I was about to quote from page 36 of the OECD Report of November, 1975. It reads:
A supplementary budget was introduced. Value-added tax on clothing, footwear, electricity and fuels other than road fuel was removed (estimated revenue cost of £8.2 million in 1975). The prices of bread, butter, milk, town gas and public transport were subsidised (estimated cost £18.5 million in 1975). These measures were officially estimated to lower the consumer price index by 4 percentage points and the Government requested a revision of the National Pay Agreement, suggesting that the measures might be revoked if no adequate revision were forthcoming. An Income Tax surcharge increasing rates of income tax by 10 per cent for all rates other than the lowest was introduced (estimated to yield £8 million in 1975) and it was announced that the PAYE scheme would be extended to public sector, church and all bank employees. In addition, a temporary employment premium of £6 per week per employee for employers recruiting from the unemployed was introduced, to run for a year to June 1976. The net estimable cost of the discretionary measures was £20 million and the estimated current account deficit for the year 1975 was increased by £116 million to £242 million taking into account additional estimated departmental expenditure of £76 million, an estimated debt servicing increase of £10 million and a revised revenue estimate reducing revenue by £11 million. The Public Capital Programme estimate was also increased to £490 million from £459 million in the January budget. The total budget deficit was increased by £175 million to £706 million.
The strategy of the Government at that time was to create a situation in which on the essentials, clothes for the children and for oneself, food and the goods for the house, there was a lesser impost or no impost at all and at the same time there was an input of capital so that there could be employment in goods that could be exported and goods that could employmen in particular. That was the thinking in June. There was no change in that thinking from June until January 28th. The message was, of course, as I have said, fair government. Social welfare recipients are covered for the estimated increase in the cost of living. It is estimated that with the overflow of the June advantages granted to them and the 10 per cent increase granted now they will be inoculated or cushioned against any increase in the cost of living that may come. Having played fair with those least able to bear any impost we were in a position to go ahead and to see what we should do to raise the country from the ashes when the world recession would begin to turn.
There were other things that we had to correct and we did not flinch from correcting them. It was true to say that in certain areas the farmers' dole had become somewhat of a scandal. Fianna Fáil had totally failed in their effort to correct this. Their effort was to remove it from single men during the summer months. They could not carry that within their own party. It was thrown aside, I would say, because there were pretty solid reasons. A single man may be just as hungry in the middle of summer as in the winter. We decided that we would adjust the multiplier and we have done so fairly. There were people who came in during the last few years and raised the number in receipt of this dole from 20,000 to 30,000. There was a very good reason for that. When the dole was £1 or 30 shillings it was not worth while going in to collect it having regard to the scale and the multiplier applicable at that time. With the generosity of the present Government who treat people on social welfare properly, when it is a matter of collecting £13 to £14 a week the people pocket their pride and come in to collect. That was something that should have been corrected over the years by Fianna Fáil by an adjustment of the multiplier.
If one wanted to go the whole way one might say that in a bad farming year you could reduce the multiplier so as to allow a person in for that year. It would have been a question of adjustment. Apparently, adjustment was not politically desirable. It might have lost a few votes here and there and Fianna Fáil, as we all know, think more of votes than of anything else.
In the social welfare field a person who was redundant and in receipt of pay-related benefit and was drawing whatever basic benefit he was entitled to could have a weekly income considerably higher than his normal basic earnings. We have adjusted that by providing that such a man will get 85 per cent of his earnings. There is no gold mine under the floor of Leinster House. It is the people's money that you must spend. It is the people who must pay. The people who have to pay realise that as well as being fair and generous to those who have less, we corrected two serious anomalies left there by Fianna Fáil.
With regard to personal relief of income tax, we gave an undertaking in our 14-point programme before the election that we would each year increase the relief of personal income tax, in other words, that we would leave the person with more tax-free income. We have done that rather generously. I am sure that matter has been referred to many times in the debate and there is no point in my quoting the figures again but it is costing £10 million and £18 million in a full year.
There were other things which impinged heavily on other people and which I will talk about later. Let us think about it this way. If one does have to pay £25 extra tax on one's car in order to see that the country is set to rights, in the case of a single man he will get a refund of that in the relief in personal income tax. The situation is very interesting. In the case of a single person with an annual income of £3,000 the saving is £17.32. That would almost meet the increase in the tax on a small car. In the case of a married person with an annual income of £3,000 the saving is £34.55. Remember also, the taxpayer has no VAT to pay on food, clothing and various other items on which VAT did operate. There is the increased tax on petrol which, admittedly, is a heavy impost which we had to apply. We applied it only on the basis that it was good for the country and would contribute towards the resurgence of the country. If one were to talk about greyhounds running around a track one could say that we have to trap very well. This country must not lag behind when there is a resurgence in Britain, Holland, France and Italy. We must trap well. We are a member of the Common Market but we owe our first allegiance to our own people. There must be good husbandry to ensure that our people get the best opportunity to prosper, to ensure jobs for young people and to provide a better life as soon as that is available anywhere in the Common Market.
