When the Parliamentary Secretary to the Taoiseach, Deputy Kelly, was speaking on the budget last Friday he said that the absence of so many Deputies from the House showed that they were tired of the budget and were doing better work outside the Chamber. That is probably true because most people are tired of the budget.
It is depressing to realise that the deficit since the last budget is now £240 million. What is more staggering is that this year we had to borrow £842 million. Naturally this money must be repaid. When one realises the amount of interest which must be repaid on this large sum, one realises the rake's progress type of Government we have. It may be argued that this budget is subsidising foodstuffs and taking VAT off certain articles. The Minister is subsidising electricity because he had previously given the ESB permission to increase their charges. Even so, people will now be paying more for electricity. The Government may say that if they had not taken that action the people would be paying even more. To my mind, this represents typical Government thinking on financial programming.
Some people were very sore at the suggestion that the trade unions and employers should revoke the recent national wage agreement. Fianna Fáil have always been in favour of national pay agreements. As a matter of fact, we initiated them. When the national pay agreement was being negotiated, the Government knew the financial state of the country. Yet they sat back and let the Employer-Labour Conference hammer out the agreement, got the trade unionists and employers to vote on it and it was carried. All that time, the Government knew that the country could not afford this agreement. They now come along and tell us that they are introducing food subsidies and taking VAT off certain foodstuffs. They asked the Employer-Labour Conference to get together again to tone down or reduce the benefits which would accrue to the wage and salary earners from the national pay agreement. That was a clever stroke because if the employers and union leaders do not fall in with the Government plan to correct inflation, they will be blamed for whatever happens.
Let us look at it another way. The Government, having made a mess of the national economy, are looking around to find somebody to take the blame and they picked on the Employer-Labour Conference. They are laying the blame for whatever happens at their door. This does not instil confidence. If there is one thing we need more than anything else, it is confidence in ourselves, and confidence to lead us from the road to disaster. If the Government had been honest with the employers and the unions some months ago and told them the true picture, the people would have responded, as they would respond to good and honest leadership. But, for some unknown reason, the Government decided not to interfere with the negotiations for the national pay agreement. Even then, people were wondering why the Government were not giving the conference information that they could not go beyond a certain figure because the economy could not bear it.
The Government have become so accustomed to denying that anything is wrong that they could not resist the temptation at that time. They deny our assertions that the construction industry is in a very bad way—20,000 people unemployed. There may be a further drop in the number of craftsmen, helpers or people employed in that industry. Yet the Government say there is no crisis in that industry. This type of reasoning has led the Government into their present trouble —their refusal to face the facts of economic life and to budget to correct those faults. We will have to pay for that, and pay dearly.
It has been suggested in this House that we may have to face yet another budget. We may have to face much more than that, because in his statement the Minister threatened further cut-backs. He said:
The Government intend, therefore, to adopt a policy of moderation in regard to non-capital expenditure generally in order to conserve scarce resources for productive purposes. The naïve notion that all can be provided by the State if enough clamour is generated will have to be replaced by a patient realisation that nothing more can be provided until extra resources become available.
I do not know who is being naïve. I suggest it is the Minister. He also stated:
Existing expenditures are being reviewed to identify those that might be curtailed or eliminated.
He said that some things will have to be shelved until the present economic difficulties have been overcome and resources once more become available to meet additional costs. There is a threat there to certain organisations and to different bodies receiving money from the Exchequer. There is a threat of a cut-back. It will not need another budget to do this. The Minister has stated this, and tomorrow the Government might decide to cut-back grants for the IMI or people like that. Nobody is exempt. The Government can say that the Minister spelled out what they were going to do.
They have insulated themselves against any clamour. The Minister anticipates clamour but says he will not give in to it. Nobody would say that a Minister was wrong in not giving in to clamour at certain times, but it would be wrong if he deprived some of these bodies who are doing such good work of grants or subsidies and told them to look elsewhere. Where else could they look at such short notice? Even if they could find some other source of revenue, surely it is a breach of faith that only a few months ago in the first budget this year there was no mention of this.
