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Dáil Éireann debate -
Wednesday, 23 Jul 1975

Vol. 284 No. 2

Finance (No. 2) Bill, 1975: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

I wish to make a number of observations in relation to this Government who present themselves as whiter than white. Certainly, they set up tribunals of one type or another to prove the integrity of a Minister. This is, in addition to dealing with matters in relation to family law reform and law reform in general. For instance, there was an example of this last evening when the Government introduced the Bill dealing with family law reform which, though important in itself, only touched the surface of what was really required.

The propagandists of this Government go to work and present them in a whiter than white light. The Chair prevented me from giving the catalogue of how corrupt this Government have become in the last two-and-a-half years in regard to their policy of "jobs for the boys" and the way the Government placed their political pals in positions. They have engaged in this practice to an extent unheard of in the history of the nation. So when we speak about the Government and this particular Bill, we recognise the type of Government with which we are dealing.

Of course the real Minister for Finance sits in the Opposition. That fact was acknowledged when the present Minister—the man charged with keeping the finances of the nation—introduced his second budget on 26th June, 1975. Deputy Colley received due praise for predicting the introduction of a budget some six months before the Minister introduced the package which Deputy Colley had called for. Of course, the package was introduced six months too late. Deputy Colley is now widely recognised as being the real Minister for Finance. He sits in Opposition temporarily but he will return, like Fianna Fáil, as Minister for Finance. As in the past, Fianna Fáil will have to pick up the pieces. I am sorry I must engage in political cliché but in order to describe the present situation one must speak in simple language. If the language is that of cliché, my apologies to those people on whose ears that type of language grates. It is the best and most descriptive language to use in the present context.

Deputy Colley indicated the action which should be taken in relation to the economy. His predictions and prognostications have been treated with the usual uninformed sneering for which the present Minister has a reputation. If the Minister—who has described himself as the person in charge of the nation's finances—had listened to the real Minister for Finance, the country would not be in the sorry state in which it is.

There is a cure for our economic ills. It is simply this: let the Government, with their convoluted philosophy get out. The Labour Party are looking over their shoulders at the Fine Gael Party and the Fine Gael Party are looking over their shoulders at the Labour Party, to the great damage and detriment of the nation.

Let the Government get out, let them call a general election. Let them test the electoral will of the country and if they get back, which is doubtful, good for them. History has a well-documented habit of repeating itself; that is, that a Coalition Government will not be elected for a second term running. Fianna Fáil will then take on the real responsibility of running the country properly. The country needs to be run properly very quickly but the Government of gimmicks do not appear to have the political will to do this.

My solution, as a non-economist, would be to get the Government out and let Fianna Fáil run the affairs of the nation.

Negative thinking.

I would consider it positive political thinking. I would suggest that the Government, who were charged with running the affairs of the country, cannot do so. Therefore, when their mandate has become exhausted they have an obligation to test the electoral will of the people. We believe that the electoral will, so tested, would favour the return of the Fianna Fáil Party.

That is one immediate solution to the economic problems. As an Opposition we have a responsibility, when the country is going through a period of economic crises not to rock the national boat. If the Government, from time to time, take unpopular measures which Fianna Fáil consider necessary, in the interest of the nation we will support them. That is responsible Opposition. That would be our obligation in assisting the Government to guide the country through the present economic morass. We would be prepared to do that, as stated by our leader on a number of occasions. Deputy Lynch has set out clearly what he considers to be the responsibility of a party in Opposition, the responsibility of the largest single political party in the country. This party, in Opposition, have been responsible. We have been guided well by the leader of the party.

Nevertheless, the public—the people on the electoral register—must be concerned about the fact that the second official budget introduced on 26th June, 1975, was to reduce the cost of living by some 4 per cent. Who in this country can put their hands on their hearts and say, a month later, that the cost of living is still at the same level as it was a month ago? As I said when I reported progress, if one was to put down a Parliamentary Question about the rise in the cost of living between 26th June, 1975, and 26th July, 1975, the percentage figures would be most revealing. They must show an increase.

During the course of this debate we have a responsibility not to endanger the possible favourable outcome of the national wage agreement. I appreciate that, but are we to suppress our knowledge of the continuous and fatiguing price rises? It is well known that the housewife in suburbia, in any of the conurbations, or in rural Ireland, cannot keep up with the continually harassing and fatiguing price rises. I once described this Government as the Government which made meat a luxury. I now have to revise my description and call them the Government that made food a luxury because of their unwillingness to tackle inflation. The Taoiseach has taken a number of stands on inflation: he tells us one day that outside influences are responsible, the next day he says we can control it ourselves, and on the third day he tells us again that it is due to outside influences. He came rushing back from Brussels with the latter state of the nation message. One wonders does the Taoiseach really know.

