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Dáil Éireann debate -
Thursday, 3 Jul 1975

Vol. 283 No. 3

Financial Resolutions, 1975. - Financial Resolution No. 3: General (Resumed).

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

It is with regret that I speak on this the fifth budget in just over two years since this Government came into power. I am including in my reckoning of budgets the petrol budget, brought in before Christmas which introduced an unwarranted increase of 15p per gallon. Worse than that was the way the Government tried to bring about this increase—through the Imposition of Duties Order—which the Minister hoped would stifle debate by the elected members of this House.

If we are to have consultation and open Government, as this Government promised before the last general election, and if they are to be judged by their actions, they have failed miserably. Any Government who believe that by using a device such as the Imposition of Duties Order to prevent a debate in this House must be in very serious trouble in many ways. We were told by the Minister for Finance that that budget would yield a further £27 million to the Exchequer. A Governto my mind, a failure particularly when ment who resort to such tactics are, one remembers the solemn promises they made about open Government.

Last January when the Minister introduced his budget he told us he anticipated another budget in the autumn of 1975. Last week he did not give any indication if he still anticipated that budget. I seriously hope that somebody in a responsible position in this Coalition Government, when contributing to this debate, can clear the air about this next budget. The question I want answered is: are we to have another budget? I hope this question will not be left hanging in the air.

In April, 1973, in 1974 and 1975 we had the official budgets. We told the Government in very clear language that any action taken in their budgets would not help the economy in any way. We told them they did not have a co-ordinated plan which would maintain growth and improve the standard of living, but instead they tended to undermine and do unbelievable harm to the solid growth which had taken place during the 1960s, up to the time this Government came into power.

When these budgets were introduced we did not knock the idea of deficit budgeting. We resisted the pitfalls put in our way by the Government. We were not happy that the excess amounts of the budget deficits, and the moneys which had to be borrowed to meet these deficits were applied, in the main, to the payment of our current account rather than productive working. This was our No. 1 charge in the budgets of 1973, 1974, and 1975.

If things were ordinary this would have been bad enough in itself, but when we have a recession such as we have running hand in hand with a galloping and unchecked rate of inflation this maladministration helped to compound the inflationary trend. The Government's action in doing what they did in the way they did it made things much worse than they were. Our party have no intention of compounding the difficulties for the economy which this Government by their lethargy, their neglect and their downright ineptitude have created.

Unfortunately, for many long months the Government tried to get the public to believe, as they probably believed themselves, that outside forces were responsible for the extraordinary inflation from which we have been suffering for about two years. Practically all Members of the Government blamed the Arabs every time everything went wrong. So much so that I smiled recently when I heard the Minister for Finance was going with his hat or his cap in his hand to the Arabs looking for money. They could not have sent a worse person, because he was so unkind to that group of people over the past 12 months or two years in saying it was they who should be held responsible for the sad state of affairs here.

Is it any wonder that when our Minister for Finance came back his hat or his cap was empty and he was unsuccessful? I do not often comment on the political cartoons in the daily papers, but full marks to the cartoonist who showed in one of the papers—I forget which—our Minister for Finance coming down the steps of an Irish airline plane this time, I think, with his hat in his hand and being checked by a dutiful civil servant saying: "Minister, as you are at home now, please put your hat back on your head."

Despite all the stick given to the Arabs by practically all Ministers in this Labour/Fine Gael Government, many of our problems could have been dealt with by the Government if they were serious and able and capable of standing up manfully to the problems of making decisions and implementing them. A weakness of the Government is that they cannot make decisions. They cannot make up their minds as to what they should do or could do. For many months we pointed out that there were forces within our economy over which the Government have control and which contributed up to 50 per cent to our inflation. On every possible occasion we asked the Government to take action. For too long they dithered and dithered. The euphoria which attended their coming into office seemingly blinded them to and upset their vision of the harsh realities of the situation.

If we look back over the two years or so of the Labour/Fine Gael Government it is fair to say that, if they are to be given credit for anything, they must be given credit for the fact that they have tried to be a Government of all things to all men at all times. They were not strong enough to resist the many demands made on them. This is the sad part of it. Irrespective of the damage which might have been done and was done to the economy, they were unable to stand up to the demands which probably gained for them a degree of temporary popularity. They must have known in their hearts that every time they refused to face realities our economy was suffering and we were sinking lower and lower and deeper and deeper into debt.