This part of the budget is being played down. The Minister should spell out what he means. Despite a certain amount of ambiguity there is a threat. All the bodies who receive money from the Government should be trying to find out where they will get the money to keep going. Even at this late stage, the Minister and the Government would be well advised to withdraw the budget and to say to the Employer-Labour Conference and the other bodies aimed at in the budget: "Things are so bad that we have to work out a new budget together". They should be honest with the people. Otherwise we will have to face a very trying time. People have lost faith in the Government's handling of the economy. They no longer believe, if they ever did believe, the publicity men who portrayed the Government as the Government of all the talents.
The Minister appealed to the patriotic fervour of the people to rally behind the Government to restore prosperity. We were told that the first budget this year would curb inflation, regenerate our lagging industry and revitalise the economy. Many people believed that. Even members of this House believed it. This second budget has shown us how bad things are. It is not long since a sum like £842 million would be the total expenditure in a budget. In this budget that is the amount we will borrow this year. It gives us no satisfaction on this side of the House to say things are bad. We know they are bad. Even making allowance for the fact that there is a worldwide slump in trade things are worse here in proportion to other countries. European countries are arresting their rate of inflation. The United States with their rich vast economy are also checking this rate. It may be said that it is foolish to compare this country with giants like the United States, West Germany and France. The point is that those Governments have taken action in the right direction, and they are arresting the drift towards complete financial anarchy towards which we seem to be heading. Perhaps it is the knowledge of what happened in the 1920s in Germany which forced the Germans to adopt a realistic attitude towards inflation. Those of us who are old enough to remember the 1930s will recall that things were bad then.
Today things will be even worse unless the Government drop their silly pretence of dealing with the economy and provide a real economic programme which the people will back because they believe in it. The Government must first remove the doubt which exists in the minds of people that this second budget this year is not the last.
I do not bemoan the fact—and I never did—that there is a deficit in the budget. The interests of people come first rather than trying to make a very neat bookkeeping entry with both sides balancing out which might hide hunger and desperation. Each day people seem to be losing the will and the energy and the dedication to back the Government in their fight against inflation. This is no wonder because they feel betrayed. They feel the Government have led them astray and that they can no longer trust them.
Some concessions were given in the budget which might ease the burden on the people generally, but they realise that these concessions could be eroded by the still growing rate of inflation or by the inactivity of the Government. While those concessions are welcome, we know that this budget will not lead towards economic reconstruction. It does not give any hope to the 100,000 people unemployed, or to the people who are worried as to whether their jobs will last much longer. When a Government lose the confidence of the people, they have a duty either to examine their policies and see where they have gone wrong and correct them or to go to the people as the final arbiters on whether or not they want a change of Government. I could go on talking about the benefits which would arise from a change of Government. At the moment the economy is in such a very bad and parlous state that it will take every effort to correct the rot which has set in.
It is fashionable to look back and ask: where did we go wrong? We might say: this is the conflict between the Fine Gael and Labour Parties. But, somehow, I do not think it is. I do not think Fine Gael have become imbued with some sense of socialism or that the Labour members of the Government have become conservative. It is merely lack of a policy: there is not that dedication or ability within the Government to get down, with the help of economists, in saying: this is the programme suitable to our needs which we believe will not alone stop inflation but give people some hope that we can reduce the number of unemployed to minimal proportions.
Anybody going through these Financial Resolutions and finding something that gives them hope is welcome to it. I saw one good point only in the budget, and that was the employment premium. That was a good provision and one that should be expanded and explored further. But I think also that it is outweighed by the deficiencies of the budget; in other words, that that good provision may well be negatived by the forces omitted from the budget on which the Government failed. This time next year, if the Government are still in power and continue the same economic policy, the unemployment rate may well have increased considerably.
Of course, it may be said that we have no emigration, but we do have some because, traditionally, our people have always emigrated to Britain or the United States. At present there are not many openings in either of those places but more of our people are heading for the European mainland and, once that emigration commences, it is very difficult to stop it. Over the years we have suffered from emigration and unemployment. Indeed, it makes one shiver to ask oneself: are we heading back to the days of the late 1950s when, in this city, we had almost solved our housing problem, not because we had too many houses but too few people? I can see that happening again unless the Government get down to business, not that of placating any section in the Government by paying tribute to their economic idealism— whatever that may be—and it is not beyond the comprehension of men of average ability to assess just what is wrong and set about developing our own resources.