The Minister for Finance has proved that he does not know how to control inflation. Deputy Colley, the real Minister for Finance, indicated time and again how the Opposition, when they become Government, will deal with this eroding problem—inflation, job losses and so on. We all know how Deputy Colley would deal with this problem so I will not burden the House by repeating it. The present Government are not capable or willing to deal with it.

It is recognised that inflation can be controlled nationally and that there are certain measures that can be taken. But the Coalition Government —Fine Gael and Labour Parties— have to accommodate one another. That is where the country suffers. The weakness called compromise in Government—one party compromising with the other—is the weakness of Coalition. The strength of Fianna Fáil or any single-party Government is that they do not have to engage in political compromise. Compromise in a political sense is an unwillingness to take action, particularly in relation to the economic situation.

When housewives daily go to their local shopkeeper or supermarket, the owners have to announce price increases. We read the headlines in the newspapers. No later than last night a headline in The Evening Herald, Tuesday, 22nd July, 1975, read: “EEC deal to put up prices.” It would appear that every time the Minister for Agriculture and Fisheries goes to Europe he comes back with the devaluation of the green £ or with news for the farmer, who is the backbone of the country.

I come from a Dublin constituency and would not engage in the political exercise of setting off the farming section of the community against the non-farming section. This is a dangerous and bad national exercise. It makes for a form of political competition. It is not my intention to engage in that form of political exercise. We know that the farmer is reasonably badly off and is entitled to what he gets.

At the same time, it appears that the middle income group, particularly the white-collar worker, seems to have had enough under the present régime. Some time ago certain sections of the community were brought into the PAYE system. Not only will they have to pay last year's PAYE but this year's, too, on this year's earnings. This seems grossly unfair. As a Member of the Oireachtas, I am in no way engaging in special pleading because we are included in this system. Maybe it is as well that I do not discuss it because I might be accused of special pleading. This is an example of the type of convolutions the Government are engaging in and the hardships the white-collar, middle-income group have to put up with. I represent a constituency which can be described as a middle-income constituency. I can only reflect in the Dáil the type of response I get from my constituents. To my knowledge, a large group of people who might have voted for the Coalition parties on the last occasion, will take the first opportunity to correct that error with a certain amount of happiness. That is understandable.

They are being taxed, either directly or indirectly, by a Government who consider borrowing to be the panacea, who seem to borrow themselves from one difficulty to the next, and the figures are there to prove it.

So much for the middle-income group. This can be described as the second official budget. We have had so many unofficial budgets it is very difficult to list them all. We had the January and June budgets. Either the leader of our party or our spokesman on Finance said there can be little doubt but that there will be a third budget before the end of the year. That appears to be the situation.

With regard to the food subsidies, we are now informed by clever, subtle Government leaks that there will probably be an increase in these subsidies in the not-too-distant future. If there are to be increases in food subsidies in the not-too-distant future does that mean that there will be a budget to provide for these increases? That appears to be so. As I say, budgeting has become meaningless in the hands of the present political Government group. It has been a meaningless exercise. We have had two budgets already and we can expect a third.

As I understand it, the purpose of a budget is to balance income and expenditure. If that is the principle of a budget, then surely it is recognised that the Government have made a mockery of the whole concept of economic budgeting for the survival of the country. You list the number of expenditures, add them, and borrow to meet the deficit. I understand that is the Government's system of budgeting, but what an extraordinary way to run the country. Borrowing this year will amount to somewhere in the region of £814 million. If a Deputy went to his bank manager trying to service an overdraft, or whatever, bringing it down to simple language, and he said he was trying to follow the Government's example in the matter of catering for the finances of his own home, I am quite satisfied the bank manager who, knowing the present Government's incapacity and incapability for running the country, having brought it in borrowing alone to a figure of £814 million in one year, would have him committed. My own bank manager is an extremely decent man and I know it would be the very last resort as far as he would be concerned in relation to me and his other customers.

The fact is that if people trying to service an overdraft or with a credit account in their banks went to a bank manager and said they were running their bank accounts on the same lines as the Government are running the country the bank manager would laugh them out of court and would ask them to take their bank accounts elsewhere, and properly so. We would like the Government to take themselves elsewhere, and the elsewhere we would like to see the Government taking themselves is to the people and let the people decide who should run the country.

With regard to the £814 million borrowed in one year, what country the size of our country could withstand that sort of borrowing? It cannot withstand it. The simple truth is the Government are living on the credit rating, in the eyes of the world, achieved by the last Government. That credit rating, the legacy of the last Government, will run out and with it the credibility of this country. The credit of the nation is about to be used up by the present Government.

I did not realise that there were other speakers anxious to contribute and I apologise for holding my colleagues in my party unnecessarily long, but I would like to urge upon the Government that they should recognise their obligations to the nation. As I said, the leader of the Fianna Fáil Party has already indicated what he considers to be the responsibility of the Opposition to a Government who have quite clearly lost their way. It would now appear as a matter of record and fact that the Opposition are leading the economic thinking of the country because the Government, six months after a view articulated by the real Minister for Finance, Deputy Colley, brought in much of what he said—unfortunately too little and too late. We would ask the Taoiseach after the recess—the Taoiseach is entitled to a holiday as are all of us—to sit down with his more responsible and more responsive Ministers and work out some form of economic plan for the future of the country.

