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Dáil Éireann debate -
Wednesday, 10 Mar 1976

Vol. 288 No. 11

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.)

This debate has been protracted over quite a long period. It has been broken up and so there is really no continuity. It is rather a headache because a considerable time has passed since the budget was introduced. Much of the criticism levelled at the budget on its introduction has in the interval proved to be well founded. The bad effects forecast by speakers critical of the budget are now plain to be seen. Perhaps the Minister will give us some indication when he comes to reply as to what, if anything, he proposes to do to relieve some of the difficulties his new taxation has thrown up. Bad though the taxes are, ill-calculated as they are in effect, in that respect the budget is less faulty than in another aspect, mainly, in the huge borrowing that is proposed in it. The first question one may well ask is whether we are creditworthy to the degree that we will be able to raise the £300 million required in addition to the outturn of the new taxation plus what was already there. Secondly, if we are able to raise this sum, what about the £350 million already borrowed by this Government since coming into office in 1973? Are this Government going to continue in Government and face up to what must be chickens coming home to roost when the next budget comes in January? My belief is this Government will never introduce another annual budget. Of course, there are mini budgets every other day. I cannot see this Government facing up to the situation with a grand total of £650 million of borrowed money, all of which is housekeeping money. There might be some excuse if this borrowing were for capital and productive purposes. That is not the position. All this borrowing is being used to meet day-to-day expenditure. We are spending over and above what we are earning by way of taxation.

Consider that £650 million borrowed money at very inflated interest rates in conjunction with the decline in the value of the £, which must have been foreseen by our financial advisers. This has placed the country in a very, very serious financial position, so serious that I am quite certain this Government will never face the prospect of bringing in an annual budget next January. Neither are they likely to take the obvious, decent, honest course and go for an election on the basis of the budget introduced last January, but rather are they likely to hang on as long as they can during this financial year and then scuttle to the country towards the end of the year, say, between mid-October and mid-November. No matter which way they go they will be on a winner. If, by any stretch of the imagination, they get a mandate at such an election, then they will have the opportunity given by a new term of office sufficiently long, they may feel, to apply the remedies that are obviously needed if we are not to sink the country financially in the immediate future.

On the other hand, they are on a winner if they lose the election, because they can say: "What about it? Let the people who follow after us try and straighten out the country." They would hope that as a result of the painful remedies that would have to be applied to rectify their reckless and wanton destruction of the economy the then Government would meet with the displeasure of the people at the following general election, so that this Government could come back for another spree for a number of years, regardless of the best interests of the country.

The decline even in the last couple of days in the value of the pound, to which we are tied, has meant, according to some published calculations, that we have lost another £30 million, which is, strangely enough, the additional amount which it is hoped to raise from VAT on alcohol. It appears that £30 million has gone down the drain on the exchange ratings between sterling and the dollar and other hard currencies over the last few days. I have no doubt that that reckoning is true and only highlights all the more the disastrous financial situation into which the country has been brought by the Government.

How, I would ask the Minister to indicate in his reply, does he hope to offset this loss of up to £30 million, this additional burden that is being placed on our resources and our creditworthiness? If there is a further decline in the value of sterling how do they hope to make up the difference that has already been created and any further differences that may arise and are likely to arise?

Our deficit this year on day-to-day expenditure is £300 million, which we propose to borrow. Even in the short experience since 28th January it is clear that the increase will be greater than the £300 million indicated in the budget. That situation would be serious enough if it were in isolation, but each of the Government's budgets has shown a progressive amount of borrowing, so that for running the country we are £650 million in the red as against our current income from taxes. That, added to our overall borrowing in the past, is calculated to be of the order of £2,250 million. For a country of our size, with an economy of the outturn we have, the impact of the interest on the volume of borrowing must make for continuing difficulty for this and for future Governments and must almost ensure that, far from taxes being capable of being eased, they will have to rise continually in order to try and meet the heavy interest charges on this relatively huge volume of borrowing that has taken place in our name. All of this is merely to service the debt not to mind raising sufficient resources to begin paying it off.

That is all against a background of a continuing deteriorating employment situation. No doubt the Government will be very quick to point out that while they have been imposing taxes and borrowing money for running the national housekeeping account they have been providing additional pay-cuts for those who are unable to provide for themselves. This would be very satisfactory if the situation were normal, but when we consider that these additional payments are being paid to more and more people, particularly unemployed people, with every prospect that there will be many more thousands unemployed in the near future, and taking the converse of that, that many thousands fewer will be in employment and therefore in a position to contribute by way of tax to the Government's coffers, we find ourselves facing a disastrous prospect.

Can the Minister now, after these weeks since the introduction of his budget, point to any upturn that is likely to be showing in the immediate future? If he cannot, then we are truly in a crisis situation and cannot get through without getting things much worse if the Government continue to indulge in self praise for what they are doing in other aspects of their activities. How long can we continue to borrow for our day-to-day expenditure? How long can we continue to spend more than we are collecting by way of taxation? How long could any individual expect to be solvent if he continued to spend substantially more than he was earning?

That is the situation the Minister must clarify. Are we going to continue borrowing? Are we going to continue running down the economy? Will we continue to stand aside and allow, without making any effort, more and more of our work force to become redundant and unemployed? Will we continue to stand aside and see more of our production units and factories going on short time or closing altogether? Will we continue to stand aside and see more of the business community going into liquidation?

In the memory of a number of us there used to be one sheriff for the city of Dublin. I understand there are now 24 such people, with all the attendant officials necessary for their operations. I am not suggesting that they are not doing any work or that these jobs were merely created for some of the boys. These jobs are a necessity because of the activities sheriffs must engage in. My information is that these men are overworked at the present time trying to get back from those who found that, under this present method of operation, their businesses are going to the wall. These firms are going into liquidation and the sheriff has the unpleasant job of trying to salvage whatever is left of the wreckage. As I said, there are 24 men today doing a job which was done by one man and an assistant not so very long ago.

The Minister in his reply must address himself to this subject, not just to satisfy those who are critical of his operations as Minister, but to try to allay in the public mind the very great disquiet that things will get much worse because the people can see no light at the end of the tunnel. Unless there is some way the Minister can show us that the picture is not as bad as it appears, then he and the Government must seriously contemplate a very fast, progressive, deterioration of the economy and the real disaster situation in the immediate future.

If he has any basis for an optimistic view, he has a duty to tell the public and so allay to some degree the fears and disquiet in the business and manufacturing communities. In this way they will endeavour to hold their ground in the hope that something better is around the corner. This is a serious situation for the whole country.

The taxes imposed in the recent budget were ill-conceived, brutal in their application, and will have disastrous consequences. The consequences can already be seen to such a degree that a great deal of the additional income the Minister had hoped to get will not be forthcoming unless there is a vast change in the downward swing in business, particularly those businesses he hit so savagely on the 28th January.

I remember not so very long ago listening to the caterwauling of the Minister in this House telling us the Arabs had screwed things up and the energy crisis was such that we had to take all kinds of steps not only to minimise the impact of the brutal Arabs in their application of new increases for their products, but we were taxing petrol further in order to try to make the public use less. It was supposed to be a two-pronged attack—one, to get more money and, two, to try to limit and reduce the demand for petroleum products of all kinds. That we were loath to swallow but we had it rammed down our throats, as did the public who have had to pay the piper since.

At that stage the price was increased by 15 pence per gallon in one jump. Now, without any provocation whatever and on top of those and other increases which took place in the intervening period, the Minister is increasing the price of petrol again. At the same time, as if he had a vendetta against motor users, he slams a tax on cars. This is totally inexplicable to anybody who looks at the picture in a fair way. Who is the Minister trying to penalise? What is he trying to do? He is hitting the dispersed workers of this country, of which there are thousands, who are endeavouring to participate in gainful employment instead of sitting by their firesides in rural Ireland, drawing assistance at the expense of the taxpayer. These workers are prepared to travel far from home to their places of employment. To do this they must provide their own transport because public transport could not serve them. Is there any Deputy who will concede that those people are using small horse-power cars which the Minister seems to favour? Are these men travelling to building sites, which are getting scarcer as time goes on, in six and seven horse-power cars? Of course not. They are grouping together and using higher horse-power cars in the 14 to 20 horse-power range to travel 20, 30 or 40 miles daily, five or six of them, to and from work. They could justly stay at home and claim unemployment benefit or assistance from the State; but the Minister for Finance, who should bear that in mind, slams those people not only in respect of petrol, the cost of which is substantial for high horse-power cars which most of these people use, but also selects them for increases of up to 100 per cent in road tax. He has given no indication to them, as I think he should, that they are entitled to claim tax free allowance for the expense of getting to work in circumstances where they would be entitled to go unemployed and draw from the State if they so wished.

These people who must necessarily use their cars as part of their job should be properly treated by the income tax code. They are not being so treated at present. Instead, they are encouraged to go on the dole or draw unemployment benefit and let the State pay more to them than they would ultimately gain from their work when they have to travel long distances to it and pay exorbitant prices for fuel and road tax. They also have to bear other increases about which the Government seem to have nothing to say but which are occurring each year such as insurance. All this additional expense falls on those who can ill afford it, people for whom the car is essential in their daily work routine. They are ignored as regards the granting of relief to which they are properly entitled.

The Minister says: "If you have a car over eight horse-power we will really nail you and the higher the horse-power the more you will be nailed". He forgets that the higher the horse-power the more tax he gets on the petrol that car uses because it burns more petrol per mile than the smaller car. There is no justification for the double increase—petrol and road tax. This is ridiculous and vindictive, or else it is crassly stupid, which I doubt because the Minister's advisers are far from stupid. I take it that it is the Minister and some elements in the Government who have devised this penal taxation. I cannot understand why; because they are hammering people who would be justified in refusing to work at such distances and justified in signing at the employment exchange and drawing money from the State, as much or more than they have left from a week's wages after paying expenses. They prefer to work, but the Government do not want them to work. That seems to be the message. This can, and may well have a further very serious effect on the employment situation in the country generally.