The Government may contend that the rates granted in the recent national wage agreement were too high. I am not an economist by any means but I feel always that too much stress is laid on wages and not sufficient on production. If a man earning, say, £50 a week can produce goods to that amount at least—allowing for other overheads on them—if one pays him more and he produces more, that is the answer rather than pleading for cut-backs in wage or salary demands and contending: this is your inflation. Inflation has been described as too much money chasing too few goods. I know economists may differ on that. But there are ready markets for lots of our products throughout the world, or at least amongst our EEC partners, if we can produce them at the right price. But simply suggesting that a cut-back on the national wage agreement will constitute a solution to all our problems is very negative thinking and will not get the Government out of their present difficulties. Rather, through a policy of industrial reasonableness, we could approach the trade unions, workers and employers, and say: we have got to "up" the national output; we have got to become very competitive; we have got to turn out goods so that our people can buy them. And we have a proud tradition in the quality of our goods.
I feel that our people buy inferior, imported articles only because they are so cheap. Therefore, in a period of raging inflation, people who might think better otherwise, who want to be good Irish men and women and buy the home-produced article, may find it beyond their means. Therefore, they go for the cheap, foreign article.
Most of us could pursue a policy of purchasing Irish-made goods more consistently than we do at present. People generally, and traders in particular, could ensure benefit to the country by insisting on buying our own manufactured articles. We can all relate stories of going into shops trying to buy some article, of clothing particularly, and the difficulties we experienced in trying to find an Irish-made article. Perhaps it is the profit margin on the foreign made article that makes it more attractive to the trader to sell. That is something that might be examined in any price control policy. I do not think that has ever been undertaken. While the National Prices Commission do examine each application for price increase, I do not know whether they examine the profit margin of the article concerned. That is an aspect of price control that might pay us very well to have examined.
Therefore, with regard to the sale and promotion of Irish made goods we might well decide that we will get our traders to push their sale. Since we joined the EEC it may not be fashionable to be insular about one's own products, but I think that is a very foolish notion. Even though the German, Frenchman or Dane may feel part of the EEC, he will still retain his native pride in buying the products of his own country first, and those of others afterwards. That is understandable. It would be even more understandable here, we being the smallest unit, apart from Luxembourg, in the EEC. The EEC Commission, in its wisdom, allowed us certain concessions because of the state of our economy and the fact that it has not yet been fully developed, as is the case in some other countries. Surely they understand our Government pushing the sale of native goods. It is unfair to suggest that this should be done by the Government alone. Every individual should buy Irish, but the Government should tell our people that if we are to get our men and women back in employment we will have to buy our own goods. The Government should ensure that Irish goods are available at prices people can afford. The quality of the vast majority of Irish goods is very high and it would pay people to buy them rather than buying shoddy foreign articles.
The Government plans to cut-back on everything should be dropped. It is a negative approach. I wonder what the reaction of the trade unions will be to the proposal that the national wage agreement should be revoked or rescinded. I accept that unions are responsible, but it should be remembered that they have a responsibility to their own members. Some months age they had to give and take in working out the agreement. They accepted certain figures but they are told now that they cannot have them. If the unions rap the Government over their delay and their procrastination in this matter they cannot be blamed. The success or otherwise of this budget depends on the acceptance by the employers and unions of a change in the national wage agreement.
What will happen if the unions do not accept? What will happen if they insist on the agreement on the basis that they obeyed the wish of the Government when negotiations were in progress? It should be remembered that we could have had a free-for-all in wage bargaining but, because of the wisdom and the patriotism of the trade unions and employers, a national wage agreement was prepared. Many hours were spent preparing this agreement and we were all grateful when it was accepted. The people accepted the agreement as a good one because they realised that there are influences outside the country which dictate to us certain economic trends. If the national wage agreement is altered will any trade union in future have the temerity to ask members to sanction a new agreement on the basis that it has the blessing of the Government? I am sure they will reply that in 1975 an agreement was prepared, with the blessing of the Government, but after a while the Government said the workers could not have the increases. This kind of thing shakes the faith of people in a Government.