The position now is that the Government are leaving the coffers of the nation almost bankrupt and Fianna Fáil will once more have to lead the country out of that situation. They will do just that. In the meantime, the present Government are charged with the running of the country, and they might consider when they return from their holidays —I will not say well-earned holidays —my modest proposal, to paraphrase the late great Dean, in a different context, of course.

It is a pity that this is not to be a general debate on the state of the nation. It appears that we are not going to have the opportunity of engaging in an adjournment debate. In the meantime, it is just as well to conclude by mentioning the Government's record. That was typified particularly between the hours of 6.30 and 7.30 this evening when the guillotine came down on their own Minister for Industry and Commerce and the Minister for Industry and Commerce turned on the Opposition spokesman and suggested that the Opposition were, in some way, to blame for the introduction of the guillotine and the fact that the Minister for Industry and Commerce did not have an opportunity to reply. The scandal of that statement is that the Bill before the House had only one hour for its Second Stage. Three Fianna Fáil Deputies spoke on it and it was discovered in the last two or three minutes that the Minister would not have any time to reply. The real erosion of freedom on this aspect is that the Minister will now have to reply to the Deputies seriatum and privately. It is a damn shame and it is indicative of the fact that what the Minister might have wanted to have got on the record of the House, where it should be, will now be placed in letters to Deputies. The Government are guilty of the erosion of the principle of the freedom of debate and speech in this House. The record should show that the Minister for Industry and Commerce replies on a Bill for which an hour was given, by correspondence.

I must ask the Deputy to confine himself to the Finance Bill.

I have got on the record what should have been on the record before and I appreciate your help.

On a point of order, it was clearly offered to the Opposition that more time would be made available for all the five Bills that were included in the Allocation of Time Motion on 9th July and in not one single case were we approached for extra time. In one case where I approached the Opposition and asked if they wanted extra time they said no.

Acting Chairman

I am afraid that is not a point of order.

Well, I want to get that on the record.

This Bill, giving effect to some of the budgetary provisions—the second budget of this financial year—set out against the background of unemployment, the serious economic situation, the high cost of living and so on has been well gone over in this House during recent weeks and months. The recent budget had three legs—(1) to give some reliefs by way of subsidies and the removal of VAT from clothing and certain other commodities; (2) the imposition of taxation, and (3) a wage package. It was a request by the Government to workers in the State service—which was really not a request—and those in public enterprise and business to forego certain wage claims. Two of these are indefinite— the subsidisation of food and the removal of VAT. These are indefinite because they are dependent on the outcome of negotiations. I hope the Taoiseach, when replying to this debate, will have something to say about what aid and encouragement the Government are giving to the negotiations which are in progress. A Government can be helpful to the outcome of such negotiations. In his opening statement it was very noticeable that there was no mention whatsoever of this. I presume the Taoiseach has left this until his time to reply comes.

We are dealing then with the only definite part of the budget package, the imposition of taxation, except in so far as it is mandatory to give legislative effect by way of a Bill to the removal of VAT on clothing and the other items mentioned. The Minister for Finance said that if there was not a successful outcome to the negotiations now in progress the food subsidies would be abolished. He did not mention the removal of VAT from certain items which is being written into an enactment of this Parliament. If we do reach a situation, and I hope we do not, in which the food subsidies are withdrawn—it is not necessary to have legislation to withdraw them—will the Dáil be recalled to pass another Bill to reimpose VAT?

The House and the country would like the Government to say what assistance they have been giving, are giving or will give to those who are negotiating, and there have been lengthy negotiations, on the question of foregoing wage increases on which some of what is in the Bill depends. The imposition of taxation with which this Bill is mainly concerned, will be a permanent feature no matter what agreement is made. There is no going back on this. This contradicts the statements made by the Minister for Finance in introducing the package.

I also want to mention the budgetary provisions against the background of the Taoiseach's own gloom and doom speech last week. If the situation is as bad as the Taoiseach indicated in that speech—we think it is even worse—then these budgetary measures are not enough to deal with that situation.

I want to ask the Taoiseach do he and his Cabinet intend to go into a three-month recess leaving behind the situation which he spoke about, and which this budget, the second budget of this year, does nothing, or very little, to remedy and which so far has been very ineffective? Do they intend to put this House into recess for the next three months, and take no further serious action to deal with the situation which is worsening daily and which he felt it necessary to alert the people to in that gloom and doom speech which was followed by another gloom and doom speech by the Minister for Foreign Affairs?

