is a confidence trick on the housewives of Ireland. I suppose we will have no more price increases until 20th June.
Last night I referred to a few aspects of income tax on which I spoke last year and hoped that some concessions would have been made. I referred to the old age pensioner, to the worker travelling to work in certain circumstances and I referred to overtime payments. Overtime is something that a worker has to do today in order to have a decent standard of living. If he is prepared to work overtime and if his employer wants him to work it, some special concession should be made in regard to income tax. It is unpardonable for overtime to be taxed as it is at present. When a man is asked to work on a Sunday he does not want to do it but if his employer wants him to and if he is a willing worker, he does it. As a result he pays through the nose in income tax.
There has been a reduction of allowances to the many mortgage payers in the country. The majority of them are just over the £2,000 income now with bonus, overtime et cetera. All those people will now have a smaller allowance. Their allowances will be assessed at the 26 pence in the £ rather than the 35p.
Last year I mentioned the man who buys a mobile home as living accommodation. I am not interested in the man who buys it as a second home or as a holiday home. I am talking about the young man who gets married and, perhaps, gets a plot of ground from his people or his inlaws and buys a mobile home through hire purchase. He is not allowed an income tax rebate on the interest payment on that hire purchase. This is unfair. I am again asking the Minister to have a look at it. There is a vast difference between this man and the man who buys a mobile home for holiday use.
Income tax allowances are completely inadequate. They have not kept pace with inflation. Deputy Lynch and Deputy Colley have already outlined how much was needed to bring them in line even with 1972. The Minister made a dramatic announcement that personal allowances were being increased and the Labour Members of the Government were taken in by it. They thought they were gaining something. They cheered and they clapped. A minute later he said in a much lower tone that he was abolishing earned income relief. Their faces grew longer. I think they realised that here was another trick, that here was another effort to trick people, a manipulation of figures and of publicity. The workers at the time of the national wage agreement were tricked by the Minister for Finance and they were confident that he would give the substantial benefits that he promised.
On a television programme on the night of the budget the secretary of the Labour Party, Senator Brendan Halligan, said that in 1957 when Fianna Fáil took office 170,000 people were paying income tax and in 1972 when Fianna Fáil left office 720,000 people were paying income tax. Can there be any better argument on behalf of a Fianna Fáil Government? It was because of the sound, solid Government that Fianna Fáil gave this country during those years that so many extra people were on the PAYE register, because of better working conditions, more employment, more money in jobs.
I hesitate to interrupt the Deputy but it is a convention of this House that we do not refer to a Member of the other House.
I am sorry but I believe the point made by Senator Halligan on television was a compliment to the Fianna Fáil Government for the work they did during their term in office.
We had much ballyhoo attached to the taxation of farmers. The Government were supposed to be spreading the tax net wider. They were bringing in the big farmers, those with a valuation of over £100. I will not say that I disagree with the imposition of tax on farmers with a valuation of over £100. It is very desirable that farmers with certain means should contribute their fair share to the revenue of the State. I would not have any sympathy for the majority of farmers of over £100 valuation but I am worried that this might be the thin end of the wedge, that next year there might be a lowering of the figure. I am interested to know what the Minister meant by his statement:
Relief will be provided in the case of farmers the rateable valuation of whose land only slightly exceeds £100 and steps will be taken to guard against avoidance of liability by the fragmentation of holdings so as to bring the rateable valuation below £100.
I am sure the Minister will agree that the rateable valuation is not a strong guideline in many areas. I know of some farmers whose valuation is half that figure but who make far greater profits than those with a valuation of over £100. This is probably a breakdown in the old system of poor law valuation and is not something which is easily rectified. We also have the case of two brothers inheriting a farm who decide to go ahead working the farm, which has a valuation of £104. They decide to work that farm jointly. This has been going on for some years. What is their position? Are they regarded as two separate entities even though they did not want to divide the farm? They wanted to work it together. They were prepared to work in partnership on that farm.
We had Labour Party Deputies saying that this was good and nobody could say otherwise, but then we came to the final paragraph on farming taxation. After the Minister dealt with who he was catching, such as the farmer's wife who was working and how she would be caught in the tax net, he slipped in a sentence very quietly. It got no comment in any of the strong speeches we had from the Ministers who spoke or from any of the backbenchers who spoke with such conviction yesterday. This was the sentence referred to by Deputy Hussey last night. The Minister stated:
The same issue arises where the farmer, whether married or single, has non-farming income of his own.
This is the sentence that spells out the ruin of the west, the south and the poorer areas of the country. I want to go on the record of this House as saying that the Minister for Finance quietly and subtly slipped in that sentence to hammer the small, struggling farmers along our seaboard. I refer particularly to the farmers in poor areas of my constituency, or any other constituency, who have small-holdings, who milk a few cows every morning and then go to their jobs in the Forestry Division or the local factories. There are many people like this in all constituencies except those along the east coast, Leinster or the constituencies represented for the most part by the Government Ministers. This is an indication of the Government telling us to forget about the rest of Ireland, that Dublin and Leinster are theirs and they are not interested in the rest of the country.
Those small farmers I referred to will have to pay income tax on their factory or forestry employment. Those people are only ekeing out a living despite having a second job. The small holding is no longer economic although it may give him free milk and potatoes. However, because he has that small holding, he is only allowed half the personal allowance for income tax purposes.
There is another item on farming taxation that puzzles me. It is the reference to the bloodstock industry. The Minister stated:
Representations have been made to me in connection with the capital taxation proposals that studfarming is a particularly high risk business where capital may be tied up for long periods without yielding income and substantial losses may be incurred. I am, therefore, considering what special treatment of the industry should be provided for under the capital and income taxation proposals.
Capital is one thing and income taxation is another. I am speaking about income taxation. Why should studfarming be given special mention here? I take the point about it being a high risk business but surely an income tax assessment takes cognisance of a high risk business. If profits are not made they are not taxed so why refer to the bloodstock industry or the studfarm industry? Is the Minister trying to placate his own supporters? Has he deliberately put that reference to the studfarm industry in the budget in order to placate people who may have vested interests in supporting him and his Government?
It is impossible to interpret clearly all the Minister said. I cannot figure out if the notional assessment is for one year only, if it only applies to the 1974-75 year and will not apply in future years. I am not against imposing taxation on the farming community whose valuations are over £100 but I am very strongly against the tax imposed on the small, struggling farmers who have jobs locally. This is the way to push people from the land.
I should like to refer to the White Paper on taxation. I am sorry the Minister for Industry and Commerce is not here to listen to me because I have a feeling some of the Ministers in the Government feel they have a divine right to stand up here and tell us and the people what is right. I have heard them use words like "recklessness", "smear" and so on, when referring to statements made by members of this party. One of the biggest problems with the Cabinet is that too many of them have university training and booklearning, as we refer to it in the country, but no general experience of the problems that face the ordinary people. I am not referring to the Minister in the House at the moment but I am referring to many of his colleagues.
The Minister for Industry and Commerce in his contribution made no effort to make a case for the budget but went to extremes to reply to what Deputy Lynch and Deputy Colley had to say. He used some of his flowery language in deciding whether we were a party of the right, the left or the centre. This idea of left, right or centre is a myth. He was obviously trying to say that Fianna Fáil were a party of private enterprise. He asked the question: "Where in our economy is there room for Aer Lingus, the ESB, Bord na Móna and NET?" He did compliment the party for having established the various semi-State companies but I say to Mr. Keating——
The Minister.
——the Minister—that it has always been Fianna Fáil policy to have a mixed economy. This has been proved and I am glad that the Minister for Industry and Commerce is now seeing the light and agrees with the policy of a mixed economic structure. I am glad of his conversion to this way of thinking.
The mixed economy has been a reasonably good one. As a result of that policy our economic position has grown over the last 20 years. The system has faults, as has any system, but the Fianna Fáil Party have always favoured State involvement in particular types of industry. Of course Fianna Fáil have always recognised also the need for private enterprise. I am glad that the Minister for Industry and Commerce, Deputy Keating, is a convert to our way of thinking and that there is now no argument and no room for argument in this respect although the Minister did try to put a certain type of words into Deputy Colley's mouth.
With regard to the White Paper that has been published, it is obvious that it has not been well researched. As I said last night, it was deliberately intended to cajole the workers into accepting a national wage agreement by telling them that the Government were spreading the tax net.
Deputy White in his contribution to the debate seemed to be out of line with other Government speakers, in particular, Fine Gael speakers, when he said at column 1654 of the Official Report, Volume 271:
Regarding the White Paper on capital taxation let me say it is time that a capital gains tax was introduced here ... So far as the wealth tax is concerned it must be emphasised that the proposals are still only in White Paper form. It is my opinion that this tax will have to be increased substantially.
That statement would seem to be completely out of line with the thinking of the Parliamentary Secretary to the Taoiseach. So is there not only a tug-of-war between the two parties in Government but is this story that we hear of a tug-of-war within Fine Gael more real than we think it is? If the Minister were in the House I would tell him of all the letters he has received from his supporters throughout the country giving him their views on the White Paper, some of them not worded in Parliamentary language.
A capital gains tax is something that I personally agree with. I do not agree with the system that the Minister has imposed. There was another system worth looking at although I cannot claim to be an economic expert. The man whom the Minister intended to hit hardest is the man who is regarded as a speculator but among backbenchers on the Government side of the House there is a feeling that any man who makes a decent effort and who is successful because of his effort is a speculator. That is not so. We are all aware of situations where the speculator—in this case I would spell the word with a capital S—who purchases land or buildings with one intention, namely, fast re-sale may not have had to pay the full purchase price. He pays the deposit and the legal documents may not be cleared up and the purchase price may not be fully paid before he has made a substantial profit. That person is the real speculator.
I would put this tax on different levels. I would introduce a phased tax. I would impose a levy of 80. 85 or even 90 per cent where re-sale had taken place within three months and would, perhaps, bring the rate down by 5 per cent after six months and by a further 5 or 10 per cent after a year and would phase the rate down to as low as 5 or 10 per cent after ten years because a man who bought land for agricultural purposes ten years ago and had an offer made to him because of rezoning of the area or because of appreciation of the value of land in the area for any reason does not deserve to be hit as hard as the speculator whom everyone wants to see brought into the net. The Minister should consider a phasing of the capital gains tax with levels from as high as 85 per cent to as low as 5 per cent.
A man may have held land for ten years. In that case inflation has contributed largely to the increase in the value of the land. This does not apply in the case of a man who has had the land for three months or eight months. That point should be considered.
The wealth tax is a tax that bears no relationship to its name. It may be a popular thing for a Government to say that they are introducing a wealth tax. In an effort to bluff the ordinary people, the Government may say that they are widening the tax net to bring in the wealthy people. The term is wrong. It should not be called a wealth tax. A wealth tax has very many drawbacks and dangers. I referred earlier to the mixed economic structure of our society. This has worked reasonably well. In the last 20 years there have been quite a number of entrepreneurs, men of foresight, who were lucky enough to be able to borrow from a local bank and who were prepared to work with their hands and with their heads. They were prepared to create employment. They brought other people along with them. Their businesses grew. Sometimes I hear snide remarks from the Government side of the House, irresponsible remarks, insinuating that these were all Fianna Fáil people. That is completely untrue. There are as many Fine Gael people involved as there are Fianna Fáil. I say more luck to these people. They did a good job for themselves and for our economy and they created employment. If the wealth tax indicated in the White Paper has the effect of reversing their situation, it will be a bad day's work on the part of the Minister for Finance.