The national wage agreement provided percentage improvements across the board. That was right at the time. It appears that as at this point in time it is for the country to say. I do not want to say, as politicians of years gone by who laboured in my constituency said, that no man is worth more than £1,000, that it would be better if every ship were at the bottom of the sea. At the same time, perhaps the percentage rise across the board under the national wage agreement was a bad thing the first day it was done. We can only look back and conjecture as to whether or not it was a cause of difficulty but in my view it certainly is not proper at this point.
Another thing that is not proper is any degree of special increases. What is needed now to give industry a starting off point for more jobs, more trade, more exports and therefore, a better future, is that everything should stay as it is. The Government in their June budget cushioned the people most in need to ensure that in their case their position would not be worsened. Their public transport was subsidised at that time. That was done at considerable cost.
The Government were trying to cushion these people against any increase in the cost of living and at the same time were trying to give the input to productive investment and productive employment that would create jobs. At the same time there was the very heavy burden on the Government in regard to security.
I mentioned the decision by the Government in regard to what was the proper deficit, bearing in mind our international obligations, our opportunities to borrow and then what could be adjusted in Departments, either up or down, according to the need, and what the proper behaviour of the Government should be, and then the arrival at the figure of £107 million extra taxation.
No matter what way you look at it, and indeed when you examine the Defence and Justice Estimates in detail you find various items in them that you might take out as not specifically relating to security. A figure of £456 million has been quoted. It is really something Deputies on both sides here could argue about for quite a while. You will find that you are talking about £150 million. We must of course be entirely honest and admit our need for guards and an Army. We now have an Army of nearly 15,000. They must be fed, they must be paid and they must have the proper equipment. When this Government took office we had an Army of about 9,000 and far less equipment, and we had slightly fewer than 7,000 gardaí. Now we are either at, or rising to, the present authorised figure of 8,500.
No matter what way you go you could equate the total extra taxation, or very close to it, imposed in this budget, to wit, £107 million, with extra security. We can get blasé about security. In my own constituency two people were killed and many were injured not so long ago. If you were in that town at the moment you might not find it was the greatest talking point. You might find that, just like everything else, we are all flies walking up a wall and some of us fall down. You might find that some other things were of far greater interest. If you started to talk to somebody in Monaghan town today about the Monaghan bombings, which were a most frightful incident, you might find that they are more interested in something else. We tend to get blasé and do not realise that the number of deaths can rise. We have 1,440 deaths at present. I have to read the reports as they come to me. For three days there may be no incident at all. But it would be quite wrong of me to place a bet that such a situation would continue. You get an ongoing horrifying average of eight or nine people killed per week.
If that dog which got off the leash some years ago were to be allowed to breed further such animals, and if security was not there to contain such proliferation, then I hesitate to think what this country would be like. Our hope and the prayer must be that slowly but inexorably we can crush these people so that we can contain them and so that this horrible phrase "an acceptable level of violence" will vanish from our vocabulary.
Many Members on the far side of the House feel as I do. This budget has this terrible constraint upon it: that so much must be spent on security. It also has another constraint that is not printed in figures and that constraint is the number of people who decided not to come here and build factories. I make no secret of the fact that my own constituency at present is a place where it would be more difficult to get a factory than if I were representing Cork. Cork has a good harbour and it is a big city. I know perfectly well that my colleague opposite, Deputy Mooney, will agree with me that it is not easy for him to attract industries to Monaghan which is beside the border. We have to push these people by producing more security forces on the border. Start off by counting a million pounds plus for a barracks beside Deputy Mooney in Monaghan. That is the sort of figure we have to think of. Whatever we do about Industry and Commerce, whatever we do about Transport and Power, whatever we do about the various ways in which we can attract people here to employ our people, we have that invisible constraint upon us that we do not even know about, that sometimes we are lucky to hear about. I have had that one experience myself. On the other hand, how many do we lose that we do not know about? That is one of the things holding back this country which no Minister for Finance can do anything about, except by his public statements. The people of this country can do something about it by not playing boy scouts and girl guides, by telling the security forces, Garda or Army or Civil Defence, when they think there is anything suspicious and show by their very actions that this must stop.
My colleague, Deputy Keating, the Minister for Industry and Commerce when he spoke in public about a month ago, made a rough estimate of what we lost and he thought of £500 million per year. Put that into perspective. We are talking about a deficit that we must find in the years to come of £327 million. We are talking about extra taxation of £107 million and we are talking about something in the order of £107 million spent on extra security.
If someone had told Deputy Leonard that a million pounds would be spent on a barracks in Monaghan ten years ago, Deputy Leonard would have smiled. It is not that Deputy Leonard would not want it, it is just that his judgment would be that it would not be there.
That is the sort of thing I have to say on a budget debate. I must leave now because I think it would be most invidious of me to continue when it can be debated on another day.
If this budget had not got measures properly designed to create more employment, then it would fall down. The Minister for Finance would have no right to ask people who are already hard pressed in their way of living to give him a greater proportion of their incomes were it not for the fact that much of it was for the future. We have provided £3,200,000 for the Institute for Industrial Research and Standards. That institute becomes daily more important as we get into mining, oil and gas. Indeed, it is an integral part of this new campaign whereby you can get a tag put on your goods that not only says "Irish" but says "Quality Irish". This is an integral part of that and it will do us good in the months to come or perhaps it is something that might become evident in weeks.
