The Minister for Finance has reduced this House to a latrocinium. I am afraid that it is not only the reductio ad latrocinium of the Minister for Finance in his budgetary financial proposals that we are concerned with now. We have gone one step further; we are co-operating with bandits. I have often heard these words——
Death of a Member. - Finance Bill, 1976: Second Stage (Resumed)
Question again proposed: "That the Bill be now read a Second Time."
Deputy de Valera now on the Finance Bill.
I am on the Finance Bill, a major part of it. I have a very strong dislike of vulgar abuse and of words like "bandits", "robbers" and so on often used by way of vulgar abuse. I had intended in all seriousness to introduce my contribution today by saying that the Minister for Finance had reduced the level of this Assembly to that of a latrocinium like the famous Council of Ephesus, which was referred to by a Pope as a “den of thieves”. By getting us voting in the lobby the Minister has reduced this House to that and in the light of all his filching legislation I think the comment is fair, but I did not think I would have to add “banditry” to the charge.
In all seriousness I say to the Minister now that in this Finance Bill and in all his tax legislation he is getting to the stage where he is taking money from the citizens and giving nothing adequate in return. That is why I say he has reduced this Assembly to a latrocinium because the Minister has a majority behind him, albeit with a shaky tail, which marches into the Lobby and with their feet, if not with their heads, to pass whatever legislation he and his Government produce. This is making a complete farce of this Parliament. Sometime ago we had an effort here to bring in rational legislation, relatively simple legislation capable of being understood. Here is a Bill the provisions of which will do nothing but create more confusion, will make it more difficult for people to understand and will add to the already existing red tape.
What will be the effect of this Bill on the economy generally? I do not propose to go over what was said on the budget or what I said myself before the recess, but the fact is the Minister and his Government in this legislation are taking money but are not providing for the regeneration of that money. They are taking. They are imposing taxes. They are borrowing. They are running deficits and so on. These ultimately result in an impost on the citizen without any provision for the economic activity by which the citizen lives and is enabled to pay for the services the State gives. But it is even worse than that. I know that much of the inflationary pressure is external but there is also a strong internal element in it. Our position is indeed disturbing because as a result of that inflation there is pressure for wage and salary increases. The Minister has become very vocal now telling them what can be borne and what cannot be borne. The fact is the Minister and the Government are largely responsible for the pressures that spark off demands for wage and salary increases.
The Minister's direct and indirect taxation is one of the greatest pressures operating to enhance wage and salary inflation. If a person gets an increase in wages or salary and then finds there is a bigger percentage of tax taken from him what can the Minister expect if he adds to that increased burden on both the employee and the employer imposts for social services? What kind of support can there be for a Government that behaves so extravagantly and so shortsightedly? What kind of support can such a Government expect setting such an example?
This Government have set the headline in the level of spending, in the level of borrowing and in the level of deficits. They have set records in every direction except in that of productive activity. How can they expect an intelligent response from the community? The Minister and his Government have got themselves into this position. As I said before, nobody expects anyone to work miracles but the Government should not have put the country in the position where miracles are needed. Before it is too late the Minister and the Government should get matters under control. I wonder are they competent to do that or is it beyond them? Is it beyond the power of this Government to remedy the situation? Can we expect anything except something worse?
The Minister came in here with his budgets and his capital and fiscal legislation. What is the result? Direct and indirect taxation have increased. On top of that the burden of administration is being increased.
While the people who are supporting the economy by their earnings have lost their employment and while economic activity, which supports the community, has declined, we have to face the fact that more is needed to support those, who through no fault of their own, are unable to support themselves. Can there be any end to that or what is the end of it? As we have already seen in the Minister's budget the end of this is that the Minister gives and he takes back. He mentioned in his budget the benefits he was giving to those who are unable to get employment. Now he is talking about taking it back. What does this mean? It means adding more to red tape, more people involved in unproductive activity and the spiral getting worse and worse.
I am concerned at this proliferation of red tape. It is paralysing to a large extent management and industrial activity. It is not even bringing a commensurate benefit to professional people like accountants and lawyers. It is proliferating a mass of red tape administration which can only be unproductively costly to the community. How many managements are now concerned with following the convolutions of fiscal law and adjusting accordingly? How many accountants are occupied with the interpretation of the multifarious provisions of the Minister's Bills, especially one like this, amendment by reference and all this kind of thing? How many of the State servants are unproductively employed in administering this system which the Minister has now built up to the stage it has built up? Now we hear that more will have to be added for fraud squads. Surely it is time to take stock to see where we are in all this? It has even got to the stage where the State service, which is being built up to cope with those problems, is now being subjected to the impost.
That situation is demoralising and dangerous. In this Finance Bill there are many sweeping provisions which will act unfairly on particular cases where the old exercises of discretion operated fairly. Why has this kind of thing to be done? The Minister has brought so many cases within the ambit of this legislation that there is no option short of multiplying the administrative personnel who have to deal with it. The building up of red tape means in the long run that productive activity is not only stifled but hindered. I should like to draw an analogy. An army has its head and various organs but its main function is to have its fighting troops. All the other services are ancillary and supported, whether they are A branch, Q branch or any other branch. The important thing is to have the fighting troops. The services, important and essential as they are, have to be subordinated. When one applies that analogy to the State one finds that we have all the service troops, the service departments everywhere, the red tape everywhere, and we have not the fighting troops. The fighting troops are the productive element and the productive activity producing units of people who are in productive employment. These are the people who are suffering; these are the people who are diminishing; these are the people who are paying under the Minister and the Government.
Section 1 (c) of the Bill states:
a certificate certifying as provided for in paragraph (a), (b) or (bb) and purporting to be signed by an officer of the Revenue Commissioners may be tendered in evidence without proof and shall be deemed until the contrary is proved to have been signed by an officer of the Revenue Commissioners.
Unless I am mistaken, anybody can sign a document which can purport to be signed by an officer of the Revenue Commissioners and unless they come in and contradict it it is so deemed to be signed. Where is red tape getting us? Where is bureaucracy getting us?
I want to deal with two things I was talking about the last day. I mentioned the onus of proof on people to pay tax on unused cars. This is another bit of bureaucratic convenience. It is too much trouble for the State authorities to find out what happens to cars which cease to be taxed and are used. It is very easy from the Minister's desk to say: "You report that and prove it or else." It is always the poor unfortunate private citizen who is in the dock and the Minister from his lordly bureaucratic height can dictate as he pleases. There have been abuses in relation to untaxed cars and there may be good reason for getting after the owners but it is a little bit cavalier when the Minister starts dealing with matters in that way, making omnibus rules and putting the onus on the unfortunate taxpayer, which means the unfortunate citizen.
The last time we had this debate I spoke about stock relief. Since then I have had the chance of looking at section 31 of the Finance Act, 1975, which is pretty explicit. Let us take that with the Minister's own statement in the budget. In the Official Report, Volume 287, column 656, he said:
It is proposed to provide for the continuation of this relief for a further year to assist companies in the sectors indicated, who may still be experiencing severe liquidity problems because of the impact of inflation.
He is referring to relief. That is what he said in the budget and here is section 31 of the Act passed last year. Anybody would conclude from the Minister's statement in his January budget that the situation would remain as it was at least for one more year, up to April of this year.
In fact, the Minister brings in a very subtle change in subsection (8) of section 26. He is giving the same relief but he is providing for a clawback in a subsequent year. Was the Minister entirely frank with the House? There was no onus on him to say that he was going to continue the relief in the budget; he could have done so in the Act and varied it. He had made it perfectly explicit that it was a year-to-year provision and nobody is faulting him or trying to misrepresent him on that but his less-than-frank statement in the budget was hardly worthy of a Minister because the position is that a number of company accounts have already been published on the assumption that the Minister's statement was unqualified but now anybody who has published accounts and those who have not as yet completed accounts, since the period is up to 5th April—if the accounts were in that period—will have to consider the effect of the clawback on these accounts.
This is indicative of the type of method of operation the Minister finds he must adopt; things are moving too fast for him. I prefer to take, until it is proved to the contrary, the explanation that perhaps the Minister may not have anticipated this at the time of the budget and, if he says so, I shall believe him. But if he says so, it is a very good indication of how the whole situation is dragging the Minister by the tail. Either the Minister made his budget statement with his tongue in his cheek or else information has come to him since and a problem has developed to proportions that he did not then appreciate. I can well see that problems under section 31 of the 1975 Act could have arisen for him and that the decision to include subsection (8) in section 26 of the Bill was reached subsequently. If that should be the case, my charge that the Minister was less than frank would not be fair and I would gladly withdraw it. But then I would substitute the charge that it is a sorry day when in a matter of a few months a Minister for Finance is so chasing the economic situation with which he has to deal that he has to operate like this.
It means that there can be no confidence in the Government or its administration and whatever the reasons or causes the public and particularly managers and those who have to contend with such problems are totally uncertain as to what the Minister will do next. They can be reasonably sure of only one thing— that he will take anything he can get and impose any impost he can impose. Sometimes I wonder if there is any real philosophy behind this. I once thought the Minister was espousing a doctrinaire socialist approach and that perhaps he believed in it. I shall leave our arguments to the bar of history to decide as to whether those who took another view were right in their approaches judging on results of what has been happening. I now begin to wonder whether the Minister is not trying to make the best of a bad job and whether he is not propounding his theory ex post facto in an attempt to justify the actions which he is forced to take.
I have said "the Minister"; I say that impersonally, the Minister in power, but of course the responsibility in all this rests on the Government and I do not seek to turn the matter into a personal reflection on the Minister. The Government are responsible for all of this. What is the philosophy of the Government? In fairness to the Minister it is only right to say, particularly in regard to legislation of this nature that it must be passed by the Government as a whole and they are responsible. What is determining the policy of the Government and what is the policy of the Government?
The people at large are beginning to ask what is the policy of the Government. What they are doing is plain enough, but what is their policy? The Government are composed of elements covering the whole political spectrum and after last Sunday, looking across the House I can say the whole political spectrum. One Deputy sitting on the front bench opposite I would put very much to the right, not the left.