I should like the Minister, who, no doubt, has had a very rough feedback from his supporters and his Deputies since 28th January, to try to justify this double, penal below against people who must use cars as part of their work. How can it be justified? How does he justify the progressive increase in tax with horse-power rating? How is it that some baby cars are enjoying a decrease in tax? What sort of people are using these cars of under eight horse-power? Will anybody assert they are used by those who must have them for their daily work? My experience is totally to the contrary. If there are luxury cars, quite a proportion of them are in the under eight horse-power class. There are second and third cars in families; that is where you find them, but outside the workman's home you find the 14 to 20 horse-power car, bought second hand at a fairly chancy price to take himself and his pals to work. These are the people who are being hammered unmercifully by a Minister who, in our present circumstances, should be leaning over backwards to encourage such people to continue to seek work and travel far for it. Instead, he is discouraging them and rather encouraging them to draw the dole and unemployment benefit. That is the effect of the budget in regard to this essential private transport.

Apart from those travelling to work there is the farming community who must be considered while agriculture remains our primary earner, but the Minister, entirely disregarding the present situation, is lambasting these people who, of necessity, must use cars because they live in rural areas in isolated circumstances. If they could do without their cars it would be unfair to ask them to do so. The cars they use are very much dual purpose vehicles, general work-horses on the farm, with a towing hitch on practically all of them for use with a trailer for many purposes. Naturally, these are cars from 12 to 20 horse-power as they must be to fulfil their functions and do all the jobs necessary and make farm life bearable in rural communities. These people are also being walloped unjustly and unnecessarily. If a man is a marginal farmer he is discouraged by being singled out to be hammered by this special tax that hits the horse-power rating of the car which uses more petrol and he is being slammed on that score also.

The Minister seems to have completely lost touch with the general community in the country and must be getting the feed in of information which allowed him to do this stupid thing, in the wrong way. This Minister is a very sharp and observant man. That has been my experience of him over the years. I am amazed at him misleading himself to the degree he has on this particular aspect.

There are other various types of people, such as doctors, nurses and vets whom the Minister may say are well able to bear this extra cost, but they are not. If they have to bear it they will in turn through the services they provide pass this on to the community they serve. They must surely get increases in return for their labours. Their costs are being increased substantially by those two particular taxes of the Minister.

We have all this against the background of the campaign and the propaganda of the Government trying to develop an atmosphere in which there should be a pay pause and in which there should be no increases sought, never mind granted during the coming year in order to give us breathing space to try to pick ourselves up from our knees where we now are. While making that plea and propagandising the reasons why we should make that effort the Government are the prime offenders, the prime movers, of operations which will defeat what they claim publicly they want. How can any Government, who on the one hand impose additional taxes which will increase everything every member of the community uses, make a big plea that workers are not to look for any increase? The Government are primarily responsible for making it impossible for our work force of all descriptions, whether professional, manual, skilled or unskilled, to face the prospect of the continual rise in the cost of all commodities.

How can the Government with any basis of honesty accept a pay pause and refrain from granting new demands for increased wages when they have irrevocably created a situation wherein the basis for wage claims is justifiably there to such a degree that those people must get increases? It is a conundrum to me what way the Government are thinking about this matter. On the one hand, they are seeking a pay pause, seeking to limit any increases during the year and, on the other hand, they are making certain by their actions, by increased taxation, that the very claims they are asking to be withheld must be met in order that the people in various walks of life can keep up with the increased costs they are asked to bear. The community are being asked to do that on a frozen wage packet and escalating daily costs. It cannot be done.

Unfortunately for the country, this is the sad situation as it stands at the moment. If the Minister cannot admit how wrong his budget has been, and his financial concept for the coming year, perhaps he can at least give us some explanation which might go part of the way to explain to the public just how we are in the mess we are in and how he is creating further demands for wage increases on the one hand and crying out on the other hand to the workers not to make such wage demands, that it is wrong, that it will ruin the country. The Minister owes the House and the country an admission of his wrong in doing this or an explanation, which is so difficult to see that nobody must be aware of it except himself, as to why he wants this. Things are far too serious for the high handed financial operation the Minister seems to be indulging in at the moment.

Have the Government and the Minister taken into account the impact on tourism as a whole of the increase in petrol tax and road tax on cars and vehicles? Surely the Government are fully aware that tourism, which has been going through a bad time in recent years, has been showing fair signs of recovery in recent times? The Minister has dealt tourism a body blow again. While he and his other colleagues in Government are justly looking for greater activity on the tourist front and while we are spending many hundreds of thousands of pounds that we can ill afford through our State-sponsored transport bodies to go abroad to try to whip up custom for this country, the Minister is imposing those taxes. The Government members must be as fully aware as I am of the impact of those taxes on the tourist industry. Is there any explanation why the budget should be geared in such a way that it contradicts the efforts made at some considerable expense by other elements of the Government to try to boost our tourist influx while the Minister's taxes are virtually saying: "Stay away. We do not want you. Go somewhere else"? That is really the message this brings to our tourist potential outside the country.

This is certainly the story we are telling to our people of the six northeastern counties. We are telling them to stay where they are or go somewhere else. We are telling them to use their cheaper petrol in the Six Counties, get their cheaper liquor in the Six Counties and not come across the Border because we want to take extra taxes from them. There are exceptional circumstances in relation to cross-Border traffic. We are imposing those taxes to the detriment of our Border counties which depend heavily on cross-Border traffic, which has been traditional so far as those counties are concerned. In my county we are saying to the people: "Do not come in here. If you do we will charge you more for petrol than you will pay at home. If you come we will charge you more for liquor than you will pay at home". Those are the everyday things which our people have to face up to and they are the contradictions which are being clearly made by the Government. We are telling the people outside the country to come and see Ireland but at the same time we are telling them: "Do not come because if you do we will charge you more for doing it. It is cheaper to go elsewhere". No matter what part of the budget we look at we will find these contradictions. The contradictions are consistent. That is about the only consistency there is in the Minister's and the Government's financial operations. Consistency in contradictions is evident in every aspect of the budget.

We have a particular economic difficulty in the Border counties. Are the Government aware that before the budget, and particularly since 1st March, our towns in the Border counties are becoming ghost towns? In the matter of prices for all sorts of materials and foods, the Six Counties are beating us to such a degree that excursions are being run daily from 50 miles and more from the Border into the Six Counties on a regular basis. Ten, 12 or 14 housewives are going in minibuses to do their week or month's shopping in the Six Counties. Who can blame them when you see the disparity and the difference in the prices of the everyday things we use?

More astounding for the south Border county people is it to find well-known products selling in the Six Counties at anything up to 33? per cent less than they can buy them on this side of the Border where they are manufactured. There are all sorts of explanations for this, but the impact and the effect of it on our people cannot be eradicated. They are continuing in ever-increasing numbers to cross the Border to buy southern Ireland products at anything up to 33? per cent less than they can buy them in the towns in which they are manufactured. You can explain all you like about export profits being tax free, and about British Government food subsidies, but the fact still remains that, with all the difficulties and troubles and bother they have had along the Border in recent years, by virtue of Government action we are adding to their difficulties in these towns and, in a very short time, we will create a situation in which every Border town south of the Border will be a ghost town. I am not exaggerating. I know it. I see it. I observe it day in and day out.

We are now saying to them: "You will have the benefit of the cheap foods and the cheap goods you have been crossing the Border for in recent months, and we will give you a bonus of getting petrol so much cheaper that you can make the journey at no cost because you can fill up with petrol out of a pump in the Six Counties". I do not believe the Government are fully cognisant of that situation. If they were, they would not behave as they have behaved. If they were blind to it when they were doing it on 28th January, they should remedy the situation and not add to the difficulties and the problems in the Border counties south of the Border these additional economic hazards and difficulties which will wreck our towns which had been building up from a very bad start since the Border was first put there. They are now being walloped back into the ground again under the present mode of operation.

All I can say in regard to liquor prices is that the Government really went to town with their liquor tax increases. I am afraid they will not get what they are expecting to get, but they will create quite a problem within the liquor trade and those associated with it. Redundancies and unemployment are bound to be created as a result of the lesser volume of throughput arising from the brutal and penal taxes which have been added to our liquor prices. Everybody in this House except the youngest Members will remember when a penny on the pint could change a Government in Dublin city. I remember members of the present Government at that time lashing the then Government for putting a penny on the pint. The same outfit now put five new pennies on it which is the equivalent of 12 of the pennies I am talking about.

Only 20 years ago they lambasted the Government and made such propaganda that it was recognised that a penny on the pint was capable of putting the Government out of office. Now they put on 12 old pennies, plus what has been put on since as a result of the VAT change on 1st March, together with the increases allowed to the brewers, all of which will bring the increase up to something like 10 new pence. To be conservative we are talking in terms of an increase of 20 pennies, 20 times the penny of the late fifties. If an increase of a penny in the fifties could change a Government, what should 20 pennies do in 1976 to the Government? They should put them into space, permanently circling the earth, far away from it where they could not do any more harm. That is the sort of operation in which the Government have engaged.

We have to borrow three times as much as the optimistic estimate made by the Minister will give us from the increased stupid vicious and penal taxes wrongly placed on the main heads he has had a go at. Even on his most optimistic calculations of the various penal taxes, £3 will be borrowed in addition to every £1 he hopes to raise. That is the manner in which our country is being run at the moment. Obviously it cannot continue for very much longer. He has already done such damage that even if the Government change and remedies are applied the damage has been done irrevocably and irretrievably. The progress the country was making has been set back for years. To put a number on those years is beyond me, but there can be no doubt that progress has been set back for many years regardless of what steps may be taken and will have to be taken in the not too distant future.

We are in a mess. There are no two ways about it. We are in a bad way. One thing that seems to be keeping the wolf from the door in one sense in so far as the Government are concerned is that they have been adding to the benefits going to those who most need them. I do not think that is done on the basis of their increasing need in a deteriorating situation. It is a matter of feeding the dog with its own tail.