The Minister for Posts and Telegraphs last night interrupted a speaker on this side of the House and challenged him regarding the outflow of money that is taking place at present. The Minister for Posts and Telegraphs cannot be so naive as to say that this has not happened. As I said earlier, there are problems in this present Government and some of them are that they have not experienced the practicalities of life outside university gates.
Finally, I want to say that I think this budget was, over-all, a major gamble, a publicity campaign. The promises made at the time of the national wage agreement fell far short in actual implementation. The taxation of the small farmer—not the big one; I agree with the big one— the small struggling man, could be a very serious set-back to our economy. The prices situation we experienced last week is I think, disgraceful. I say to the Minister for Finance review the VAT immediately; you know it is now contributing enormously to the coffers of the Government. It is now contributing far more. Even since the introduction of this budget Government speakers have said there was no taxation in the budget. I asked them about the price of petrol, beer and the 121 prices of last week when VAT was tied up in every single one of them.
When this Government took office last year it had a short nine weeks in which to produce a budget. Of course, that limited the depth in which it could examine the situation, as it found it, because of the physical fact that in nine weeks one cannot do as much as in 12 months. In that previous budget there were definite changes that indicated the pattern the Government would follow. These changes were a promise—a promise kept—that the health charges would be removed from the rates and the first slice of that was applied. It was a great relief to ratepayers all over the country. The second slice was applied in this year's budget. There was also the question of the reduction in the qualifying age for old age pensions from 70 years to 69. This also was in line with the 14-point programme which indicated that, during the term of office of this Government, the age limit would be decreased to 65. Again, in this budget, that has been decreased by a further year. We did not promise—as did the previous government in the last week before the election—extraordinary things not related at all to the amount of capital moneys available or any other moneys available, such as the removal completely of rates from houses, in an effort to get votes. Having assessed the situation in a proper and fair manner, having tied our ship of State entirely to the idea of open government, we gave an indication of what we considered possible. As far as we can—with, in my view, considerable success—we are following that line and will have our job finished during our term of office. If those who wish to criticise can do so on the basis that there are no magic wands in Government, then let them do so. I think the ordinary people have reached the stage where parish pump spouting politicians no longer impress them. What they want to see is development proceeding along measured lines, lines laid down clearly and indicated to them in a sober, fair and deliberate statement of intent before a general election. It should never be an occasion for fast dealing and trying to shoot birds quickly at the top of the rushes. Rather it should be an occasion for deep thinking for the ordinary people, an assessment of what is given to them and what will be the efforts of the Government to take office upon which they can exercise their franchise properly in the ballot box.
I suppose this budget comes at a time when it is right to assess the Government's operations and whether or not they are following that line. I have indicated two items on which they are doing so. We also indicated, on the social welfare front, that the unfortunate poor people of this country were badly treated. There is no point in my going into detailed figures but, over two years, we have given the most spectacular increases in social welfare benefits over a wide field and have made many new social welfare improvements, as we promised we would do. These are things we said we would do. These are things we are doing. There are set targets, such as the two I instanced, which will be achieved during our term of office. We are working towards these set targets.
While that is being done, we must bear in mind also the matter of good housekeeping for the ship of State which must govern our decisions. We must not upset the apple cart by trying to put too great a load on one side or the other. We must endeavour not to turn everything upside down but, at the same time, we must keep our word. We must do so, as the Taoiseach has outlined so many times, by the system of open Government. The system of open Government has a political deficiency inasmuch as it allows people who want to be destructively critical to have an advantage over you in that you are playing a game of cards in which you spread all your hand on the table and let the people assess it. I believe the people of this country have reached a stage where they will assess—after all the spouting that has been a feature of the last year, and particularly of the last three months—the situation and all that spouting will be of no avail whenever the challenge of the ballot box arises again.
Because of the constructive and progressive budget first introduced by the Coalition Government, last year has been a time of great expansion, of the greatest expansion there has ever been in the gross national product. That is extremely good for the nation. As the last speaker said, it has also been a time of spectacular price increases. But, when he spoke of price increases, he never mentioned the oil crisis, the fantastic increase in the cost of animal foodstuffs— which, of course, governs the price of meat and everything else—the fantastic increase in the cost of world proteins, because of all sorts of things, including, say, the failure of the anchovy fishing in Peru. All these things had a fantastic international effect on commerce. Deputy Brennan may chuckle but I am sure he does not know much about it——
You said you would keep them down.
The fact is that price increases in various items here have a direct relation to all those world prices. The Government, through the National Prices Commission, have exercised the most stringent control over and examination of these price increases.
Of course, these prices had an effect on a judgment of the present budget. In as far as the Government were involved—and certainly they were involved more than ever before in the national wage agreement—we were happy and pleased to find that the workers of this country were prepared to go with the Government, with their employers and with the national economy in agreeing to a further national wage agreement. In that national wage agreement there was a very fair escalator clause that governs the position if there are further price increases. So from wherever the chuckles come the fact is that the wage earner is insured against price increases by the clause in the national wage agreement. That is clear, specific and had a great effect upon the judgment of the Government in producing this budget. I think that does get rid of a large measure of the politically ignorant criticism I have heard voiced during this budget debate.
If that was so, then the Minister for Finance had something else to bear in mind. That was that if he created inflation of his own volition— and as year follows year, of course, the fact is that Government intrudes more whether or not it likes to upon the lives of the people because the State, the lives and the economy of the people become more and more complicated and get more and more involved in Government—then he would do wrong. Therefore, if the Minister for Finance intruded to an exorbitant extent on the economy of people, it would have had an effect upon the result of the national wage agreement. Had he, of his own volition, created a situation that would increase prices further, then he would further increase wages with no real effect for the worker, further increase the cost of the goods we purchase and thereby weaken our export situation. The Minister was disciplined by the desire to ensure that the ship of State would move smoothly on its course to the satisfaction of everybody within the physical possibilities that existed. This is what the budget set out to do.
I want to draw attention to the fact that there were no Financial Resolutions after this budget. Had the old reliables been taxed there would immediately have been, within the national wage agreement, an increase in wages, without any benefit to the worker, and that would have had the effect of weakening our competitive position in markets abroad. We are not masters of the price of our agricultural produce and if we had a drop in agricultural produce, as we had in the last year, and if, at the same time, we had a weaker competitive position on our industrial front, we would have the worst of both worlds. It was wise, therefore, to bring in a kind budget, an expansionist budget kind to the ordinary worker, taking into account that he should be entitled in 1974 to a fair measure of entertainment, be that in the shape of a bottle of beer, a few cigarettes or something of that kind. That has to be taken into account as the prerogative of the ordinary man. While there is to be the most spectacular wage increase ever over the next year, there is something else that must be taken in context with that: I refer to the increases in the personal tax free allowances for income tax purposes. These increases have been denigrated here. They have been described as paltry. Remember that for years—I do not wish to speak wrongly here—Fianna Fáil made no change at all in tax free allowances. While wages increased and prices increased and the pressures on persons rearing families increased again and again Fianna Fáil continued to allow the person earning money, the person who had no other income except the money he earned, the same tax free allowance, which meant that, paltry as they were, they became more paltry year after year for at least a decade.
We increased them in the 1972 budget and the Minister knows that.
Fianna Fáil increased them very slightly that year.
It was more than the Coalition have done now.
It was the first time in ten years.
It was more than this budget has given.
Deputy Brennan must not interrupt. He will have his opportunity shortly.
Be that as it may, there were no Financial Resolutions following this year's budget. The old reliables were not taxed but there was an increase in the tax free allowances and that means that the ordinary man, the white collar worker, the manual worker, the skilled and the semi-skilled, are now better off as a result of this budget and, at the same time, they have the protection of the clause in the national wage agreement whereby, if prices increase, they will be cushioned against those increases. That is something that is quite specific. It is something of great importance. It can be regarded as the bulwark of the budget.
Last year we had a fantastic expansion in GNP. I am speaking now of volume as well as of value in case anyone may be tempted to say that prices increased. At the same time, the warning light was there because of price increases. When I mention oil or the world shortage of proteins chuckles from the other side of the House do not do any good. The facts are there. No one went out looking for price increases unless he was justified in doing so and no one got price increases until those proposed increases had borne the full scrutiny of the National Prices Commission and, after that, the scrutiny of the Cabinet. The price increases were minimal and those producing the goods believe they were inadequate. But these are matters of judgment. A full examination was made. Now the fantastic expansion of last year must be followed this year by the maximum expansion possible. The OECD report and all the other reports indicate that, if everything was left as it was, there would not be as high an expansion this year as there was last year. That was known to the Government a few months ago and it was, therefore, the Government's duty to take that projected figure from impartial experts, experts who bore no ill-will to anybody and who carried no flag for anybody in the political field, and increase—the projected figure was 3 per cent or 4 per cent—to the excellent figure of 7 per cent last year, to the very maximum possible, wherever it lies, between 4 per cent and 7 per cent, or above that if we are able to do it.
The budget, therefore, had to be an expansionist budget and, in order to be an expansionist budget, it had to budget for a deficit. We budgeted for the deficit we believed right and proper. Last year we budgeted for a deficit and the out-turn was highly satisfactory. That deficit was reduced to around £10 million. This year we are budgeting for a deficit and, in my considered opinion, because of the thought that has gone into the budget and because of the expansionist slant given to the budget, if we can get our people to go along with us, then, as the year progresses, I believe we can look forward to a good year this year once again. Remember, it is from the positions I have outlined the Government started.
We must sustain the growth that is there. We must keep it at the level at which it was last year. We have been advised that this is unlikely, but every effort that has been made, every line, figure, dot, comma and paragraph in the budget is designed towards that end. At the same time—this must be emphasised again and again—the worker has had something he never got before—no tax on the old reliables and an increase in his tax free allowances. That cannot be emphasised enough. The man-in-the-street on the evening of the budget was raising his pint to Richie Ryan——
The price of the pint has gone up twice.
And wages have increased and, if there are increases in prices, the man-in-the street will be compensated for them under the national wage agreement and it is politically dishonest for Deputies opposite to argue that that is not true. The price of the pint will be in the consumer price index and it will be taken into account should that become necessary and the period during which the consumer is required to pay more will be taken into account and he will be compensated. It is politically dishonest for Deputies to keep saying: "Prices, prices, prices". The agreement is there and the budget has been designed on the basis of our realisation that the escalator clause covering price increases will probably be invoked and, just like the examination carried out by the National Prices Commission, the most detailed examination of any proposals in that regard will be carried out. Justice will be done because this is going to be a just society for a change, and a great change it will be.
I should now like to pass on to the question of expenditure on security. In this regard I want to tell the people that I believe, sincerely, that the most serious problem facing this country at present, and there are serious problems, economic and budgetary, is the question of security. I want to tell the people, and I would be thankful if it was passed on to them by the media in as full a way as possible, that there is no restriction of capital moneys either in the Department of Justice or in the Department of Defence to ensure that we will have a decent secure State again. Every penny that is found to be needed after examination is immediately available and this Government are fully decided on that. Contained in the capital budget are considerable figures which are needed in this financial year.
It is not proper for me to go into details and I do not intend to do so but it must be recorded that as far as this Government are concerned—of course the budget governs everything —there is no brake as far as proper expenditure is concerned on security. That message should be given to the people who are at present suffering, particularly those in Border areas. They live under a situation whereby it is perhaps, not safe to drive down the road. Nobody on this side of the House has any other view or any other mind and we stand by that.