The Deputy's party have a chapter in the history of that crowd. One Fianna Fáil Deputy said he started off that crowd.
I will content myself by saying——
The Deputy should sing quietly about the IRA.
——that, from the Parliamentary Secretary on the right to another Deputy on the left, a pretty wide spectrum is represented.
They would not be there but for the Deputy's party.
What is the Government's policy?
It is a recipe for political success.
We know the Government's actions and their failure to act. We know what has been happening while they have been in office. We have figures for taxation, direct and indirect. We have figures for employment and unemployment. We have economic stagnation. We have all this data.
I find it hard to find in this Finance Bill any policy other than a stop-gap policy of trying to get by and get more money. There is a proliferation of red tape. There is an added burden of administration on the community. There is very little to stimulate the recovery which is needed. Can this country afford to go on like this? I know our neighbours across the water are having their problems and they are creating problems for us. Unfortunately we are not better than they are. In many ways we are worse.
Recently I was able to check prices of certain commodities here and in Britain. The comparison was in their favour, not ours. Our standard of living is dropping. Therefore I ask again: what is the policy of the Government? If the Government have not got at this juncture a definite policy to stimulate economic activity and to bring about a state of affairs where the community can support the demands being made upon it for the purposes of Government and for general social purposes as well as maintaining its standard of living, we will be concerned with something more than merely academic arguments about social questions. We will be concerned with more than discussing in this House the imposition of particular taxes.
It is sobering to reflect that, having rushed through a lot of financial legislation in the course of two years, in this Finance Bill this House has very little influence on the course of affairs fiscal or otherwise. One of the greatest threats to the development and the functioning of true democracy is the impact on the individual and on the productive units of society of the financial policy of this Government. To say more might well be irresponsible but I should like to have it on record that I have said this. Unless we put our house in order and ensure that this Parliament can truly represent the people, and bring about a situation in which the country can prosper as it did in the past, and unless we can carry the burdens placed on the community by this Government through the agency of this House, things may not go as well with our institutions in the future as we would all wish. There is an urgent need to examine the realities of our democracy. I am not harping back to the matter which arose at the end of Question Time when I say that. I am talking about economic and financial affairs. It is the economic and financial troubles which stimulate the other problem in the long run.
In addition, unfortunately, we are bringing our public service under criticism which it does not deserve. Even the Minister deplored this. I have not got the actual words he used. I cannot locate them at the moment. I do not think I am misquoting him when I say that he deplored the reflection on public servants that had been made in relation to some of the matters arising out of his legislation and proposals for legislation. I could not agree more that that should be and it is to be deplored. I would like the Minister to ask himself also why he has to make that statement. Is it not very much the same type of thing as the position he and his Government are in when they appeal for wage restraint, which is most necessary, and an effort to balance our accounts as a community? But, when he makes an appeal and simultaneously unbalances everything, it is time this House took stock of itself as a whole and that the Government considered what was their policy. If they have not a positive policy to offer to the people of this country very soon, then there is one thing only for them to do.
I listened to the second half of Deputy de Valera's speech. After a conventional warning, with all the familiar elements that we were bringing this House into disrepute, that democracy was staggering on the edge of its grave and so on in consequence of our acts, he said that to say more would be irresponsible. I was hoping I would hear a bit more —although I am impatient of long speeches—and that we would have had from Deputy de Valera, if from no other Member of his party, some indication of what precise fault he had to find with the general package represented by the Minister's budget and Finance Bill and how he would have improved it, because that is the only thing in which the public are interested. As I said in the budget debate, when I had to criticise Deputy Lynch's speech, the public are not interested in hearing that the Minister for Finance is taking money out of their pockets. That has been happening as long as there have been Ministers for Finance. They are not interested in hearing, in general terms, that the economy is being mismanaged or that the Government have no policy or plan for making everybody prosperous. What they want to know is—and this is what you or I, Sir, would want to know were we ordinary punters—what would the other crowd do that is any different or better. That is the only thing they want to know. When I hear Deputy de Valera complaining that the public are absolutely uncertain what the Minister will do next—those are his exact words—that no philosophy was visible behind his acts, I have to ask myself was there ever any philosophy behind the acts or omissions of the party levelling these criticisms. Was there ever any principle behind anything they did, except this—and I must say it was a fair substitute for a policy for a long time—that the party is the policy and the policy is the party.
The Parliamentary Secretary is challenging me now.
That is what it was. Once, when challenged about this, Deputy Colley, one of their leading spokesmen, went this far: he said that policy was an on-going thing. I think he said it was an on-going, evolving thing. In other words, he was not to be asked to say what was his plan— that was when he was Minister for Finance—in regard to his remit, as I hear it being called nowadays, at any particular time. He was only willing to say what he proposed to do today, Tuesday, or tomorrow, Wednesday, but no further because the whole situation would evolve and would continue. And the only philosophy which underlay all these words and acts on the part of our predecessors was: the policy is the party and the party is the policy. That did them very well and stood them in extremely good stead for many years.
Now that they are in Opposition with a "think tank" rightly set up—I do not begrudge them the expenditure of public funds on that one bit; I think the Opposition are entitled to be facilitated by the public in this regard —now that they have the best facilities that any Opposition ever had in this regard I would expect to see coming from them something even remotely comparable with the constant stream of policy and discussion documents that the party to which I belong produced on a shoe string between 1965 and the change of Government in 1973. I am still waiting to see a single document that one could call a policy document, let alone hear or read a single speech which showed that Fianna Fáil had the slightest real, inner conception of the economic situation, of the difficulties we are in, of the difficulties to which they themselves, in part, contributed, or of how to go about solving them.
I listened to the set piece, the dingdong debate in this House, almost every word of which on the Opposition side could have been written before this Bill was ever produced or before the budget statement was ever made. I ask myself: how dare they expect the public to take them seriously. Although I have been a few years in politics now I find myself getting angry at the thought that we are faced with the possibility—I do not think it a very strong possibility but it is there and the only possibility—of a Government provided by that party which has not a single constructive thing to say about the economy, the entire burden of whose attack on the budget, and subsequently on the Finance Bill, has been along three lines. They are certainly mutually consistent but totally inconsistent in their behaviour in Opposition in all other respects.
I break down their contributions on this Bill into these three headings. Finally they complain about the Government's excessive expenditure. Secondly, Deputy Colley, Deputy O'Malley, and perhaps other Deputies on the first two days of the debate, complained that the Minister was wrongly falling over himself in placing, as they said, equity and fairness ahead of economic growth. They thought that that was wrong. If indeed he could be positively said to be doing it, they asserted that he was doing so and said it was a wrong priority. Thirdly, there was criticism of individual taxes.
So far as excessive expenditure is concerned, I ask the House and the people, through those who transmit the business of the House to them, have they heard one single suggestion from the Opposition since this debate started, or before it, as to what area of public expenditure they would wish to see curtailed? Deputy Colley met that point himself and he said it was not their business to be making suggestions; we are the boys who are now being paid to think up the plans; it is from us that suggestions are expected. It is true that we are being paid to do it and Deputy Colley is not. I would be sorry to think that of an idealistic man like Deputy Colley but perhaps that explains the very low grade of the comments he and some of his colleagues offered here.
I have looked back over the Order Papers to the beginning of this year's work, to the end of October last. In spite of the bleats from Deputy Brennan here just over an hour ago about the muzzling of the Opposition, that they were not being given a chance to debate this and that, I find that they have been given more time for Private Members' Business than any other Opposition was given in the history of the State, and they were given that time freely by us. We freely adopted the suggestion made by the All-Party Committee, but we could not persuade the Opposition to agree to some important items in the same report to which they were very willing to agree when they were in Government. In other words, the changes made were entirely to their advantage.
Deputy Brennan made the complaints the House heard about how we were not being allowed to have this and that debated. He threatened to put down a motion of censure on the Ceann Comhairle because of the line he was taking about sub judice matters. I hope, when that motion comes up, we will hear the views of Deputy Breslin who, so far as I know, has never opened his mouth since Fianna Fáil took the Chair away from him back in April, 1973. I do not think he has spoken since then; certainly I have never heard him. I hope he will speak up on this occasion and tell us what there was right about his decisions in regard to sub judice matters and wrong about the present Chair's.
Leaving that to one side, in the few moments when the Government have —as the Opposition would like it represented—ungagged them long enough to debate for three hours a week, almost every week, matters which they thought deserving of notice, in the majority of cases the Opposition debated here for three hours and made us rush through the lobbies in support of propositions, all of which would have cost a great deal of money and some of which would have cost astronomical sums of money.
On the 25th and 26th November, 1975, we debated in this House the motion:
That Dáil Éireann notes with concern the placing by Irish Shipping Limited of an order in Japan for two large new ships and calls on the Government to intervene in this matter to ensure continued employment in the shipbuilding and related industries here at a time of exceptional economic distress and heavy unemployment.
That motion was signed by Deputies O'Malley, Jack Lynch and Gene Fitzgerald, three front bench spokesmen and there were four or five back bench Deputies as well. Those Deputies want us to add Irish Shipping to the list of semi-State bodies that lose money year in, year out. Irish Shipping does not lose money. If it is to be turned into a social service, let us say so openly, and it would be turned into a social service were we to bail it out of the loss it would make by merely supporting employment. I have complained frequently about this confusion of roles. Even if my complaints are not justified, even if semi-State bodies ought to have regard, even at the cost of losing money, to the employment content of their acts.
I have to draw the attention of the House to the fact that had the House agreed that motion or had the Government been defeated on it and considered themselves obliged to follow the House's direction, the Minister for Finance would have had to find another £2 million at least. According to the Opposition that would not have raised any problem in the one week left. The following week they produced another motion in which they deplored the decision of the Government to increase postal and telephone charges by up to 40 per cent because. they said, of the serious adverse affects on inflation, unemployment and on commercial and industrial activities and they called on the Government to rescind the decision pending a full examination and recommendation by the National Prices Commission.
