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Dáil Éireann debate -
Wednesday, 28 Apr 1976

Vol. 290 No. 2

Finance Bill, 1976: Second Stage (Resumed).

Question again proposed: "That the Bill be now read a Second Time."

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.

This is genuine proof that the majority of small farmers are not able to pay. They are not taxable.

The cost of putting the Finance Bill through this House, in terms of time in debate, printing and circulating it to farmers, I would say was a nett loss to the Exchequer. It brought in £100,000 from farmers whose sole income was from farming. It probably lost about £100,000.

We said that.

Interruptions must cease.

Why should we not have an £80 valuation in terms of income taxation for farmers? Why should we not have a £50 valuation?

Why should we have a valuation at all?

Why should farmers' income not be liable for income tax?

I accept that.

If the Deputy heard what was said in this House by Deputy Colley and others and the promises made by the Deputy's party at IFA meetings around the country that they would abolish income tax for the farmers, the Deputy would not support the view that I put forward, that is, that one can have a farm of £80 or £50 valuation and can make a good living from it. You can have a farm of £100 valuation which can make a loss for one reason or another. Therefore, the valuation system is crazy.

It is wrong.

I agree but any effort by the Government to introduce a rational system of income taxation for farmers has been thwarted. With all due respect to Deputy Callanan, the Fianna Fáil capacity at the moment is to vote for the poor, give promises behind closed doors to the rich about what they will do after the next general election and then to assure both that they will protect one another.

I deny that.

I will leave it at that. We have a strong agricultural base which is now growing and I hold that we have a strong private sector in this country.

I would like to ask a question.

Deputy Desmond is in possession and he must be allowed to make his contribution without interruption.

We have a strong industrial and services sector which, even in recession, has done remarkably well in relation to exports but which has suffered quite heavy unemployment in the domestic importing sector. That sector contributes to the economy due to the fact that two of every five industrial workers in this country are engaged in exports. We have a very substantial and efficient construction sector in this country. A lot of speculative fat has gone from the construction industry. Fly-by-night merchants are no longer making a £1,000 on a private house. The major and efficient construction firms have remained in this sector. We also have State-sponsored bodies which are fairly efficient and reasonably well managed. Some of them in terms of their management structure seem akin to private enterprise and some might not necessarily be called, to any great degree, State-sponsored bodies. Nonetheless, they are pretty efficient and well managed.

These four sectors employ tens of thousands of Irish men and women. They are the basic productive wealth of the nation. I have no doubt that these sectors will contribute towards economic recovery in this country. It is the job of politicians to provide democratic institutions of the State to enable these sectors to develop in confidence. Our financial institutions must provide them with short term liquidity and investment. It is important to note that despite the gloom of Fianna Fáil our external reserves are quite healthy. Our level of domestic savings is quite substantial. As a result of this we were never better poised for economic recovery. Farm prices were very good in 1975 and with many other sectors receiving a 30 per cent wage increase in 1975 I hold the view that it is not a surprise that the level of domestic savings should not have gone up to such a substantial degree but it is good.

The civil service must work to provide flexible administration to protect the public interest as determined by the Houses of the Oireachtas. Within the public sector and the public service, the civil service in particular, there is enormous goodwill and a high degree of dedication, ready to make a contribution towards economic recovery. It is the job of politicians, particularly those in charge of the various Government Departments, to harness that goodwill, to give it a sense of purpose, to lay out clear strategies in each Government Department, so that the public service will know what is expected of it and will have a respect for the political heads of those Government Departments.

Our trade union movement has special responsibility at all levels towards economic recovery. The Irish Congress of Trade Unions and the employment organisations of this country deserve tremendous support. They have overcome a number of obstacles that have been placed in their way— not least by the Finance Bill—and produced a national wage agreement. I would advise some of my colleagues in veiled terms that between now and the ratification of that agreement by the parties concerned they would be well advised to stay quiet. While I know it is a political function of the heads of any Department, particularly the Department of Finance, to manage the economy in the context of the Finance Bill, I believe that there are occasions when silence could make a major contribution to enabling the parties to reach agreement and I would make that plea.

Lest anyone should think that I am anti economic and social planning let me say that what we need is a flexible form of consultative review structure for our key economic and social sectors. In such a structure the major representative bodies would have to have an adequate opportunity of alerting one another to individual problems and anticipated needs. A structure of that kind would be more beneficial than simply the opening of another office block in Merrion Square staffed by principal officers and assistant secretaries and which would be called a national planning commission office. I have reservations about that kind of structure. As an integral part of their evolutions of economic strategy the Government should promote a more flexible, more positive and, perhaps, an enlarged role for the National Economic and Social Council. We should concentrate on developing existing institutions rather than setting up more institutions. Already we have enough self-appointed institutions without the politicians adding further structures unnecessarily.