I should like to dwell for a few moments on the question of credit, the availability of capital moneys and the full pressing forward with the construction of roads and the building of houses. A most exhaustive study was carried out by the Government in their examination of the budgetary situation to see to it that houses, roads, schools, and other buildings that need to be erected will be erected, and the other capital services so necessary to keep our society abreast and, if possible, in front of like countries in Europe—and in this regard we are very far behind them at the moment—will be provided.
Without going into the details of the capital budget I should like to assure this House that there will be no slackening in the building of houses this year. Like other Members of this House at my clinics during the week I have learned over the past 20 years, of young boys and girls living in mobile homes, or living in squalor and in damp houses. Every time they call to me they tell me of their baby having been moved to hospital with bronchitis or of their young boy or girl getting virus pneumonia. In my view this is a condemnation of the previous Government. In 1957 when the previous inter-Party Government went out of office the things that put them out—when one mentions things abroad they are treated with chuckles —were the Suez crisis and the Korean war which produced a situation economically which resulted in unemployment.
The way the difficulty was cured was to reduce the number of houses built between 1958 and 1962 to 4,000 houses per year. If the building industry is allowed to run down it results in emigration and it is years before it can be got back on its feet again. The flag that was raised by this Government in their 14-point plan was to build a specific number of houses over a period so as to catch up with the dereliction of duty that dates back that far. The target of 25,000 houses set by this Government for this year will be fulfilled if humanly possible and there is no question of any shortage of money for that.
In Dundalk and Drogheda on last Monday night I must have interviewed at least 20 young boys and girls living in squalor. If this Government can see to it that at the end of their term of office I will not have such young people with these problems and that these people will have decent houses so that their children will not be suffering from all sorts of ailments, then I will have produced, as one member of the Cabinet, something which would not need the erection of a headstone if this Government were ever to die. I would have helped in something which is fundamental, the alleviation of something which is a shame and which has been a shame in this capital city and all over the country. This problem has resulted from the application of the principles of the Manchester School of Economics from 1958 to 1962.
I should now like to deal with a matter which has been the subject of some considerable misintrepretation and political mischief over the last few months. I have already dealt with the question of open Government. Open Government means that as far as possible the people of the State are allowed to comment on proposals. What serious proposals there are, are not imposed upon the people overnight The people are told what it is intended to do and they are asked for their views. The crunch comes then and this relates to Parliament and Government. The members of the Cabinet sit around a table, fed with all the information from the interested parties, to make their decision and on that decision, and that decision only, can they be judged. They cannot be judged by the production of a White Paper on capital taxation or by the production of a White Paper on corporation profits.
The first thing I should like to state about the White Paper on capital taxation is that it is not a set of decisions, it is a set of proposals which in open Government are open to the citizens to comment upon. That comment, as a matter of duty, must be considered, examined and decided upon by vote, by the collective responsibility of the Cabinet after 30th June. I understand, on good authority, that Deputy Haughey is gathering together a group of people who are worried about this White Paper on capital taxation and on that basis might revert back into some organisation within Fianna Fáil, an organisation which I am sure on this occasion will not be called "Taca". That is political mischief. It is derogatory to the people and it is misjudging their intelligence.
However, if one keeps throwing mud long enough and if one keeps telling an untruth long enough a lot of people will believe it, especially if it is something that may, in their opinion at that time, react unfavourably to them. I must emphasise again that the set of proposals indicated in this White Paper are proposals and not decisions. The decisions on that matter shall be the subject of consideration and decision, alteration or removal, by the Cabinet after 30th June.
That is not what the Minister for Labour, Deputy O'Leary, said. He does not agree with the Minister for Defence.
Lest the interruption by Deputy Tunney should, as he so desires, mislead the people again I shall quote from the speech of the Minister for Finance on Wednesday, 3rd April, 1974, as reported in the Official Report at column 1441:
In accordance with the promise I gave in my budget speech last year, I have invited the views of all interested persons and organisations on the proposals contained in the White Paper. These views and representations must be received by the end of June this year if the legislative measures necessary to replace estate duty and to make the new system operative are to be introduced and passed during the present year. In response to this invitation, comments have already been received from a number of organisations. These and others received will be carefully considered and implemented where a good case can be made for them.
That is the precise position as I have outlined it.
Will the Minister quote the Minister for Labour?
The Minister for Finance has indicated the position. His speech was considered by the Government and it is the policy of the Government. I shall not take interruptions from people who do not seem to know very much about economics.
We know more about the truth. The Minister for Labour is not in agreement. What about collective responsibility?
The Minister should be allowed to make his contribution without interruption.
The Deputies opposite, in a mischievous way, are trying to mislead the people about a fair and open proposal from the Civil Service regarding a substitute for death duties.
Is the Minister saying the Government are not bringing it in?
I did not interrupt other speakers and I am entitled to speak without interruption. Deputies opposite will not hinder me from making my speech. It might be asked what was the reason for the White Paper. It was because of the dereliction by Fianna Fáil when the cost of farmland in particular, and property in general, increased very considerably. They let the matter slide because their urgent desire was to get past the last election without creating any upheaval that might lose them votes. That is typical of Fianna Fáil. Their attitude is: Fianna Fáil first, with the country in second place in a photo finish with God because they like to have Him on their side also. That is their line of country. I might put it another way and say that if it suited Fianna Fáil to put a person in Mountjoy for six months he could not avoid it; he would pack his bags and go——
And get out by helicopter, I presume?
Their line of thought is that they look into their own hearts to see what the Irish people want. The White Paper is now the subject of consideration by the people and this should be done without any mischievous comment from Fianna Fáil. The situation was that the position regarding death duties had reached the stage where farms had to be sold to pay the duties. The position of the farmer was bad until a few years ago. Since then, due to EEC membership, to certain international changes and the good work of the Minister for Agriculture and Fisheries, the farmers have done better.
However, I would draw the attention of the House to the income of farmers in relation to the value of the holding. Some ten or 15 years ago the ACC in assessing whether a loan should be given took the amount of earning power on a farm as two-thirds of the amount paid for it. Because of land scarcity, payments for farmland were always about one-third above the figure that should be paid on the basis of earning value. When farmers did somewhat better that situation escalated to an extraordinary degree. Although farms were worth much more the farmers had not more money to spend because the greater profits were absorbed by higher prices for machinery and stock.
The situation developed that family holdings had to be divided so that the death duties might be paid and the family continue to use part of the land. The last time that happened was in the penal days. I know of instances where farmers' sons had to sell their farms due to the dereliction of duty by Fianna Fáil in the last few years. It was a public scandal. For the last three months all these moguls of Fianna Fáil have been wailing and roaring about capital taxation but they do not mention death duties. One ill has been removed and the people have been asked for their views on the other.
There has been discussion on capital taxation. As proposed in the White Paper, it can be changed. Deputy Fitzgerald expressed the view it should be changed; he said this very forcibly, rather as if the Government would resist change. There is no intention or desire on the part of the Government to resist change in any one of the three proposals. There is a desire on the part of the Government to obtain the right mix to replace the money that has been collected in death duties during the years. Any proposals in the White Paper are wide open for change.
If anyone considers he may be adversely affected by the application of any of the three major proposals in the White Paper, he is neglectful of his duty if he does not make known his views to his TD, for transmission to the Minister for Finance, or to any member of the Government. He is most negligent if he just shouts about the matter from the rooftops and complains without making known his views to his public representative.
I am not defending one line of the White Paper. It is not mine, neither is it the Cabinet's. The proposals in the White Paper were produced by civil servants to replace death duties. There are more ways of killing the cat than by choking it with butter. There are enough brains in the Cabinet to find the right way to handle the matter. Fianna Fáil and Deputy Haughey in particular, in a despicable political act, want to pin the White Paper on us but it is not ours. If Fianna Fáil wish, they can make representations and they will be seriously considered after 30th June. If a 100-page representation comes in after 30th June that will be carefully considered before anything is done with regard to the White Paper. In the meantime, if representations prove there is a glaring omission or mistake in the White Paper, it is open to the Government to decide tomorrow to change it. It is political trickery for anyone to try to pin the White Paper on the Government and it will not be tolerated.
I have been connected with farming all my life and my family have been involved in the industry for very many years. Let the farmers take from me as a positive guarantee that we are asking for their representations on the White Paper. If they hear anyone in a pub saying the White Paper is ours, let them check if he is in a Fianna Fáil cumann before they make their decision.
I should like to end by saying that this is an expansionist budget. We have budgeted for a deficit which I believe, because of the various other factors built into the budget, will over the financial year be substantially reduced. Political and financial pundits often get red ears. It is possible that Deputy Brennan, if he and I are here a year from today will be in a position to pin back my ears. It is probable that he will not. The position we have created where under the national wage agreement the escalator clause may be invoked will help the working man. The fact that the old reliables which are in the consumer price index have not been taxed will mean that the small pleasures will not be restricted. The spectacular social welfare increases are at last bringing us from the Scrooge Fianna Fáil situation into something more normal and natural and will help the worst off. They will also expand the economy. Even an old age pensioner with his extra few shillings is helping the expansion of the economy. How Fianna Fáil can object to this budget in that regard I do not know.
Those are the expansionist things we have tried to bring about. We tried to bring them about when the advice from OECD and various financial institutions was that growth would not be as good as last year. Our budget is designed to improve on that, to bring it if possible up to the growth of last year. We are affected by the price of oil, by all the different things that have happened abroad. We are keeping a sharp eye on price increases. Nothing goes through which has not been carefully examined by the National Prices Commission and then assessed by the Government. Much of the Government's time is spent on that sort of thing. These things over the coming year will improve the lot of every person. Let nobody think that matters that are not of the Government's making can be pinned on the Government. I ask every citizen and particularly farmers who are being deliberately led astray to decide that they will, if necessary, even individually, make their representations on any item in the White Paper on capital taxation that they think affects them. I want to assure even individuals that their representations will be fully considered by this Government.
I should like to congratulate the Minister on completely disowning the White Paper. I am delighted that we can now take it as being thrown on the scrap heap because it has been the bane of the lives of every right thinking person in this country. I am glad he has pointed out that the Government completely disown it, that they have nothing to do with it. I take it that is the end of it and I am sorry that the Minister misled the public by mentioning in his budget speech that he was bringing in these taxes.
That is untrue. My quotation proves that untrue.
I take it now there is a complete change of mind on the part of the Government and that these taxes will not be introduced. I want to congratulate the Minister for having given that piece of information to the House at a time when the people were wondering what next.
Before dealing with some of the stupid statements made by the last speaker, I should like to deal with the budget in a general way. It is a budget that did not, on the day it was introduced, mean anything to anyone. In the short term it is a harmless budget. In the long term it is a serious budget. It is a budget that will go down in history when all other budgets are forgotten about unless the rest of the Cabinet are of the same way of thinking as the last speaker regarding the White Paper. Like our 1972 budget, it created no new taxes and it gave social welfare increases, something commensurate with what the cost of living would justify, in fact a little short of what would be necessary to keep in step. It has failed to honour the promises made to bring about the third national agreement.
I have had enough experience in that field and I do not wish to further exacerbate a serious situation because the workers know what they got out of the budget and as they do their sums day by day they find that many of them have got nothing, some of them will lose when it comes to comparing disposable income in 1974 with that of 1973 and, at best, 3 per cent is what any worker will get. This has been given to me by those who are organised workers and I am not in a position to dispute the figures they have put before me. The weaknesses in the budget and in relation to the economy generally are probably best emphasised by various Ministers making statements which are not accurate. This in itself discloses real anxiety to get across a message which is not there.