We all hate to have to pay more for postage stamps and for telephone services and the only alternative to increasing the rates is for the Minister to subsidise them but that would have cost another few million pounds. In the second week of the last session, on February 10th and 11th, the Opposition tabled a motion which read:
That Dáil Éireann deplores the decision of the Government to deprive a large section of the community of new house grants and demands their immediate restoration.
From the Opposition point of view it will be no problem for the Government to find the money to do this although we have provided much money for housing. Indeed, it is my view that all governments have provided too much money for public housing. While the Opposition were making these demands they kept up their sleeves the criticism of the Minister which they reserved for budget day.
On March 2nd and 3rd we were invited to agree this motion:
That Dáil Éireann deplores the failure of the Government to provide adequate funds in 1976 to enable regional health boards to maintain the health services at their existing levels.
I have heard Deputy Haughey challenging the Minister for Health in regard to cut-backs in menus in county hospitals and so on and I have heard the Minister defend the action of his Department in calling for economy in the health services which not only here but in the other EEC countries and, presumably, in every other country in the world, are galloping in cost as every voluntary health subscriber knows since the premiums in this regard have almost trebled in two years. However, that is not enough for Fianna Fáil. According to them no one should be asked to economise or to cut back.
In the following week Dáil Éireann was asked to deplore the Government's continued failure to provide adequate funds towards the implementation of the Cork Harbour development plan. Harbour development is an intensely expensive form of activity. I do not recall any figures being mentioned while the issue was being debated but it is not an exaggeration to say that the amount involved would have been well into the seven-figures bracket, a matter with which Fianna Fáil have so little difficulty in dealing when there is a motion inviting the Government to spend more. However, that is all forgotten on budget day. On March 30th and 31st there was a motion from them saying that Dáil Éireann:
believing that for social and economic reasons, the Claremorris/ Limerick railway passenger service should not be discontinued, calls on the Government to ensure that the passenger and freight service on this line be improved immediately so as to attract more business.
This line is not being torn up and it is my hope that if conditions improve and there is an increase in population in the west, it may be possible to restore the main passenger service. Having said that, let me inform the House that I have seen that train travelling with only four passengers at a time. That would not concern Fianna Fáil so long as they thought there were a few votes in it for them or that there was the possibility of taking a few votes from the Fine Gael, Deputies concerned who were embarrased by the cutting down on the services. We are not playing the fool here. This is the Dáil and I would expect the Opposition to co-ordinate their approach and to make some sense rather than to condemn the Government for excessive spending while at the same time calling for the subsidisation of this toy railway. I am sorry to have to refer to the line in this way but it is the only way in which one can describe a service that carries only four or five passengers at a time. The part of the country involved is that part from which all my people come. It would be my wish that the train would be packed with passengers but that is not the position. No country anywhere would subsidise this kind of railway except for the reason of not losing a few votes here or there. That is not a consideration that would stop Fianna Fáil from producing a motion of this kind, a motion which is a complete contradiction of their call on budget day to the Minister to economise and cut back on expenditure.
On April 6th and 7th there was a motion on the Order Paper asking Dáil Éireann to deplore those actions of the Government which reduced the competitiveness of the tourist industry and to recommend that subventions necessary to restore competitiveness be provided. The Minister was being asked to provide more incentives. Deputy Gibbons has been here longer than I and he has seen Governments come and go so perhaps he has become too cynical to concern himself with the inconsistency of such an approach but it is something which makes me very angry. I know that the Opposition must say something about the budget and about the Finance Bill but how inconsistent they are when they charge the Minister and the Government with being extravagant and with indulging in excessive expenditure while at the same time hounding the Government week after week to spend more money. If one were to consider all those questions which appear on the Order Papers and which represent grievances that could be solved by the expenditure of money, one would think that the Opposition have nothing left to say because nearly all the grievances they voice—with the exception of comments on questions of ideology which are few and far between—are grievances which the application of enough money would solve. If these questions were taken from the Order Papers we would have a very silent Opposition. That is what I call blowing hot and cold, something in which one is not allowed indulge in law, for example. One will not be listened to in court if one advances too inconsistent arguments. However, it passes for Opposition here and at the church gates but Fianna Fáil can hardly complain if it is pinned and identified as such.
There is a reduction in expenditure by the Government with corresponding easement of the tax burden. One would expect to find from the Opposition, at least when they are in their budget mood, some welcome for this situation but this is not so. In his budget statement the Minister announced a rationalisation, which is a polite word for a tightening, of the dole system as it applies to smallholders. In fairness to Deputy Lynch he referred to this rationalisation as being commendable. This was during his speech on budget day and one must give him credit for his fair mindedness in this regard. Evidently, however, we are not to take that view as being the policy of the Opposition because on the next day, Deputy Haughey who had not heard what his Leader had said or, perhaps, had heard and for that reason decided to adopt a different posture, condemned this rationalisation as being brutal. He expressed horror at the cruelty of the suggestion. We will be forgiven for not taking that kind of Opposition too seriously.
I move now to the second leg on which is based their attack on the Minister's fiscal operations, namely, the supposed doctrinaire preference for equity at the expense of economic growth. I cannot see that "equity" ought to be a dirty word and cannot see that the Minister, or his colleagues or supporters, need to apologise for trying to bring a bit of equity into a system which was full of inequity. I know the House ranks me as a man to the right —very unfairly, I think—but I am all for equity. If that equity is something which means that people who can well afford to pay tax pay it and that, through their contribution, life is made easier for the people who can less well afford to pay it. I am all in favour of that. I call that equity. I do not apologise for it and the people who should be making apologies are those who attack that kind of operation. If it necessitates snoopers, the fault for the snooping is in the people who will not pay their taxes. If it necessitates inspectors trying to make sure that everybody is paying his fair amount the people who are to blame for that are those who will not pay voluntarily.
That is one side of the equity question. There is another side of it which is connected with the question of excessive expenditure. When last year's and the previous year's national pay agreements were being negotiated it was clearly recognised by the media, the public and Members of this House, that part of the general atmosphere in which, or the background against which this pay deal was to be negotiated was an equity in a broader sense. It was going to be the atmosphere or the background of compassion for the people who were less well off and who had been fobbed off with disgracefully low benefits by comparison with neighbouring EEC countries under the last Government. Again—this may come as a surprise to people who think that I am far out on the right—I am proud to work for a Government who removed, or did their best to remove, that reproach from us. The Government have left welfare benefits at a point where one does not have to hang one's head in shame and apologise for their low level or even their non-existence in some categories as one had to do regularly up to 15th March, 1973.
They have not the guts to say so publicly although they whisper it in private to the industrialists and to those who used pay £100 per plate that too much money is being handed out to idlers and drones; they do not say that in public because a lot of their voters would identify themselves immediately with that description. The expenditure for which we are being pilloried includes very heavy expenditure on social welfare objects. That is part of the background which is absolutely indispensable if any kind of a reasonable pay agreement, the kind the Minister wants, is to be negotiated and kept. Deputy Colley carefully avoided dealing with this matter when he spoke before Easter. He said that the Minister by the imposts in the budget had put so many points on the cost-of-living index and had made infinitely more difficult the task of negotiating a national pay agreement. He carefully avoided paying any attention to the fact that the social welfare levels were increased, even in this difficult year, so as to keep pace with or go a bit better than inflation. The improvements in the social welfare limits are indispensable before talk of a national pay agreement.
That again is an example of blowing hot and blowing cold. There is no doubt but that the Minister could have saved many millions of pounds had he left the social welfare levels alone. The saving of those millions might have avoided the imposition of taxes which added points to the cost-of-living index but it is not possible to have it both ways, at least not in Government. Fianna Fáil, in Opposition, can have it both ways and I hope they will long continue to have it both ways from that position but in Government it is not possible to have it both ways.
Ordinary sensible people know it is not possible to have it both ways and one must decide which is the real sine qua non, which is the thing one cannot do without, which is the thing one cannot get away from responsibility for neglecting. Keeping the social welfare levels up was the one and the Minister chose rightly in so far as these two items were in any kind of conflict in his mind, although I do not suppose for a second that they were. I believe the Minister made the right decision. It would have been wrong for the Government to have tried to avoid the imposition of extra tax by economising on social welfare. I hope due note will be taken of that opinion coming from somebody who is supposed not to have too much sympathy for that side of political business.
Part of the second leg of the Opposition's charge, that equity was being maintained at the expense of growth or that equity was being attempted at the expense of growth, was accompanied by a good deal of glowing rhetoric from several Deputies about the "good old days". Deputy O'Malley, and Deputy Burke, spoke about the "good old boom days of the sixties" and of the good times when Deputy Seán Lemass was Taoiseach. We heard of the rising tide that lifted all boats. At column 1086 of the Official Report for 7th April Deputy Colley said:
We believe in the rising tide that lifts all the boats. Of course it would be possible to have equity if everybody was broke. If one wants to achieve equity one must get growth in our economy.
Later Deputy Colley referred to that great phrase of the late Deputy Seán Lemass, "the rising tide that lifts all the boats". Everybody respected and, up to a point, admired the late Deputy Seán Lemass but when I hear about the philosophy and the golden age which is supposed to have been associated with him I am reminded of one of the most famous things he ever said, next to his statement about the rising tide and the boats. He made a statement in Clerys restaurant in 1955 when the country, under a Coalition Government was in the wash of difficulties created for every country immediately before the Suez crisis. It was about 18 months before the election in spring of 1957 which put Deputy Lemass's party back into office and put him, two years later, into the Taoiseach's chair. He made a promise in Clerys ballroom that it was Fianna Fáil's object and aim to provide 100,000 new jobs and God knows how many more factories.
I should like to tell the House about those golden years of the rising tide and the boats. In 1955 there were 186,000 people employed in manufacturing industry, including turf and mining. In 1973, when Fianna Fáil went out of office that figure had advanced to 227,000. In the space of 18 years during which they were in power for all bar 18 months, the figure for manufacturing industry had risen not by 100,000 but by 41,000. In the agricultural sector, which includes, for this purpose, forestry and fishing, in 1955 there were 442,000 people in employment while in 1973, when Deputy Lynch left office, that figure had fallen to 260,000. There was a loss, therefore, in that sector of 182,000 jobs. The gain on the industrial side did not even make a quarter of the deficit on the agricultural side and while the service sector grew very strongly—the bureacracy that Deputy de Valera was foaming at the mouth about half an hour ago—in the sixties, the net result of people working between 1955, which was supposed to be something like a famine year in Fianna Fáil mythology, and 1973, when they left office, was that in the former year there were 1,146,000 people at work in gainful employment and when they left office in 1973 that figure had fallen by nearly 100,000. In 1973 there were only 1,051,000 people at work.