We continue to give to the growing number of unemployed increases each week. The Government justify and laud themselves on the very fine sentiment that those who are out of work and who cannot help themselves are entitled to the help of the community through the Government and the Exchequer. They laud themselves on that basis but it is not an honest basis. It is merely a method of trying to keep quiet those who in normal circumstances would have risen up to such a degree that the Government would have had to go to the country. The dog is being fed with his own tail, not for the love of the dog but in order that he does not bite his master.

The Government are doing this to such effect that the country will suffer for many years to come as a result of this wanton spree. The Government do not seem to know where they are going. They do not know where they have come from or where they are going; in fact, I doubt if they know where they are at this moment.

By now a number of people who did not realise the full effects of this budget know a good deal more about it than they did on budget day or a few days afterwards. By now most people know what has been the effect on prices and their reaction is one of undiluted hostility towards the Government for what they have done. However, I do not think that many know about the full effect of this budget with regard to employment.

It is undoubtedly true that this budget not only is deliberately fuelling inflation with all that implies but it has and is continuing directly to bring about unemployment. It does so under various headings. I will mention just one or two but they will illustrate what I have in mind. Deputy Blaney mentioned one heading with regard to the impositions on spirits and beer and all the consequences of the charges. However, we might also consider the imposition with regard to cars. It is clear that the effect on the assembly industry and in garages throughout the country has been to cause lay-offs. Within a short time of the budget I had information regarding commercial firms with fleets of vehicles who had plans to make replacements. Instead of that they now have fewer vehicles and they are laying-off staff who had been engaged on maintenance work. The effects of the budget on tourism must be severe, with a consequent effect on employment. There are other aspects that have a bearing on employment but I am mentioning these merely to draw attention to the fact that the most obvious consequences of the budget, those relating to prices, are not by any means the only damaging and deleterious consequences.

It is true that most people would accept, reluctantly of course, heavy tax increases if they were satisfied such increases would help employment and would get the economy moving again. By now people realise that in this Government we have a collection of incompetent amateurs who are running our economy into the ground and who have no idea of how to remedy the situation. They are simply scurrying from one crisis to another, hoping as they go to cover up the worst effects of what has happened.

There is very little dispute now as to the appalling state of our economy; indeed, almost daily we hear from the Taoiseach and other members of the Government about the serious state it is in. They are not exaggerating when they describe the state of the economy. In some instances they might reasonably be accused of not spelling out sufficiently fully just how bad is the situation.

We know that inflation is rampant, that unemployment has reached a figure of more than 117,000, that we are borrowing way out of line with any of our EEC partners and that there has been a drop in sales and production. All the indicators show just how serious is the state of our economy. The evidence was there in the past that this was the way we were heading; we pointed out this was happening but there were disputes at that time about whether we were correct. Now there is no dispute about the state of the economy. The only points of dispute now are, first, why the situation is so bad and, secondly, what should be done about it.

With regard to why the situation is so bad, the Government are still trying to plead world conditions but that tune is becoming discredited by now. It is interesting to recall that virtually all the economic indicators show that the deterioration in our economy began in the second half of 1973, not after the oil and energy crisis and not after the Arabs had caused considerable disruption in world trading conditions. It happened before that, in the second half of 1973. All the indicators show that this was the case and I have referred to a number of them. They are on the record of this House and I do not propose to go over that ground again. However, it is interesting to recall that that was when the deterioration started.

Of course, we can measure the performance of the Government against the performance of our EEC partners who have had to face the same problems of world conditions and the same problems arising from the energy crisis. Indeed, for some of those countries the problems were more acute than for us because of the nature of their consumption of energy. We find when we make that comparison that our position is considerably worse than that of our partners under almost any heading one can think of. It is probably true to say that at the moment we are not the worst in relation to inflation—I think that doubtful distinction belongs to our neighbours across the channel—but in regard to the effects on employment, which is of course crucial for all of our people, we leave our neighbours far behind.

Worst of all and most significant of all, our borrowing in relation to GNP is this year likely to be in the region of 22 per cent. Britain and Italy have a corresponding figure of about 10 per cent and most of the other EEC countries are half or much less than that, so we are far out of line in that respect. The only possible justification, if there can be a justification, is that as a result of that kind of borrowing and consequent spending we would shield ourselves from the worst effects of the international disruption of trade and the general recession throughout the world, but unfortunately the evidence is we have not shielded ourselves but are worse off than our partners to the extent that all this enormous borrowing is virtually going for nothing and we are now saddled with an enormous dead weight of debt which is such that it is difficult for us to grasp the significance of what is happening. If we consider that with all the savage taxation imposed by this budget the total amount of extra taxation being brought in by the budget will not be nearly sufficient to service the increase in the national debt, we get some idea of the extent to which the situation is getting out of hand and has got out of hand.

This Government to an amazing degree have displayed one particular characteristic, and that is an unwillingness and inability to accept responsibility for what they do. I do not want to speculate on the psychological make-up that this discloses— each person can do that for himself or herself—but I want to draw attention to the fact because I think it is important not to misunderstand what is happening and the Government's reaction to it. It will be recalled that at one stage all our difficulties were being blamed on the Arabs, but there is another phase when all the other Governments, particularly the Governments of major industrial countries, were at fault because they were not reflating their economies fast enough, and we had the Minister for Finance giving a lecture to those countries on their failure to discharge their obligations to us.

Of course no Government will act in any way other than what they conceive to be in the interests of their own people and if that happens to assist the rest of the world that is a bonus, but if it does not, the interests of their own people will come first, and anybody who thinks that any Government or any country owes us a living is gravely mistaken. The approach that it is the other person's fault is one we find in various aspects of this Government, and perhaps a good example of it lies in the approach to the question of equal pay.

It will be recalled that the Government boasted of their social conscience, their social concern. They said they were in the van internationally in regard to the implementation of equal pay and the rights of women. Up to the last moment the Minister for Labour was maintaining that of course the legislation would be enforced—it was unthinkable that we would do anything else, not a Government of social conscience such as we are blessed with—until in December the announcement was made that such was not to be the case. Then we had the Minister for Finance having the nerve to say that if we were to have equal pay the EEC would have to pay for it, if the EEC were to issue a directive they would pay for it, this from a Minister for Finance who knew the Exchequer had benefited to an enormous extent from EEC membership, a Minister for Finance who with his colleagues had maintained the alleged social concern of this Government, a Minister who was well aware that strong representations had been made continuously by the private sector that the legislation should not be implemented and who had rejected such representation.

But suddenly the boot was on the other foot. I suggest that the Minister for Finance and his colleagues were not in the least concerned with the private sector, that their concern arose solely when they found the implementation of equal pay would present some problems for the Exchequer in regard to the public sector. Suddenly the whole position changed. Are we to believe that the consequences and the cost of the implementation of equal pay suddenly emerged with clarity for the Government last December and that in the whole period from the enactment of the legislation until then the Government were unaware of the consequences which they now say will flow from its implementation? Somebody was bluffing somewhere and I think few people have the slightest doubt that the bluffing was on those benches and that it was exposed eventually, and, in the process of its exposure, we were treated to a disgraceful performance by the Minister for Finance in relation to both the EEC Commission and the Commissioner from this country. I do not want to pursue the matter any further except to make it clear that my view is, as I have stated, that the Minister's performance was disgraceful and was certainly not in the interests of this country.

In this whole saga of equal pay we had yet another example of this Government's inability to accept responsibility for their own actions and their apparent congenital necessity, when things go wrong, to blame somebody else. In this case it was the EEC. Whenever there is difficulty it is always somebody else's fault. It is never a question of the Government saying: "Look, things are difficult and we did, perhaps, let things go too far here and there, but this is where we stand. We regret it, but it has to be this way". We get sounds like this on occasion from the Minister for Finance and from the Taoiseach. Then we get the opposite sounds from other members of the Government so that, whatever happens, they can say they took this line or they took that line. The real test is not what the Government say. It is what the Government do and, on that test, this Government seem to fail in almost every single instance.

One of the problems that will arise for the Government out of this budget is not alone the estimated huge deficit but the fact that the deficit is likely to be considerably greater than estimated. I say that even on the assumption that expenditure is kept precisely to the estimated figures because, to take one example, namely, the revenue expected from beer and spirits, the position is that there is no hope of the Minister's estimates being realised. Indeed, there is likely to be a substantial shortfall in revenue from beer and spirits. Certainly all the indications are that there will be a substantial fall, perhaps 20 per cent, perhaps considerably more than that, and that is in only one area.

Prior to the budget the estimates were that inflation this year would run at about 11 per cent or 12 per cent. I am afraid it is more likely to be far closer to 20 per cent by the time this year is finished. The bulk of that extra inflation is a direct consequence of the budget and of increased taxation. There are other factors, such as the impact of the agreement in Brussels on the price of agricultural products, but by far the most important are the other items that have been increased, though not in the budget. I refer to fares, social welfare contributions, telephones, postal charges, the TV licence and so on. The list is huge. Added together these will bring us to a situation in which we will be closer to 20 per cent and not 11 per cent inflation this year, and this in the context of the Government seeking a pay pause.

I have found it extremely difficult to understand the mentality of the Government and the Minister for Finance in their approach to this question of incomes and national pay agreements and the impact of his measures in the budget on such agreements. I am more mystified than ever now because I recall what happened last year. I recall the extraordinary ineptitude of the Government in bringing in a budget in January, 1975, knowing a national pay agreement was about to be negotiated, as a consequence of which the cost of living increased by four percentage points.

The Government allowed a national wage agreement to be negotiated on that basis and then said the country could not afford it and brought in another budget introducing subsidies of various kinds, subsidies which had been advocated by us the previous autumn and ignored. The net effect of all that was to reduce the cost of living by four percentage points but there was no corresponding reduction under the national pay agreement. I find it very hard to understand that ineptitude. Here we are faced with a situation in which the Government are not calling for a restrained national pay agreement but for a pay pause, no increase on the conclusion of the existing agreement, no increase for nine months from that time.