The Minister for Finance made a speech recently outside this House and in it there were at least three glaring inaccuracies or untruths. The previous speaker told anybody who interrupted him: "You know nothing about economics anyhow." That sort of thing does not account for very much. The Minister for Finance claimed that they got the economy moving last year, that when they came into power they found a sluggish economy and then he insinuated that he waved some sort of magic wand because a 13.5 per cent increase in the growth of industrial output took place in the first quarter of the year. In other words, before the Government got settled down there was a 13.5 per cent increase and they claimed that they were responsible for that by some peculiar manipulation of budgetary policy. It tapered off towards the end of the year. These are facts published in the Government's own documents and I do not think any person outside a lunatic institution will believe that the 13.5 per cent increase in industrial growth in 1973 was in any way attributable to anything the Government in power did or did not do. The fact that they cling to the effort to claim that that was due to some action of theirs is demonstrative of the fact that they are bereft of argument and are prepared to grasp any straw.
That was not the only thing the Minister said the other day as reported in the national papers. See how carefully he refers to the increase in the consumer price index. This is one of the oldest ploys in the political game. The Minister gives an average figure. Some of the official documents issued in the last week repeat the same thing. The average increase in the consumer price index was 24.4 per cent. Why not give the actual fact and say that the increase was 25.6 per cent and forget about the average. The 1973 average was given by the Minister in his speech as 11.4. The increase for 1973 was 13.5 per cent. Why use an average figure for the purpose of misleading people who might not realise what is involved when we give an average figure instead of giving the actual figure? At the end of the year the figure was 13.5 per cent increase. This is one of the further inaccuracies we have.
A third inaccuracy was that food prices were reduced by the removal of VAT. The figures published from Government sources show that the consumer price index in mid-August was 24.4 per cent and in November it was 25.6 per cent. Maybe it would have risen higher but why say it was reduced? Why does the Minister for Finance in his speech say it was reduced by the removal of VAT when in actual fact the figures show it has gone up during the period? He should be honest and say that it could have gone up further if VAT was not removed from food.
I merely refer to the things mentioned by the Minister for Finance to indicate the extremes to which a Minister who resorts to that sort of ruse in a major speech must be driven to try to make things look a little better than they are or to take credit for something which he and his Government had absolutely no hand, act or part in. The most interesting thing that will be recorded in this budget debate is the speech which the Minister for Defence has just made.
Before the Deputy leaves that if we are not to take credit for expansion in 1973 surely equally we are free from blame for price rises? If everything that happened last year is a consequence of what happened in 1972, surely we are entitled to the benefit of that right across the board and the Deputy's party must take the blame for whatever is bad about it.
I will deal with prices in a moment.
Does the Deputy see the point I am making?
I do. One of the 14 points of the pre-election statement of the Coalition parties was that they would stabilise prices and reduce the cost of living. I will talk later about why the Government did not deliver on that. The budget is supposed to be an important economic regulator. It is admitted by everybody that our biggest problem at present is inflation. What has the budget done towards arresting the galloping inflation we have? It has not done anything. The Minister budgeted for a deficit. He hopes that the buoyancy of revenue on the one side will close the gap somewhat at a time when it is predicted there will be a drop in national growth. The Minister would naturally have to borrow to close the gap on the other side.
Last year the Minister had not very happy experiences in relation to borrowing. He scooped the till in the Central Bank to make up for what he failed to get from the people. How does he now expect to get money from the people who are daily finding that the devalued paper money in their pockets must be exchanged rapidly for something of intrinsic or permanent value? Does he think they will put it in Government stocks when their past experience goes to show that the decline in the value of money leaves these worthless? Surely we are entitled to hear something about the serious economic consideration that should be directed towards that big problem. Will there be a complete change in the whole financial thinking so that the public will again decide to hand over their paper money to Government stocks?
Some Deputies pointed out that we are living at a time when people are prepared to put their money into anything, fixed assets, such as antiques, land, buildings, anything other than have paper money that is declining so rapidly in value. The people who are exchanging their money which is worth less daily as a result of galloping inflation and creating assets will not get through the net. The White Paper on capital taxation, which the last Minister who spoke completely disowned, will introduce a wealth tax. The people have now got to think if it will be worth a candle to own property or if it is better to get out of it. You will not get away if you own anything in future.
This country has had a traumatic experience in the last few years. When its economic history is written it will be a Fianna Fáil history because its progress is synonymous with this party. This country has not had an industrial background. When Fianna Fáil set out to develop the industrial arm it had to be done by way of tariff walls. The home market was reserved for those who were prepared to invest in industry. We had not much technical know-how. We had not much capital. The home market was a rather restricted one but we got industries going. We reached a stage where their efficiency improved and we moved on to create further incentives to get in foreign capital and foreign technical know-how to start new industries. We succeeded tremendously. It is a great success story, a story of outstanding success.
It is a story in which the first chapter is Gerard Sweetman.
The story is the story of Fianna Fáil and Seán Lemass. The economic history of the country cannot fail to put those side by side as being synonymous.
When we were told about factories in back lanes—workshops they were referred to—when James Dillon used to spit venom from this side of the House about wheat and beet and beef and the nonsense of Fianna Fáil, we stood firm and proceeded with industrial development and invested in it what we could of the meagre capital available. We rapidly reached the stage when we invited outsiders to take part in the industrial development and give us the know-how that we had not got traditionally.
During that tremendous expansion of industrial development which brought with it a marked development in our services industry we were unable to absorb the manpower fall-out from agriculture which was running at a very high figure annually and the slack was taken up by emigration.
Every effort was made to improve the agricultural situation. I do not think there is one individual in the Government who knows anything about farming. Those of us who were brought up on the land know what the farmers had to go through down all those years. We gave them subsidies; we gave them grants; we tried to keep them alive. Their social standing was low. The whole outlook for them was one of insecurity. Finally, the point came where they saw the silver lining through the cloud that had forever hung over the precarious livelihood of agriculture and that was when the EEC promised some stability without which farming cannot be successful.
I am not going to deal with how the matter is being handled at Brussels at the moment but, taking it overall, EEC membership did for the first time show the silver lining to agriculture in this country. The year 1972 was the first time that the farmer could breathe freely and be sure that he was getting somewhere. No sooner did that occur, for the first time in the history of the farmer, than we had a White Paper from the Government proposing to tax the farmer. The £100 valuation is the thin end of the wedge, the toe in the door. There was a commission on income tax that reported some years ago. The Minister quoted it in his financial statement. I quote:
They recommended that a gradual changeover be made to a system of assessment based on actual profits to apply at first only to those with holdings of £100 valuation.
That is the recommendation the Minister is acting on—to apply at first to those with holdings of £100 valuation. Once Revenue get a new tax going it will be stretched as time demands down to the lowest farm valuation in the country. No matter what anybody may say, this is the beginning of a new era. It is the beginning of the taxation of farmers.
Your own leader invited your think-tank to discuss this very subject six months ago and I am still waiting to hear a single Fianna Fáil speaker say——
You are still waiting for others to take the decision, the same as in the case of your Contraceptive Bill. Take your medicine now. I am going to give it to you hot and heavy. We consider every aspect of everything in Fianna Fáil.
And do nothing.
We did what is blazing a trail for you now.
We are having to grasp nettles that you left uncut for 16 years.
Deputy Brennan must be permitted to make his contribution without interruption.
The Government are going to tax the farmers now, about whom they shed crocodile tears in this House in the past. The farmers know that they have been deceived, they have been let down, they have been misled. You talked about their death duty problem and to get their votes you promised them, as you promised them so many other things before the last election, that you would abolish death duties but you dithered on it and you got around it and you asked your civil servants—you are now going to jettison and disown them—for a White Paper and the Minister who has just spoken said that if anybody in a publichouse says that that is their White Paper, it is a lie, that they had nothing to do with it, that it is a civil service document, that they do not own it. You are ashamed of it now but you brought it in to see how you could fleece the farmers, as you are removing one thing that you blamed Fianna Fáil for not changing. We know when this Government remove anything that they will replace it by something which will take in ten times as much. You have now got the farmers into the net and they will get it right in the neck. Their only hope is the removal of the people who are doing it. There will be 9,000 farmers caught at first. Before long every farmer will have to make an annual return to show whether he has to pay tax or not.
Any taxation that is removed has to be replaced.
The farmers had just got the chance to get their heads above water. Down through the years the farmer had to face drudgery and the precarious way of living that essentially a farmer has to face. At best, his fortunes depend on the climate and seasonal weather conditions. The farmer is the main exporter from this country. Industrialists get tax free exports. For the farmer there is no such privilege. He will now be taxed.
There is another thing that I wish to point out. According to statistics, agricultural income for 1972-73 was considerably improved. What is taken into account in assessing that improvement? The increased stock on the land is taken as part of the improved agricultural income. The increased stock on the land in 1973 was the greatest catastrophe the farmer had to face for many years. There was a loss of £50 a head on cattle from spring to autumn. That is put in as part of the improved income. The biggest number of cattle on the land was recorded for 1973 because they could not get rid of them; they held on too long and finally, as the mortality rate began to run high, they had to sell at dramatic losses.
The answer they get from their old friends in the Coalition is, "We will tax you". This introduces a completely new element into the national economy. In fact it will change society. The days of freedom in agriculture, when a man could look forward and say that at least he had not to pull down a lot of records and start filling up income tax forms—which everybody detests—have gone and it is now going to be the farmers turn to do that.
It is quite all right for his farm labourer to do it but not for the farmer himself.
The farm labourer gets his pay at the end of the week whether it is wet or dry; whether it is good or bad.
(Interruptions.)
Deputy Brennan.
The Government are now doing what the Labour Government commanded them to do.
That is Fianna Fáil policy.
The Government are doing what the Labour Government instructed them to do. If the Parliamentary Secretary had manners he might get a chance of speaking after a while but I am going to give it as tough as I can and he will not stop me. They are now handing out a few sops. They do not know whether they are going right or left. The dichotomy in the Government is becoming more obvious day after day; the two idealisms which never could fuse must, at some time or other, show their ugly heads. Every time there is a Labour conference they must announce something to suit it whether it is to be tax on mining, or tax on farming—some sop to hold the two diametrically-opposed ideals that make up the present outfit which is attempting to run this country.
When we were in power we were condemned for doing several things by the people now in Government. I should like to hear the Parliamentary Secretary tell us what they are going to do about them. Day after day we were condemned for the cost of living and for prices running amok and about which it was said we were doing nothing. The Prices Commission were ignored as being a mere sop by Fianna Fáil; they had no real relevance——
Hear, hear.
How did it arise overnight that the Prices Commission became a great institution? How have the very same body which we established now become a sacrosanct institution doing a wonderful job? Did you think people were completely gullible when they were told, before the elections, that we did nothing and that we were responsible for the prices? Now it is because of foreign crises; things outside the control of the Government. The Minister who has just spoken referred to the price of fish in Peru. Every intelligent man knows that these things are beyond our control and we can do nothing about them. It was all right to gull the people to get their votes by distinctly stating you are to bring down the cost of living and reduce prices and then stand up, put out your tongue and sneer at them and say: "You can go to hell; we are in now and we will do what we like; we will operate the Prices Commission that Fianna Fáil set up; that is all we have and we can do nothing further about it". That is the type of thing one gets when one rises to speak and the Parliamentary Secretary to the Taoiseach comes in to tell us what Fianna Fáil did and did not do. We are sick listening to the people opposite talking and condemning us for not taking action about price increases. They are over there now and have to swallow it. It is sticking in their throats because they have done damn all about it. It is a Government of bluff from one day to another. They set up the best information service, the best public relations and image-building service any Government ever set up; something that could be described as "maconghailingo". This "maconghailingo" far exceeded any action and eventually reached a stage where no action could measure up to the public relations and publicity effort they had developed themselves.