The NESC should develop as a common meeting ground as between their members and the Government. The previous Administration was totally remiss in this regard. There is no evidence that Fianna Fáil had such a structure within their Cabinet.

There is less evidence now of any such structure.

I am not sure that there is one now but the point I am making is that there is need for an economic and social committee within the Cabinet structure and that there should be direct discussions between that Cabinet sub-committee and the members of the NESC. The work of the Cabinet sub-committees would be to commence internal reports and then proceed to discuss them with the major representative bodies. This is what gives flesh and blood to what we call planning. It is a much more flexible and more effective approach than simply setting up a grandiose bureaucratic office, placing gilt letters on the door and calling the office a national planning commission. I do not wish to see our public service economists hived off into that sort of service because ultimately it would lead to the same kind of situation we had when the old NIEC reports were presented. Deputy Haughey did not want to hear about them. Deputy Colley became very frustrated about the whole matter because, as Minister for Finance, he thought someone was impinging on his prerogatives, that somebody from outside was giving him advice. Too many reports were appearing so the whole thing became too much for the then Minister. There must be an inter-meshing between the Government and the NESC. In recent times we have seen the National Employer-Labour Conference assume the role of government for a while in relation to the planned development of income levels during the next 15 months.

Is the Deputy objecting to that situation?

Yes. I should have thought that the role of the Oireachtas would not necessarily conflict with the role of representative bodies and that there should be a high degree of consultation on that basis. Irrespective of the acceptance or otherwise of the current pay package I, as a trade unionist, intend voting in favour of it in my union. The NELC have assumed a major economic and social role in our economy. Therefore, any consultative planning structure must encompass that body.

I emphasise again that, rather than create new institutions, we should concentrate on developing existing ones. An example of what I have in mind was the development in the Department of Social Welfare of a programme of reform. This programme was initiated by the Parliamentary Secretary with the full co-operation of the departmental staff. Another development of an existing institution was the responsibility given by the Minister for Industry and Commerce to officers in his Department for the formation of a policy on the advancement of our oil, gas and mineral development. There are some fine officers in the section concerned. They know where they are going. They have a sense of purpose and do not need any new monolith in order to get on with the job. It is regrettable that Fianna Fáil Ministers were not so constructive while in Government. Indeed, the reverse was in evidence.

Would the Deputy like to elaborate?

It is arguable whether the annual budget, particularly the capital budget, is the most effective short-term mechanism for economic policy. The Finance Bill can be of no use if the policy of the Government of the day oscillates widely and bends exclusively to the pressures of different lobby groups or to the interests of political expediency in the months preceding each budget. However, where a Government have evolved a definite line of economic and budgetary policy for their span in office the annual budget is an admirable means of implementing that policy. A capital budget with a perspective of up to five years would be of major benefit. As a member of a local authority I know how frustrating it is to be dependent on the often wild fluctuations in capital allocations for housing, roads, sanitary services and so on, sometimes on the basis of a six-month period. One must have a coherent policy in regard to forward planning and capital allocations. Otherewise it has a corrosive effect on local authority planning and on employment. It is also extremely wasteful.

As a social democrat and a socialist I am in favour of strong purposeful economic and social planning. That does not necessarily mean I would throw out the baby with the bath water in terms of the role of the annual budget. It is regrettable that Ministers for Finance in recent years —and here I would include all three: Deputy Haughey, Deputy Colley and to an extent Deputy Ryan as well— have worked on a six monthly basis. There are enormous pressures on them. Every Minister for Finance deserves our sympathy. The enormous pressures on them mean that long-term economic management perspectives on the economy go out the door. They work on a six monthly basis and this is disastrous in terms of managing the economy. It is a matter of real concern that whereas there were no Cabinet sub-committees in the days of Fianna Fáil except for a short period when I gather they had a Cabinet sub-committee on Northern Ireland——

The famous one.

I gather a few Cabinet sub-committees were set up by the Coalition Government. I am not privy to what happens at Cabinet level but I gather there has been a sub-committee on third level education.

Another famous one.

I gather there is one on security and one has been publicly announced at sub-governmental study level. I am not so sure there is an economic and planning sub-committee as such. If our politicians at Government and Opposition level are incapable of planning ahead for two or three years, what hope has national planning? There is a very sensible argument that what a Government decide to do in the first 12 months determines what will be done politically for the next three or four years. That is very true. Any decisions of any consequence which have ever been taken in this country at political level have been taken in the first 12 months after the Government took office. They spend the next 12 months explaining why they did certain things in the first 12 months, and the last 12 months in office explaining why they should be re-elected.