While no country can have a perfect Government we expect our Government, on a broad issue like this, to stand by an agreement reached. It may be difficult to do it now, but what is wrong is the fact that the Government refused to participate in negotiations for a national pay agreement. After the negotiations had been completed the Government told the unions and employers that things were so bad that the country could not afford the agreement. The Government said that they would introduce certain food subsidies and remove taxes on certain items, but they put it up to the unions and employers to forego parts of the agreement so that the Government could balance their budget or prevent the country going into absolute chaos.
It is the duty of a Government to rule. The trade unions and employers are not the Government although they play an important part in the life of a country. It is wrong that the onus should be thrown on them of accepting responsibility of whether or not this budget will work. If the trade unions agree to cut back a certain amount it will not solve our problems. The budget is wrong and it constitutes wrong economic planning. My views on this are respresentative of many people in the city, and they cannot all be wrong. With the exception of the employment premiums the economists who advised the Government on this budget were well out. It is easy to say that because the world economy did not come up to expectations we went wrong. We have no guarantee that the world situation will improve although we get encouraging reports from the United States, and from other European countries. It should be remembered that, compared with those European countries, our economy is poor. The workers in Europe have a higher standard of living than we have.
In view of the action taken by the British Government to restrict wage increases will our Government tell the trade unions here that if they do not cut-back enough British goods will be cheaper here? The Government should withdraw this document and get down to drafting a blueprint for prosperity. Unless the Government elevate their sights we will be accepting the same old things again—the high rate of unemployment, the ever-increasing cost of living, the despondency and the lack of confidence in ourselves. We need a blueprint for the future. The Government should be prepared to say that they will stand by any agreement. Had the Government warned, some months ago, that they would not stand by the wage agreement the trade unions and employers would have taken a different approach in the matter. It is not surprising that they are cynical when they hear advice from the Government as to what should be done when the Government do not know what to do themselves. If the economy is to be damaged irreparably by some of the blunders made the Government should ask themselves where they stand in regard to the future of our people.
They must be convinced that their policy is not getting us anywhere. It is not reducing unemployment by even one person or a dozen people. We fear, and I am sure the Government side must also fear, what the figure will be in the autumn when there will be a fall in what is called seasonal employment. What will be done for the young people who are leaving school and cannot get jobs? This afternoon the Minister for Labour told us what AnCO are doing. They are doing a fine job, but when one considers that the total number of people being retrained is so low it gives one no confidence. We realise how bad things are when we see a semi-State concern like the ESB having to let their apprentices go.
We pointed all those things out to the Government a long time ago. When we told them what was hapening in the construction industry we were abused for daring to suggest this, even though we showed from official Government figures that there were 20,000 people unemployed in that industry. When we told them the ESB had let some of their apprentices go and we showed that the private sector of the construction industry was in a bad way we were told that everything was in apple-pie order.
In the budget the Government have given an extra £10 million to the house building industry and they have told us that the banks will give £40 million in housing loans. When one examines the bank figures one realises that if somebody can afford a loan he has no need to go near a bank. Even if the Government had a document which said that things were bad at the moment but their policy would cure all these ills we know that it would not.
We may have a third budget shortly, which will add more taxation to an overburdened public. It will just be a further stop gap which will hold off the doomsday which now seems to be facing us. It gives nobody any satisfaction to be a prophet of doom because we all suffer by it. When one is a politician it does not save his family or friends from the depression we are in. Life can be made very intolerable for people on a fixed income when they face ever rising costs. I know that the Government have given some concessions to help people out, but we all feel in our hearts that things will get worse because the Government have not got the ability to grapple with the problem.
Can the Government see what our basic problem is? I believe it is that we cannot record any worth-while economic growth. Until there is some growth in the economy we will go on devising ways and means of keeping people on some kind of State pension. I heard unemployed people being criticised in the House because they were not working. Only a very minute section do not want to work. The vast majority of people want to have gainful employment. It is good for the moral fibre of a people to be employed. Any normal human being wants to devote his talents to some employment, whether he is using a shovel or working a computer. A man should be given an opportunity to exercise his ability to create wealth for himself and his fellowmen.