The only reason the Minister for Foreign Affairs was sent in to dot the i's and cross the t's of the Taoiseach's speech was to tell the people: "Although the Taoiseach was telling you a sad economic story, a sad financial story, a sad rising unemployment story, a sad rising cost-of-living story, we should count ourselves lucky that the European countries and other countries are in the same boat." This was the only reason why the Minister for Foreign Affairs came in to take some of the sting out of what the Taoiseach had been saying.

We, on this side of the House, do not think what has been done in either of the two budgets has been effective in dealing with the situation which a Government must deal with, whether it be this Government now, or another Government in six months' time. We have the increasing number of unemployed. We have a rising cost of living, so much so that it may be necessary to further add to the food subsidies. Yet we have Ministers of this Government going gaily around the country trying to say: "Look, boys, the situation is not as bad as all that. You will have so many thousand jobs after some time."

Everyone knows—and I will deal with this very briefly—that this country is being used as a dumping ground by all the nations of the earth and in this Financial Resolution we are providing that, as well as reducing or removing VAT from certain items, from certain commodities used by our own people and produced by our own people, the removal of VAT also applies to every article specified here imported from any corner of this earth. If you put that situation against the position even in Britain, which is as open a trading country as any, and has all the problems we have, they are subsidising their own producers to a certain extent. I will give the Taoiseach one example, and it refers to one of the commodities from which VAT is being taken in this Finance Bill, and that is clothing.

We are removing VAT from clothing manufactured not only in Britain but in all other countries and imported here. Therefore, we are making it more difficult for our own manufacturers to increase their production here and compete against those imports. Over and above that we are not doing what Britain is doing because Deputy Keating, the Minister for Industry and Commerce, who was the greatest protagonist of those who were against going into the EEC, is now the most meticulous observer of the finer print of the EEC regulations. He is more European than the Europeans themselves at the expense of the Irish worker and consumer. Britain is subsidising the shirt end of the textile industry in Northern Ireland, in the city of Derry, to the tune of £10 million, so much so that each shirt manufactured in the city of Derry can be exported to Donegal bearing a British Government subsidy of £1. How can our manufacturers of that commodity and other commodities such as these survive? Yet the Minister for Industry and Commerce will not give one penny of assistance to the Irish shirt manufacturers, nor to the factories which are going out of production in that line.

I have the statement of a person in that business in this city of Dublin who asked a Northern Ireland manufacturer to quote him for cut, make and trim—the manufacturer here supplying all the materials and commodities which go into those garments— and the price he was quoted for the labour only was less than the price at which they could export a fully made shirt of their own into this country. That is the situation. The Government are not doing a thing to remedy this. I am not exaggerating the position when I say this country is the happy hunting ground of dumpers from Korea, Taiwan, all over the world, not alone of textiles but of boots, shoes and other commodities.

The Taoiseach should take a dander around some of the bigger stores in this city and see for himself what our manufacturers are up against. There is no use in talking about setting up new factories. There is no use in talking about any of these things unless we do something. I know there are EEC regulations, and some countries are busily getting around some of the regulations or negotiating with their fellow members where there is a panic situation in their own countries. We are not doing that. The Minister for Industry and Commerce has said: "Well look, boys, you have made your bed and you can bloody well lie on it now."

Inflation in Italy has been reduced by measures taken to deal with their own economy from 24 per cent to 12 per cent. On the other hand we have been advocating that many things could be done here to prevent imports and to obviate the necessity of having imports. We have on the stocks a Turf Development Bill. I do not know how that will solve any problems we have in the fuel line, and we have many such problems. This is something that I, and many Members of this Party, have been advocating since November, 1973, when the fuel crisis began. However, this is the first time the Government have decided that it is a good idea to make more money available for the production of peat fuels.

There are many other things the Government may have to do in six months' or nine months' time. Why not take these measures now? In the months of June, July and August we usually have the lowest valley of employment, the graph shows at its lowest, and from the end of August and until March-April of the following year it starts to rise again. The graph at the moment has not gone below, subject to correction, 101,000 people unemployed. Unless there is Government action, a definite, serious, down-to-earth business-type of action, we will have in the winter period and into the spring a rise from the present high graph point. Yet there is no provision in this budget to deal with this.

The number of people in employment has decreased. The number of wage-earners who will be hit by this, the third leg of the budgetary package, will suffer permanently from this. Whether the other two aspects of the budget come into being or not the 10 per cent surcharge on incomes, on incomes of those who are lucky enough to be in employment will remain. This is not fair or the right way to tackle the problem. It is up to the Government to get down to more basic measures to deal with the situation which is worsening steadily.

I should like the Taoiseach to tell us if the reduction in the green £ percentage, which the news media and others say will amount to an increase of 1 per cent—it may be more than that—will be met by subsidies. It is relevant to ask whether the degree of subsidisation which was relevant when the budget was introduced is relevant now. The price increases arising out of the devaluation of the green £ and other price increases which arose out of nothing, arose out of the lack of price control by the Minister for Industry and Commerce. I accuse that Minister of not having a proper price control system operating effectively.