Not only were 100,000 new jobs not created; not only was the flight from the land four times greater than the net increase in industrial employment, but even taking into account the advance in the civil service and the public service generally, the number of extra jobs, through immediately productive jobs on that side, this was the harvest of the golden years—95,000 fewer people at work. The population had increased slightly, but 95,000 fewer people were at work and were therefore being supported by the State. That is the truth about the rising tide and the boats. Deputy Colley says that he believes in the rising tide that lifted all boats. I believe in it too, but when have we had it? Let us have the truth about those years and about the failures of all Governments here.
This country has not come within a mile of realising its economic, human and social potential since independence. A large part of the blame for that must lie on the party who were in power for the greater part of that time. This myth about the rising tide and the boats ought to be exploded once and for all. If anyone wants the figures which I have been quoting to the House I will provide them in a form which will make reference easy.
That is the Fianna Fáil line on equity at the expense of growth and the truth in regard to the amount of growth they provided in a decade of an unprecedented boom, when some of the poorest countries in the world picked themselves up off the floor, and when the developed and rich countries experienced a boom the like of which they had never seen or dreamt of. It was called in those days "government by tail wind". The net investment in serious reflection about where we were going as a nation or as a society or economy made by the Opposition in those years in Government was absolutely nil. Anything about where we were going in regard to social questions, education, investment of an economic kind, came from the Opposition.
The third leg of the Opposition's attack is, essentially, the unfairness of imposing taxes. They do not seem to accept that you have to tax in order to spend. They want more expenditure every week except budget week and the week of the Finance Bill. They will not accept that if you spend you either have to borrow or tax, or both, as this Government have had to do at a great rate. Speaker after speaker has complained about the cost of drink and petrol, and how it will frighten all the tourists away. Deputy O'Malley instanced a man who was a stout drinker and who drank five pints a day, and it would now be difficult for him to do this. I believe that a man earning £40, £50 or £60 a week who drinks five pints a day, and has a wife and family to support, is drinking too much. He was drinking too much stout even before the budget, because he was drinking roughly 25 per cent of what he was bringing home.
Whether it is pompous or not to call attention to the very excessive slice of his income that the five-pints-a-day man is consuming at the expense of his wife and children, he was taken as an object of compassion and pity by Deputy O'Malley. He and the tourists are the people we are supposed to weep for. I believe the tourists will not be deterred by the increase in the price of drink. I feel it. Deputies Gibbons and Fitzgerald probably feel it. We were meant to feel it. That is what it means to make sacrifices and tighten your belt and put up with a stationary or slightly receding standard of living in order to get the boat back into the economy and provide the rising tide again. I do not believe that many tourists will be deflected by this. Since the slide in the value of the £ the continental tourist would think it laughable for us to suppose that he would be affected by the increase. To the Swiss, the German or the Dutchman, to name three nationalities strongly represented among our continental tourist trade, Ireland is laughably cheap. The exchange rate has moved very much against the £ but the cost of living in a place like Luxembourg, Strasbourg or Paris or any towns in their hinterland, in Germany, Belgium or Holland is ferocious when you use the ordinary rate of exchange. I am not making the point that we should not complain about our cost of living because I realise that it is not comparable at that level because salaries are also higher. But from the point of view of the tourist it makes Ireland a very attractive proposition and the difference to him between the pre-budget pint and the post-budget pint or between the pre-budget gallon of petrol and the post-budget gallon of petrol is an absolutely marginal one on his holiday costs. I do not accept for a second that it will have any serious effect on the tourist industry here.
Perhaps the House at large does not realise this, but we have an authority on our doorsteps that is bound to keep us right if we can only approach it respectfully enough and get economic advice from it. That authority is the British Treasury and the Chancellor of the British Exchequer. When reading the Official Report I could not help noticing the frequency with which grovellingly respectful references were made by Fianna Fáil speakers to Mr. Healey and his recently produced budget. I regard this as a fantastic performance by the legion of the rearguard, by the soldiers of destiny. Deputy Colley said that "It is interesting to contrast the approach of the British Chancellor with that of the Minister for Finance." This was within 24 hours of his introducing his budget when no one knew whether it would work or not, and still do not know. He went on to say:
Each was in many ways facing the same kind of problem, and whatever one may think of the British Chancellor one cannot but accept the fact that he displayed a great deal more wisdom in his approach to the application of higher taxation than did the Minister for Finance.
Deputy O'Malley made no fewer than four references to Mr. Healey's budget. At column 1099 of the Official Report for 7th April, Deputy O'Malley said that the Bill was put in its proper context and shown up for what it was by what happened in the British House of Commons yesterday. We really are a sad crowd of Paddys when a front bench Opposition spokesman on Industry and Commerce would come into this House and introduce an argument with that sentence. He said that they were the only other country in the EEC in serious economic difficulties. He went on:
Their difficulties are not dissimilar from our own and while the magnitude of them may not be as great, the nature of them is somewhat analogous. There you had a budget introduced by Mr. Denis Healey, Labour Chancellor of the Exchequer in a party where nearly 50 per cent of its parliamentary members voted a very left wing member of the party as leader of the party, and the whole nature of that budget is diametrically opposed to the budget of the Minister for Finance introduced here at the end of January.
We are supposed to fall flat on our faces when the British produce a budget different in its structure from our budget. At column 1100 he went on to say:
In yesterday's Times there is a table in a reply given by Mr. Robert Sheldon, Financial Secretary to the Treasury——
A name to conjure with, a big man that
——showing, for a married man with two children the initial rates converted into £ sterling at which income tax is charged and the maximum chargeable in each of the EEC member States...
He takes from this man's article in the Times a useful lesson for our Government and for our economy.
At column 1145, after Question Time, he is back again. No one took him aside during Question Time and said to him: "For God's sake, will you produce something about Ireland?"
I spoke earlier about the increase in VAT and the main 6.75 per cent rate, on which there was a 47 per cent increase. That contrasts very starkly with what happened in Britain yesterday, where the higher rate of VAT, 25 per cent, much lower than our higher rate, was halved to 12½ per cent. That was not done by the Socialist Chancellor in Britain without good reason. He believed it was necessary to do that in order to stimulate the economy. He believed it was necessary to try to stimulate growth in demand and in the economy generally. He understood that above all other people and institutions, the one which has the greatest duty to try to prevent the further fuelling of inflation is the Government. The British Government made their contribution to try to keep prices down.
At column 1152 he said:
thank goodness Britain seems to have done something major yesterday to solve her problems.
Deputy de Valera—this will perhaps amaze some Members here—said at columns 1356 and 1357, Volume 289, on 8th April, 1976:
Yesterday there was a British budget and, making allowances for the plea of the Taoiseach that we are smaller, the performance of the British shows two things we are not showing.
The British budget was scarcely 24 or 48 hours old. Quite apart from the question whether it might have been in Mr. Healey's mind to make it an election budget, quite apart from the utter difference of the economic history of the two countries and quite apart, above all, from the question of whether this budget would work or not it was uncritically swallowed by the legion of the rearguard. The soldiers of destiny could not fall over each other fast enough to compliment Mr. Healey on his budget.
Now I have a suggestion to make to the legion of the rearguard today. Would they ever take their caps in their hands and go over and ask Mr. Healey to let us back into the UK because then we could have Mr. Healey's budget and not Deputy Ryan's? We would not have to bother with the Coalition here at all, at all. We would have Mr. Healey's budget on our breakfast tables the morning the British had it. We would have all these benefits. We would have all the understanding and the wisdom of himself and Mr. Robert Sheldon. We would be able to read it in our London Times and know that it applied to us and we did not have to deal with an Irish Government which only made things worse, put the economy on the floor and stood on its throat. I could scarcely believe my eyes reading that debate and seeing the line these speakers had taken. The automatic acceptance of everything that happens in Britain is something I am sick of hearing about here when I find Opposition spokesmen bringing it to the length of asking us to suppose that the British Chancellor of the Exchequer, within 24 hours of his making his speech and before the debate was even concluded, has necessarily rung the bell and put the economy back on its feet. It is babyish and, if it were not babyish, it would be shameful because it shows they are still tied intellectually and spiritually in a way this party never was to their masters or those that they think are their masters.
Now that is the size of the Opposition attack on our budget. So far as it was based on alleged excessive expenditure I have tried to show that the Opposition's line is completely inconsistent with their own line here over months and years in other contexts except budgetary ones. So far as it was a complaint about equity and growth, or equity taking precedence over growth, I defend the equity element in the Minister's budget, in all his budgets, and I am proud of it and, so far as growth is concerned, their own performance shows that the tide has not by any means risen here incessantly and steadily during their period of office. It has risen here erratically and gone down erratically and my personal view is that no party has ever succeeded in exploiting the full potential of this country's economy, its people, their brains and the effort they could be led into putting into it.
The Opposition, as we saw again today at Question Time in a question by an Opposition Deputy in regard to unemployment figures, try to get the people to suppose the position is worse by asking how many people have their names registered in employment offices. That figure is, of course, much larger than the live registrar shows and I explained today why. It is because it includes categories which are not in the live registrar and Deputy Daly then said does not that mean the true figure is such and such. Let it be so, but, if it is so, it is not far off the figure, the true figure, under the Opposition when they were in Government as well because the system of classifying categories in employment offices has not changed and in the last year in which I was in Opposition the unemployment figure topped 81,000. It is much worse than that now but, if we were to add to that the categories we are always being invited to add by the Opposition, namely, the school leavers and now the smallholders, then their true unemployment rate in 1972 was about 160,000. Ours of course would be some 20,000 to 25,000 worse than that. It is not a contemptible or a small figure but I cannot see that the thing has suddenly become a problem of a different kind. It has certainly become worse in degree having improved sharply in the first year we were in office. It has become worse in degree. There is no question about that.
