(Dublin Central): I move:
That Dáil Éireann deplores the decision of the Government to increase postal and telephone charges by up to 40 per cent, because of its serious adverse effects on inflation, on employment and on commercial and industrial activities and calls on the Government to rescind the decision pending a full examination and recommendation by the National Prices Commission.
The Minister for Posts and Telegraphs announced on 26th November that the Government had decided that the charges for postal services should be increased from 1st January next in order to meet rising costs. The Government said these increases would average 30 per cent for postal and 35 per cent for telephone communication services and were designed to yield sufficient revenue to put expenditure and revenue in balance for 1976. I do not have to tell the Minister the reception this announcement received from all sections of the community: everybody has condemned him for this unjustified increase.
In recent times Ministers have exhorted the people to do certain things in an effort to curb inflation. The Taoiseach also made such a plea and the Tánaiste, at the Labour Party Conference, asked the public to show restraint during 1976. This was accepted as genuine advice from the Government and people thought the Government were genuine in their plea. We are aware that the biggest disadvantage to our industrial expansion, to the creation of new jobs, has been inflation. Many companies have gone out of business, and during the coming year many more will find themselves in difficulty. It is the duty of the Government to lead and show good example in this regard. If no example is given at the top it is hard to expect other sections of the community to show much concern.
This will have an adverse effect on commercial firms. Many companies are in deep financial trouble and many more will not be able to survive the coming year. The Minister must be aware that charges of this magnitude will put many more firms in serious difficulties. How can the Government justify an increase of 35 per cent as and from next January? The Minister for Finance told us that the cost of living would be reduced during 1975 and other Ministers stated that the increase in the cost of living would be in the region of 20 per cent, but how can a Department increase prices by 30 to 35 per cent? A positive step will have to be taken within that Department, and as regards public expenditure generally, if we are to survive economically.
I expect the Minister will say that the increase is necessary because of the high labour content and will argue that something in the region of 80 per cent of the Department's expenditure is on wages and salaries. I am not disputing this and I do not believe there should be massive redundancies in that Department. The employees of that Department are entitled to the same standard of living as their comparable partners in other industries and in the public sector. However, the Minister will have to find ways to economise and increase productivity. The Department of Posts and Telegraphs are one Department which can boast of increase in sales and output. We all know of the number of new telephones installed and the increase in the number of letters delivered annually. It is an expanding Department but we will reach a situation where there will be a reduction in returns if the Minister persists in his attitude.
The Minister will have to ensure that the functioning of the Department is streamlined. The telephone and telex system is of vital importance to industry. It is of vital importance that we have an efficient and reasonable telephone service. If we put this service outside the scope of companies who require to make contact with European countries daily we will be putting such concerns out of business. We all know that returns on the average investment in business was never at a lower ebb and that these increases will have an effect on the unit cost which is of vital importance if industries are to retain their export market.
Many of our firms some years ago were at a disadvantage with regard to unit cost on the export market but the majority of them have lost their competitiveness on that market because of increases in cost. It is the duty of a Government to keep people in employment. A charge like this will affect people in the private sector. I am talking now about the average householder who has a phone and old age pensioner whose only means of communication is by letter to their friends and relations. This 40 per cent rise is bound to present difficulties for them. The Minister does not seem to have presented any formula for the future development of the Post Office and the telephone service. He merely comes into this House and states that he requires a certain figure to put his accounts in balance for 1976.
This principle could not apply to any business concern. If a manufacturing company today was granted that latitude, they would have no problem staying in business. A private company would have to submit their accounts to the Prices Commission before they could increase their prices. They also must ask themselves if their product is competitive, because they do not enjoy a monopoly similar to that enjoyed by the telephone service and the Post Office.