I know that anybody speaking on these benches is in danger of being misrepresented in regard to his attitude towards this matter. Let me recall that it was we in Fianna Fáil who pioneered national pay agreements. We believe in them. They have many difficulties but we believe they are in the national interest and we want to see them maintained. When we were in power we tried to gear policies to facilitate the conclusion of national pay agreements. This Government seem to go out of their way to produce policies that will make it more difficult to get a national pay agreement. There can be no doubt but that the consequences of the budget and the other measures taken by the Government accelerating the rate of inflation is to make it extremely difficult, if not impossible, for trade unions and employers to act responsibly in negotiations in regard to what should happen at the conclusion of the existing agreement.

I have no desire to sabotage negotiations or the position of the Government in this regard. I have made it clear and the Leader of this party has made it clear that we fully support the necessity for income restraint at the present time. But it is impossible to ignore the realities and it is impossible not to point out that the actions of the Government and, in particular, their actions in this budget, have made it extremely difficult for the employers and the trade unions to act in a way that would be regarded as responsible and certainly in the national interest.

It is only fair to say that at a time when there is a fall of, I think, 3 per cent in our GNP, it is not possible for everybody to get increases. In fact, somebody has to have a lowering of his standard of living in circumstances like this. If it were a one-off situation it would be possible to cushion the effects of this borrowing, but because of the extent to which borrowing has gone on under this Government, that option is not really open. The sheer cost of servicing the increased borrowing is wiping out any cushioning effect we could have. Therefore there cannot be any real improvement in the standard of living of our people until we get growth again and get the economy moving. It is all right to ask people to recognise this fact and to exercise restraint and self-discipline, but there is a limit to what you can reasonably expect people to do. If we get inflation this year approaching 20 per cent, then the extent of the sacrifice that is being sought is unrealistic.

The trouble is that this is not the time when one can do very much about that. The time to consider these factors was when the budget was being prepared, but it would seem that little or no consideration was given to that, and so we are faced with the situation that whatever course is adopted it is going to be the wrong course. Clearly if a national pay agreement is entered into and it provides for substantial increases that will have the effect of causing even further unemployment. If, on the other hand, we have no national agreement and have a free-for-all, the position may well be worse. If we are to have the pay pause the Government seek, we cannot realistically expect to have one with inflation likely to run at the rates that are now being projected. I do not know what the answer to this problem is, because the answer was in the hands of the Minister and his colleagues when they were framing the budget, and to deal with it now is trying to lock the stable door when the horse has bolted.

The nature of the increases in this budget, too, the way they were implemented, has annoyed people very considerably, the two tier increase, people recovering from the shock of the enormous increases imposed in the budget and then finding on 1st March a huge range of commodities increasing in price again. None of this has helped the kind of climate that is required to have any realistic negotiations and results in regard to incomes in general. The art of government consists, in part, of the creation of the right climate for such negotiations, the right climate for growth in the economy.

I very much regret that the Government have pursued the line they have. We have in the past pointed out to the Government the manner in which they were putting the national pay agreements at risk. I had hoped by now the Government would have learned the dangers of that course, but it would appear that they have learned nothing, and the consequences for our whole economy, and particularly for employment, could be extremely serious.

One sometimes gets the impression that members of the Government, especially the Taoiseach and the Minister for Finance, imagine that sermons are substitutes for policy. We have had many sermons from the Taoiseach and the Minister for Finance. Some of them have been quite sensible, true and sounding the right warning notes to the people. However, the Minister will have to realise that such sermons totally lack credibility if they are not accompanied by action. If you look at some of the recent speeches by the Minister for Finance and the Taoiseach on this theme and compare them with what has been said about 15 months ago, you find they are very similar. I am thinking of the time when the white paper entitled A National Partnership was issued in the autumn of 1974. I may be wrong in the date, but it was introduced a considerable time ago. All the warnings that were given then are being given now.

People ask reasonably what is the point in all this? It is one thing to tell the people what the situation is, to warn them of the consequences of this course or that; it is another thing to regard it as a substitute for policies implemented, which is what a Government are for. By this time and long before this time, this Government ought to have determined on what their policy was going to be in regard to incomes, what their policy in relation to the requirements of the economy were, to have spelled out clearly what that policy was and taken responsibility for implementing it, and not to be subjecting us now, 15 or 18 months later, to the same sermons we have been hearing in the past. That is not really what government is about.

Speaking of sermons, I notice that the General Secretary of the Labour Party has been giving another of his sermons on the link with sterling. I have spoken about this matter before and I do not want to waste too much time on it again. It is about time the Labour Party made up their minds where they stood on this. The Labour Party are in this Government and are as fully responsible for the actions of the Government as are the Fine Gael Party. If it is a matter of policy for the Labour Party to break the link with sterling, it should be implemented by the Government or they should get out. If it is not something they think should be done, or is not something they think is of any great importance at this stage, the general secretary of that party, a nominee in the other House of the Taoiseach, should stop talking about it as though he meant it.

The Minister for Finance knows, as I do, that Senator Halligan is talking through his hat. The balance of advantage as far as this country is concerned till lies with maintaining the link with sterling. The advantage is getting smaller and smaller, but it still lies there. This is what annoys me about Senator Halligan's repeated sermons; if we were to break the link with sterling now, the immediate consequence would be a devaluation of the Irish £ relative to the British £. Furthermore, anybody who is serious about breaking the link with sterling would have insisted on the Government's following policies designed to strengthen our economy and to enable it to stand on its own two feet. If ever there were policies designed to ensure that we could not break the link with sterling, they are the policies which have been followed by this Government for the past three years.

We are now in a totally dependent situation as far as our economy is concerned. We are borrowing all over the world. Even with the huge taxation raised in this budget we cannot raise enough money to service the increase in the debt we are bringing about. That is not the kind of approach that would be required from any Government even remotely thinking of breaking the link with sterling. The discipline that is required to maintain one's own currency, even tied to another strong currency, is enormous. The first man who would squeal at having to be subjected to that discipline would be Senator Halligan. I urge Senator Halligan to stop talking about this. If he means it, he should not be general secretary of the Labour Party who form part of this Government, and he should not be supporting the policies of the Government which are having the effect, even if they are not designed to do so, of weakening our currency and our economy far more than anybody could have conceived possible when this Government took office.

The Minister, I think, has received representations—I too have received representations—about one matter he announced in the budget, that is the acceleration of the payment of income tax by the self-employed. The consequence of what he announced could fairly be stated in this way. In the period between 1st July, 1976, and 1st July, 1977, a self-employed person will have to pay four half-yearly payments, that is, two years' tax. When the Minister referred to this in his budget statement he accompanied it by one of his usual bland clichés about equity and talked about the PAYE taxpayers. He knows that when PAYE was introduced certain concessions were rightly given to taxpayers in order to phase in the new system. No such concession is proposed by the Minister at the moment for the self-employed. It also appears— although we do not have the full details—that for the public service who are being phased into the PAYE system, certain concessions are being given. I want to point out to the Minister that whatever else he is doing, he is not giving anything like equal treatment to the self-employed as was given to PAYE taxpayers and as is proposed to be given to public service taxpayers. I want to urge him strongly between now and the introduction of the Finance Bill to rethink his proposals and to try to ensure that some form of proper phasing-in is given.

There are some general aspects of budgeting by this Government to which I referred before but I shall briefly touch on again. The first is the whole question of deficits. I have gone into this before and I will not go into detail about whether deficits are good or bad, and the sheer nonsense to which we have been subjected in this House and outside, until very recently, about expansionary budgets and the more you spend the greater the expansion in the economy. It has been demonstrated that this is simply not true.

As far as this side of the House are concerned, we do not object to deficit budgeting. In fact, we introduced deficit budgeting in this country. I do not want us to be misrepresented in that regard. We say that a deficit in the budget should be used productively. If it is not, it is very likely directly to fuel inflation and will have other ill consequences, but it will not help our economy.

We have consistently urged on the Minister for Finance the necessity of curbing Government spending. He has used various devices to try to deal with this argument but he came up with a new approach in his budget speech. However, I want to make it clear that the real mistake the Minister and his colleagues made in their successive budgets has been their failure to curb spending. By that, I do not mean that they should say: "Expenditure as it exists at the moment has to be cut by one-third and that is that. We do not care what happens". That is not the way. If you do that, you create the most enormous misery. The key is not to allow expenditure to grow at too fast a rate. Every Minister for Finance is tempted to allow expenditure to grow more than he knows it should grow, and more than the economy can bear at a particular time. He is tempted because there are some very worthwhile things he can do and he is tempted for purely political advantage. If he lets spending grow without regard to the capacity of the economy to pay, he can have short-term political advantage but, as sure as night follows day, he reaches the situation we are in today.

It is no answer for a Minister for Finance who has allowed that to happen and who has not exercised the discipline he should on himself and his colleagues in successive budgets to say now: "But what would you cut? What are the consequences of cutting?" His failure began with the first budget he introduced in 1973 and it has continued since.

When we criticise him for failing to curb Government expenditure we are not talking only about this budget but about his whole course of action, his lack of discipline and control and his failure to do the fundamental job of the Minister for Finance—ensure that he does not yield to the temptation, for a purely short-term political advantage, of running his country into pawn, which is what the Minister has done, as was done by some Coalition predecessors of his also.

I notice that the Minister for Foreign Affairs, when speaking on the budget, made reference to our claim that we had been advocating food subsidies, cuts in VAT rates and similar things in the autumn of 1974, that the Government had rejected this advice in the budget of January, 1975, and had only adopted it belatedly in the budget of June, 1975. In referring to this the Minister said, as reported in column 932 of the Official Report of 29th January, 1976:

.... diligent research has so far failed to elicit any published statement to this effect, but I have no doubt that Fianna Fáil speakers will direct our attention to what we have missed.