Córas Tráchtála must sell abroad. Nobody cut them down. They had been given an increase from £3,100,000 to £3,350,000. The Kilkenny Design Workshop gets another grant in aid of £300,000 and well they deserve it. They have succeeded in designing articles that have been manufactured throughout the country and have sold well throughout the world.
The Industrial Development Authority's administrative and general expenditure will amount to £4,500,000 as against £3,815,000, but for grants there is voted £53,500,000 as against £40,920,000. All the money spent would be lost as far as the unfortunate person who is on disability benefit and unemployment benefit is concerned if we left him without hope, and this Government have not so done. This Government have so designed their budget that there is hope, that there is application of funds towards the creation of new jobs.
The Shannon Free Airport Development Company—and they have been having a rough time—show an increase from £231,000 to £250,000. Credit financing of certain capital goods exports has a figure of £400,000, I presume for interest. I had experience of the ECGB, which is the British Export Credit Guarantee Board, a few years ago. They have succeeded in selling their goods at higher prices all over the world because of this facility. In the middle of the city of London there are 1,500 people, either seconded civil servants or persons brought in from outside, working on just that.
The Minister has moved far on that in this year, and I hope that no firm here exporting quality goods to a good customer will be short of the export credit finance that can be afforded by Britain. We are in a competing market. If we want to sell £100,000 worth of machinery to somebody in Uganda and if the person who is competing with us can give five years' credit, then we must give five years' credit or we will not get the contract. It has been traditional in Defence that, because of the cost of defence equipment, most of it is bought on this system, and export credits have been granted for decades. Perhaps the Minister for Finance will frown on my giving secrets, but this is so, and that is the reason why Defence is the only Department that has not got a capital budget. That facility is most important and has been provided by this Government. The first provision for subsidisation here is £400,000.
Technical assistance is helped, and so is the Irish Productivity Centre. These are the things that matter. The exclusion of these items could have been the subject of severe criticism from the benches opposite. But when the composite mix includes a fair deal for those who are in need, includes a proper balance between deficit, borrowing and expenditure, indicates the intention of the Government in relation to deficits in the year to come, and at the same time produces from the various business-developing Departments the proper expenditure to see that more jobs are on the way, then it is a proper budget. Whether it is a pleasant or an unpleasant budget for the country as a whole does not matter. It is a budget that is well laid out, well documented and, I think, well received notwithstanding the comments on it in the couple of days after its introduction.
Grants for Bord Fáilte Éireann under the Tourist Traffic Act have increased from £7,850,000 to £8,150,000. Again how many tourists have we lost because of this cancer of subversion? Let us face the fact, although it is a dreadful thought, that far worse than the deaths on the southern side of the Border has been the loss of opportunity, the despair of young school-leavers who would have got jobs in various places if there had not been this dearth of tourists. There are, of course, lies, damn lies and statistics, but going on holidays is becoming more popular. There is no compulsion on them to go anywhere in particular so they say: "Why not go to Cornwall, Devon, the Scilly Isles, the north of France which are not so expensive and just as close to the centre of England and Dublin?" They say: "Why not go there where there is likely to be no bombs? We do not even want people to be nasty to us." What they do not know is that the chance of anybody being nasty to them is minimal, that nobody will touch them, and that these are all isolated incidents on the part of subversive, smuggler, gangster devils.
The amounts for the development of supplementary holiday accommodation in the western counties, on the acquisition of lands and constructional works at airports and so on total millions of pounds, and are items that have to be provided for and will bring good to the nation.
There has been comment on various new taxes. Change in relation to taxation should always be slow and measured, but when it came to the stage that every girl who earned £9 a week had to pay tax under PAYE, then the demand for spreading the tax net became absolutely unanswerable. At that point the change began. I hope that as this develops, great care will be taken to note the effect of such taxes on production and employment, because one must not only gain revenue but at the same time generate economic activity.
That is the ever-present dilemma of the Minister for Finance and of any Cabinet, who must accept collective responsibility for all they do. If we can do that—and this budget goes a considerable distance in that direction in this difficult year—then there will be better opportunities for all. The striking fact that we need 30,000 new jobs per year in the next few years because of our EEC membership, population trend and so on, was described by the Minister for Finance as a challenge. It is more than a challenge. It is almost a crisis, and we must face that with the greatest courage and be prepared to do everything we possibly can to meet it fully. If people have the opportunity and incentive to expand and know the Government are giving them every help to expand their activities and employ more, and if we at the same time see that the tax load does not fall inordinately upon those who have least to pay, then I believe we will have succeeded.
I believe this budget is an interim measure. It is very foolish of any businessman, any board of directors or any government to regard a budget as the be all and the end all. Many companies make a loss in a year knowing full well they will make a good profit in the following year.
This is an instalment of the movement, as it must be, towards our position in the Common Market, as it must be brought about year by year and month by month. If at the end of another four or five years of good Coalition Government, I see our people considerably better off because of wise taxation moves and wise budgetary policy, if God spares me during that time, I will rest a little easier.