The record shows clearly and without any qualification that six months ago we pointed out to them that there was still time available to them to try to do something about the economic decline which was obvious to everybody except the so-called Government of so-called all-stars who did not have their economic glasses on. Six months ago we begged them to take action mainly along the lines now being taken. If they had faced up to their responsibilities, as they should have, things would not be as bad as they are now. Since they did not take action which they were exhorted to take, the question must be asked: Why did they not? What prevented them from doing so? If they had shown sufficient political courage to do then what they are now being forced to do, we would probably be in a much better position than we are now. I suppose I will have to answer my own question. The reason they did not take the action they should have taken was that they did not have the political courage to do so.

Within the European context practically all the countries with the exception of ourselves show signs of coming out of the inflationary spiral. Britain and ourselves top the lead in this regard. The Government should have busied themselves with things which mattered to the economy and devoted themselves to the tasks which they were elected to perform, and been aware of their responsibilities and prepared to act, instead of getting themselves involved in other matters which I believe were introduced to create a diversion and to take the people's minds away from the realities of the situation.

The Minister for Posts and Telegraphs on behalf of the Government is hopping about the country still preaching about open broadcasting which he knows, as well as I know, was never on from the word go. He tried to delude the people throughout the country that we could immediately, if they wanted it, give them BBC 1, that it was as simple as that. The Minister on behalf of the Government was not too strong in his interview on the news on television yesterday after his discussions with the Minister for State from Britain who was here to talk to him about something or other. All the talk, all the stumping around the country, all the efforts to lull our people into this state of delusion, all the energy and time spent on something that was not "on" from the word go, could have been better utilised looking after things that needed to be looked after— principally the economy, the way it was going and inflation spiralling along with it. Perhaps it was a diversionary tactic—as I am inclined to believe— merely to keep people's minds off other things but, then, perhaps that is the role of the Minister for Posts and Telegraphs.

We had other diversionary tactics also. We had the transference of the Criminal Law (Jurisdiction) Bill from this House to the Seanad on the so-called grounds of urgency. Where is that urgency now? Where is that Bill that had to be got through as quickly as it was said it must be got through? How serious are the Government with regard to that Bill now? How many of the sitting days of the Seanad has it been ordered since it went there? Is it not a fact now that the bluff of the Government with regard to this Bill and the reasons for its withdrawal from this House has been blown wide open? If the purpose was to create merely another state of delusion, they might have succeeded. But so much time has been lost. They were fiddling away for themselves, all playing different tunes at the same time while the country sank deeper and deeper.

I believe there is another reason this Labour-Fine Gael Coalition failed to tackle properly the present economic problems. I believe there is another reason why they failed to produce any cohesive, long-term strategy to deal effectively with the unbelievable spiral of inflation we witness at present. I believe the fact of a Coalition Government, the fact that we have a Government which is a coalition, is the reason things have been allowed go unchecked, as they have at present. I shall not speak at any great length on all or any of the old arguments against a Labour-Fine Gael Coalition. But I have a question to ask of this Labour-Fine Gael Coalition, which is: will they plan our recovery and future economic progress on the basis of a mixed economy, which appears to be the view of the majority at least of the Fine Gael Party, or will we have a socialistplanned economy which one must presume to be the aim of the majority of the Labour Party? That is the question being asked and not being answered. Why is it that the Minister for Finance is unwilling to answer it? Is the Minister unwilling—or perhaps I should say, is he permitted—to embark on an economic programme? If he is not permitted, is it because he is dependent on the tail, it being as strong as the body of the dog, to keep him in that position? The fact that the Government and the Minister for Finance are not in a position to state what is their economic plan inspires a lack of confidence, and that lack of confidence is crucial in our present situation. If, for any reason, a realistic programme is impossible, are we to be faced with recurring crises during whatever length of time there is left to the Government? Are we to have a series of emergency budgets every time something goes wrong? We do not know. Those are the serious matters the Government have still failed to take in hand and do something worth while about them.

It is fair to say that before the budget of last week, there was to be seen no Government policy whatsoever. Indeed since that budget the same can be said. Might I say—and I had hoped to say so on the legislation which went through before the Parliamentary Secretary took over, legislation being pioneered by the Minister for Industry and Commerce —we urged the Minister for Industry and Commerce many times to take action against the flood, and I cannot over-emphasise that word sufficiently to describe the amount of third country imports coming into this country, putting thousands of our workers out of jobs. That Minister failed miserably to protect the jobs of those many thousands of people. Over the months he kept throwing phrases at us, such as that he was looking for the right economic mix; phrases such as "economic mechanisms", "ongoing situations which were being monitored continuously". But, while he was monitoring ongoing situations, our dole queues were growing and more people coming out of work.