At the same time there is a certain mild optimism possible in regard to the economy at the moment. I will list five or six heads which seem to justify a mild but not exaggerated optimism. First of all, the employment figures are not coming down at a fast rate but they are coming down at a distinctly faster rate as compared with this time last year. In the two months between mid-February and mid-April, 1975, only about 1,000 people left the register. In the corresponding period this year the figure is neared 3,000. It is a small thing in a total live register of 115,000 odd but it seems to me to suggest, though not conclusively, better economic activity in this first quarter this year as compared with the first quarter in 1975.
Manufacturing industrial production was up in the last quarter of 1975 by about 4 per cent and that is the first increase shown since the first quarter of 1974, for a period of 21 months. Retail sales increased in the last months for which there are records and the increases around the turn of the year this year for December and January were far larger compared with the previous year. It seems to me very significant that the increased figure for January, 1976, was almost as great as the increased figure for December. The December figure was 24 per cent, well up, perhaps even beyond, the inflation figure, and the figure for January is virtually the same, 23 per cent.
Another indicator which seems to me to offer some kind of a clue as to where we are going was the number of new applications for help, by firms not previously in trouble, to Fóir Teoranta. The number of new firms applying for help in 1971, 1972, 1973 and 1974 were in the sixties and seventies. In 1975 the figure jumped. I am not saying this is the number to which help was given but this is the number that was applied. In 1975 the figure was up to 95. In the first three months of this year the figure is only 15. That seems to be a straw in the wind which with the other straws help to add up to something. That seems to me to suggest a slackening of pace. There are only 15 applications up to the end of March as compared with 95 for the whole of 1975.
Another indicator, about which great play was made in regard to its receding quality, although it turned out to be only Fianna Fáil that was misled, is the number of new car registrations. The number of new car registrations runs like this, 1976 as compared with 1975. In the first three months of 1975 there were 14,295 new registrations and in the first three months of 1976 the number of new registrations was 21,776; that is an increase of just over 50 per cent. In fact, one of the monthly figures, that of February, 1976 is 9,936, very nearly 10,000 new cars, which must be an all time record for car registrations. I was not able to confirm this but I got the impression that there has very rarely been a month in which there were 10,000 new car registrations. We do not have the March figure which, of course, is naturally down after the very big figure of February, although this was included in the 50 per cent increase for the first quarter. This was adverted to by Deputy Colley when he laughed off this increase as being due he thought to a desire to beat the tax. The very same point of view was put forward by Deputy Wilson the following day. Deputy Colley at column 1075 of the Official Report of 7th April and Deputy Wilson at column 1276 the following day said that the rush to buy cars was due to some tax apprehension.
Deputy Colley, although he is the Opposition spokesman on Finance, clearly was not listening very carefully to the Minister who said in his budget statement in January that the VAT rate on cars would not change. In fact, it has marginally come down but it certainly did not go up. Although Deputy Colley said that VAT was the cause of the increased number of cars registered in February, he cannot mean VAT. The only other thing he can mean is road tax. It is true that a large number of car owners, because of the altered road tax system, the system of the multiplier with the horse power, will have more to pay. My car will cost about £15 or £20 more a year. I do not think I can afford to buy a new car. I certainly would not have been panicked into buying one in February if I had no plan to buy one merely to save myself the extra £15 or £20 at the end of the year when it came to tax it. I do not believe the upswing in car sales was due to apprehension about the increased road tax in relation to people who pay their tax after the beginning of March.
We cannot conduct a survey of the state of mind of all those new car buyers but it is, nevertheless, an enormous increase. It is childish to try to explain it as being a rush to beat the increased rate of road tax. If there is that much money around for buying cars merely to save a sum as low as £15 to £20 in my own case, although people with better cars would have to pay an extra £30 or £40, then it seems to me that people have made a very optimistic calculation about the inflation rate. It seems to me that that could be saved. If the inflation rate continues at the same rate this year as last year or even something like it that £15 would be saved by holding on until the end of the year.
I do not believe I have chosen any indicator which is any way eccentric. I have heard them all used on former occasions as indicators of economic activity. They collectively suggest to me an improvement. There are many reasons for my optimism but I want to emphasise that the fact that everybody on all sides is so much in the dark about the future of the economy, where we are going and how fast we can get substantial growth back again, shows how vulnerable this economy, this society and this political organism is.
I want to draw the attention of the House to the kind of task the Government have had to face in these conditions of an extremely vulnerable economy and vulnerability of the other things which depend on the economy, society and the Constitution. The Government are trying, as both the parties which compose it set out to do years before they even agreed to coalesce, to achieve in the space of one term, in the first instance, serious beneficial change at the points at which the economy and society are susceptible to Government control. It may be that we over-estimate the degree to which the economy can be controlled. It may be, as I heard Deputy de Valera say, that there is not an awful lot essentially which a Government can do to control an economy. That certainly is true in a State like this.
We have seen the Government being sneered at as being impotent in regard to a wage agreement. The truth is that in this country we do not do our work by imposing agreements. Once the thing is imposed it is not an agreement. It is no bother to the rulers of Rumania or Cuba, countries I hear being admired by people who never had to live there, it is no bother to the rulers of Communist countries—I know it is rude to say Communist nowadays because the term is too bloodstained and one has to say Socialist—it is no bother to Socialist, authoritarian states to keep down the rate of inflation because the rates of pay and costs are determined by the Government. There is no free bargaining such as there is here. There is no such thing as a strike. If there is, nobody ever hears about it. If we were to do our business that way, of course, the job of any Minister for Finance would be extremely easy but we cannot do our business that way.
The main job of a Government is to develop enough authority of a moral kind, not of a rubber truncheon kind, to bring the people with them in appealing for restraint in regard to pay increases. They cannot achieve that moral stance and nobody would take that moral stance seriously unless they showed themselves willing, so far as their powers extend, to achieve equity, the very thing I heard being attacked by Deputy Colley as being something which should be postponed to growth. If I may use a kind of nautical simile, the Government have turned from calm, easy water, water too deep to see what is going on more than a couple of feet down, into rather rough, tricky seas in an attempt to reach a serious, profitable course which will take us into the next century with the same kind of values we have at the moment. In order to do that injustices which existed have to be minimised and done away with. One cannot go to a society and say: "We want you to make sacrifices; we want you to exercise wage restraint, we want you to do this and that" if you do not show willingness to eliminate injustices on the other hand. There is no doctrinaire socialism or doctrinaire anything else in that. It is just common sense. It is the way the father of a family would behave towards the people in the family. He cannot expect to carry their moral support with him unless he shows himself to be fair and just.
I have to remind the people, because it is very often forgotten, that it is only a little over three years ago when this Government came into power. At that time no farmer was paying income tax on his farm profits. Some of them in those days did not have much in the way of farm profits. The social welfare benefits in the country were a disgrace in comparison with our EEC neighbours. A family crippled by the loss of the breadwinner, through an accident or sudden illness, who had not distributed his property, irrevocably, and remembered to do so five years beforehand, was struck by death duties which frequently meant that they had to sell their house or farm or break it up in order to pay the taxes. There was very heavy unemployment, as I have tried to show, although it was not, for some reason, an issue in the election. I might as well bring in the last Leader of the Conservative Party in Britain because Fianna Fáil will know who I mean.
Mr. Heath said that "the unacceptable face of capitalism is running wild in this country". Deputy Gibbons knows exactly what I mean by that. As certain kinds of people became prosperous here in the 1960s that phenomenon was accompanied by a gross degree of unseemly ostentation which was out of place in a simple Republic like this. It was a thing, which Deputy Gibbons knows very well, brought many people into the Opposition parties if nothing else would have brought them in.
The local rates in cities and in the countryside were being made to carry burdens they should never have been asked to carry and people were being expected to pay for health services, housing and so on based not on their ability to pay or otherwise but on the historical accident that their houses had been valued at a certain figure.
That is a short selection of the kind of things this Government found when they took office in March, 1973. All these things represented injustice. What would have been the position if the Minister for Finance today were appealing for restraint and if the people to whom he was appealing were able to say: "First, let us see the farmers pay some income tax"? What would they have said if he had been appealing across the social welfare figures as they were in 1972, even allowing for the decrease which inflation has meant in the value of money? What would they have said if he made his appeal across the heavy death duties or across the rates system as it had been? Or, if he had shown himself willing to tolerate loopholes or even gaping gaps in the tax system through which anybody who could afford to pay an accountant could escape, what would they have said? They would have said: "Let us see a little fair play; let us see others carry some of the burden." Although the inspector is never very welcome I think the Government and the Minister are absolutely right in taking the line they did take in trying to set these matters right. They are in a far stronger situation to appeal for restraint and patience in the face of a stationary standard of living now than they could possibly ever have been if the Government were still made up by Fianna Fáil. If the changes were made, and which Fianna Fáil said could not be made and were laughable and impossible, had not been made, the task of any Government in appealing for wage restraint or any other type of co-operation by the people in the battle with the economic situation would have been absolutely impossible.
Those are my views on the budget and the Finance Bill. I do not want to be rude or harsh towards the Opposition but I am depressed by the quality of what we have heard from them in this debate and in the budget debate. It is not good enough for a party containing some 12 men who were Ministers only a few years ago, for a party whose back-up services are being rightly supported by us at a cost far greater than they were ever called on to pay for us when we were in Opposition; it is certainly not good enough for a party pretending to offer itself as an alternative Government. The kind of generalised criticism we are getting, that we are spending far too much but at the same time we ought not increase taxes and that we ought not borrow—nobody wants to bother with that kind of criticism. It is not worth anything to us. The simplest, most unsophisticated supporter of Deputy Gibbons does not want to bother with that kind of generalised criticism. He wants to know what is their assessment of the country's situation and how, if they are put into office at the next general election, will they improve on the situation.