When goods are dumped in any country one of the reasons they are dumped and can be sold at a cheaper price is a glut or a policy of export subsidisation in their own countries. When they come here at low import prices to the importers; when we have a situation where a 200 per cent profit is added to the import price at the retail outlet, then it becomes more attractive for retailers, wholesalers and others, to deal exclusively in those imported goods than to purchase from home manufacturers. Human nature being what it is, and profit margins and overall profits being the norm, if two travellers arrive in a Dublin store and one says he will give Cork goods on which there will be a 50 per cent profit or Donegal shirts on which there will be a 45 per cent profit and the other traveller is able to offer imported goods dumped here, in the same lines, on which there will be 100 per cent or 150 per cent profit, I know the type of goods that will be retailed in that shop. This is hitting the Irish worker because he is not getting the benefit of the imports. But when you have imports and dumping and profiteering at that rate due to lack of price control and due to lack of looking after profit margins—the Government have thrown their hands in the air as far as price control and profit margins are concerned—the Irish worker, the Irish producer, the Irish manufacturer and the Irish consumer are bound to suffer and the economic situation is as it is because of that type of inaction by the Government coupled with their inaction on very many grounds.

The Taoiseach will get all the help and encouragement he needs from this side of the House if he is prepared to buckle in and deal with these problems. If there must be imports do not make them attractive by allowing 100 per cent or 150 per cent profit. We in a deputation to the Minister for Industry and Commerce on Monday last demonstrated beyond yea or nay that profits on certain goods dumped here were of that order.

I do not wish to say any more. The message is clear. It is necessary to do very much more than the Government are doing. I hope they do it soon.

Mr. Kitt

I should like to comment briefly on the taxation proposals and in regard to value-added tax reliefs and the income tax surcharge which were the subjects of financial resolutions passed on 26th June. I am disappointed with the 10 per cent surcharge on people paying tax at the rate of 35 per cent. This applies to the middle income groups, the people who had to bear, perhaps more than others, the mismanagement of the Government for the last two years. We still have inflation and rises in the cost of living, the most obvious example being the staggering rise in the price of petrol last Christmas. We are now to have increased taxation on these groups. Under this proposal £8 million will be raised from this middle-income group some of whom are finding it hard to live from week to week and even from day to day as it is. Some of these people are able to pay this 10 per cent but there are others who have contributed a great share in the past and who are now being asked to pay more under this taxation proposal.

Some figures have been given to us in the budget which were nicely rounded off in thousands of pounds as to how this tax will affect single and married persons. A single person, for example, earning £2,500 will be paying an increase of £13.12 a year. A married person earning £3,000 will pay an increase of £18.55. This is only where the husband is the only earner in the family. I wonder if the Government realise that there are many married women who have to go out and work for purely economic reasons. If a man and woman were each earning £30 or £40 a week they would be better off to live together rather than to marry because in those circumstances they would pay less tax than if they were married.

Before these proposals, a single person was allowed £575 personal income tax free and the next £1,550 was taxed at 26p in the £. After that the tax was 35p in the £. Married couples would have twice that personal allowance and, consequently, they should have had the next £3,100 taxed at 26p in the £—that is twice £1,550. However, this was not the case because that £3,100 was not taxed at 26p in the £ but at 35p in the £. What has happened is that the married couple up to this have paid £139.50 extra a year or almost £12 a month extra because they were married. That was the position. Under these proposals because of the 10 per cent surcharge on people paying 35p in the £ they will be paying £193 extra per year or £4 a week extra. There is a nice bonus for living out of wedlock. In other words you pay £16 a month for your marriage licence. It is good that love still exists in Ireland, because young people trying to set up homes for themselves are getting very little help from this Government. Young people are being hindered and frustrated by the Government in trying to set up homes for themselves, not only as regards taxation but also because of the fact that adequate loans are not made available. The income limits at present are completely unrealistic because of inflation. On top of this we have this outdated taxation code. Surely a young married couple where both partners are working should be given some relief from taxation until they get a chance to put their financial affairs in order. As a single person I may be able to look at this problem objectively. While I am a Member of this House I will do my best to represent married couples and to impress on the Government the problems they have in this regard.

The Government might see my point a little clearer if they examined carefully the woman's role in Irish society. I am delighted to say that in our party under our spokesman for Labour, Deputy Fitzgerald, we have brought in a policy in this regard and, while we do not want in any way to undermine the role of woman as wife and mother, we say that if she wishes to work outside the home whether for economic or other reasons she should be free to do so and any barriers in her way should be removed. One of those barriers is the highly punitive taxation system which we are imposing on married people. I am talking particularly of young married couples, and I hope that the Taoiseach will comment on this aspect in his reply.

