In considering this measure one must be aware that the Finance Bill and the budget are imperfect annual mechanisms for economic recovery and growth. Nevertheless, in this debate we have seen highlighted two basic problems facing the Government, and I think these reside at the core of the expansion of a modern mixed economy such as ours. The first is how to regain some measure of full employment without further accelerating our rate of inflation. The second problem is how to manage the economy in an open and egalitarian manner without excessively increasing wages and prices and the general level of taxation.
I am not sure that the Finance Bill attempted to deal with these two problems, and there is a paucity of constructive comment from the Fianna Fáil Party on how these two basic economic problems should be dealt with. We must acknowledge that any employment prospects well be dependent on progressive economic policies being fully implemented by the Government. If we are to have any hope of not having in excess of 100,000 people unemployed again next year, we need a major surge forward similar to that generated in the sixties by the late Seán Lemass and the former secretary of the Department of Finance, Mr. Whitaker. We need a major development in productive capital formation, because without this there is no hope of recovery.
I remember in the fifties when I first started work the question at issue was whether the Irish as a race would survive, there were so many emigrating at the time. That is not an issue today. Because of the growth in the economy due to the commencement of major industrial development in the sixties, we are not faced with that appalling situation. But we are faced with a very critical, continuing unemployment situation, and the question is, does the Finance Bill in any way mitigate that degree of unemployment?
I hold the view that within the Department of Finance and within our major representative bodies, both employers' organisations and trade union organisations and at general industrial level, particularly in bodies like the CII, the IMI and so on, there has been an improvement in expertise in economic management. There has certainly been an improvement in entrepreneurial skills, and I would hope that political abilities to manage a mixed economy would also have grown in that period. I frankly have my doubts that the political judgement of the Oireachtas in the seventies has shown much maturity in handling the complexities of a mixed economy.
Listening to the Second Stage debate on this Bill did not give much hope that what one would call the political input of the political parties has been of major consequence. If we are to make any serious impact on such startling data as that produced by the NESC, when they indicated we have to have a net increase of about 30,000 jobs annually in order to absorb new entrants to the work force to make up for redundancy in agriculture, I wonder if this Finance Bill or the views of the Opposition in relation to it are likely to make any impact at all.
I get very cynical when I see both the Opposition and some other politicians screaming about the Walsh Report. One would not have imagined that it was available right through 1975. It was only when somebody suddenly discovered that Brendan Walsh and a few more academics had done these projections that they were suddenly dragged out of somebody's drawer somewhere and somebody began to read them, but they were available for at least 15 to 18 months prior to that recent spate of publicity which they received. However, politicians are wont to find things out 15 or 18 months later, just as, for example, in relation to the Finance Bill perhaps the most serious criticism was that it was deflationary at the time when one should have been attempting to hold course. Therefore the question is does this Finance Bill aid economic recovery and to what extent could it be regarded as a contribution towards economic and social planning? That is the question that we have to attempt to answer in any assessment of the Bill itself. It is very easy to put on an ideological hat and to say, "Well, of course, the Bill is not a contribution towards effective economic planning." It is quite a different exercise trying to spell out in detail what other mechanisms one would favour in practice. That is the difficulty.
I make a plea, and here I share the view of the managing director of the IDA when he spoke at the Statistical and Social Enquiry Society of Ireland symposium last November, and I quote him:
I make a plea therefore that we do not waste time seeking simplistic solutions.
He correctly pointed out that the environment for industry today is far more complex than it was in 1958. The nostalgic harping back of both Deputy Haughey and Deputy Colley for the good old days of Seán Lemass when things were nice and simple, with a little bit of trade protection here and there and you kept an industry floating, is useless. Now with EEC membership, with much closer world economies, with violent fluctuations in monetary policies, with a far more volatile industrial technology, with markets which can come and disappear overnight, with very rapid job losses—and most job losses in this country have been on the import competing side—and with the very substantial cost of new job investment, planning in this climate is extremely complex and formidable. It seems to me, therefore, that there is no simplistic solution.
In view of that, for the Opposition in Dáil Éireann to hope that the Minister for Finance will trot in here once a year with one Finance Bill, or that he will arrive in a few months time with a new economic and social plan produced by the Government is naïve in the extreme. One might say that we all want plans and we all want Finance Bills, provided the other fellow is foolish enough to produce them for us, and no sooner are they produced than we tear these propositions to shreds. Very frequently we have nothing much to contribute ourselves.
I favour planning mechanism. I see some reason why one should support the view—in other matters I do not agree with the gentleman—of one economist, Mr. Desmond Norton, who in his broadsheet—"Problems in Economic Planning and Policy Formation in Ireland, 1958-1974"—suggested that we need a rolling plan of some four years' duration which would take into account unforeseen initial conditions and which would also take into account the accumulation of information over time. I see merit in that. The planning, therefore, in the context of the budget and the Finance Bill, must be an ongoing exercise. It is rather like wishing that there would be a 13th programme for economic expansion produced tomorrow morning with a joint foreword by the Minister for Finance, Deputy Richie Ryan, and by Deputy Colley with a nostalgic epilogue written by Deputy Haughey. That kind of production is not likely to produce one new job in this country. This presumably is the purpose of that exercise.