The Minister for Finance and the Government have an extremely difficult job and, as I said during the budget debate, I think the Minister deserves the admiration of the House for the way he stands up to the burdens he is asked to carry. Both in regard to this Bill and otherwise I wish him the very best of success.
I am sorry that the effect of the contributions so far made on this side of the House has been depressing for the Parliamentary Secretary because I must confess I found his own contribution having a similar effect on me. All the same it was very interesting. Like many colleagues, I am in the habit of driving late at night and listening to the radio in the car and occasionally to English broadcasts from Radio Moscow. The trend of these broadcasts is the trotting-out of certain selective statistics to demonstrate that the comrades behind the Iron Curtain are getting it better and better all the time. Listening to the Parliamentary Secretary I could not help thinking of Radio Moscow. The reality is that for members of Fianna Fáil at present when working about their business in the constituencies it is becoming something of a difficulty being approached by strangers in the street who speak to them in great alarm and with great concern in the knowledge that the country of which we are all citizens has been reduced to the direst condition of near bankruptcy by the administration of this Government of which the Parliamentary Secretary is a member.
It was typical of his contribution that he should try to say that the existence of almost 120,000 people out of work is not, after all, such a great figure and to go back at great length into the situation that obtained during the premiership of the late Deputy Seán Lemass and to seek in a way that did not become him to denigrate some of the great constructive work carried out under various Governments under the leadership of the late Deputy Seán Lemass. I thought that was unworthy of the Parliamentary Secretary and I confess I was surprised.
Frequently, in the Parliamentary Secretary's contributions inside and outside the House, you get a glimpse of reality. At one stage he said that everybody was in the dark as to where the country was going at present although he is a Parliamentary Secretary in the Government that has been in office for more than three years. I do not purport to quote him verbatim but that is the essence of what he said. But a great many people are growing more and more certain that we are getting deeper and deeper into trouble of a kind that it will take many years of good administration to get out of.
The Parliamentary Secretary recited at great length a great number of Private Members' Motions that had been brought before the House by Fianna Fáil members in the past six months but that list was selective. He said all these things looked for the expenditure of more money—and a great many of them did—but I recall bringing in Private Members' Motions of my own which sought to get the Government to adopt policies which would provide more money. The Parliamentary Secretary did not allude at all to these motions from me and my colleagues who had similar motions.
Being an academic, the Parliamentary Secretary's contribution was conditioned by the environment from which he comes. It was interesting that, not once in his rather long speech did he make any allusion at all, good, bad, or indifferent, to our biggest resources, and the main source from which our economic revival will come. He made no reference of any description to the food producing industry. In his interesting change of face, I would think, with regard to the question of social welfare payments he said he was now proud to be a member of a Government who pay such good social welfare benefits to so many people. This is one of the places where the National Coalition go wrong. They think that the simple arithmetical adding up of the amounts of money paid in social welfare benefits is a true indication of their social concern. In an odd way the reverse is the case. The fewer social welfare benefits have to be paid the better is the performance of the Government. Evidently this point escapes the Parliamentary Secretary and all his colleagues.
We were reducing the need to pay social welfare benefits. On the other hand, this Government have created a situation of which all Deputies in this House are well aware. For a great many people in this country at present it no longer pays to work. Work has become something which is no longer profitable to be in. Quite a large section of the working population would be better paid to become redundant. This is a situation which is being created by the crazy economic policies of the Coalition Government composed of people who have been heavily Marxist on the one side and people who have been Fascists on the other side, all sitting down around the Government table and purporting to cook up some kind of an economic policy.
The reality is that there is no effective Government in the country of any description. That is why my constituents and the constituents of my colleagues to an increasing degree stop us in the street or call to our houses and ask us with the gravest of anxiety to do something quickly to rescue the country from the hands of the National Coalition. We will do that but, in the meantime, the means at our disposal to accomplish this end are rather limited.
It is not my intention, nor do I think it would serve any useful purpose, to recite the long list of unwise and misguided actions taken by the Government in the budget. The worker in my constituency who has to drive a motor car if he is to have a job, and whose taxation has been doubled, and whose petrol has gone up in the last rise to almost £1 a gallon—about 83p a gallon—knows what the Government have done to him. We do not have to tell the employers whose costs have shot up also. Therefore it is not necessary for me to dwell on that.
The reason I came into this debate is that I submitted a motion to the House. It is on the Order Paper and it reads:
That Dáil Éireann deplores the proposal by the Government to tax co-operatives and calls on the Government to withdraw the proposal because of the vital importance of co-operative plants to the national economy.
That is the proposal in section 32. It is indicative of the total unawareness of the Government. It is as if their vision is limited to a small arc of the normal circle of vision and, in the remainder of the circle, they are totally blind. It seems to me that, in dealing with matters which have to do with the food industry, with agriculture, this Government suffer very severely from partial and almost total blindness.
One does not have to be an economist or in any way especially learned to realise that the downslide which the whole economy is in at present will eventually have to be arrested by somebody. It remains to be seen by whom. Whoever it is—I should imagine it will be a Fianna Fáil Government—will have at his disposal certain limited resources. By far the greatest of these will be the food industry; the food production industry to begin with and then the food processing industry. The food processing industry for milk and milk products is almost totally co-operatively owned. In the area of meat processing it is largely co-operatively owned.
It follows that the more rapidly these industries develop and the more sophisticated they become, the more rapidly our economy recovers and the more quickly we get our exports back into the field in increasing volume, and the more rapidly we get more people employed in the industry. It seems absolutely logical to me that this industry should be protected, developed, encouraged and built up. Successive Governments, imperfectly admittedly but with a benign intent at any rate, have seen this industry haltingly at times but finally with great success expand and develop.
I have a few figures which illustrate the type of thing I am talking about. Let us take the turnovers in the dairy sector of the co-operative industry. In 1950 it was £22.8 million. In 1974 it was £407.6. In the meat sector in 1950 it was £3.22 million and in 1974 it was £114 million. The total for all co-operatives in that period is £30.22 million in 1950 as against £743.4 million in 1974.
Coming nearer to the current date we have all noticed the very remarkable concentration on the dairy processing industry in the past decade or so, in groups like Ballyclough, Golden Vale, Mitchelstown, Waterford and Avonmore. They would be the big five in the dairy industry. There are other very estimable industries like Lough Egish, Killeshandra, Kiltoghert, all of which have concentrated their manufacture and invested enormous amounts of money from their shareholders and from borrowing in the building up of huge new, modern processing plants that must inherently have a flexibility of manufacture in order to be able to swing as the market dictates in the manufacture, let us say, of cheddar cheese to dried skim powder or some other more marketable product. This demands fairly severe expenditure on expensive machinery that may at any given time be standing idle because the market dictates some other demand.
Those large concentrations I have mentioned represent a majority of the dairy co-operative enterprise here. It is worth having a look at their indebtedness: Avonmore, £7,330,000, Ballyclough, almost £6 million, Golden Vale, almost £15,500,000, Mitchelstown, £7.805 million, Waterford, £6.651 million. One could quote similar figures for the co-operative meat processing plants which have seen in recent times, largely because of the absence of management on the part of the Government, the almost abandonment of the Irish cattle herd. We have not had disease control in our herd getting on now for a year-and-a-half. There is no attempt on the part of the Minister for Agriculture and Fisheries to do anything whatever about it. We have seen the closing of Clover Meats, Clonmel. We have noticed short timing throughout the meat industry. I am afraid this will continue and worsen, because of the hopeless mismanagement of the cattle herd we have discussed in this House before but which it is no harm to mention again because it is a contributory factor to the economic ills in which we are still wallowing and which will worsen because they are not being corrected.
For instance, last year we slaughtered 600,000 cows from the breeding herd. Continuously we export the best of our calves. I think the official figure would be in the region of 150,000 to 160,000 last year. Their export is continuing, and they are the best of our calves. Of course, these are the calves that ought to have been the material for the meat processing plants over the next couple of years. They will not be there. Consequently, the meat co-operative factories will be in all the more dire trouble. The general manager of Clover Meats, Mr. Michael Collins, in recent times adverted very strongly to this business of the totally uncontrolled sale of calves.
When Fianna Fáil were in office I remember being asked to license the export of calves. I refused point blank, and would do so again. The development of our co-operative meat and dairy processing plants, the building from scratch of the huge new Midleton plant, for instance, by Cork Marts and IMP, and other developments throughout the country give us a meat processing potential comparable to anything in Europe in modernity and potential efficiency. Nevertheless, looking at the industry as a whole, it is only half-developed and the producers and workers are being only half-compensated for the high quality goods they produce, half process and send out in a half-processed condition. I refer, in particular, to half-processed meat going out on hooks. We are subject to certain limitations under EEC regulations, which need to be changed, such as the three kilogramme rule for cut joints of meat.
The co-operative industry itself is well aware of the requirements that need to be fulfilled in the matter of market exploration and product development. It needs to be done immediately and requires heavy investment. Hence it is precisely now that the Coalition Government opt to impose deterrents in the form of taxation on the one golden goose that will lay the most golden eggs. It is an idiot policy and one that could have been arrived at only by a Government in whose ranks there is not a single person from rural Ireland, and that is a fact; there is not a single person from rural Ireland in the National Coalition Government. Evidently there is not a single person who has the remotest idea of the enormous value of this food processing industry to the country. Conditioned by their peculiarly cloistered mentalities, they try to make a virtue of the crushing of the industry that will save the country. Even if the Government succeed in getting this measure through—as I presume they will; unless at the eleventh hour, and under our pressure, they withdraw this iniquitous proposal—Fianna Fáil will repeal it when returned to office because, to do otherwise, would be criminal folly.
As a party, we are well aware of the shortcomings that beset the co-operative food processing industry at present. There is a pressing need for the revision of the legislative base on which the co-operative movement rests. There is a need to increase the thousand pounds investment limit that unnecessarily restrains investment by farmers in their own co-operatives. There is necessity to strengthen the democratic process and the democratic control of co-operatives. It is necessary also to seek and achieve the harmonisation of activities, especially of co-operatives dealing in animal products, as most of them do. What I am speaking about now is the existence, in isolation, of different co-operatives, possibly one dealing in meat products and another dealing with dairy products, in the same area, being served by the same farmers and yet operating in total isolation, taking no interest at all in vital problems such as cattle breeding, milk production, advisory work and general service to members. The party for which I speak are well aware of these shortcomings. We would propose to take counsel with the co-operative movement itself, examine the difficulties under which they labour and put the co-operative food processing industry on a new and better basis.