This Bill is described as Finance Bill (No. 2), 1975. It is the second one brought before the House and we are now only at the 23rd July. I suppose it would be too much to expect that we would escape the remaining five months of the year without having another budget proposal, another change in direction and another Finance Bill introduced by the present Government.

If the present management of our economy by the Government and oft-changed direction of the Government are any indication of the morass in which they find themselves, then it is time, for the sake of our people, to call on them and say: Let us give Fianna Fáil a try; let them resign honourably before any more harm is done to the progress made in our economy over a number of years of Fianna Fáil administration. As the Taoiseach is present, I would appeal to him—I respect him as a man of high integrity who is concerned about our economy at present—to stop his Minister from saying both in the House and outside that it is because of inflation abroad and the rise in the price of oil. We have listened for too long to that being advanced as an excuse. Excuses are not sufficient. When a man sets out to do a job, if he happens to face difficulties in it; if he does not do it properly, then a number of alternatives are open to him. If he is honourable enough, he will resign; if he does not resign he may be forced to do so. This is the position into which the Taoiseach is leading his Government. If they are not prepared to resign and say: "We have failed, we cannot hope to improve on our performance," then our people will deal with them at the earliest opportunity, because of the way in which they have allowed evils to grow in our society.

In the budget proposals introduced by the Minister some weeks ago we find measures being taken which were suggested by the Opposition many moons ago; measures which if taken at that time would have been effective, saved jobs and helped our economy. Instead everything was let go to the stage when fire brigade action is required, when we are standing on the precipice. We have seen some of our industries falling over that precipice never to rise again and others struggling along for a little while longer. Action taken in time is what is required at present.

VAT is now being removed from clothing and other items. When the Minister says he is doing this in an effort to help the textile industry one questions his sincerity. The textile industry has been ailing for so long that unless the Minister was in cuckoo land—and he must have been —for a lot of that time, then the textile industry is dependent on weak shoulders if it has taken the Minister that length of time to realise it needed assistance. For most of those textile industries this action has come too late, and it will not save jobs lost in recent months and days.

At present a number of evils face our economy. They have existed and been growing more serious over the past 18 months. The situation reminds me of the fellow who finds a leak in a bucket and tries to do a repair job but it is too late because the hole is too big and the water continues to leak. But had he put a new bottom in the bucket in time it would have solved the problem. What is required is early effective action. There is no point in blaming outside sources or factors. The problem exists within our economy to be faced up to.

If the situation was not so serious one could think back to the last election when at every church gate throughout the country Government speaker after Government speaker said that the issues in the election were bread and butter ones. They spoke about what they would do, the way they would reduce prices and the jobs they would create. Are they not ashamed now of the empty speeches they made at the church gates and the empty promises they made? If not, they must be very thick-skinned.

I have said that there are a number of evils facing the economy. The chief ones are unemployment, the cost of living and the ability of people to survive these evils. I was pleased to hear Deputy Kitt, from Galway, dwelling at length on the income tax impositions in this Finance Bill; on the way the Government, who rely so much on propaganda, present examples favourable to their proposals on the income tax code. I question the legality of the situation. We have an imposition of tax, an increase in income taxation on PAYE taxpayers. I mention them specifically because this is a retrospective imposition. Is this legal? It is unjust that a Government can impose tax retrospectively on people who have already paid income tax on their earnings over that retrospective period. But the Government have reassessed that situation and have increased taxation on those people from 6th April. Therefore, it is retrospective taxation.

In questioning it I say that the man in the middle income group, mentioned several times in the budget, is being asked to bear an impossible burden. One remembers how the Government, the then Opposition, screamed about the plight of the middle man when Fianna Fáil were in office. I suppose that is an indication of why there have been so few contributions from those benches and Deputies opposite have shown complete lack of interest in this Bill. Government Deputies realise the complete mess that is being made of the situation by their Ministers. The income tax situation is a burden on our working people.

It is understandable also that the Government are now pushing harder, first of all, on the smaller number of people who are working and, secondly, on people who are having their real incomes eroded because of the non-availability of overtime or bonuses freely available to them a few years ago. These were things to which the working man could look forward, to provide holidays for his children and to keep a motorcar.

If there is anything to be said of the present Government it is the piecemeal way they have been dealing with these situations. I remember last winter the Minister for Finance announced an imposition of £27½ million on the Irish people by an overnight increase in the price of petrol. We were told why it was done. It was a question of being out of funds and not having finance available. There were other impositions at the same time by State bodies and Departments. Now in this measure we are providing money to help subsidise the increased cost of transport. We go a bit of the road this way and we come back another way.

It is no wonder that the real problem within our economy at the moment is the lack of confidence, the real concern that the Government are not giving guidance or leadership. This is one of the reasons we find ourselves without jobs and without the opportunity of creating jobs for our young people leaving schools. They were given the opportunity of being educated within our system by a Fianna Fáil Minister—Donogh O'Malley. Many of them would not have had that opportunity but for the foresight of a Minister for Education from this side of the House. It is unfortunate that this education now leaves them without any hope of anything to look forward to in the future because of the lack of real action from the Government.