In recent times it is fair to say that one notices a marked difference in the attitude of some of our newspapers to the Government. Perhaps I may be forgiven for mentioning The Irish Independent, a paper regarded always as being sympathetic to Government actions. Mind you, The Irish Independent of last Wednesday contained a leading article of which, were I a member of this Labour-Fine Gael Government, I would take notice, particularly from a paper I believe always to be reasonably sympathetic to that Fine Gael-Labour Government. It said that the Government had waited for a very long time to see if inflation would moderate of its own accord. I suppose it is fair to say that certain papers cannot forever forgive. What The Irish Independent said of this situation really presents the tragedy of the situation as it obtains at present. Governments with experience know that economic difficulties and crises do not disappear of their own accord. There is no doubt about that. This Government, by their neglect to use the means at their disposal at the proper time, made the prospect of recovery more difficult. The process of recovery will take longer because of the Government's failure in this regard.

The Government missed out and neglected the opportunity to stave off the worst element of inflation, bringing as it did with it declining standards of living, reducing employment and investment and turning investment away from our shores. They also drove away investment from here. By not acting when they should have this Government missed a wonderful opportunity in relation to the situation in Northern Ireland. By allowing our economy to sink into a situation comparable to that in Britain we lost the opportunity of inducing the Loyalists to turn their eyes to the south for hope or inspiration in their own economic troubles.

For too long this Government have whistled their way past the graveyard of lost opportunities. They wallowed in a state of indecision, they attempted to glibly talk their way out of difficulties without taking appropriate action, they have attempted by diversionary tactics to delude the public and obsecure the difficulties of the economic situation. Many people believe that what the Government have done is too little too late. They believe that the attempt at a solution will not come to grips with the problem as it should. It is the job of the Government to reduce unemployment and protect us from inflation.

It is hoped that this budget will do these things, but it is based on the expectation that the national wage agreement will be modified. We favour such agreements and the Government do also. Fianna Fáil prepared the ground for the first national wage agreement and we support the Government's request for the modification of the present agreement although we know that this will make unions reluctant to enter into new agreements. This is part of the drastic price we have to pay for Government failure to act in time. This was unnecessary and need not have happened.

If the Government accepted the proposals we put to them last winter, and repeated before the January budget, prices would have been cut and a new national wage agreement would have been negotiated on that basis. Instead, those who could not make up their minds, who could not reach agreement among themselves, who were working without leadership, allowed the situation to develop where now we find that the unions and employers are being asked to break an agreement which was signed only recently. There was not advance warning from the Government although it was plain to be seen that our economy could not sustain a 24 per cent price and pay rise this year.

The weakening of confidence in the national wage agreement is only part of the process of undermining the existing machinery. This Government have weakened price control by overruling the recommendations of the National Prices Commission in relation to CIE fare and ESB charges. We have seen proof in recent days that the Government were wrong and that they weakened the National Prices Commission for no reason. The Government have publicly acknowledged that once again they have made a mess of affairs because they tried to be all things to all people at all times in an effort to buy, at the expense of the nation, the popularity which they believe is so necessary for good Government.

I smiled a sickly smile when I heard the Minister for Finance say that his budget was one of the most significant ever produced by a Minister for State in this House. If one had time, and the energy, to analyse that statement one could make a case why one would feel as I did, sickly, at the suggestion that it was the most significant budget ever. The deficit last January stood at over £120 million and with this new budget the deficit will rise to £241 million, twice as much as it was six months previously. It is no wonder that the Taoiseach went on record as saying that we were living in borrowed time; we were living on the goodwill of our creditors. The Taoiseach made that statement before the budget and when we had planned for a deficit of over £120 million. What will the Taoiseach say now with regard to living on borrowed time and the goodwill of our creditors?

If the Taoiseach was going to the same function as he did when he made the statement I referred to it would be worth one's while to listen to him because things are twice as bad now. It is a poor show on the part of any Taoiseach to hear his Minister for Finance say his budget was one of the most significant introduced. I do not believe that statement, and I reject it entirely. He would have needed about four tongues in four different cheeks when he made that statement. He did not fool anybody on this side and, judging by the amount of applause he got from the back of the centre on the Government side, it would appear that he did not fool too many on his own side either.

Debate adjourned.
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