To break their backs with taxation is not the way to do that because in the long run that policy will be converted into lower prices for the basic producer, the man that the Parliamentary Secretary, Deputy Kelly, is so anxious to tax. Let me remind both he and the Minister that when we were on the Government side of the House I discussed this question with some people from the Press and I said that as a farmer I could see no reason why farmers, no more than anybody else, should be exempt from paying their fair share of taxation. I recall saying on that occasion that I would envisage the payment of income tax by farmers as being just and equitable since everybody else, including the farmers' workers, paid income tax. But I made that declaration in the context of discussing the imposition of rates which, despite what the Parliamentary Secretary says, continue to shoot upwards so that now there is a double taxation on farm production. The Parliamentary Secretary should not try to pretend that Fianna Fáil, because we have such substantial farmer support, would seek for farmers the evasion of their just share of taxation. All we are asking is the avoidance of totally unfair and destructive taxation of the farming community. I consider the proposal to tax the food processing co-operatives to be a destructive and wanton form of taxation and when we are returned to office again we shall repeal it.
It was for the purpose of condemning this measure that I intervened in the debate. To a government in which I had any confidence I would suggest that they take counsel immediately with the IAOS, with the farming organisations and possibly with our-selves—because we, too, have a familiarity with these matters—in order to ensure that our food industry is put on a sound basis immediately. However, I have no such confidence. How could I have when I contemplate the decimation of the cattle herds and of the sheep flocks that have taken place since this Government have come to office and also when I contemplate the abandonment of animal disease control? It is clear that the Government could not care less.
On a former occasion the Parliamentary Secretary to the Taoiseach deplored the necessity that beset the Government to purchase votes with taxpayers' money. He seems to have veered a little from that view but it is obvious that the Government have only one common purpose—to beg, borrow or steal by taxation or otherwise in order, as they see it, to purchase support at the next general election. However, the people are not so naïve as to be misled in this way. More social welfare is being provided at the expense of the dwindling working population and there is increasing borrowing abroad at very high interest rates. This is a negative approach. It is cynical and without shame. Our approach is different. The Parliamentary Secretary invited us to say something constructive, something that would indicate to the Government how we are to extricate ourselves from the state of despondency in which our people find themselves. What I have suggested here today will help. I repeat that Fianna Fáil will not wear this attitude on the part of the Government.
Much of what I wished to say has been said forcefully by Deputy Gibbons. In regard to the Finance Bill as a whole, the Minister made a big mistake. I am not one who criticises for the sake of criticism but it is my contention that the huge amounts of taxation imposed in the budget paved the way to the non-acceptance of the pay pause which we had been told both by the Minister and by the Taoiseach would be absolutely essential to save our economy. Perhaps the Minister panicked and endeavoured to recover too much at once. Had he used a lighter hand, I am convinced that he would have had more co-operation and sympathy in regard to his request for a pay pause.
Let us consider a worker from, say, my part of the country who must travel by car each day to Galway city to work. The increases he must face are considerable when one takes into account the imposition on petrol and so on. Is it not unreasonable to expect that man to accept a reduction in income? I refer to the reduction that would result from the various increased costs. Regarding the proposed national wage agreement, I cannot understand how the Labour Party can claim to have a socialist policy and yet go along with this agreement which gives an extra £10 a week to a person earning £100 per week but gives only £6 to a person on a weekly wage of £30. Where is the socialism in that?
It baffles me that trade unions which are supposed to look after the interests of the working man can agree to an agreement like this. There is every reason why the agreement as proposed should not be accepted. An across-the-board flat rate would have been much more appropriate. I am sorry that there is no Labour Deputy present to comment on what I am saying. I regard this issue as being relevant to the Bill before us to the extent that if taxation had been kept at a lower level, the Minister could have said to the people: "There is a need for restraint but we will give you this advantage; we will try to keep taxation as low as possible."
The Minister's huge increase in taxation prevented all of us from tightening our belts. Workers who have to drive 20 miles to work could not be expected to accept a pay pause. This was not on. The Government are now following the line of least resistance and they are telling the people that they must accept the second best decision, the agreement at present under negotiation. The impact of this agreement, as far as the public sector is concerned, will not be apparent until the budget next January, unless we have a mini-budget later this year. Our country is in a serious position at present and we should all be endeavouring to do something to take us out of the financial mess we are in.
There is little use in anybody saying we would be better off out of the EEC because if we were not a member of the Community we would not be in a position to borrow the money we badly need. However, we are being told how to spend that money. It is most important that we get employment for our young people, even if we must borrow money to do so. I was astonished to hear the Parliamentary Secretary to the Taoiseach disagree with the statement that a lot of our young people were unemployed. I would like to see an arrangement made to borrow money to give some future to our young people. I agree with the recent statement of the Parliamentary Secretary which was to the effect that young people must be occupied or their minds would turn to violence. There is nothing in the Finance Bill to give confidence to our people to invest money and to create employment for our young educated people. I have a bogey about education.
This is not relevant on the Finance Bill.
The situation in regard to our young people leaving school is serious. I may be one of the older generation but I try to keep in touch with the younger generation, those who will be governing our country in a few years' time. Those young people are asking what is being done for them. There is no provision to help them and I do not believe the Government will be allowed to devote any of the money they intend borrowing to relieve their situation either.
Workers are getting fed up with the situation. The cost of the stamp has been increased and they must pay more for petrol and road tax. Their take-home pay packet, even though it looks good, is no use. I should now like to deal with a change in the social welfare code. Improvements in the social welfare system is the only one of the 14-point programme of the National Coalition that has been implemented. Any Government, with the saving from agricultural subsidies, would do the same but, nevertheless, this Government are deserving of credit for the improvements. However, after improving social welfare benefits they decided to assess means on a valuation basis as far as the small farmers are concerned. They have gone from one extreme to another. I have submitted accounts to the Parliamentary Secretary to the Minister for Social Welfare which show that the income from a holding of £30.50 valuation is £985 although the Department reckon that the income in that case is £1,250. The farmer concerned prepared his accounts for the small farm incentive bonus scheme. That shows the injustice of the change.
In my view the Government should have given an incentive to small farmers to work to a plan for productive purposes. If that was done, I would not have had any objection to the changes in the social welfare code. It is simply a case of take all and give nothing back. What annoys me is that when there is a scarcity of money here nobody ever cuts at top; nobody ever declares men at the top redundant. If anybody is to be made redundant, it is the man at the bottom who is left off; plenty of officers but no men.
Health boards are suffering because enough money is not being given to them. Health cards are being withdrawn; the man at the bottom is suffering again. The Western Health Board would need £3 million to staff some of the homes that are ready and to carry on the same services as we provided last year in that region, we are £500,000 short.
We are not dealing with expenditure; we are dealing with taxation.
The Parliamentary Secretary to the Taoiseach went into every aspect of the Government's work. I bow to the ruling of the Chair anytime but on this occasion the Chair is being a bit harsh. I am talking about cuts to health boards and taxation and I do not think that is irrelevant.
The Chair is not excusing itself in regard to the matter but pointing out that we could go over the complete field of expenditures.
I agree but every speaker, from both sides, went over the budget debate. I must point out that it is essential that the lower income group are not victimised all along the line. One of the things that is of vital importance to me and to the people of the west is the repeal of taxation of co-operatives. Twenty-five years ago co-operation was practically unknown in the west. At that time we were shy of the word co-operation because in the older days the co-operatives were not limited liability companies. A lot of people in the west got their fingers burnt in the early days, and it was a dirty word. A lot of dedicated people went around the country, without travelling expenses, and told the farmers that the only way they could survive was to co-operate. The big man can buy big and sell big, but the small man cannot; he is competing against big combines and his only hope of survival is to co-operate. We got co-operation going in the west.
There are the fishery co-operatives which are of vital importance to the fisherman and pig co-operatives. Pigs would have been completely finished in the west during the time of the pig crisis only for the fact that the co-operatives paid more than they could afford for pigs. We started the co-operative creameries in the west and everyone knows that milk is the only solution for a small farmer. The co-operatives in the west are struggling all the time and they can never afford to pay a dividend. Any money that is made is ploughed back into the co-operative. Co-operatives in the west were formed for the purpose of buying and selling agricultural produce and ensuring to the producer that he would get what is essential to agricultural production at the cheapest possible rate. If he does not he cannot survive. He takes his produce on the market to sell it co-operatively to the best advantage. This is the whole idea of co-operation. The co-operative movement plays a very vital part in this country. The small farmers are now co-operating, and the very minute they are beginning to move the Minister proposes to tax the co-operatives. This is going to be a deadly blow to the west. The small co-operatives will go out of business. To tax the co-operatives would be a crime. Where would we be today without our agricultural produce? Co-operatives are the most efficient way we have of getting good production and marketing our produce properly.
I would ask the Minister to meet all those concerned and he will find out that there is not one person representing farming who would say that you should tax agricultural co-operatives or fishery co-operatives. Every organisation that I have anything to do with say that you cannot or should not tax them. That goes for all the rural organisations.
Rural organisations should not be taxed and the elected farmer representatives on committees of agriculture are 100 per cent against taxing co-operatives. I would ask the Minister to bring in a Bill defining a co-operative. It is not fair to tax the small co-operatives which deal solely in agricultural produce. It might be all right to tax a big co-operative which is run as a business venture.
Co-operatives in the west are a community effort. Co-operatives have saved the pig industry in the west in the same way as they have saved the creameries. If the co-operatives had not paid a little more for the bonhams there would be no pigs in the west today. In the same way the co-operatives make machinery available to farmers who could not otherwise buy that machinery. I never thought I would live to see the day when a native Government would tax people for community effort. The policy of the Government should be to help people to help themselves.