There has been the extra imposition of income taxation on the middle income group. There has been the played-down situation on the housing loans. It was always the policy of our party to encourage people to purchase their homes. In one stroke the Minister has decided to reduce the term of years for borrowing SDA loans from 35 years to 30 years and, at the same time, has decided to increase the interest rate by 1 per cent. Yet despite doing that, he has not gone on to tackle what is urgently needed by house purchasers and prospective home-owners, and what is being preached not only by us on this side of the House but by prominent backbenchers on that side also, the increasing of the home loan limit from the miserable £4,500 at which it stands at present and has stood for far too long in spite of the rising cost of home purchase.

It must be evident to the Deputy that he is straying considerably from the subject matter of the Bill before us.

This is the last opportunity to discuss the financial state of our economy generally. In the budget proposals this was one of the items played down by the Minister. It did not get across to very many people and, because of the Government's refusal to accept our leader's request for an adjournment debate, we will not have an opportunity of touching on these items again between now and the end of this present session. For that reason, I would appeal to the sense of fair play and justice of the Chair, which has always been evident, to be tolerant and lenient with a speaker on this side of the House on an occasion like this. The Dáil will be in recess before 31st July, when the vital decision is coming from the Irish Congress of Trade Unions. I thought it would have been in the interests of the country and the people that the Taoiseach should decide that we would have an adjournment debate and that it would be held on the Thursday and the Friday and bring our Dáil session to a natural conclusion at the end of a week. It was certainly expected on this side of the House.

I referred to the home-owner situation. There is an imposition of approximately £1.50 per week in that household imposed by the Minister in the budget. There is an extra hidden £1.50 in addition to the other measures that he has not included.

With regard to VAT on clothing, on the night of the budget on the financial resolutions I questioned the Minister as to the rate of VAT on blankets. Lo and behold, the Minister for Finance not alone did not know that blankets were not in the same category as clothes generally but he did not even know what the VAT rate was on blankets. He promised he would examine the categories for clothing under the different VAT categories and he would examine why blankets were in a different category from clothing generally. There may be reasons for it.

As usual the cheap jibes came back from allegedly responsible Ministers like himself and his colleague in Foreign Affairs—who, of course, enjoyed his plight anyway—and said that perhaps they should ask Fianna Fáil. That is irrelevant. In the modern cliché terms of one of our Ministers, everything now is an on-going situation. If we refer to the on-going situation of the economy, we must look at it over a period of years to see what advantages or disadvantages may be gained for the community by changing categories. It is not enough for any responsible Minister—and God knows we have not many of them—to say because somebody else did it a number of years ago it is right now. It would be far more correct for the Minister to see is there any advantage to any industry or to a number of little industries in our country by including blankets with other items of clothing.

Other contributing to the debate referred to the fact that blankets are on a very high rate—19.5 per cent VAT, whereas fur coats and mink coats are now down in the zero category. This is not my point. Even at this stage, my request to the Minister is to examine the possibility where industry is affected, where jobs can be preserved. It is not important how many; every job preserved is a saving for the Exchequer.

I appeal to the Minister to examine the categories and to give us the promised explanation, to tell us why he has not considered a genuine request. It coincides with what I have been saying earlier, that action will be taken here too when the firms concerned with this problem will again be on the brink of the precipice, ready to topple over. I appeal to the Minister to think about it before it goes too far.

We have been promised again, that because VAT is removed from clothing and clothing is on a zero rating and certain essential foodstuffs are being subsidised our cost of living will come down. I welcome these subsidies. Many months ago Deputy Colley in this House recommended this move, but of course the Government could not see it then. It took them so long, with such disastrous results for our country and our people and the rising cost of essential foodstuffs, that the problem is still with us. Despite these subsidies, the price of food is rising apace. For example, last week 30 items increased in price, many of them foodstuffs, but because of the decision implemented by the Minister for Industry and Commerce, they were not advertised. Advertising has been done away with. When the housewife went to the supermarket or the local shop, she discovered that the price of so many commodities such as sausages and puddings, had again gone up. This is the type of situation we are dealing with at the present time.

It has been said that this country is being governed by a ship of State. That ship of State is floundering around, trying to attach blame somewhere else, but is doing nothing to protect the jobs of our people. There are 36,000 more unemployed than there were when Fianna Fáil left office. The position does not seem to be improving. I would like to say that we could look forward to improvements. Many Ministers, including the Minister for Finance, have been guessing different times for the revival of the world economy and trying to attach blame for our present problems to countries all over the world. The way we have been directing our internal affairs will saddle many generations with a burden from which it will take a long time to recover.