The Government are not encouraging growth. They are doing a holding up operation in bringing in at least two budgets in a year in the hope they can stave off the day before the whole lot comes tumbling down. Various suggestions are put forward by the Government about what they should do. One canvassed at the moment by some members of the Government parties is that we should break the link with sterling. While one feels this might not be a bad idea, surely it is an important matter on which the Government should say yes or no? There has been mention of this by the Minister on occasions, but I have never seen a definite statement by the Government saying if they intended to sever the link with sterling.
We live so close to Great Britain and we trade so much with that country that if we broke the link with sterling it would have great repercussions here. I, with my lack of knowledge of the matter, say that we should break the link, but then the experts might not agree with that. One of the famous presidents of the United States said that the experts were very often wrong. I know that the task before the Government is not an easy one, and they should take it much more seriously than they have done up to now. I believe if they have to bring in a third budget that democracy will suffer. Not alone will the Government parties suffer but the democratic institutions of Parliament may suffer grievously because people can become impatient with such dithering on the part of the Government and demand real action.
The vast majority of people do not want riches. They want a reasonable standard of living. I do not believe it is beyond the wisdom of Government to so frame our financial policies towards that end. We have had many times a much higher rate of unemployment than most European countries. I cannot understand why we cannot become just as prosperous as the Danes, the West Germans, the French or any of those other countries. When one visits those countries one sees the very high standard of living in them. We look around for this magical formula which makes those countries prosperous. Generally speaking, our people work as hard as anybody and, indeed, because of some defects in our organisation they have to work harder than Europeans. That is why I stressed that the Government were failing in this budget to encourage production.
The potential of Irish industry and agriculture is great but the Government are so busy trying to stop leaks in the economy due to their own policy that they have no time to produce an instrument for economic development to give us some measure of prosperity. It sounds crazy to me to have 20,000 people unemployed in the building industry when in this city alone the corporation housing waiting lists show over 5,000 families or individuals in need of proper dwellings. There are people in the Dún Laoghaire or county area also waiting. It is sad to think that men and women, particularly men, must wait for the day when the economy picks up again before they can go back to gainful employment. We are paying men, say, £25 a week in unemployment benefit, and a man with his family will struggle along with that, but surely the Government could devise some way of using their resources to give that man an extra amount per week and say: "We would much rather have you working, building houses or factories." The satisfaction for a man to know that he is wanted again in society would be great and the fact that he is off the dole and back in productive work helping to create wealth and can see a finished building which will mean that some families will have a better life, would boost his morale. Instead, we sit back and say: "We cannot help it; outside influences are too great."
The Government should have some confidence in themselves and in the people and say: "We will inject sufficient capital into the construction industry to get the industry going at maximum potential." That could apply to other instances also, but the construction industry is the national barometer of economic progress or otherwise. Men should be put back into productive work in the construction industry. I have heard much criticism of office blocks but I am not against them per se. I object when they replace houses, but many a man earned good money and pursued his craft building office blocks, factories, churches or houses. When we see 20,000 unemployed in that industry the Government should withdraw this budget and go back to the employers and trade unions. They should take the people into their confidence and say: “We will mould a new weapon in a financial policy which will be designed not only to get us through the present slump but which will be a blueprint for prosperity in the near future.”
The Minister's appeal to the patriotism of the people will succeed if he can convince them that the Government are in earnest, that their policies are the right ones, but let us not talk of prosperity around the corner or tell the people they are not really badly off. There are certain facts that are depressing: we have over 100,000 unemployed and a deficit of £241 million and we have to borrow no less than £840 million this year. The Government could still save the day, but it must first drop this budget and confer with the various interests so as to have their backing before the next budget—not after it. They should be fair to the trade unions and employers and say: "To save the country, we need your help. We think the wage increase should be £X." The Government should get the co-operation of these bodies to join in a great stride forward. Otherwise, if this budget stands and even if the trade unions and employers agree to forego their wage increases it may not be enough. The Minister has sown doubt regarding the making of future national pay agreements, and some Government will pay dearly for this.