The Opposition were not short of publicity when they were in office.
The Chair would prefer that individuals would not be referred to, even by implication, in the House, people who are unable to defend themselves.
I see even the Leas-Cheann Comhairle got the message.
I got it too. The Opposition are not able to take it.
When the Parliamentary Secretary gets up to give me a running contradiction during my speech I can tell him I am going to let him know a few home truths, and I am only starting. It is not my wish to get into a bitter controversy but there is a limit to the taunts one can take and I can give twice as much as I get at any time.
There never was a more dishonest piece of propaganda put before the people than this budget. I compare it to using a few tons of soap to launch an old battleship. That is the soap on which the new capital taxation has been launched. It is a nice way of slipping it across—tax on the farmers; tax on wealth; tax on gifts; tax on capital gains. This is at a time when inflation is running at a rate which means that for what you bought last year you would almost need to get double the price now and still you would not be making money. Anybody who has worked and tried to create wealth, generate wealth for this country, is going to have that taxed, estimated and valued each year. If there was one thing on which the people prided themselves down through the years it was ownership of property. We are rapidly reaching a stage now where one will have to consider seriously whether or not it is worthwhile owning anything because if one makes an effort, if one uses his God-given foresight to establish himself successfully in business, in industry or to acquire property, he is going to have to pay on that regularly, with the result that he would be better off on the breadline.
The last speaker boasted that the pint had not been increased, the old reliables as he said, have not been increased and every man having a pint could drink to Richie Ryan, as he put it. I had a question down yesterday asking what was the estimated increase in taxation from the recent increase in spirits and in oil, fuel oil and fuel generally. The Minister's figure for the last increase, when it was announced the other day that 180 items or so were to be increased, showed that it will return almost £1 million to the revenue. With VAT at the rate chargeable on certain goods since the Government increased the rates—19 per cent in some cases—you do not have to tax things, all you need to do is sanction price increases and the revenue comes in. That is a simple way of doing it. Every time the Prices Commission sanction an increase in price, it means more revenue for the Government. The Government have taken in almost £1 million from the increase in drink and oil alone. We have not seen a more dishonest budget in a long time. The Minister who spoke last talked about the increase in the capital programme. He made no reference to the method by which it would be financed, how borrowing might work out, but he pointed out that the increase in money for making roads was essential.
I ask any county council who have money for roads to have any member of the council take out his pencil and work out the increase in wages over last year, the increase in machinery costs, the desperate increase in the price of tar, one of the main materials used in road making—it has increased by about 30 per cent—and to tot these increases and he will find that the amount available in any county for roads in the current financial year will fall far short of what it was last year; in other words, he will do less mileage this year than he did last year. There is a fallback in the programme. It is just like saying so much is being given to social welfare recipients when in actual fact what is being done is barely keeping abreast of the increases last year and the increase there will be in the cost of living this year.
When the Deputy was the responsible Minister he did not face up to that situation.
Every increase I gave was substantially more than the increase in the cost of living would justify.
The Deputy was the most inactive Minister for Social Welfare for a long, long time.
The Chair is anxious to ensure that Deputies are allowed to speak without interruption.
I may not have made a great many misleading speeches.
The Deputy did not know what to make them about.
Speaking is not much good. The Minister has made 11½ speeches about the pay-related benefit scheme. I piloted that Bill through this House.
We have the files and we know what was done.
We must have orderly debate and cross-questioning and heckling must cease.
The Parliamentary Secretary cannot deny facts. We left enough to talk about for the next year or so. After that, the Government will have to do something.
We could talk for the next three years about the Deputy's inactivity.
The Minister referred in his budget speech to my last year as Minister for Social Welfare and the serious position that existed in the case of those people changing over from the widow's pension to the old age pension. That was done originally for the benefit of widows. He advised us to get rid of it and he has now had two budgets and there is scarcely an improvement. He promised to abolish the means test. If you are getting £5 a week you can still get the pension. Wonderful. It was £4.
What was it when the Deputy was in office?
£4.
It was not. It was £26 a year, 10s a week.
If someone comes in here and has a pension from Britain of £5 he does not get the full old age pension here. That is a disgrace at a time when money is worth about half what it was worth. Someone worked out an interesting calculation for me the other day: in 1957, 15s for a pensioner was exactly the same as what he is getting today from the point of view of its purchasing power. Remember, that was the last year of the Coalition.
The last speaker referred to house building incidentally. He made the extraordinary statement that when the Coalition went out of office on the last occasion they had set a trail for house building. How could anybody be expected to give any serious consideration to a Government one of whose Ministers makes a statement like that? I remember friends of mine here in this city in 1957. They were retired. They were offered a choice of seven vacant houses in Ballyfermot. That was the pattern right throughout the city. The building operatives were over working in Birmingham and one could get a house in any scheme for the asking. We are not that stupid that we do not know that the first essential is to keep the economy going properly. If that is done the money will be there to give to people. If, however, you kill the goose that lays the golden egg the Government will soon find themselves in the position in which the Coalition found themselves in 1957.
We fought for entry to the European Community against the opposition of the Labour Party and in our campaign we pointed out the savings there would be from agricultural subsidies alone for an improvement in social welfare. In his budget this year the Minister takes credit for a further windfall. Before the election there was an auction as to who would give the most. If we had not become members of the European Community there would not be one extra cent over and above the normal increases available for improvements in social welfare. Had these improvements not been given it would have been a crime against the people who had been promised them. The increases will barely keep step with the galloping inflation. This is a budget covering a nine-month period. We do not know where we are going, whether we are going left or going right on that side of the House.
We are going ahead.
The farmers are going to be taxed. Wealth is going to be taxed. Capital gains are going to be taxed. Inheritances are going to be taxed. Gifts are going to be taxed. There is nothing left that will in future make anybody interested in going into private ownership.
Is the Deputy against all these forms of taxation?
I am totally against taxing farmers and totally against wealth taxes. The Minister for Defence, speaking a moment ago, completely disowned that report on capital taxation—"Nothing in it of ours, a Civil Service document, nothing whatever to do with the Government and, if anybody accuses us of having anything to do with it, he is wrong". Let the Parliamentary Secretary read in the Official Report what he said. He has thrown the document out the window. He is ashamed of it and when Deputy Tunney said to him that that is not what the Minister for Labour, Deputy O'Leary, said here the other day, he retorted: "I do not care who said what. That is not our document". Apparently, if a thing goes right the Government take credit for it; if it goes wrong it is because of Fianna Fáil or some outside influence. That may wear for a while but it will not wear for ever.
It seems to have been rubbing the Deputy for a fair while.
The present budget will be easier to talk about next year just like the one that went before it. When the last budget was introduced we told the Government that they created new taxes and that by doing so they had actually contributed to the already galloping inflation and rising prices. The Government took our-advice and did not impose any taxation this year. The increases in social welfare were not as much as the recipients should get but were an effort, as has been pointed out by Members on that side, to keep these people in step with the rising costs of living. However, the occasion was used to launch new taxes which will completely change the face of this country.
The Minister has referred to the fact that he was taking steps to prevent money being transferred to tax havens. This country is certainly not a tax haven any more; it is not a place to which any outsider would come to live and it is not a place in which to retire. It is not even a place in which to build up industry any more. Private enterprise can be criticised by the socialists as being a capitalistic system but it is being used to create the wealth that is necessary. If it is being used for this purpose, the people who do the work to produce it should get some protection. They are getting none; they are being walked upon and it is time that somebody stood up in favour of those who generate the wealth, and, comparatively speaking, there are not many of them.
This is a small country which has not been fully developed and in which we have not reached full employment but the few people who are engaged in production and in producing wealth and were rapidly expanding are now to be hit in the neck. If they generate any worthwhile assets they will be taxed to the hilt. The farmer who was beginning to see a silver lining to the dark cloud that for ever shadowed the life of agriculture will now be brought into the net screaming by the heels. This year only those with £100 valuation will be brought in and we have been told that this will mean only 9,000 farmers will be paying tax but it will be double that figure next year and will reach 100,000 after that.
The farmers are in and the Labour Party have been advocating that for a long time. They have got their way. How the two idealisms in Government can continue to work beats me. One cannot have one foot in the socialist camp and the other in the so-called capitalist camp. The only thing the parties forming the present Government are agreed upon is to keep Fianna Fáil out as long as they can. The State was handed over to them in a good and productive manner and they will flog it to death as they did on two previous occasions. The view of the parties forming the Government is that if they can stick it out for three years to hell with whoever has to clean up the mess after them.
For the second time we have the true reactionary policy of Fianna Fáil. We have had the real right-wing reactionary policy and, thanks be to God, that the people can now judge that openly.
The Parliamentary Secretary, and his party, are only looking after themselves and he knows that.
The social conscience of the present Coalition Government is manifest most clearly in the allowance which they have given in respect of children in the budget. Since the introduction of children's allowances initially it was always accepted that it might be, and it should be, used as a true indicator of the regard which the Government had for family life and an indication of the financial assistance that was due to parents who were endeavouring, in spite of increasing prices or prevailing economic difficulties, to rear children. Without referring to and without wanting to increase in any way the blood pressure of any member of the Government I should like to refer to their famous 14-point plan.
I feel sure that they will all admit that in respect of their promise to stabilise prices, to say the least of it, they did not succeed.
The criteria the Deputy used for judging a social conscience was children's allowance.
One of them.
Is the Deputy aware that Fianna Fáil gave four increases over a period of ten years in children's allowances and that this Government in the two budgets which they have had the opportunity of introducing increased these allowances on each occasion?
I think the significant aspect of this budget is the fact that every speaker on behalf of the Government is linking last year with this year. The Minister for Defence went out of his way to indicate that he did not want this Government to be judged on last year's budget because they only had a matter of seven weeks in which to prepare it and most of the budgetary arrangements had already taken place. Now we have the Parliamentary Secretary establishing that it is necessary to do this.
I concede that the Parliamentary Secretary is a more astute and intelligent politician than the Minister for Defence and he realises that last year's increase in children's allowances of £1.50 per child was far in excess of the 30p per child this year and that now it is more advantageous to him, and a much better political point, to couple the two.
It was necessary to bring these allowances up to a proper level after the neglect of Fianna Fáil.
If the Parliamentary Secretary will bear with me I will be able to demonstrate my point. I concede, and he might regard this as a compliment, that his social conscience is equal to mine and I will concede that fractionally it is superior. On the matter of children's allowances last year, on the admission of the Minister for Defence, what happened was something, by and large, which the Government inherited. What happened this year was the work of the Coalition. On that point, I suggest £1.50 per child last year was far in excess of 30p per child this year. When one takes into account the cost of living, the £1.50 last year is equal to £2 this year. Notwithstanding that, the Minister gives the paltry sum of 30p per month as an acknowledgment by the Government of what they regard as fair to parents to counterbalance the many increases that have occurred during the year.
I said on a radio programme, and I repeat it here, it was "an icepop, a bag of crisps children's allowance". There has been no provision for the many increases that have occurred with regard to food, footwear, clothing, school transport and school books. I shall endeavour to pursue further the point on which the Parliamentary Secretary has taken issue.