So we are in that phase now, are we?

Deputy Desmond made a slight mistake. There are two more years to go.

Deputy Desmond is being more honest.

I have a terrible sense of fatalism because the average life of a Dáil is only 3¼ years.

We are a month away from a general election.

One of the major difficulties in the current situation is the re-emergence of the pragmatic Fianna Fáil economico-politicos, if I may use that phrase. They are the vintage twins, Deputy Haughey and Deputy Colley. Added to that is the utter conservatism of Deputy de Valera who makes very genuine contributions, but mistaken ones at times. We have the constructive contributions of Deputies like Deputy Fitzpatrick and the nostalgia of Deputy Brennan for the sixties when life was not very complicated.

We are now having an analysis of the Fianna Fáil Party.

I do not know how Fianna Fáil survived during that period. The difference between Fianna Fáil and the Coalition is that Fianna Fáil had the good sense to let the civil servants run the country while they acted as the Government and we have tried to run the country and be the Government at the same time.

And made a mess of both. The Deputy is getting tied up.

It is a very interesting thought. Looking back over the Dáil debates proves that the Fianna Fáil Party's preoccupation was power and Government and not so much the management of the country or dealing with departmental affairs, and so on. They were the Government. They were in power and they let the civil servants run the country. We have tried to do the two jobs and I am not quite sure we have succeeded. We have to be serious about economic planning. I have no doubt that in the mid-sixties Deputy Lynch, Deputy Blaney and Deputy Boland regarded the First and Second Programmes for Economic Expansion as purely public relations exercises. If we regard the next economic programme or the next economic plan——

What happened to the third and fourth programmes?

Unfortunately the third one collapsed. It was abandoned and there was not a Fianna Fáil mourner in sight.

Where is the Coalition programme? I have not seen a current one.

The only man who turned up for the funeral of the third economic programme was the present Minister for Foreign Affairs, Deputy Garret FitzGerald. I think Ruaidhrí Roberts sent a telegram of regret from Congress. Congress were never particularly in favour of that kind of indicative programming. They were in favour of a more full-blooded version.

In this context we must consider the proposals of my colleague, Senator Halligan. I gather we cannot refer to the Seanad but he made a public contribution about the need for a much greater rate of job creation. I am not entirely in favour of the setting up of a national planning commission. I do not think enough work has been done on the creation of a national pensions insurance fund as yet for us as politicians really to understand what we are talking about. A great deal of work is being done by the Parliamentary Secretary to the Minister for Social Welfare, Deputy Cluskey, on the question of a national occupational injuries fund and a national pensions fund. I should like to see the results of that work before making up my mind about it. There is a proposal that a State development corporation should be set up. I am not entirely in favour of it. We should have a State holding corporation because the State now has a very substantial amount of shares in private companies. I know I am precluded from mentioning private companies but I see merit in the concept of a State holding company holding substantial State investment in the private sector. I gather the Minister for Industry and Commerce may favour that concept.

He has been converted to that principle.

The State holds substantial shares in such well-known companies as Asahi, Cement Road-stone, Tara, and so on. A very substantial slice of the taxpayers' money is invested by the IDA, Fóir Teoranta, ICI, ICC and Irish Life in the public sector. They need to be monitored on a regular basis in aggregate by the State to ensure co-ordination of investment and policy.

It is patently impossible for the Department of Finance and the Department of Industry and Commerce to undertake the complex task of accountability on a regular basis for the very large State investment in the private sector. The IDA have major equity share holdings in seven major Irish industries. Therefore, there is logic in the concept of what I would call a State investment holding company which would be rather different from a State development corporation. I do not think much flesh has been put on the latter concept. I understand the Government favour such a proposal. It would be extremely interesting to hear the views of the other economic members of the Cabinet, particularly the Minister for Finance, on such a proposition.

I might deal also with the proposal of Senator Halligan that the State should hold a segment of the commercial banking structure. Frankly, I would prefer to turn the horse around in another direction. Rather than the Oireachtas trying out any type of unconstitutional expropriation—which I do not think is on in terms of an infusion into the commercial banking system—I would pick a different horse to back. Rather should the Oireachtas expand the Central Bank's statues to enable the bank, where appropriate in the national interest, to underwrite such developments and, for example, the State's industrial, commercial ventures in say, oil, gas and mineral development. The Central Bank should be entitled to be involved in that role. It should not be left exclusively to our commercial banks. This would be to our benefit. Of course, it would constitute a radical policy change.