With regard to our industrial situation, I have a figure here of a number of firms that have gone into liquidation since this Government came into power. Very many of those firms could have been saved by effective Government action. The textile industry was the one big, black, sin of the Minister for Industry and Commerce. He closed his ears to our appeals. If those appeals had been heeded, and if the dumping had not been allowed, some of the jobs that are gone or thrown away so wantonly, might have been preserved.

With regard to the footwear industry, we hear a lot of ballyhoo about the Minister's recent announcement. How effective is it? How effective can it be when it is only reimposing the duty, as it applied prior to the 1st July? We all know that the footwear industry was in a sorry plight before that date. On one of his trips home, I was told in this House by the Minister for Foreign Affairs during the budget debate that effective measures could be taken for the footwear industry. How effective can these measures be when the reimposition of protection is the same as it was prior to that time? The employment figures in that industry have been dropping very quickly—it was 6,000 not so long ago and is now approximately 4,000.

Worse than that, in those industries there is a lack of confidence, frustration at management level and factory floor level. If we can, we should be seen to be doing something positive towards restoring jobs.

I think I am in order in referring to a Bill which is going through the House at the moment—the Employment Premium Bill which was introduced as a result of the Government proposals. On that Bill, our spokesman on finance expressed the opinion that there was a certain amount of imagination behind its introduction. It is a pity more homework was not done. It is a pity that the Government were not more far-sighted, and could not have seen that here was an idea that could be developed. It is a tragedy that this Bill was included in this guillotine motion. As a result of a guillotine motion proposed by the Parliamentary Secretary to the Taoiseach and seconded by the chief Whip of the Labour Party, Deputy B. Desmond, we will have a mockery Committee Stage. Deputy Desmond made a very strong case for the guillotine motion, which is guillotining a very important Bill.

In Committee Stage we could have made this a good Bill if we had the opportunity of discussing it in detail. We could have made it an effective Bill for our community and not confined to a number of industries. I hope we will create jobs in those industries but I feel there will not be enough jobs. They will only be a percentage of the jobs lost and they will not compensate for the jobs which, I fear, will be lost in the not too distant future. I do not want to stand here as a prophet of doom, or preaching a lack of confidence, but a lack of confidence is oozing from the Government benches right down to the wheels of our industry.

There are times when strong and unpopular measures have to be taken, but if they are for the good of the community generally let us have courage. I am sure some backbenchers would support me in that.

Everything is all right in Cork.

Perhaps Deputy Burke would like to know what was on a page in The Irish Times today which I think would be of great assistance to the Deputy. I suggest he read that page, and if the Deputy has not read it already, I will show it to him. He will have a personal interest in it. When I am finished I will loan him the paper.

This signifies the mess that has been made. I know Deputy Burke is concerned about this industry, the future of which is in grave doubt, and would have provided jobs in my county. Let us hope that there is no truth in that story and that that industry will thrive. I am sure that is the wish of the Deputies opposite, too. I know they have been spurring the Minister for Finance to take action that he has delayed taking for so long. The bread and butter issues mentioned in 1973 would be valid now. This Finance Bill is being guillotined. It ends tonight. Like the mini-budget we will be having between now and Christmas, this debate could be regarded as a mini-adjournment debate. Everything is mini now except the unemployment figures.

The Minister has not referred to the point I made—the £12.50 in the cost of house purchase as a result of the measures taken here. We appear to be having difficulty. I think it is time that the Taoiseach spoke to his Ministers and said: "Stop fooling the people. Let us be honest for a change". We listen to them talking about moneys being available in excess of what was available in 1971, 1972 or 1973. They do not go on to say that the moneys available now, in the context of inflation, the fall in the value of money and the huge increase in prices right through every sector, in no way relate to the moneys provided a number of years ago. This is the propaganda machine working for the Government. We see the figures of our jobless rising. We see our school leavers in a hopeless situation. We see our people finding it harder and harder to do their shopping each day.

In February, 1973, there were bread and butter issues facing the people. They may have been bread and butter issues then but the issues now are far more serious.

The Deputy must make his closing remarks.

I did not know the guillotine was coming so fast. It has come to the stage that one can expect anything in this House. Finally, the Minister for Finance has a lot to answer for to this generation of Irish people for his mishandling of the purse for two-and-a-half years. He has a lot to answer for to the present generation. I can assure him that his name will be remembered by many future generations of Irish people as being the man who failed, refused to take the steps necessary and take them in time. He will be regarded as the Minister who was cumbersome, ponderous and indeed slow in acting. Perhaps the Taoiseach made a mistake. The wrong man may be handling the purse. Perhaps it should have been the man who is travelling Europe and the world. I think he would have a certain amount of imagination lacking in the present holder of the office. For goodness sake, take action even at this late stage or else throw in the towel.

As it is now 9.30 I am, in accordance with the Order of the Dáil of 9th July putting the question that the Bill be now read a Second Time.

Question put and agreed to.
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