Last year many speakers, including myself, expressed dissatisfaction that those whose incomes were in excess of £2,500 per year were forced to refund the children's allowances. We tried to show the Minister for Finance he was in error in classifying those people in the upper income bracket. The Minister justified what he was doing, and it is no harm to repeat exactly what he did. For wage earners whose income exceeded £2,500 per annum net, he gave no children's allowance whatever.
He did, but he took it back in income tax.
He did not give them any. I remember making the point to him——
Are the Deputies disagreeing among themselves?
No. Last year the Minister said the increases would be made with minimum administrative requirements. I suggested to him that with regard to a family of four children where the father earned more than £2,500 the Minister claimed to give to that man a tax relief representing a net £72 per annum. Presumably that required certain Civil Service administration with the appropriate costs. At the same time, to the wife of the man he pretended he was giving her £6 per month, or £72 per year presumably this transaction also required Civil Service administration. The net effect to the household was that they were no better or worse off. I asked the Minister how he could justify that while he was claiming to be concerned that there should not be any wasteful exercises in the Civil Service. In short, what the Minister for Finance did last year was to withhold the £1.50 per child per month from the parents whose net income exceeded £2,500 per annum.
I am sure the Parliamentary Secretary accepts that this happened. When challenged from these benches, the Minister accused us of a wrong and unjustifiable concern for people in the upper income bracket. At column 1075 of the Official Report of 17th July, 1973, the Minister told us he was doing this to save £2 million to give to families in greater need. He told us he had little sympathy with those who begrudged handing back the children's allowances.
The one ingredient required from anyone who presumes to govern, whether a father or mother at household level, a teacher in a school, a trade union official, an army officer, or anyone who has the right and the duties of authority, is that of consistency. If that is there, there is some hope of obtaining respect at least from those who are governed. When one departs from that, especially in a way that is in total conflict and contrast, one tends to lose the respect of those one presumes to govern.
I am demonstrating the attitude of the Minister for Finance in the budget debate last year. He indicated how absolutely essential it was that he should withhold £2 million from those wage earners with a net income in excess of £2,500 per annum so that he would have this money available to him to distribute among people in the lower income bracket. We endeavoured to demonstrate to him that what he was doing was not fair because there were people in this alleged high income bracket who, in fact, were quite poor. He refused to yield and prior to the presidential election he spent considerable sums of money advertising what he regarded as the correct attitude in respect of the claw-back. As Hamlet said: "Look you now what follows." This year the same Minister for Finance has given 30p per month in respect of children's allowance to the people about whom he was so concerned last year, the people on whose behalf he took £2 million from other people. At the same time, he has given to the upper income people of last year full children's allowance. What has happened this year in respect of children's allowance is that the Minister for Finance who last year was so concerned about the lower income groups and who had so little concern for those with incomes in excess of £2,500 per annum this year decides to give people in the higher income group children's allowance of £1.50 plus 30p, which is £1.80 per month per child, and to the children of parents in the lower income group he gives the bag of crisps and the pop—30p per month, 7½p per week.
It was the Minister for Social Welfare who did that, not the Minister for Finance.
I would disagree with my colleague.
Perhaps I should stop this argument within Fianna Fáil. Everyone on this side of the House is proud of the budget.
He is the same Minister who gave the millionaires the free hospital service.
Everybody on that side is proud of it. There is an old sean-fhocal: "Is geal leis an bhfiach dubh a gheárrcach féin." I suppose if it was ours we would claim to be proud of it.
We never put up the cost of living by 50 per cent.
I do not think that when the Parliamentary Secretary was making his submissions to his Minister, who would make them on his behalf to the Minister for Finance, that he indicated he wanted to give £1.80 per child per month to the upper income group and only 30p per month to the children of the poorer classes. I do not think the Parliamentary Secretary put that proposition to his Minister.
You Dublin fellows are very clannish.
The Minister for Finance is not from Donegal and I am attacking the Minister for Finance because in the ultimate he is the authority in the matter of releasing funds. I am taking it that there was greater pressure put on the Minister for Finance in respect of the claims of the constituents perhaps of the Taoiseach and in other areas where you would have a weighted situation in respect of the upper income group than in constituencies represented by the Minister himself, by the Parliamentary Secretary or by myself. My concern is to find out on what principle do the Government operate. I suppose it will be conceded that all Governments in the past with one exception, an exception away back in respect of old age pensions which is better forgotten, in every budget, indicated a greater concern for the weaker classes than for the more wealthy. This is the first occasion on which any Government gave more in respect of social welfare payments to the rich than they gave to the poor. This should be publicised as widely as possible. I concede that the better off people need children's allowances the same as anybody else, but I do not think anybody can justify a situation where you give £1.80 per child per month to the parents whose earnings are £3,000, £4,000, £5,000, £6,000 or £7,000 a year and to the child of the manual worker you give 30 pence a month.
It is a brilliant distortion even in the context of Fianna Fáil distortions.
Is it not true?
It is true that it is a brilliant distortion.
Facts are facts and you do not have to distort facts.
What is the Parliamentary Secretary's version of it?
It is a beautiful distortion.
Order, please. The Parliamentary Secretary has already spoken and he may not be invited to speak again. Indeed, the Chair is anxious that Deputies would speak without interruption.
He is always worth listening to.
I would love to give my version but the Chair will not allow me.
The Parliamentary Secretary is saved by the bell.
Let us have no further interruptions.
It is a brilliant twisting of the facts.
Let us have no further interruptions.
There is a good twist in it.
I agree with the Deputy there is a good twist in that statement.
Will Deputy Ahern and the Parliamentary Secretary please cease interrupting? Deputy Tunney without interruption.
I think the Deputy means distorting when he says twisting.
If I was of a rather sensitive nature I suppose I would appeal to you to have removed from my remarks the words "twist" or "distort" but I know they are not said in any malicious or vindictive fashion. In case anybody reading the Official Report is in any doubt I think I have adequately demonstrated that in respect of this year's budget and accepting the invitation of all Government speakers to link it with last year's budget, the position last year and the position this year can be linked to show that, whereas last year there was a payment in respect of children's allowances of £1.50 per month in respect of each child to all wage earners below a net income of £2,500 the position this year is that the increase which was given last year is now being given to people who did not get it last year. Along with that they are getting the general 30 pence per month per child.
Does the Deputy not feel he is over-elaborating the point? The Chair is concerned about a lot of repetition in the matter.
Let me demonstrate the basis for my feeling insecure with this Government.
I do not blame the Deputy for feeling insecure politically.
I want you again to accept the case I have made and now listen to what the Minister for Finance said at col. 431 of the Official Report for the 13th June, 1973.
It is of interest to hear the Deputy relate one budget with another but I am concerned that he is harping quite a lot on the previous budget. The Chair is very anxious that we get down to the debate on the budget for 1974 rather than that of 1973. I appreciate the need for comparisons to make a point but the Deputy is harping a lot on the previous budget.
They were both so good it is understandable.
One cannot say the correct thing too often. The Parliamentary Secretary referred to last year's budget, and the Minister for Defence also referred to it. Every Government speaker has linked this year's budget with last year's especially in respect of children's allowances.
The Chair says this is quite in order but the Deputy is over-elaborating on last year's budget. This is the point I am making.
This will be the final nail in the coffin of last year's budget if you will permit me. It is a short quotation. The Minister for Finance reprimanded me and put this question to me:
Does he not know that the whole science of competent, progressive government is to transfer the burden from those who cannot afford to bear it to those who can? That is what we have done and we make no apology for it. We will do it again next year and we will get the support of the people.
I am referring there to a promise which the Minister for Finance made last year. He promised that he would take money from what he regarded as the wealthier classes and give it to the poorer classes. I have spent the past half hour demonstrating that certainly in respect of children's allowances he has done the reverse. He gave it to the rich and he did not give it to the poor.
Capital gains tax will not agitate the minds, the pockets or the bank accounts of my constituents. I will say, in passing, that I was rather amused at the stand which the Minister for Defence took here this morning and I was also amused yesterday evening when I heard Deputy Fergus O'Brien saying as far as they were concerned there was no going back on the White Paper in respect of wealth tax. About a fortnight ago the Minister for Labour on a Sunday radio programme said that this was a White Paper with schedules attaching to it and that no responsible Government introduced a White Paper unless it was their intention to implement it. Today the Minister for Finance said that the White Paper was the creature of civil servants as if that meant it was something which did not require any consideration.
Last night Deputy Fergus O'Brien indicated it was the Government's intention to proceed with it. It is understandable if I refer to this feeling of insecurity and if I quote something which I read years ago, a critique of an American violinist. This damaging critique spoke about the unfortunate violinist as a perfect and living example of not letting your left hand know what your right is doing. That same criticism could be levelled at the Coalition Government.
You could call it fiddling.
There is ample evidence to indicate that the left hand does not know what the right hand is doing. I would venture to predict that in another year or two—it is possible that this Government will run the full term—there will be ample evidence to demonstrate that what I am saying is correct. Apart from the left hand not knowing what the right hand is doing, the time will be reached when the disaster that will come as a result of that will be attributed to the left hand by the right hand and vice versa.
I agree entirely with the previous speaker, Deputy Brennan, and would take issue with the Minister for Finance in respect of the alleged healthy condition of housing in the year 1957.
Do you agree with the previous speaker's views on all forms of taxation?
I have two pages on that. That will be my finishing point. I will give my own views on that.
I understood that everyone who stood up there was talking on behalf of his party.
Order.
Have things got that bad now?
This is a democratic party. Big Daddy does not tell anybody what to say here.
Knowing Deputy Tunney, I find it difficult to accept that he would agree with the views expressed on these items by Deputy Brennan or by Deputy Haughey in his contribution.
Deputy Tunney, on the budget.
The reactionary right wing voice of Fianna Fáil is going out in full flight now.
I will be giving my views on wealth and capital before I conclude, with your permission, a Cheann Comhairle.
They are defending the Taca boys to the bitter end.
Order, please. Allow the Deputy to speak without interruption.
I remember Finglas in 1957. That was one year when there was no housing emergency, it has been said. A certain builder there who was building SDA loan type houses was advancing the deposit of £47 10s. to prospective buyers and I remember people in Finglas village refusing to take from him the corporation houses which were vacant in West Finglas. That was the position then. If the fact that there were more houses than there were people able to pay rent for them is taken as an indication of having solved a housing problem, they are welcome to it.
Could I dissuade the Deputy from harking back too much? The Chair is anxious that Deputies would relate their remarks to the 1974 budget.
Having no policy, it is understandable that they have to look back.
I am in the unfortunate position that the Chair seems to change. I was sitting here patiently all morning listening to speakers from the other side of the House going back as far as 1920 and nobody said a word to them and when I go back to 1957 I am told that I am going back too far.
The Deputy understands that a reference back is quite in order but I am concerned that we may have too much of 1957 or a previous period. The Chair is anxious that the House should debate the budget of 1974. If there must be reference back, all right, but let it be a fleeting one.
I will spend a few minutes expressing my views on wealth, capital, profit, profiteering, Taca boys, office blocks and all that emotive area.
Do not forget the farmers' tax.
I will start with the farmers' tax.
Good lad.