The Minister stated that there would be a deficit of roughly £24 million for 1976 if he did not increase his prices. I cannot understand how estimates are arrived at by any Department. Twelve months ago the Minister increased telephone charges. He said then that those increases would cover the deficit for 1975. After allowing for the increases for last year, we now find that for the current year there will be a deficit of £13 million. If any accountant in a business concern were asked by his directors to give a projection for a given year as to what the deficit would be if prices were not adjusted and if, with a turnover of £75 million there was an error of £13 million, I would not give much chance for his job. The Minister must not have taken all factors into consideration last year because we have a deficit of £13 million this year.
The Minister stated that for 1976 there would be a deficit of £24.6 million. How did he arrive at that figure, if postal charges are not increased? On what did he base his overhead expenses? On what wage structure did he base that decision? Was it based on existing wages for 1975 or did he estimate what wages would be in 1976? I do not believe any professional accountant would stake his career on giving the Minister advice without first telling him that certain expenses were not taken into account.
Is the Minister using the same criteria this year as that used last year when there was a £13 million deficit? In October, 1976, will he again come to this House and say that his projections for 1976 were wrong? He probably will because he has given no indication of how he arrived at this estimate. He merely made a broad statement that if these increases did not take place from January there would be a deficit of £24 million. The Minister should explain to this House how these errors were made and he should also tell us if we can expect a repetition next year.
This is not the only Supplementary Estimate to come before this House. Various Departments have put Supplementary Estimates before this House during the past fortnight and this is not good enough for any Government or any private business. I treat the Department of Posts and Telegraphs as a commercial concern. It has always been treated as such and their accounts should be projected in fairly accurate figures. I expect that from the accountancy system within the Department. I think their instructions were to give projections on present overheads, without taking into consideration wage rates in 1976. I do not believe the Minister could give an accurate idea of what wages will be next year but he could say that the deficit would take place on present outgoings and that he was not taking into consideration, for example, any increases in wages in 1976. That would be a very fair way of presenting this case. We would then know that if increases had to take place in 1976 there would be a further deficit. The Minister did not make that statement. He merely gave us the facts as he saw them and told us the deficit which he expected.
The majority of people outside this House, including business concerns, have expressed their condemnation because the Minister did not put his case before the Prices Commission. He should show a lead in this matter if he wants other sectors to follow him and subject their prices to the Prices Commission. It should be his duty to present his accounts to the commission for examination, as all manufacturing concerns in the private sector have to do.
According to the Minister's statement, it was decided in October that proposals for increasing Post Office charges from 1st January, 1976, which sought to offset the estimated deficit for 1976, should be referred to the National Prices Commission for their views. The commission intimated that the urgency of the proposals and the very limited time available precluded a detailed examination by them of the proposals.
They are fair comments. The Minister and the officials in the Department must have known last April what the likely cost would be and the revenue. I am sure a look was taken at the situation every three or four months and that the Minister must have realised that there was no hope of balancing accounts and that there would be a £13 million deficit in the current year. He must have known what the position would be in 1976, and if he were sincere he would have put these accounts before the Prices Commission last June, and they would have been given plenty of time to examine it. He failed to do what every other business concern in the country must do.
This sets a bad example and it is bad for the morale of the public who are now price-conscious and who face a 35 per cent to 40 per cent increase. If this had been examined by the prices body and if it had been explained that this could not have been avoided and if this had been published in the prices body's monthly report, at least the public would have been satisfied that an examination had taken place. It is only fair that the public should have this knowledge. They are entitled to say: "You are asking us for restraint, you have been preaching to us in the last month, you are telling us what 1976 will be like, but what can we expect when the leaders of the country set us such an example."
If the present system is to continue, the morale of the people will deteriorate further. I realise that progress has been made in regard to the telephone system, that last year a record number of telephones were installed, and I congratulate the Minister on it. However, this huge capital investment must be made to pay. We cannot hope to continue if we have a capital investment of an estimated £175 million in five or six years and if the service is still a liability. This will bring a terrible impost if it has to be subsidised, The country could be rendered bankrupt.
