Dáil Éireann debate -
Thursday, 19 Feb 1976

Vol. 288 No. 3

Financial Resolutions, 1976. - Financial Resolution No. 11— General (Resumed).

Debate resumed on the following motion:

That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.

—(The Taoiseach.)

Mr. Wyse

Last week I was trying to establish the effects of the Minister's panic budget. I said that no proper assessment had been made of the economic plight of our people. This morning we read in the newspapers of the massive increase in CIE fares and here again, as a direct result of the budget, we inflict further hardship on the poorer sections of our people. Freight rates are to go up by 20 per cent and this, in turn, will have its effect on employment.

Last week I pointed to the tourism situation and we have now been told by the director of the Irish Hotels Federation that thousands of holidays booked this year have been cancelled. I also mentioned the increase in the tax on drink and over the weekend I made it my business to make inquiries from the breweries. I was told that only a fortnight after the budget there has been a decline in the volume of drink sales. I do not know if the Minister consults with the Prices Commission before introducing his budget. He should be aware that last December the breweries submitted a claim to the commission for an increase to meet the cost of production. Is he aware that the insurance companies have lodged a claim for a further 30 per cent increase in car insurance?

When we talk about collective responsibility, which is so essential in any Government, I wonder does such a responsibility exist in the present Government? Do Ministers make their own decisions without consulting with their colleagues? Do they make decisions irrespective of the consequences those decisions may have on another Department? Apparently that is the position because I recall a discussion some time back on Verolme Cork Dockyard. The Minister for Labour informed us that he had been approached by representatives of the trade unions with regard to the problem existing there and I remember him saying that, on Monday morning, it was his business and the business of the Minister for Industry and Commerce to have consultations with the Minister for Transport and Power on the matter. This bears out my charge. Here were two Ministers waiting to consult with a third and, at the Labour Party conference in Galway on that Sunday, neither the Minister for Labour nor the Minister for Industry and Commerce was able to inform the delegates that the Government had a policy for Verolme. We talk about collective responsibility. Here was an extraordinary situation. Two Ministers had to meet another Minister and then come in here and tell us the Government had a policy. Incidentally, we have not heard what the policy is yet.

Last year the Government set up a commission to investigate the reasons for poverty. Everybody must be aware of the reasons, everybody except the Government. Poverty is created by mass unemployment and inadequate social welfare benefits to meet the exorbitant cost of living. The Minister made a brief reference in his budget statement to a 10 per cent increase in social welfare benefits but we were not told anything about the forthcoming increase in the social welfare contributions. Presumably the Minister for Social Welfare will announce these. The Government claim to be a socialist Government. Yet every aspect of this budget inflicts hardship on the people they say they represent and for whom, they say, they will provide.

Are the Government aware of the poverty that exists in homes at the moment? Are they aware of the poverty suffered by single people dependent on social welfare? I suppose we will have an opportunity later of discussing this with the Minister for Social Welfare.

I mentioned the Cork harbour development plan. Everyone in Cork and throughout Munster was confident the Government would provide the necessary moneys for this plan. Now I understand it is being shelved for some years. I would ask the Parliamentary Secretary to make a very special case to the Minister for Finance and the Minister for Transport and Power to rethink the decision with regard to this development plan. It is of vital importance to the harbour. The harbour is the gateway to Europe.

I was amazed that there is no further reduction in the qualifying age for old age pension. We were not told the reason for not reducing it. The Minister should have had the decency to tell us why it is not being reduced and I hope he will take the opportunity of doing so when he comes to reply. It must be a great disappointment to many.

The projections in every budget since this Government took office have been wrong and the Government must realise the confusion engendered by their failure to make a proper assessment of the economy. Industrialists and others are suffering because of this failure. The Government must now formulate policies designed to safeguard the economy from further deterioration, even if that means introducing emergency measures. Employment must be provided for our young people. We know what happened last year in the case of 50,000 young people who completed their education. Will we have the same situation this year with thousands of young people walking the streets in search of employment? The Minister for Labour should introduce some measures to provide employment or will we again go through a period during which our quays will be lined with emigrants, the lifeblood of the nation? It is sad that any Member should have to plead to the Government on behalf of our young people.