The Minister is a very intelligent man. So are all the Government Front Bench but they have no practical experience. I doubt if they are capable of properly assessing the co-operative movement. They have the theory, perhaps, but they have no experience of the practicalities. I appeal to the Minister to reconsider this provision. By way of compromise I suggest he might bring in a Bill defining co-operatives and providing for taxing those large co-operatives run as a business venture. Taxing the small co-operative, the real community effort, is a retrograde step and one the Government may live to regret. If I ever get to that side of this House, I shall insist on the repeal of this legislation. It is altogether wrong.
I believe the Minister panicked and went too far in taxation. Not enough effort is being made by the Government to creat employment. The Parliamentary Secretary to the Minister for Social Welfare is doing a reasonably good job but cushioning people against adversity is not the solution. The solution is the provision of employment because a country cannot go on cushioning people forever. There must be productivity and there will not be productivity unless people are in employment. Employment should be provided for young people.
Deputy Barry Desmond is a trade unionist. I cannot understand why trade unionists were so keen in the national wage agreement to give an increase of £10 to the man with £100 and an increase of only £6 to the man with £30. That is not my idea of socialism. The man with £30 has to pay the same price for his gallon of petrol and for his pint of stout. I have always approved of increases in social welfare. Were it not for the efforts made by Deputy Cluskey, the Parliamentary Secretary, there would be a revolution in this country. There is a general feeling that the Government are not doing enough to provide employment. I see nothing in this Bill which would give one the impression that the Government are doing something to provide employment.
A lot of people might ask what views have I on it. There should be a general research into the replacement of human beings. We should ask ourselves if we should be educating people for clerical jobs which are not there instead of giving them technical education to enable them to obtain factory jobs. The Government should look into this and give some confidence to the young people who need employment.
It does not matter who is in power. I would prefer to be able to say that the country is doing well but it is not. The Minister should know that. It astonished me that the Minister and the Taoiseach said that under no circumstances could they agree to a national pay agreement this year. They said there should be a pay pause but then the Minister came out with the budget which prevented that happening. Now they have to come back and say that what they have agreed to is the second best. The full implication of this will not be felt by the public sector until next January's budget unless the Minister brings in a mini-budget. Nobody on that side of the House could stand up and satisfy me that the country is all right with the amount of debt we have to face and knowing the dictation the Minister got when he looked for a loan on the Continent. I hope that the loan will be spent to generate employment.
There is no confidence among people at the moment, especially the youth, that there is any hope in the country for them. The escape of emigration, which we had in the past, is no longer there. We have to provide employment for our young people. I would like to see an all party committee trying to iron out a solution to provide employment for young people. We find up to 50 people going in to be interviewed for one job. They are scarcely asked a question because the people who are providing the job seem to just pick one person out of a hat.
In the Galway Country Committee of Agriculture four years ago we had one job going and three people applied for it. Today up to 500 people apply for one job. That number has to be screened down to one person. I am honest enough to admit that I have not an answer to this problem but I have ideas which might be rather drastic. I would prefer to give them at a conference around a table.
I believe that this Finance Bill is a very bad one because of the terrible burden it creates for all people. I dealt with the co-operatives, the taxing of which I condemn wholeheartedly. It is too much to expect a workingman, who has to bear extra costs in relation to everything he buys, to do without an increase. We have an agreement where the bottom man gets less than the top man to do the same job. It is the same if John and Jack came to me for a job and I said to John: "I will give you £10" and then I said to Jack: "I will give you £6 because you are a small boy". The higher up the ladder one goes the more money one gets. We are, perhaps, accepting that because the man at the top has a higher standard of living he must get more money. I can never see why, when the price of petrol costs the same and the price of a pint costs the same for both men, the man at the top has to get more than the man at the bottom.
One of the inbuilt ironies of any democracy is that nobody wants to pay for anything. When one looks at the contributions of the Fianna Fáil Party in this debate the point again bears home on one. I get the impression, having listened to the Fianna Fáil Party in this debate, that they vote with the poor; they give promises to the rich and they mutually promise both sides that they will protect one from the other. The result is that they could finish up in Opposition being just about all things to all men on all issues in the hope of getting all the votes. That is not a particularly constructive way to approach the Finance Bill.
We have certain constraints in this country. We cannot have, for example, comprehensive national, so-called free health services simply by charging people £15 a year. No health service can be provided on that basis. We cannot have millions of pounds spent every year on the so-called free, post-primary school transport without somebody having to pay for it. We cannot have a comprehensive, egalitarian social welfare system without people having to pay through social insurance.
Neither can we have massive agricultural subsidies, with due respect to Deputy Callanan, such as giving farmers £40 million a year in rates relief, which we currently give, and at the same time say that not 5p will have to come from agricultural co-operatives in the country. I get sick and tired of hearing politicians of all shapes and sizes and all ideologies and clerics as well, such as for example the bishop recently, who is well-known and does not require much more publicity, who have no hesitation in demanding that the Government should spend millions of pounds on child care and who simultaneously rap, so the newspapers said, the Minister for Finance, because he proposes in the Finance Bill to ask for about the most Mickey Mouse contribution of taxation that was ever devised in a Finance Bill, a very nominal contribution from agricultural co-operatives. We have many people coming on deputations to the political parties screaming blue murder. Some of them are making what I would regard as undemocratic sounding threats against certain Deputies, some of the farmers' spokesmen, who I do not think entirely represent the farming community.
They are not from our general committee.
I agree they are not from the general committees of agriculture but certainly some browbeating spokesmen from the IFA have tried it on. I would like to tell Deputy Callanan that one has to look at this in some simple context. The turnover of agricultural co-operatives in the country at the moment is running at £600 million a year.
How much is owed?
That is the turnover.
What is owed to the banks?
Turnover is what is important in any business.
I can give the Deputy the other figures.
We will get down to it. There are not many poor cattle marts in the country. The Minister for Finance proposes to introduce a system whereby in theory they would be liable to pay £3 million in taxation out of a total of £600,000,000 in turnover.
Banks' money. We are working for the banks.
We will come to that. There is such a thing as offsetting one's indebtness against one's profits. Not only that, but the Minister will not even see £3 million. From what I can gather, he proposes to give out of the £3 million—probably on a phased basis—£2 million in relief so that, in effect, he is asking at long last, and I totally agree with him as a social democrat and as a member of the Labour Party for a contribution from the co-operatives. My father was a founder member of the City of Cork Co-operative Society with the late Deputy James Hickey and we have a proud tradition of involvement in the co-operative movement. We simply ask that in 1977-78 the agricultural co-operative side would contribute to the Exchequer something like. 06 per cent of turnover. I must pose the question: if the co-operative movement is—to use a phrase somebody used—to go totally out of business by having to make a contribution of that miniscule size it must be in a terrible financial situation and one would call into question its effectiveness and business efficiency.
Somebody must pay for something. We cannot have a situation where farmers do not want to pay anything; industrial workers do not want to pay anything and professional people do not want to pay anything. Nobody wants to pay anything but meanwhile demands on the Exchequer are such that no budget could possibly bear them. This may sound desperately conservative but it is a fact and I would suggest to some—what I might call clerical supporters—of those who are opposed to payment of taxation by farming co-operatives or, more properly, agricultural co-operatives, that they cannot on one hand demand all kinds of special subsidies and payments from Deputy Clinton, Minister for Agriculture and Fisheries—a damn good Minister—and at the same time attack us for attempting in a very small way to equalise the taxes which industrial co-operatives are currently obliged to pay with agricultural co-operatives. They are being brought in on a phased basis and this is entirely proper.
I do not believe that there is any special magic about a co-operative. For example I have always questioned, as one with an abiding interest in the co-operative movement, whether some of our so-called co-operatives are really co-operatives at all. In some respects I think they prostitute the word "co-operative". I hold that view strongly and here I share the stricture of Deputy Callanan: there should be a definition of what constitutes a co-operative. Some people have set up cattle marts and various undertakings and enterprises masquerading in the guise of co-operatives and there is as much co-operation in them as there was in the days of the most rapacious landlords. Let us keep this matter in perspective. This is not an attack on the co-operative movement. I am completely in favour of a dynamic co-operative movement with real participation working in a rural community. I can see great benefit and great prosperity for the food processing industry emerging from it, but I have a jaundiced view of some of the special pleading by some Deputies here. I do not believe that the carefully thought-out recommendation of the Revenue Commissioners and the equally carefully thought-out viewpoint strongly held over the past 15 years of successive commissions on income taxation who recommended that co-operatives be brought in should be ignored. Bodies such as the old National Industrial and Economic Council and the present NESC all recommend that this anomaly should be abolished. Fianna Fáil vote with the poor in public and privately give assurances to the rich and promise both sides that they will keep far apart from each other. That is the sort of special pleading we hear.
What about the £10 fixed in the national wage agreement?
I congratulate both the trade unions and the employers' organisations on having very successfully negotiated a national wage agreement. It would be improper for me to elaborate except to say, despite Deputy Callanan's comment, that the whole structure—which I am surprised he has raised—undoubtedly benefits relatively in percentage terms the lower paid workers, as is well known. Those of us in the £5,000 bracket may yet be able to twist the Minister's arm and get perhaps £10 a week out of him—if there is any money left at the end of 1976: as salaried public service employees we might be seeking it ourselves. The worker at the lower end of the scale will be getting in the region of 20 per cent or 24 per cent of an increase and the gap is being narrowed. In no national wage agreement can one possibly eliminate the inequalities of job differentials.
They have to meet the same increase in the cost of living.
I accept that, but the essential purpose of a national wage agreement and one of its great by-products is that lower paid workers are being brought up and those relatively better off have not received the same relative increases. That is where there is great merit in the national wage agreement. Therefore I support the agreement and I speak not as a Member of the House interfering in union affairs but as a member of my own union I intend to vote in favour of the draft national wage agreement. I have no hesitation in saying so publicly. Frankly, I was surprised—I was not very optimistic—that the parties, exercising great responsibility, succeeded in bringing about a rational agreement.
Debate adjourned.