Therefore, I stress the point that there are no simplistic solutions. I think I am in order in dealing with the planning aspect of the Finance Bill to the extent to which it fits into a planning context. There has been a lot of windy talk about national planning. There is a naïve view, very prevalent among politicians and some business people, very prevalent in Fianna Fáil who keep on demanding that the Government must produce plans and so on, that all the Department of Finance have to do is to produce another paper plan of, say, objective economic projections to 1980 and automatically we will all know where we are going. I remember going through that exercise in the mid-sixties in regard to the First and Second Programmes for Economic Expansion. I remember going through them on the annual review of industry. I remember when I was not in this House and when both Deputy Haughey, and Deputy Colley subsequently, were solemnly hostile to those programmes for economic expansion. They did not believe in it at all. They bitterly resented the old NIEC reports. How dare anybody suggest that Dáil Éireann and the Cabinet were not capable of knowing their own minds? There was great hostility to that performance and the attitude was: "We will produce an annual budget and we will have an annual Finance Bill and we will know exactly where we are going." Some politicians, therefore, suffer from what might be called in the Irish context a simplistic beggary. I think that is the only phrase I can use.
The real life of investments, of employment, of export promotion, and the complex problem of social planning cannot all be encompassed in a 20,000 word document produced by the Department of Finance once every three or four years. My plea is that the entrepreneurial managers in the private and public sectors do their main job, get on with the job of economic recovery and not sit back and wait for the Government to just produce a plan. That is not in any way to defend the almost total absence of economic and social planning in the past five years.
I do not share the view that it will prove to be the total panacea for all ills. There has been an almost complete absence of economic planning and a great underestimation of the gravity of the situation, particularly during the first half of 1975. I hold the view that many of the efforts to curb inflation were not particularly sophisticated and some of them were positively hamfisted. It might even be argued at times that there seems to be an absence of a coherent policy. These criticisms are valid enough but they do not get over the fact that we still have to have, by our own ingenuity in the public and private sector, managers who are creative, inventive and have imagination. Unless such managers have in the export areas a flair for design and a flair for going to other countries to get markets for their products we are in for a very grim time in 1977.
Even now two out of every five jobs here are dependent on our exports. If we lose our competitiveness in the export field—there is not that much indication that as yet we have—the two out of every five jobs in manufacturing industry at present will go down the drain because no foreign importer owes any Irish worker a job. I hope, therefore, that the plea that we get on with the job of economic recovery will ring a bell in somebody's ears. I do not hold the commonly expressed view in some ultra-conservative business sectors that the Irish people have lost the incentive to work. That is simplistic nonsense. Some hold that view because they can no longer avoid paying taxes. There are some who would hold the view that they should not pay taxes at all, like the 120 or more family investment trusts that are now being wound up here. Deputy Colley's heart bleeds for them although they have been avoiding taxation for the past ten or 15 years. They are now caught and my heart does not bleed for them. It is time we all in that context paid our taxes because otherwise the prospects of having any kind of budgetary revenue here will go down the drain.
There are those who simply believe that some economic mandarin in the Department of Finance is just going to produce a plan that we would all work to gaily without question. I describe that as simplistic binary. There are those who maintain that the country has lost any incentive to work and I dismiss that view also. There are those who would take a more realistic view. The reality of our economic set up is that we have a tripod policy of economic future development. We have a strong agricultural base. We have prosperous farmers and we are glad to have them. We have a well off substantially based food industry and both farmers and workers in these agricultural sectors are about twice as well off now as they were 10 years ago. God knows we pour enough taxation money into them to keep them that way.
Yesterday I questioned the Minister for Finance about aid to agriculture and I am sure Deputy Callanan would be interested in the reply I received. In terms of aid in 1965, £54 million was given to agriculture; in 1970 it was £95 million; in 1972, £114 million; in 1974, £156 million and in 1975, £219 million. Revenue from agriculture, Exchequer-wise, was £18.6 million in 1975. Therefore, the net aid was £200 million. The real increase in aid and revenue from agriculture which is staggering over 1965 is about 77 per cent—a phenomenal growth in aid to agriculture. One gets a bit of a pain, and I am sure every industrial worker liable for PAYE gets a bit of a pain, when one reads of the income tax paid by farmers and rates payable in respect of agricultural holdings for 1975. Income tax realised £1.6 million which, in the context of income tax, is peanuts. I can break down that figure. The income from the restriction of allowances where there is an income other than farming profits was £500,000. Farmers with another trade or business paid £1 million in taxation to the Exchequer and farmers whose sole income was farming in 1975 paid £100,000 in taxation.