I was surprised that Deputy Brennan did not refer to one aspect of the farmers' tax. Deputy Brennan accepted what the Minister for Finance told him, that he was taxing only 9,000 out of a total of 170,000 farmers. That is evidence of the fact that the Minister for Finance has codded Deputy Brennan. I am surprised at that. As I see it, the number is far greater. Apart from the tax that applies to the farmer whose valuation is in excess of £100, there is another tax to which Deputy Brennan did not refer at all, that is the tax indicated in the yellow paper, as we call it now, where it says:
In the case of farmers not now being brought within the scope of income taxation only one-half of the appropriate personal allowance will as from the 6th April, 1974 be set off against non-farming income whether of the farmer or of his wife.
I am very much surprised that Deputy Brennan, who comes from a farming constituency and who spoke on behalf of farmers, did not concentrate more on the farmer affected by that paragraph than he did on the farmer affected by the £100 valuation provision because that paragraph means that practically every farmer in Ireland will be taxed. He will be taxed to the extent that the normal allowances in respect of income tax will in his case be halved.
I am not here to make the case on behalf of farmers but I would indicate that when the Minister talks about taxing 9,000 farmers he is not quoting the correct figure because he is also taxing what I would assume to be another 50,000, 60,000 or 70,000 farmers who will be caught in this net. I thought for a moment I was going to get some assistance from the Parliamentary Secretary.
I was not listening too carefully. If I had been the Deputy would probably have got some.
I have indicated that, in his speech, the Minister for Finance indicated that he was going—to put it in simple and everyday words—to tax 9,000 out of 170,000 farms, basing that figure on farmers whose valuation was in excess of £100 but that he had no regard at all for the farmers who were included, and must be included, in the last paragraph and, again, I quote:
In the case of farmers now being brought within the scope of income taxation only one-half of the appropriate personal allowance will as and from 6th April, 1974, be set off against non-farming income, whether of the farmer or of his wife.
There I think he is referring to the farmer about whom we heard so much last year in the Mansholt Plan and about the ideal situation where a farmer would work half a week on his farm and the other half in a factory. This means that now in regard to any farmer doing that—and there are many at the moment—in respect of his factory earnings and allowances which he enjoys at the moment, the Minister for Finance proposes halving the personal allowance, thereby imposing an additional taxation.
I do not think that is the point, Deputy. I know very little about agriculture but I would think that the number of Mansholt farmers who have 100 acres and upwards would be very small indeed. A 100-acre man who would be working in a factory simultaneously would be a very rare bird.
There is no question of 100 acres; it is £100 valuation.
£100 valuation I mean; that is what I meant.
But this is different. It says, and this is the point I am making, apart from those the Minister proposes halving their personal allowances.
I do not want to be authoritative on this because I freely admit to not being an expert on it, but I take that to refer to cases where farm losses are used to avoid tax liability on large profits being made on some other business owned by the same person.
If that is not authoritative, we do not want to hear it.
I do not know whether the Parliamentary Secretary has read the paragraph in question but it is on page 19 of the Yellow Paper. It is one he might well look at. Again, no more than myself, he is not going to be troubled by many farmers.
I am afraid the Deputy is wrong; I am going to have a lot of farmers in my constituency if I am elected next time.
The Parliamentary Secretary is going to the south county and the best of luck to him there. I wonder how many small farmers in the south county would be affected by this. I suggest that the Parliamentary Secretary indicates his interest in it——
Or change constituency.
As long as the Parliamentary Secretary does not come north of the Liffey we will be happy enough. As I see it there will be farmers in his new constituency who, as and from 6th April will have been brought into the tax net without their knowing it.
The Parliamentary Secretary to the Minister for Social Welfare has left. I appreciate that I am not addressing him but he did ask me to give my views on wealth tax, capital gains and things of that nature. As one who reads Quadragesimo Anno and Rerum Novarum, my view is that the spirit of that was that it was not a case of giving the labourer enough to live on but that the labourer should have enough in his wage to allow him save and create capital. Ideally that was the position. I do not accept at all that there is anything wrong with wealth. On the contrary, I accept that it is very necessary in any community that one has people who will be so motivated as to create or generate this extra wealth which can be utilised to the benefit of others who have not the same industry, intelligence or initiative. I think there is the same obligation on the community to create wealth as there is to distribute it. More important, I would submit, it is ridiculous to talk about distributing it if you do not accept that first it must be created. Again, you cannot distribute wealth unless, first, it has been created. That, to me, indicates the need for it. I accept that need.
I do not claim that this results entirely from good Fianna Fáil Government over the years, but we did inherit good times and wealth from previous Governments, from industrious people and from thrifty parents. I know it would be very easy for me or anybody else to pander to the natural and understandable envy which the normal human being has of those who would appear, in material things, to have more than himself. That is a temptation which politicians must resist nurturing or fostering. Unless we assume that the world will end with this generation, we must accept that, if future generations are to enjoy the standard of living made possible for us, there is an obligation on us to make a contribution to the general pool of wealth; that we must resist the prodigal son approach from everybody. We can afford some prodigals but, if we were all to aspire to being prodigals, there would be nothing for any of us. If one wants to equalise wealth —if that is your outlook, your aim, your principle—the best, surest, and quickest way of doing it is to make sure that there is none for anybody. That may sound paradoxical but I think it stands up to economic examination. If we want to create a situation where we all have exactly the same amount of wealth, the only way in which we can guarantee that is to make sure that none of us has any of it.
On the other hand, if we want the bingo mentality and if we want to instil that into the minds of our people— take a ticket and the £30,000 might come up—we should tell them that it will come up only for one person. We must explain to them that they cannot all win the £30,000. We must explain that they cannot all win the bottle of whiskey, or the big or the small prize, whatever it is. I fear that what is happening here and what the leftist element in this Government are tending to do is to move towards a situation in which they hope to pacify and satisfy human needs and human demands in respect of material things by distributing all that has been created and all that has been saved by the rest of the community in the hope that they will thereby gain popularity and sustain their position. I would concede that it is possible that they may do that for a short time.
Deputy Hussey yesterday was saying just the opposite. He seemed to think our proposals were so unpopular we will suffer for them in the short run rather than in the long run.
I am not saying there is a hunger upon every member of the Government to distribute all that has been saved and all that has been collected but I detect this desire among a certain few members of the Government. I am hoping that they are looking beyond the present generation and that they will realise that, if they reduce the accumulated assets of the country to a general nothingness, there will be nothing for future generations. I do not think one has to be an economist, dismal, classical or otherwise, to accept that. So soon as you remove from human beings the motivation and the need for competition, so soon as you remove the element of the competitive race, and so soon as you indicate that, irrespective of what talents or abilities a person may have, in this race of life he will finish up at the exact same point as the competitor who is moving along pulling his coat behind him by the sleeve, you automatically and assuredly kill initiative, kill endeavour, kill industry and you guarantee—the best way to describe it is to use the double negative—that there will be nothing for nobody.
I agree with the Deputy about all this. He is pushing an open door. However, I do not know a single member of the Government in the Labour Party or the Fine Gael Party that takes the point of view the Deputy is so rightly criticising.
I accept that from the Parliamentary Secretary, but I think one often times gets a better view of a situation by looking at it from afar rather than by looking at it from within and, perhaps, if the Parliamentary Secretary, out some day reconnoitring his new constituency, pondered for a while beside a brook up in the Dublin hills——
The Wicklow hills.
Wicklow and Dublin.
I think there is more of Wicklow in them than there is of Dublin.
The Hell Fire Club.
If the Parliamentary Secretary does what I suggest he will get some evidence to confirm what I am saying. This applies even to the Minister for Finance, figuring on his "Late Late Show," seeming to suggest there was something obnoxious, something wrong, something antisocial in one's being industrious and having something of one's own, and that the better attitude is to shout and scream and consume that which belongs to others. This seems to me to be the policy which is gradually emerging.
As far as I am concerned, I shall be happy to see any man who has wealth entitled to that wealth, even if it be wealth resulting from inheritance. I believe a family have the right to pass on their savings and their resources to subsequent generations. If that wealth, be it from inheritance or from industry, be not ill-gotten then the owner of it is entitled to it and he is entitled also to the thanks of society because, without him, it would not be possible to attend to the needs of the needy in the fashion we all desire.
In the matter of making a contribution towards weaker companions there is ample evidence to show that there are members in our society who should be reminded that in their search for and lobbying for social welfare benefits an element of conscience enters in. I refer in particular to unemployment assistance or unemployment benefit—I am never too sure of the exact term. I am talking about the situation which obtains in every urban area: there are able-bodied men reporting every week and succeeding in defeating the regulations and they are obtaining financial assistance which is not their entitlement. In the interests of other genuinely less fortunate people I would appeal to them to desist from this practice, a practice which brings neither honour nor credit to themselves or to anybody else.
When I was talking about the farmers my tactic was not to say anything that might reflect in any way on the Taoiseach, but here I would make a plea to the Parliamentary Secretary to the Taoiseach. I realise I am not in absolute agreement with every Minister of this House but, from the limited knowledge I have of farmers, I cannot see, for the life of me, and here I am talking specifically about the farmer with a valuation of £100 or more, why if those who rear sheep, pigs or cattle are to be taxed there can be any doubt about taxing the farmer who is engaged in what is regarded as bloodstock rearing. Why is there any doubt in the mind of the Minister in this regard.
I explained that this morning. It is because of vested interests.
I feel sure that the Chair will allow to every Deputy the right of suspicion. It would appear that the reason for the doubt there might arise from the lobby within the Government of those who have a specific interest in bloodstock rearing. I am not suggesting that this lobby is coming from Deputy Bruton because I do not know whether he is engaged in bloodstock rearing.
Has the Deputy sorted out the gun lobby in his own party yet?
Now it is pressing on a corn.
I am glad the Deputy is able to recognise a shrewd thrust when he sees one.
Can the Parliamentary Secretary produce no better argument than that which he has submitted?
Can the Deputy produce any argument?
I have already produced my argument and I regret that the Parliamentary Secretary was not here to hear it. He should read the report of my contribution because it would be a very useful exercise. Why is there any doubt in respect of the horse when there is no doubt in respect of the bullock, the sheep, the heifer or the pig? Why are we differentiating between these categories of animals? I am sure the Parliamentary Secretary to the Taoiseach, with his alert mind, is recalling the number of times he has seen the gentlemen of his party sitting on horseback.
And gentlemen belonging to the Deputy's party falling off them.
In view of the fact that the Parliamentary Secretary to the Taoiseach has moved into fresh and green pastures, away from the streets of our city, to a new constituency he might think about the advice I am giving him. I know that at the first branch meeting he attends in his new constituency he will be confronted with this question. He will return to this House in a few months' time and tell me that I was correct. He will find that at these meetings he will be questioned about the farmers personal allowance being halved and of their difficulty in understanding why farmers engaged in the production of livestock are being taxed while those engaged in the production of bloodstock are not. I am sure that at these branch meetings the members of his party will be more outspoken than I have been today in telling him the reasons.
I know that the Parliamentary Secretary has been doing a fairly effective John the Baptist in the recall of the White Paper on taxation even though he is making it most embarrassing for Minister O'Leary and other Ministers. I admire his loyalty and his concern for his party and the element of the Government which his party represents. He realises that it is not to the advantage of his party, or to the Government, that they should proceed with what the Minister for Defence has described as a White Paper prepared by mere civil servants. The Parliamentary Secretary to the Taoiseach is more honest than that. He knows it was a White Paper foisted on Fine Gael by certain elements in the left wing assisted by one or two of the Fine Gael members; the just society, distribute all that is belonging to everybody else but make sure that you keep your own.