I suppose it is a fair measure of the diligence and the competence of this Government—"diligence" is the word of the Minister for Foreign Affairs— that they failed to find any such reference because first, I advocated these matters on a radio programme, "This Week" on Sunday 6th October, 1974; I advocated fuel and food subsidies. The following day reports of that interview appeared in the national newspapers. In The Irish Times it was reported on page 13 and was referred to in an editorial in page 11. In The Irish Press it appeared on page 3 and in The Irish Independent on page 7. In addition, some weeks later, I made a speech in Cork in which I spelled it out in more detail and advocated cuts in VAT rates also. This was reported in The Irish Independent of 19th October, 1974, under the headline: “Aid on Food, Fuel Bid by Fianna Fáil”. It was also reported in The Irish Press on the same day under the heading: “Colley Again Urges Fuel, Food Subsidy”. Despite all that the Minister for Foreign Affairs says “Diligent research has so far failed to elicit any public statement to this effect”. That is a fair comment, I suppose, on the diligence and competence of this Government.

On a purely personal note I must confess that there are times when I wonder just what will happen to this country under this Government.

That is not just personal; the country at large shares that concern at the moment.

We are closer to it. We can see what is happening and see the degree of incompetence shrouded in public relations and bouncy attacks by the Minister for Finance, but we suspect deeply that perhaps the Minister for Finance does not know how bad the situation is. One wonders if he could live with himself if he knew just how bad it was and what he had allowed to happen and what he was failing to do to remedy it. Perhaps he has an excellent poker face and that he knows—he is in a better position than anybody else to know what the situation is. But whether it is a tribute to him or a condemnation of him he certainly does not give the impression that he knows what is really happening.

We have the strange situation of the Tánaiste, speaking with very considerable publicity, calling on the Government to produce an economic plan. Unfortunately, I suppose the age of Dean Swift has passed and nobody today can do justice to the kind of situation in which the Tánaiste, Deputy Leader of the Government, makes a speech which could have been made—in fact was made many times —from these benches, calling on the Government to produce an economic and social plan. I do not profess to understand the situation. I can speculate; we know that the Minister for Finance on many occasions poured scorn on the whole idea of such a plan and said it was nonsense in this type of situation with various uncertainties even to think of it. Subsequently, somebody twisted his arm and he did make noises indicating that perhaps there would be a plan. Then he became very definite and we were going to have a plan by the end of 1975. All of this is on the records of the House. We do not have that plan yet but we have been told in the Minister's budget statement that we shall have a green paper. We have not had the green paper yet either and it is now nearly the middle of March, 1976. Apparently, sometime we shall get a green paper. That means that the Minister for Finance will be committed to nothing in it and, I suppose, the Tánaiste will not be committed to anything in it either. At least he will be able to say: "We have produced something on those lines" and the Minister for Finance will be equally able to deny that any such thing has been produced.

All this could be very amusing and interesting politically, but our people do not have time for this kind of nonsense. This country is sinking. This country needs now more than it has ever needed before a Government that knows where they are going and what they are doing. Even if some of the steps they are going to take are wrong, if they know where they are going and go at it, at this time the people will follow a lead if the Government are seen to know what they are doing.

The Government are clearly going around in circles. They do not know where they are going. They are going from one crisis to another. "Ad hocery" reigns supreme. We have all the talk about a social conscience, a Government of concern. Apart from the obvious public relations aspect of it, which is obvious to anybody who knows the score of what is going on, the reality is that you cannot hope to implement any kind of ordered social programme unless you have an economic programme that will pay for it, that you can gear one to the other.

While the Government talk about social progress our economy decreases by 3 per cent. Think about that for a moment. If you continue on on that road where do you end up? How do you pay for social progress? Is it not by an expanding economy? Is it not by a Government who create a climate in which people want to invest, in which people want growth for themselves but with a proper share being taken for the community? If you do not create that climate and if you do not create that growth you are just fooling people and perhaps fooling yourself if you talk about a plan for social development.

Unfortunately we have yet another budget from this Coalition which is doing virtually nothing to tackle our unemployment problem—in fact it is making it worse—but which is clearly making our inflation problem worse, which is adding to our enormous national debt, which is not reducing our deficit and which is giving no inspiration to any of our people to make their contribution to the growth of our economy, to getting this country going again and enabling us to bring about the kind of social reform we all want to see.

Once more we have a budget of that kind. Whatever hope people may have had, be they supporters of the Coalition, be they neutral, even be they on these benches—there were some on those benches, and I was one of them, who hoped that by now the Government would have learned something—unfortunately this budget proves that if you start with the basic amateur inabilities of this Government there is nothing you can do about it.

This has been the most disappointing budget debate I have yet experienced in this House, as a Member now in my seventeenth year of membership. Never had we to debate in that period economic problems of greater depth and greater impact than those we have this year because never during all that time or during the last 45 years has Ireland been afflicted by a world crisis of the dimension or the depth of that which now afflicts us. I would have thought, as I appealed in my budget address, that it would have evoked some sense of responsibility, some depth of thought and some degree of uniformity of approach by the Opposition to the problems of today because the problems which face this country are not the problems of the Government or of the Opposition but the problems of the people.

I thought it might have been helpful if they had responded to the appeal which I made in my budget speech for an adult debate on this occasion and not the kind of debate, which Oppositions can be tempted to engage in, of scoring petty points. Unfortunately the Opposition did not rise to their responsibilities and we have had one of the most tardy, contradictory and futile debates ever. It has been useful, perhaps, in identifying the massive confusion which exists in the Fianna Fáil Party that they cannot even produce one common thought, not merely between one another but indeed even in one speech. As they have called for massive additional expenditure they have condemned the Government for the current level of expenditure. They have complained about the high rate of tax. They have complained about the broadening of the tax base. They have criticised every form of expenditure and saving in which we have engaged.

At the end of this debate perhaps the only thing that is now apparent is that the Fianna Fáil Party are the chameleon of Irish politics. The chameleon everybody will recall, is the lizard, distinguished by a prehensile tail, long tongue, eyes moving independent of one another, distinguished especially by his power of changing the colour of his skin, varying through different shades of yellow, red, grey, brown and dull inky blue according to background.

The forty shades of green.

I am quoting from the Oxford English dictionary. Somebody found a republic there on one occasion. The Oxford English dictionary says that the chameleon was formerly supposed to live on air. If people had witnessed the debate in the last five weeks they would feel that the Fianna Fáil Party were living on more than that. "What is the prehensile tail?" some people might ask. I would like to explain that Oxford says that "prehensile" means having a capacity of laying hold of anything. That is what we had throughout this debate from the contributions from the Fianna Fáil Party. Every speaker got up and spoke like an irresponsible Independent. There was no cohesion, there was no unity; there was total conflict.

We had the Leader of the Opposition saying that the Government's efforts in relation to the dole for the small farmer were commendable and Deputy Haughey saying they were atrocious. We had demands for cutbacks in public expenditure and we had, after criticism of the size of the budget deficit, the increases in taxation and Government borrowing, from the Fianna Fáil Party, that want to parade themselves as being responsible, demands for an addition to publish expenditure of £222 million. That was their contribution in the last five weeks —additional expenditure of £222 million. They criticised the size of the deficit of £327 million. Their demand would have made the current deficit £549 million.

That is on to the Minister's deficit.

Yes. How would they have financed this deficit? Would they have borrowed it? They have criticised our borrowing at home and abroad.

For unproductive purposes.

They presumably would not tax us because they have criticised our taxation so they would have borrowed it. That would have meant borrowing £728 million. That was the collective wisdom of the Fianna Fáil Party or, to give them their due, maybe they would have taxed for some of the additional £222 million they wanted to spend. How might they have collected some of that tax? I will tell the House. These are the only options which would be open to them. The people should know that what the Fianna Fáil Party in their collective confusion believed should be done is this. According to Fianna Fáil, income tax should be raised by a further 10p on every rate.

Quote the Fianna Fáil person who said that.

That would produce £80 million.

On a point of order, is it not a rule of this House that if a speaker purports to attribute a statement to another Member he quotes?

He did not name the Member.

I did not say I was quoting.

So we did not say it. All right.

I am trying to point out the inevitable, inescapable and realistic consequences of weeks of total confusion and independent recklessness from the members of the Fianna Fáil Party who have not a common thought or a moment's consistency, either collectively or individually. I am being fair to them. I have not added to these figures the millions of pounds they demand at Question Time every day in this House. Question Time never passes without every one of them currying favour from his own narrow parish, and looking after his own skin, not giving a damn about his own party colleagues, and still less for the nation, demanding more and more money to meet the demands of parish pump politics. Leaving all that miserable politicking aside, we find they want to add £222 million to public expenditure.

The Minister spent 16 years doing that and he did it very well. That is why they were left over here.

They know we recognise what they were at. They were adding up the sums and so were the people. How would they get this money? They rule out borrowing so they would not have £900 million of borrowing. They do not like a deficit of £327 million, so presumably they do not want a deficit of £549 million. Therefore, they would have to put an additional 10p on every rate of income tax to produce £80 million.

They have criticised the petrol tax. They would have to add at least another 10p to the petrol tax which would yield about £16 million. They would have to add at least 5p on the packet of cigarettes, in addition to what has already been put on it, to produce about £5 million. They would have to add on double what we put on spirits and beer. This would produce only about £22 million extra. They would also have to double the recent rates of car tax, which they said were catastrophic, to produce £8.5 million. At the end of that, they would have obtained only £131.5 million towards their additional expenditure of £222 million. According to Fianna Fáil they would still have to go out to the world with the begging bowl looking for an additional £100 million to meet their extravagant schemes, as they try to beg and borrow their way back to public popularity.

No. We would just get our people back to work.

I would be less than charitable in calling them chameleons. They have been adjusting their colour, every one of them speaking individually and collectively according to the territory through which they are passing. No matter how much he changes his colour, and no matter how much his eyes are looking in different directions, a chameleon is still a lizard. That is what the Fianna Fáil Party have proved themselves to be over the past five weeks.

They have also been very anxious throughout this debate to reject their own think tank. They are getting tens of thousands of the taxpayers money to assist them in Opposition to finance their "think tank". We know their think tank is leaking brilliant ideas. Their think tank is suggesting a cut in social welfare of £30 million and a slashing of the pay of every policeman, of every nurse, of every soldier, of every civil servant, of everybody in the public sector, by 10 per cent. They are holding back to their golden jubilee, no less, the revelation as to whether or not their economic plan will include drops of wisdom from their think tank.