I spoke last Thursday and I tried to place emphasis on certain aspects of this budget, especially in the area of employment. It is regrettable that less than a week later we can see the effects on tourism, the motor trade, and on CIE, all leading to more unemployment. It might be necessary at this stage for the Government to re-think the whole budget because the effects are showing in less than a fortnight. It will be interesting to know the effect on the unemployment figures.

Before Christmas I had a question down asking the Minister for Finance if when finalising his budget he would make the necessary moneys available to implement the terms of reference of the task force on child care set up by the Government. I was told that the Minister could not anticipate the outcome of the budget. For me, and I am sure for anyone interested in young people and their development, and that is almost everyone, this is one of the most important reports placed before the Dáil and it has been completely ignored. We all agree that the economy is in a bad way and that moneys are not available, but surely someone should be able to implement some of the important recommendations in this report. It is a pity that we should turn our eyes away from it. It is a pity that sufficient moneys are not available now to implement some of the aspects of this report. No mention whatsoever of this was made in the Minister's speech, and the nation is crying out for some action on this very important matter.

Finally, no one likes to forecast doom. We, the Opposition, are trying to build up in this nation the confidence that our people had before the present Government took office. Unfortunately, we know that the people are losing confidence in the fuure of the nation and that is a bad thing. I plead with the Government to show initiative now; to show some concern for the people by producing proper policies, by giving the people to understand that the Government are making some effort to alleviate the appalling conditions in which our people now find themselves. Meet a man in the street and the first thing he will ask is: "Are you working?" Surely this is a note of warning to the Government. We do not know what the end of this year will bring—maybe a general election. I can assure the Parliamentary Secretary that our party are ready and prepared to make the sacrifices, maybe unpopular, to raise the economy of this nation.

Mr. F. O'Brien

I want to speak particularly about the whole aspect of the general economic situation. We hear from the far side of the House that we are borrowing trouble, we are overspending on the one side, and on the other they say, "Why are you not implementing this and spending money on that?" I realise they are in Opposition and have to indulge in some form of criticism, but they are not coming forward with any positive alternatives. There is an economic wind blowing across Europe today which is basically unprecedented. This resulted and manifested itself from the oil crisis and the increases in the price of oil. When they occured we still maintained as a nation the same standard of living which we had despite these vast increases. Unless we increase productivity we cannot hope to sustain that standard.

The Government wish to protect the less well-off in our society. The only way they can do that is by social welfare benefits, by cushioning the effects of inflation and particularly the imported inflation which we have to endure. Despite the increases in the price of oil we tended to indulge in high income demands, high income claims and settlements which we now realise were far too high. If we want to pay ourselves more than we can afford we are going to run into an economically ruinous situation which, if it did continue through the national wage agreement, we would be in severe trouble. The only way to protect our economy now is for restraint to be exercised by everybody. The Government will have to curb employers and trade unions right across the board. If they do not we will have more unemployment. Now is the time seriously to examine the incomes policy and base it on productivity. If we hope to get any real increase in our standard of living this can only come about by higher productivity. If we talk about getting an increase of X per cent or Y per cent it is not very relevant because prices will automatically rise. This will eat up the increase unless we are determined to work harder and determined to increase our productivity to make ourselves more competitive in world markets. We have to compete with other nations. Our productivity is not as high as it should be in relation to our competitors abroad.

I am glad to see the money going to AnCO has been increased by 70 per cent this year. Industrial training is important. We must have trained personnel to go into industry. When people come here to set up industry we must ensure that trained people are available to go into productive employment quickly. If those people are not available the people who have money to invest will not come here. Despite the cutbacks in various areas I am glad that the Government have seen that it is important to put money into AnCO. When the economic situation improves and industry is able to take on more people we will have the labour force trained to take up this employment.