Without conceding what the Deputy has said is accurate, even if it was accurate would it not be the ordinary normal product of any kind of Government consultation upon anything? I can recall Deputy Blaney demanding in a budget to be introduced by Deputy Haughey nothing less than £20 million for the farmers but he did not get it.
The Parliamentary Secretary will accept that we never had a situation where on Radio Éireann at 1.30 p.m. we had the Minister for Labour stating that the White Paper was a positive statement of intent by the Government with accompanying schedules and five minutes later, to stymie him, we had a speech from the Parliamentary Secretary to the Taoiseach, which had not yet been delivered but which had been handed to the lady who was doing the interviews, to choke what the Minister for Labour was saying.
I absolutely repudiate that. For the record, I rang the programme concerned and complained about the use of that script before it had been delivered and they apologised for having mistaken the embargo. That is the truth of the matter.
But the Parliamentary Secretary is not denying what was in the speech?
I will not comment on what I did not hear but this speech was used before it was delivered and this was done by mistake. The implication by the Deputy that it was done deliberately is absolutely wrong.
I accept what the Parliamentary Secretary says but I am sure he will accept that what he was saying and what the Minister for Labour said was not on the one beam.
I cannot say yes or no because I did not hear the programme.
I am sure some of the Parliamentary Secretary's friends informed him of what was on the programme because they certainly told the Minister for Defence. I should like to ask the Minister for Finance, through the two Parliamentary Secretaries present in the House, to think not only of distributing the accumulated wealth of the country during our lifetime, but to remember there are people who will follow us and that there is an obligation on us to leave as much for them as we inherited. That is as much good government and the responsibility of government as any other of the aspects mentioned here.
As Deputy Barry Desmond would say, at this point in time the only beneficiaries of the budget are the Government. The coffers of the Minister for Finance have benefited to a considerable degree. Since the budget, costs for the ordinary people have risen so steeply that the benefits of the budget have been eroded.
On last Saturday's daily papers, at considerable cost to the Exchequer, three-quarters of a page was devoted to a litany of price increases, which were not the only increases to have occurred since the budget. Any benefits in the budget, which Deputy Tunney has correctly pointed out were only marginal, have gone. The greatest beneficiary has been the Exchequer. In respect of the many increases on commodities and services, the VAT involved has been a windfall to the Minister for Finance while the benefits have been eroded. We have another eight months until we have another budget to rectify the situation, unless the Government find the situation so desperate before the end of the year that a supplementary budget is needed.
The Minister for Finance was quite dishonest in his explanations regarding how the budgetary provisions would work, especially in pointing out the extent of the benefits. He instanced the case of a married man with two children whose income was £2,500 to £3,000 per year and he pointed out the family would benefit to the tune of £140 by way of income tax relief. That is not so. The majority of families are paying interest on house mortgages on which hitherto there was income tax relief. A person who got income tax relief last year because he was paying a house mortgage will not get the same amount of benefit now. For a person who has a mortgage of £4,000, the income tax relief will not be £140— it will be £40. I instance this as the kind of sleight-of-hand running through the whole budget.
As Deputy Tunney has pointed out, the farmers have been hoodwinked in the same way. There was a clear categorical statement that only 9,000 farmers, those with a land valuation in excess of £100, would be caught in the income tax net. This is a lie, a distortion of the truth. A large category of small farmers had been advised by various Governments that one solution for their problem was the establishment of industries, the fostering of a fishing industry, so that they might engage in a non-agricultural activity. For many of these small farmers it is not profitable to engage in farming on a full-time basis. It was a good principle to provide alternative employment. Fianna Fáil are anxious that where farmers have uneconomic holdings every effort should be made to have alternative employment for them. However, the Minister for Finance says that although his Government agree with that policy they will not give any tax benefits.
It is true to say that the farming income tax net, allegedly and dishonestly stated to catch 9,000 farmers, in fact is catching many more. Unfortunately it will catch the farmer who cannot make a living on his small farm and who must engage in a non-farming activity. Here I would ask the Parliamentary Secretary if fishing will be regarded as a farming or non-farming activity for a small farmer. He is obliged to work in a non-farming activity in order to provide for his family but now he will be taxed. He will suffer. The Minister for Finance should be honest, revise his figure and tell us what the figure is likely to be because the provision which has been mentioned does not just apply to the farmer who himself engages in non-farming activity. Even if the farmer devotes all his time to his small farm, if his wife engages in non-farming activity he is caught in the net by this budget. It is true to say that the only beneficiary is the coffers of the Coalition Government.
Deputy Cunningham, Deputy Brennan and Deputy Tunney have proceeded on the assumption that there was a deliberate intention on the part of the Government to crush the farmers. They know very well that is not so.
I am not talking about crushing. I am talking about taxation.
To penalise them.
I am talking about taxation.
What the Minister said was that the tax bearers were too few in number and that they were too heavily concentrated in one particular industrial or social area and he wanted tax more equitably spread. That is the beginning and the end of the Government's attitude to tax and to be crying about people having to pay——
That is not my point. My point is that if the Government are taking credit for taxing farmers at the top level and basing a case on that, why go to the other end of the scale and tax farmers, too, without saying that this is being done? Why was the Minister for Finance very forthcoming in his budget statement, and why were other Ministers very forthcoming since then, in saying that all that is being done is to tax 9,000 farmers when they know, and the yellow paper says so, that what is actually being done is that, plus the taxation of small farmers who engage in non-agricultural activity part time?
No. That is not the point and the Deputy should know it is not. The point is to get the man who uses a farm against the losses on which he can set off big profits which he is making on some other business.
When Deputy Tunney was speaking the Parliamentary Secretary, Deputy Kelly, said that he was making the statement which he has made now but that it was not authoritative.
The Deputy knows very well that I do not set out to be an expert either on finance or on agriculture but that is how I understand the situation.
Tell me if what I am saying is wrong? I am saying that when Deputy Tunney was speaking and referring to this matter the Parliamentary Secretary said to him: "That is not correct. This is the position but I am not saying it authoritatively". My rejoinder was: "Well, do not say it unless you have sufficient knowledge to say it authoritatively". Is he now saying it authoritatively?
I might have done better to say nothing. The Deputy knows that I am sitting in for the Minister for Finance. He is the man who can answer authoritatively. I merely offer the Deputy my understanding of what the Minister meant.
After the passage of a month, after all the discussion that has been going on about this item, after the publicity it has got in the papers, the statements by farming organisations, is the Parliamentary Secretary saying now that he does not know, as a junior Minister in the Government, what effect the provisions of the budget and the last paragraph of the yellow paper will have on all classes of farmers?
No, I am not saying that. What I am saying is that for an authoritative answer and a final one the Deputies will have to wait until the Minister for Finance comes to reply but I want to give an interim answer by saying that my understanding of the situation is quite contrary to that of the three Deputies.
If the information has not been released pending the reply of the Minister, fair enough. If he is going to mend his hand, fair enough. I can understand the Minister for Finance mending his hand on this particular item. Indeed, it is widely forecast that the Minister will mend his hand on this item.
I do not know whether the Minister is going to mend his hand, if there is anything wrong with his hand. I have no information about that at all. Surely the whole point of this debate, so far as Opposition contributions are concerned, is to try to persuade the Minister that he has made a mistake. The Deputy seems to be blaming him for the possibility that he might have what the Deputy calls mending his hand in prospect.
I hope that the gist of what I am saying will create a situation in which the people on whose behalf I am speaking will not be penalised by the provisions of the last paragraph of the yellow paper. That is why I mention it at all.
Without the authority of the Minister, naturally, I feel certain that when the Deputy sees the Finance Bill the apprehensions which he has expressed will prove to be unjustified.
We have gone through this. I know we do not have the authority of the Minister. As a front bench, all we can do is discuss it, try to see what it means, get the best information possible. My interpretation, and I am not alone in this, is the one I have given. If that is what the Minister had in mind I am asking him to change his mind. I would be glad to hear when he comes to reply that that is not what he had in mind.
The Minister for Industry and Commerce has sanctioned very large numbers of price increases that have been applied for but it has reached a ridiculous stage when increases larger than those applied for have been sanctioned. In the case of coal in Donegal, increases have been sanctioned to importers who did not apply at all. This is a serious situation. The Government are blaming the EEC for all their troubles, their commodity problems and scarcity of goods. The Minister for Industry and Commerce is trying to get it across that all our troubles in relation to prices are due to membership of the EEC so that he who was against our entering the EEC will be able to say "I told you so" and at the same time create a feeling in the country that we would be better out of it.
There is provision in the budget for increases in the various services. I want to deal with two of them, the Army and the Garda. Recruitment is taking place in both forces. That is necessary. Training is also necessary but it is not enough. It is necessary out of the budgetary provisions to spend very much more on equipment. This is more necessary in the case of the Garda than the Army. However, I read in the papers recently that the Army have complained about the accommodation along the Border. After the lapse of many years since those premises were occupied it is quite understandable. I hope something will be done about it.
Something is being done. Two new barracks are being built in the Border areas. The Minister has admitted that the claim about the substandard accommodation is true.
We have the example of the Department of Education over the years providing accommodation very quickly, pending the erection of new schools, to cater for increased numbers. You will not build a barracks in a day or two. Temporary accommodation such as pre-fab accommodation should be provided.
There is a big difference between a classroom occupied a few hours a day and a building which, quite apart from security problems, must house grown men right round the clock.
I prefaced my remarks by saying that what I had to say in relation to accommodation referred to the gardaí. Their situation is even worse than that of the Army. You have an unusual situation over the last few years along the land frontier from Donegal to Louth. Large numbers of gardaí have been sent there to barracks in small villages and towns.
How does the Deputy relate this to the motion?
I am relating it to money provided in the budget. I am suggesting a use for the money provided.
The Deputy, of course, is well aware that what is applicable to Estimates is not applicable to a debate like this. What would be appropriate to Estimate speeches such as that of the Department of Justice, the Department of Defence or the Department of Education is not applicable to a debate like this.
I thought as this is an urgent matter I might be permitted to raise it.
The Deputy will appreciate that if that precedent were followed then any other Department might fall to be dealt with in the same way.
It is a new situation. Large numbers of gardaí are accommodated in barracks where only a sergeant and one garda were accommodated up to about three years ago. There are now over 20 men there.
The Deputy may not proceed any further on this matter.
Immediate attention should be given to what was raised in a Parliamentary question yesterday, that is, correlating the efforts of the Garda and the Army along the Border. It is hard enough to deal with this situation in relation to accommodation but the most important thing is the safety of the gardaí who are unarmed and are under attack. There should be more co-operation between the Garda and the Army on this. Where road checks are in operation by the gardaí there should be no reason on each occasion to request the Army to be present. Once a road block has been put up, the Army should be present, especially on those roads which are in use every day of the week.
I tabled a number of questions dealing with the fuel supply, especially coal and turf. The Government are missing a golden opportunity here. The fuel problem in the years ahead will be acute. The importation of fuel will cost a lot. I suggest that provision be made for an emergency turf development scheme because if the present situation lasts and the people have to pay £2 per bag for coal, it would be good budgeting by the Government if they made available out of this year's budget some funds to local authorities to build roads in undeveloped bogs. People could then provide handwon turf for their own use and also for sale.
No Government can deal with all our problems satisfactorily. There will be fuel problems in the years ahead which the Government cannot deal with. There will also be problems in relation to increased prices for imported fuel which the Government can do nothing about.
Debate adjourned.