Is it not a reflection on the Fianna Fáil approach to things that the man who was the chief economic adviser to the Fianna Fáil Party when they were in power believes that were they in power today they should be taking £30 million from the weakest members of our community and taking 10 per cent back from the public sector, not simply having a pay pause such as we are asking for but taking 10 per cent back from everybody in the pay of the public sector? I said this was an occasion for serious debate.

The Minister could have fooled us.

At least Jim Dillon used to sound good.

I am deadly serious in what I have said so far. There are hard choices ahead for our community. If the community is to respond in a positive and united way, the unvarnished facts must be spelled out very clearly. They have not been spelled out by the Opposition in the course of this debate in which they tried to avail of every little escape to give them momentary popularity.

I want to draw attention to the development of public expenditure and not only over the past year or two in which there have been very substantial increases, increases which I might point out received the endorsement yesterday of the European Economic Community. They pointed out that if these increases had not taken place in Ireland in the past two years the economic recession in Ireland would have been far more grievous than it has been. Those who believe, according as it suits them, that all wisdom comes from Brussels might like to read the reports issued yesterday.

I thought the Minister was not allowed to mention the European Economic Community any more.

They point out that the Irish Government in the particularly difficult circumstances of the past few years adopted correct financial, budgetary and economic policies.

I wonder who wrote that.

This must not blind us to the realities that face Ireland and the community. For many years there has been a steady and accelerating increase in Government current expenditure and in the public capital programme. Both have increased at a much faster rate than gross national product. Ten years ago, total public expenditure came to 35 per cent of gross national product. Five years ago this figure had increased to 41 per cent. In 1975 it was 51 per cent. In 1976 it is 55 per cent.

Public expenditure and gross national product ratios provide a crude indication of the extent to which the public sector is absorbing national resources. Whatever the reservations attached to the measurement the trend is unmistakable and it is very marked. We have now reached the stage at which the public sector accounts for more than half of total national resources. If we take the expenditure of local authorities into account as well as the expenditure of the Exchequer, the figure is around 60 per cent. While the individual social and economic policies underlying public expenditure may well be desirable, as they are if considered in isolation, we must seriously as a community ask ourselves whether the present overall balance between public and private expenditure is desirable.

What is even more important is whether we are prepared to allow a continuation of present trends to permit the public sector to account for an ever greater proportion of national resources. Even when account is taken of the extent to which public expenditure was deliberately increased in the past few years in order to meet the most extraordinarily difficult circumstances in a world recession which necessitated special measures to reflate the economy, it is indisputable that the factors responsible in the past for the increases in public expenditure will, if not checked, automatically lead to a still higher expenditure ratio in future. If the growth were to be maintained within five years it could reach a figure of 65 per cent, including local government and national expenditure. It is questionable whether present and prospective levels of public expenditure and the taxation and borrowing that is inevitably involved are compatible with the working of a mixed market economy and of the allocation of national resources best suited to meet national objectives.

If, therefore, the present ratio is considered too high—there are many who think it is and their thoughts are valid—and even more so if the present ratio is considered excessive, then we will have to change this direction. This will involve difficult decisions. It will entail the kind of unpopular decisions the Government had to take in relation to this year's budget where we reduced the initial estimates by around £500 million and where we have been lambasted by the Opposition and others because we dared to keep down the level of public expenditure. It will also entail a reduction in a number of items of current expenditure, many of which have existed for decades past and have been built into the income expectations of people but which are not necessitated today either by their own social circumstances or by the economic needs of the last quarter of the 20th century.

In 1975 the current budget deficit accounted for 7.3 per cent of GNP and in 1976 this deficit will account for 7.9 per cent of GNP. It is to be hoped that in the latter half of this year we will move back again to a significant growth path which may reduce the percentage of the current budget deficit as a proportion of GNP. The figures I am giving are according to present estimates.

The corrective measures we have had to take in the economic recession of the last few years have necessitated massive deficits but this will certainly not be necessary as we move back to a world of growth, internationally and domestically. This contrast means that just as the deficits were necessary, totally justifiable and certainly most desirable in the recession of the last two years, they must be eliminated when growth begins once again. Like any borrowing, a deficit has to be repaid and, therefore, we would be wrong to mortgage the future of our people by having deficits which are unnecessary to the circumstances of our time. That is why I indicated in the budget statement that it is the Government's determination to eliminate the present deficit over a three-year period because during that time we will be moving back into a period of most significant growth which will make it possible for us to eliminate the deficit.

Today we face a problem that the world is still in comparative recession. Some economies, such as those of the United States, Japan and Germany, are accelerating once again. However, as they are accelerating at a pace that is now much faster than they thought possible six months ago they are becoming worried and are applying the brakes. It is extremely difficult to forecast with accuracy the developments in the next three years, and it is even more difficult to do so over the next ten years. However, as we endeavour to prepare a national plan we have to make some assumptions in relation to the pattern of economic behaviour in the world outside and in our own country for the period of the plan.

I have heard criticisms from the Opposition about the failure to date to produce a plan but I would direct the notice of objective and fair-minded persons to the remarks of Deputy Haughey who spoke in a sensible and adult way when he said that the production of a plan would be meaningless unless it were acceptable to the community as a whole. He said that more important than the forecasts of the experts was the willingness of our people to commit themselves to whatever sacrifices or decisions that were necessary in order to achieve particular targets. He was quite right in what he said and in speaking in that way he reflects entirely the Government's thinking. That is the justification for the publication of a Green Paper which we hope to produce soon and which will spell out to our people the realities of our time and the options open to them. Those options will involve a postponement of ambitions unless people are prepared to pay the cost of achieving them. That may mean not achieving a level of educational standards, of housing or of industrial or farming investment unless people are prepared to pay the cost of meeting their investment.

Deputy Colley said with truth that we cannot expect the rest of the world to support us. We cannot expect it; it would be nonsensical to do so, it would be futile and in the end we would be disappointed. As a community we cannot continue, as we have so often tried to operate in the past, as though we can achieve all our ambitions without paying the cost. The cost is not going to be prohibitive but it will involve a little patience, a little prudence and the kind of sacrifice that any responsible parent will gladly make for the welfare of his or her child. This means that, as a nation, we will have to put aside all the sectional bickering and all the foolishly imported class conflicts from other societies. They are strange to our people, most of whom were not born with silver spoons in their mouths and every one of whom has a common interest in achieving a better Ireland and a reasonable standard of living for all.

Who is the Minister talking to?

I am talking to the nation as a whole, including members of the Opposition whom we are very glad to cherish as members of this nation, notwithstanding their occasional lack of patriotic duty.

And some Ministers who knock the Christian Brothers.

I am not aware of what the Deputy is referring to. No member of this Cabinet has ever criticised that noble order. There is a fundamental need for a reappraisal of public expenditure. We have to look at what has been achieved by the growth of public expenditure in the past. In the last 20 years—this involves the Opposition as much as this Government—public expenditure as a proportion of GNP increased from 29 per cent to 55 per cent. The objective of that increase was to produce jobs and to increase the number employed. What has been the end of that 20 years? What has been the result of increasing the public sector expenditure? A decline of 3,000 people at work.

Increases in the industrial and service sectors, including the public service, have been more than outweighed by the number of people leaving agriculture. Although it might be argued that the fall in employment would have been greater were it not for increased public expenditure, it would be very difficult to justify a substantial increase in public expenditure by the results achieved in employment alone. Far too much of the increase has gone towards redistributing resources rather than increasing them, and this is not a pattern which it would be safe for us to continue any longer.

This conclusion gains added force when account is taken of the increased employment required to attain full employment ten years from now. If full employment is defined as a situation in which the unemployment rate is reduced to about 4 per cent and there is no net emigration, then an annual net increase in non-agricultural jobs of 23,000 would be required between 1976 and 1986 as compared with an annual average of 1,500 achieved in 1972 to 1975. The greatest number ever achieved was an increase of 9,000 a year, and yet in order to get back to the rate of unemployment which we experienced in easier days we will have to generate 23,000 new jobs per year or else live with the present rate of unemployment and more, or see once again a return to the draining sore of emigration, if indeed that release, that safety valve, is available to us. As everybody knows, there is no assurance of that now because so many of the communities to which our people traditionally went are today suffering massive unemployment themselves and there are other areas in the world where the growth of populations is so massive that peoples are leaving their homes and are going to secure their livelihoods elsewhere, and they would be in competition with our people if our people were forced to leave our shores.

Therefore, in terms of gross job creation, when you take the number of people leaving the agricultural sector into account, the annual requirement could be as high as 38,000, because we may continue, as we had in the past, in this highly advanced technological age, when changes in fashions and techniques are also changing job possibilities, to face in the next ten years the creation of 38,000 new jobs per year. That is more than four times as much as we achieved in our best year to date and as high as 25 to 30 times greater than we achieved on average in the last three years.

That is the scale of the problem ahead of us and it is a pity there was not more attention given in the budget debate to the years that are ahead of us than to the temporary reaction, which there inevitably is, to the ups and downs of the current budget. That is the problem that faces the country and we have not yet as a community even started to think about it. The Government have been endeavouring to draw people's attention to it because it is a scale of the challenge that faces us and the sooner we take it up the better.

How do we face this problem, how do we meet the cost of doing it, how do we provide the sustainable jobs, the investment necessary to create the employment opportunities and at the same time provide a social structure which is inevitable if our population is increasing? That again is a problem to which too little attention has been paid, but the problem of providing the resources cannot be ignored.

The taxation and GNP ratio has increased from 25 per cent to 36 per cent in the last ten years. About 80 per cent of income tax receipts comes from wage and salary taxpayers. It is reasonable to assume, and no reasonable person can deny it, that the limit of direct taxation has been reached. It is unarguable that the scope for further increase in the rates of any taxes is limited and even to the envious I should like to point out that even if the top rate of income tax of 77 per cent was to be increased to 100 per cent—there is nobody daft enough to suggest that—it would yield only £2 million.