The employment situation is a very serious matter. Unemployment must be tackled in the long term. I would like the Minister to look at the construction industry. In our 14-point plan we said we would built 25,000 houses a year. We have succeeded in this and nobody can point a finger at that aspect of the building industry. However, there has been a fall off in office development and other aspects of the building industry. We must try to get more employment in that area.

In Dublin there is a growing need for development within the city area of houses, flats and construction generally. If we make this attractive we will get people to come here. If people decide they want to build large blocks of apartments or engage in some housing development we should give them some type of tax concession to encourage them to come in. When the entrepreneur wishes to invest money he wants to see a return for it. Building in the centre of the city, as I have outlined, could employ a large number of workers and give us housing development to supplement our local authority housing development.

The Government are committed to developing the central city area. In Dublin the Government have acquired 150 acres of land for local authority houses. Some of those houses are already under construction. We could supplement this by encouraging the private sector into this area. It would not be any great problem to get them if they got some tax concession such as a percentage write-off on the cost of property over a number of years. When we are in a situation of economic recession and unemployment we have to look for ways and means of developing industry. As chairman of the housing committee of Dublin Corporation I am interested in housing. That is why I bring this idea forward and I ask the Minister to give it serious attention.

When the building industry is booming the economy is booming. In America when the car industry is booming, generally their economy is booming as well. We can use the same yardstick. When the building industry is booming, there is a large spin-off into other industries. Native raw materials are used in building. It is a reasonably highly intensive industry as well. From the point of view of employment that is one area we should be looking at seriously to see what can be done.

I am not an expert on tax or on how you operate the system. We should not be too inhibited about the tax system. We should not feel that, if something has not been done before, it might be seen not to work. We have to be innovators. We have to be bold. We have to make decisions and experiment. This is the only way in which we can come up with ideas. I know the Minister is bringing in a paper on economic planning and development. This is necessary. We must plan. We must project into the future. Because we have inflation, or unemployment, or because other aspects of our economy do not come up to scratch, does not matter. We can always adjust our plans and our targets as we want to. If we draw up a five-year plan, we can review it every year with a view to updating it.

There is a projected upturn of 2 per cent now as against an original projection of 1 per cent. That is encouraging. We have to ensure that from now on there must be an upturn in the economy. We must all work towards that end. Deputy Wyse said people were losing confidence. I do not think the Irish people are losing confidence. They have the will and the desire to maintain and increase their standard of living.

At the moment because of the current economic situation our expectations must be limited. We must make sacrifices. If over the next 12 to 18 months we were all prepared to tighten our belts and make the right decisions and work for the good of the nation, I have no doubt that we will come out of this situation with few scars. That is why I would welcome some sort of pay pause or a minimal pay agreement. If we carry on demanding too much, the less well off people on fixed incomes and people on social welfare will suffer.

Despite the fact that the budget was intended to cut back in various areas, it ensured that the areas of social welfare were looked after. That is the way it should be. A country which did not do that would not last too long. If we call ourselves a Christian society, we must devote portion of our earnings and our national wealth to social welfare.

We are accused of spending too much and borrowing too much, but no real programme is forthcoming from the other side of the House which would cut the type of borrowing in which we are currently engaged. The Opposition should be asked where do they propose to find the additional money to make up for the rates they claim they will abolish. Where would they find the additional money to increase the SDA loan to £6,000 and bring more people into that scheme? This would involve vast sums of money. Where would they hope to raise that kind of money without further borrowing? It is not honest or right to make vague statements without costing them. If we borrow less we will have to cut back on health services, education and social welfare, or cut back on areas of development. The Opposition should be serious if the people are to accept them as an alternative.

Additional spending can be brought about either by additional borrowing or additional taxation. We all see that additional taxation is not popular. Additional borrowing would not get us very far. We have to look to the areas of productive development. Moneys have to be raised for AnCO, the IDA and the various Government agencies in order to promote growth in industrial development. The Government should commit themselves in that area.

Debate adjourned.