Therefore, we have clearly touched the limit of taxable capacity as far as direct taxation is concerned, and despite the increase in direct taxation, indirect taxation still accounts for a relatively high proportion of total tax receipts. Indeed, as a percentage of GNP, the Irish figure is much the highest in the Community. The heavy reliance on taxes on beer, spirits, tobacco and petrol and the fact that one-third of our personal consumption is exempt from VAT, limit the room for increasing direct taxation. We have had to increase indirect taxation, we have had to increase the excise taxes on the old reliables and the non-essentials to the levels we did in this budget because we as a Government deliberately had taken taxation off foodstuffs, off clothes, footwear and oral medicines. We do not apologise to anybody for doing that. If we had not done that we would not have had to increase the tax levels on fur coats and on motoring and on the other items which are still subject to VAT. We could have left the injustice that Fianna Fáil believed in and which some of their spokesmen have said they will restore if they get back to office— that they will put VAT back on food again. That is not our policy and no matter what difficulties we may face we do not believe that the necessities of life should be taxed. Fianna Fáil not only believed they should be, but actually ensured that they were.

As regards capital resources, our national debt now represents 70 per cent of our GNP. It is among the highest in the world, although we as a country have not had to accept the burden of war debts. Between now and the end of the decade, more than £1,000 million of national debt will mature for payment or conversion. In 1976 public sector borrowing, which some people are arguing we should increase but we in Government are not disposed to increase, will amount to about 19 per cent of GNP as compared with 8 per cent five years ago and 6 per cent ten years ago.

Our objective must be to reduce that figure rather than to increase it because if we increase it all that will happen is that more and more current taxation will have to be put aside in order to repay debts previously incurred and we could very soon end up by having to devote all our borrowing towards meeting our annual debt-servicing cost or to having hypothecate one-third or more of our tax revenue for that purpose.

I have spoken at length on these matters because I considered it necessary to spell out these realities so that our people will not delude themselves into thinking that there are easy options ahead for them. I heard with interest what Deputy Colley said about the link between the Irish punt and the pound sterling and generally I find myself in agreement with his conclusions.

(Dublin Central): Ask Brendan Halligan.

I would not agree with his criticism of Senator Halligan or others who believe that this issue should be openly and maturely debated. We have nothing to lose by discussing this—at one time it might have caused panic but nowadays the strength of our economy, the capacity of this country to look after its own affairs independently of Britain, our EEC membership, the much broader base which we now have under this Government for our external reserves, allow us to discuss this problem in a sensible way.

As I said yesterday, the material question is not whether we sever the link with sterling but, if we do sever the link, what will we do afterwards? Will it be a revaluation or a devaluation of the Irish £? Naturally when the £ sterling has fallen below the two dollar level this leads to renewed questioning of the one-for-one link between the Irish £ and sterling. I want to assure the House and the country that this matter is under constant and mature scrutiny by myself, by my Department and by the Central Bank. There are a number of basics that are inescapable and that are overlooked, I am afraid, whenever people react to the fluctuations of the international money market.

A revaluation of the Irish £ would not be feasible unless and until we had a pay and incomes pause implemented and unless and until it was seen both at home and abroad that incomes moderation was succeeding in reducing both the rate of inflation and the increase in unit wage costs below those of Britain and the other countries with whom we trade. The usual conditions for a revaluation of currency are that one's balance of payments is in credit, that it has an excess of exports over imports and that it has a lower rate of inflation than the people with whom it trades. None of these conditions operate in relation to Ireland at the present time except that, as Deputy Colley said, in relation to some of these we are in a healthier condition than Britain.

The orthodox practice is that devaluation becomes necessary if inflation is higher, production costs are higher and if there is an excess of imports over exports. That situation does not exist in Ireland at the present time. But, even if the preconditions for exchange rate change did exist, it is unlikely that exchange rate policy could make any dramatic contribution to overall economic policy and certainly nothing as significant as the pay pause which the Government are seeking.

A revaluation of the Irish £ at the present time would have adverse effects on output and employment in the economy. There certainly has been, as we know, a decline in the value of sterling of about 32 per cent compared with the exchange rate set in December, 1971. The reason for that continuing fall in sterling against other world currencies has been the failure of Britain to reduce its rate of inflation to the rate experienced by other countries and, in particular, by the United States and Germany. The fluctuations in the market in the last week are not entirely related to this particular aspect but fundamentally and over the longer period that is the reason for the fall off in sterling.

Deputy Colley said that if there were a severance of the link maybe the circumstances of Ireland might dictate a devaluation of the Irish £. In certain circumstances that certainly would be true and, if we start behaving here with the prudence and wisdom which our circumstances require —in other words, if we moderate our income demands and improve our competitiveness, and if we bring down our costs—then we can answer the desire that many of us feel to sever the link and have our own independent currency. But you cannot sever the link until we put our own economic house in order. The fall in the value of the £ affects both the cost of servicing foreign debt and the total size of the debt. The cost in 1976 of servicing government foreign debt outstanding at 31st December, 1975, is estimated at £60 million. That was based on the exchange rates prevailing in January. Because of exchange rate changes between then and March, and on the assumption that no further net changes occur, the cost will rise by some £2.8 million in 1976. Against this extra cost, if it materialises—and it cannot be said yet it will materialise because there could be further fluctuations in the £ before the end of the year which could lead to restoration of the exchange value of the £—it would have to be set against the effects on the earnings of the Central Bank, on its foreign currency holdings which, of course, will rise in terms of Irish £s and, as the major part of the foreign currency holdings of the Central Bank are now held outside sterling, there would be a gain in these holdings. The bank's surplus income is payable to the Exchequer in the year after which it is earned. The State bodies with foreign debts would of course also be affected. Some of them, however, are earners of foreign currency and their income would benefit from the exchange rate changes.

It should be noted that if money were raised in sterling or Irish £s the interest cost would be much greater than on foreign currency. The yield on Irish Government stocks ranges from 9¼ per cent on stock maturing next August to 14.4 per cent on longer dated stocks. This affords a considerable margin, about 3 per cent upwards, on Eurodollar credit facilities to meet changes in exchange rates. The cost of six months dollars is now about 6½ per cent and this rate applies to dollar credit facilities of which there are £410 million outstanding. The external Government debt as at the end of 1975 stood at £566 million based on the exchange rates then operative. As a result of the exchange rate movement since this figure has increased by some £25 million.

From the point of view of the economy, however, account must again be taken of the rise in the value of the Central Bank's official external reserves. The non-sterling foreign exchange part of the reserve had risen to £565 million by the end of January, 1976. The increase in their value, therefore, would be of the same order of magnitude as the increase in the size of the Government's foreign debt so that the overall effect on our economy is neutral. The foreign debt of the State bodies has risen by some £8 million due to exchange rate movements.

I thought it desirable to spell this out in detail and with precision so that some misunderstandings might be avoided. About half of our trade is with Britain and consequently that trade will not be directly affected by the recent exchange rate movements except to the extent that other suppliers to the British market will be disadvantaged as against ourselves because their goods in Britain will be dearer than they were before sterling slipped in the way it did whereas our goods will be able to maintain their present price because of the £ for £ relationship between the Irish £ and the £ sterling. Our exports will be comparatively cheaper which will certainly help to increase their volume in the British market. Imports will, however, be dearer—that is, imports from the non-sterling area—but this should provide an assistance for Irish manufacturers who will gain an advantage over the foreign supplier into the home market. There is, of course, an offsetting factor in that much of the raw materials required for Irish industry has to be imported and where they originate outside the United Kingdom they will be dearer. But we could hope to benefit from any general improvement in the British economy and such an improvement can be anticipated as a result of the recent moves in sterling. As I said, people who believe that in the long run Ireland's best interests are in severing the £ for £ link with sterling and revaluing the Irish £ upwards should be outspoken and determined and resolved in their own individual and collective actions in supporting the Government's call for a pay pause and prudent policies in incomes for some years to come.

There were suggestions by Deputy Colley that the Government have been acting in a hamfisted way in relation to the plea for a pay pause. This is a proposition which must be totally rejected. The Government have a responsibility to look after the general welfare of all the people and in exercise of that obligation the Government as far back as December last had a meeting with the social partners. That was on 10th December, and on the day on which the Government Ministers, headed by the Taoiseach, had the meeting with the social partners when he asked in the Government's name for a pay pause at least to the end of 1976, he went on television and radio and also addressed the people of the nation through the newspapers to make this appeal. Again the Taoiseach reiterated his appeal on 17th December when he opened the Adjournment Debate before the Christmas recess. On 19th December the trade unions said that, while they were unable to recommend at that stage the particular formula that the Government had put before them, they recognised the economic realities that faced the country and they were open to discussion, and again on 29th December when the Government met the trade unions, the same case was reiterated.

It must be remembered that incomes in 1976 for those who have been fortunate enough to receive the national agreement increases of 1975 will be 11 to 12 per cent higher than they were in 1975, and apart from those elements of indirect taxation which were necessary in order to meet increased levels of welfare which were demanded by our community and other essential costs, the level of increase in prices in 1976 should be of a similar order. It may be a little more but not much more. It is interesting to observe, as I am sure many people have observed, that within the last few days OECD anticipated that Britain, which is our main competitor and which is the community with which we are most involved financially and economically, is expected to have a 10 per cent increase in income and a 15 per cent increase in prices in 1976. As we try to correct the imbalances of the last few years, it is not unreasonable to ask that people would make the adjustments necessary to correct the wrong trends which developed, and wrong trends did develop, for instance, in 1975 when pay rates rose by 28 per cent and prices by only 21 per cent.

The Government are not making an extraordinary request. Similar requests were made by the Governments of Denmark, Britain and the Netherlands within the last few years. When the Governments' requests were responded to and when there was moderation in incomes, when a pay pause was granted, then the economies improved very significantly. For instance, in Denmark, following a pay pause which was introduced last year, the rate of inflation was brought down from 15 per cent in 1974 to under 10 per cent in 1975, and a continued improvement is expected in 1976. The Netherlands Social and Economic Council in 1972 recommended that wages be determined within the framework of the Government's economic objectives, and this too resulted in a very significant moderation in the rate of inflation.

Is it not significant that these economies are now on very substantial growth paths? This has followed directly as a result of the communal wisdom in accepting the Government's recommendation that a pay pause was the easiest, fastest and surest way to economic salvation. That is what we have argued and we believe the facts that we have produced in support of that argument are not capable of honest contradiction.

In 1975 we experienced a 21 per cent increase in the consumer price index, and of that increase about 8 per cent was attributable to the income increases which we awarded ourselves. I put very bluntly the question to the House and to the country: which would people prefer to see, an end to the crucifying increases in our inflation rates or a continuation of such increases and nominal pay increases? I think there are very few people indeed who would not opt for an end to the speed with which we have increased inflation, would not see the wisdom of having a pay pause which, by producing real reductions in the cost of living would, in the long run, have greater material benefit for individuals and would quite clearly substantially improve our own competitive position internationally. If we want to safeguard the jobs that we have and to provide more jobs, they can only come out of increased exports, and competitiveness can be achieved most speedily and with least pain and difficulty by having the pay pause which the Government have been seeking.

We believe our people have a right to prefer employment to nominal or even real income increases, and we believe that people who are working are anxious in these days. We have seen in our economy and in other societies a tremendous lack of consumer confidence and investment confidence in recent years. Even in our own environment when the rate of pay increase was 7 percentage points higher than the consumer price index, we nonetheless had a slump in consumer demand; we had a fall-off in investment, because people were afraid, people were uncertain, people were anxious. Nothing is more destructive of human society than human fear, and this fear which has eaten into our society and which has eroded our stamina and our willpower, just as it has also hurt other communities, will remain unless and until we improve the situation by having the wit to exercise income restraint.

People will have noted that the European Economic Community yesterday exhorted Ireland to exercise income restraint and have a pay pause in 1976. I think I can fairly say that those who consider that all wisdom lies in Brussels and went there recently in order to get a decision in support of their attitude ought now to be consistent and abide by the recommendation which Brussels has recently issued.

I am not prepared to accept, nor is anybody on this side of the House, any criticism from Fianna Fáil on the issue of equal pay. They were in power for 35 years and did not move one fraction towards equal pay.

That statement is not factually correct.

It is absolutely true. They did absolutely nothing to move towards equal pay, and it was left to us in a period of the worst economic recession experienced by the world in 45 years to close the gap in equal pay by 60 per cent in a period of 2½ years and to do it ahead of the target that the Commission on the Status of Women recommended. We thought it reasonable and we still think it reasonable that people who themselves wanted to forgo their right to equal pay in order to maintain their jobs should be able to exercise that right. There are those, however, who think that procedures are more important than survival. I do not think that is right. I take no comfort out of seeing somebody sinking according to the correct procedures when reasonable steps can be taken to save them from sinking. That is what the Government suggested but, as I say, other procedures have now intervened to make that reasonable policy less achievable than it might otherwise be. We accept that that is the world in which we now live. All we say is that those who believe that the correct procedures should be followed should apply that in all sectors and realise that an incomes pause is the simplest and least uncomfortable way to achieve again the competitiveness which is so essential to our survival.

I would like to pay a tribute to Deputy de Valera for a very fair comment he made yesterday. It was a refreshing breath of honesty from the Opposition benches. He said that through the fault of nobody in this House or in the country, Ireland had suffered a rapid deterioration in her economic circumstances and environment in recent years. That is the truth and our people know it. That, I suppose, is a disappointment to the Fianna Fáil Party, because they have not been able to make capital out of the difficulties our country experienced in recent years.

It is a great tribute to the people that they have shown their understanding of the problems. They have realised that we in Government with a commitment substantially to improve the employment opportunities and the standard of living of our people, were afflicted with the most severe storm to strike this country, or indeed the rest of the world, for 45 years. As the Minister for Industry and Commerce said, we had to carry out continuous repairs and maintenance to the dykes to prevent the country from being flooded by the economically dangerous forces operating outside. We have come through the worst of the storm. There are calmer times ahead and we are moving back to a growth path that will enable the Government to resume the growth which we achieved in a dramatic way in 1973, when we took over from a Government which, unlike the rest of the world, had our economy working about 20 per cent below capacity and we brought it up to 100 per cent capacity within a few months.

The only growth in 1973 was in the first half.

I can give this assurance. Notwithstanding all our difficulties, we will never have to resort to such desperate straits as the Fianna Fáil Party did about a decade ago, when they dismantled the Garda Síochána band when it came back after a glorious tour of the United States. We do not have to do that kind of thing. The steps we take are mature and sensible and are best suited to the needs of our time.

Meals on wheels.

We believe that it is right, when money is scarce and unemployment is high, to give priority to protecting jobs, creating new ones and helping the weak. We did that because we increased our public capital programme in this year's budget by 27½ per cent, well above what is required to meet increases in cost, and that on top of the massive increase in the public capital programme for which this Government have been responsible and which would not have been conferred on this country if the Opposition had been in power.

I do not know why unemployment is growing.

We believe also that notwithstanding the other problems, we must help the weak. We have helped them by a 10 per cent increase in their benefits instead of resorting to the Fianna Fáil think-tank of cutting them by £30 million. We do not think it is unreasonable to say to people who are better off to be patient a while and to let us come through the worst of the difficulties so that growth can again begin. The chances of a general recovery in economic activity are now favourable. The climate of confidence among consumers and firms is improving steadily.

In this country?

Yes. We are convinced that it will be stronger and more lasting if the Government's appeal for incomes restraint is heard, as we believe it will be, because this is the path to salvation and nobody else can suggest otherwise.

We now know what the Minister dreams about at night.

Question put.
The Dáil divided: Tá, 67; Níl, 61.

  • Barry, Peter.
  • Barry, Richard.
  • Begley, Michael.
  • Belton, Luke.
  • Belton, Paddy.
  • Bermingham, Joseph.
  • Bruton, John.
  • Burke, Dick.
  • Burke, Joan T.
  • Burke, Liam.
  • Clinton, Mark A.
  • Cluskey, Frank.
  • Collins, Edward.
  • Conlan, John F.
  • Coogan, Fintan.
  • Cooney, Patrick M.
  • Corish, Brendan.
  • Cosgrave, Liam.
  • Costello, Declan.
  • Coughlan, Stephen.
  • Crotty, Kieran.
  • Cruise-O'Brien, Conor.
  • Desmond, Barry.
  • Desmond, Eileen.
  • Dockrell, Henry P.
  • Dockrell, Maurice.
  • Donegan, Patrick S.
  • Donnellan, John.
  • Enright, Thomas.
  • Esmonde, John G.
  • Finn, Martin.
  • FitzGerald, Garret.
  • Fitzpatrick, Tom (Cavan).
  • Flanagan, Oliver J.
  • Gilhawley, Eugene.
  • Governey, Desmond.
  • Griffin, Brendan.
  • Harte, Patrick D.
  • Hegarty, Patrick.
  • Hogan O'Higgins, Brigid.
  • Jones, Denis F.
  • Keating, Justin.
  • Kelly, John.
  • Kenny, Enda.
  • Kyne, Thomas A.
  • L'Estrange, Gerald.
  • Lynch, Gerard.
  • McLaughlin, Joseph.
  • McMahon, Larry.
  • Malone, Patrick.
  • Murphy, Michael P.
  • O'Brien, Fergus.
  • O'Connell, John.
  • O'Donnell, Tom.
  • O'Leary, Michael.
  • O'Sullivan, John L.
  • Pattison, Seamus.
  • Reynolds, Patrick J.
  • Ryan, John J.
  • Ryan, Richie.
  • Spring, Dan.
  • Staunton, Myles.
  • Taylor, Frank.
  • Timmins, Godfrey.
  • Toal, Brendan.
  • Tully, James.
  • White, James.

Níl

  • Allen, Lorcan.
  • Andrews, David.
  • Blaney, Neil T.
  • Brady, Philip A.
  • Brennan, Joseph.
  • Breslin, Cormac.
  • Briscoe, Ben.
  • Brosnan, Seán.
  • Browne, Seán.
  • Burke, Raphael P.
  • Callanan, John.
  • Calleary, Seán.
  • Carter, Frank.
  • Colley, George.
  • Collins, Gerard.
  • Connolly, Gerard.
  • Gibbons, Hugh.
  • Gogan, Richard P.
  • Haughey, Charles.
  • Healy, Augustine A.
  • Hussey, Thomas.
  • Kenneally, William.
  • Kitt, Michael P.
  • Lalor, Patrick J.
  • Leonard, James.
  • Loughnane, William.
  • Lynch, Celia.
  • Lynch, Jack.
  • McEllistrim, Thomas.
  • MacSharry, Ray.
  • Meaney, Tom.
  • Crinion, Brendan.
  • Cronin, Jerry.
  • Crowley, Flor.
  • Daly, Brendan.
  • Davern, Noel.
  • de Valera, Vivion.
  • Dowling, Joe.
  • Fahey, Jackie.
  • Farrell, Joseph.
  • Faulkner, Pádraig.
  • Fitzgerald, Gene.
  • Fitzpatrick, Tom (Dublin Central).
  • Flanagan, Seán.
  • French, Seán.
  • Gallagher, Denis.
  • Geoghegan-Quinn, Máire.
  • Molloy, Robert.
  • Moore, Seán.
  • Murphy, Ciarán.
  • Noonan, Michael.
  • O'Connor, Timothy.
  • O'Kennedy, Michael.
  • O'Leary, John.
  • O'Malley, Desmond.
  • Power, Patrick.
  • Smith, Patrick.
  • Timmons, Eugene.
  • Tunney, Jim.
  • Walsh, Seán.
  • Wyse, Pearse.
Tellers: Tá, Deputies Kelly and B. Desmond; Níl, Deputies Lalor and Healy.
Question declared carried.
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