In our planning and in the strictures we have made of late we have failed to acknowledge the pivotal role of the Industrial Development Authority in job creation. Any national planning mechanism, even on a consultative basis, which fails to take into account the role of the IDA will simply flop. Too many commentators and politicians gloss over the fact that the scale of industrial development by the IDA since 1970 exceeded that of the entire preceding lifespan of the IDA since their inception by the second Coalition in 1950. More work was done by the IDA in terms of actual industrial investment since 1970 than in the whole of the 20 years from 1950 to 1970. Between 1970 and 1975 the IDA approved industrial proposals from home and overseas sources, with a potential of 95,000 jobs at full production, compared with 68,000 in the preceding 20 years. One must bear that tremendous contribution in mind.

I have been rather critical of some comments made about, say, a national planning commission, a national pensions insurance fund and so on; I have not been entirely enamoured of some of those concepts. One of the points made was that our State-sponsored bodies be given a more active commercial role. I would go along with that. There is a need to give the manufacturing and marketing State-sponsored bodies a full opportunity to engage in direct competition. They should be given a competitive role and allowed enter into joint ventures with the private sector. The State should give State-sponsored bodies every encouragement in that direction. They should be allowed to engage in viable, commercial, competitive operations. I do not hold the very traditional view, which is very much a Fianna Fáil one, that there must be a sharp division between the public sector—which is purely for servicing the private sector—and the private sector, which must be allowed to get all the cream. In a mixed economy the State must achieve a fair balance between the private and public sectors. If we are to achieve any real economic recovery our State-sponsored bodies must be given an opportunity to engage in direct, competitive undertakings. I would support any proposal made in that direction.

There has been a great deal of very unfair public comment by some business people about the lack of State understanding and support for their business. As a matter of fact, I get a bit of a pain when I hear some of this because the same business people have no hesitation in demanding from Members of the Oireachtas and from all Government Ministers all sorts of concessions in relation to their ordinary day-to-day commercial activities. The managing directors of some businesses slate the Government from on high for their taxation policies while, at the same time, writing letters to Ministers seeking help from Fóir Teoranta, from the IDA—from the taxpayers' money. They come screaming to the Institute for Industrial Research and Standards with technological problems, again taxpayers' money; they want assistance from CCT for export markets, again taxpayers' money. They want assistance in relation to industrial training from AnCO and, in relation to the filling of jobs, they want to avail of the services of the National Manpower Service, again the taxpayers' money. We have too much belly-aching from some business people about what the State allegedly is or is not doing in the taxation structure. It is time we recognised that the State gives massive assistance to the private sector. We are a mixed economy and there is no reason why we should not do so. It should be acknowledged also that millions of ounds of taxpayers' money are given in transfer payments to private enterprise here. I do not begrudge the giving of that money but certainly I find it disturbing that some individuals very much resent the fact that they have to pay some taxes and, consequently, will not acknowledge what they get from the State.

If we are to have any real economic recovery we shall have to examine very carefully the public capital programme in conjunction with the Finance Bill. I do not know how we will do it; whether we would ever get sanction for such borrowing. I would advance the view that at present it is arguable that we should have a supplementary capital budget; if we could have an emergency public capital programme of approximately £150 million. Admittedly, one would have to find £15 million to £20 million a year to service that borrowing.

It is arguable that if one had a major capital programme for productive investment introduced on an emergency basis—and this is something I favour—productive work for the tens of thousands of unemployed could be found in the short term. There would be a consequential saving in social welfare payments and the Exchequer would gain more in PAYE. At least 50 per cent of the £150 million programme would go in wages with, as I said, a consequential saving to the State in social welfare payments because of a substantial reduction in unemployment. This suggestion should be seriously examined by the Government. This is not just a gimmick. In such a major capital programme a great deal of the money could go on essential construction purposes, more than might be devoted to an expansion of the telephone service, which is itself quite viable. A good deal of the money could be spent in the direction of coping with the explosion we will have in our schools because of the tremendous growth in the young age segment of the population. That kind of public capital investment could substantially reduce unemployment because one could put 20,000 back to work with a programme of that kind. I would certainly favour such a programme.

We should exercise great care in our concept of economic planning. The generation of economic activity, the expertise required in coming to an investment decision in a particular firm, which may be trying to project a price 12 months ahead, coping with severe monetary fluctuations and the harnessing of the goodwill and dedication of the public service sector are not easily amenable to the grand strategy of planning and the answer to our real problems will not necessarily be found in just another programme for economic expansion. The answer will certainly not come from the conservative business spokesmen, such as the President of the Association of Chambers of Commerce, or the head of the Construction Industry Federation——

The Deputy is aware it is not proper to refer to persons outside this House.

I am not naming them. They have spoken about the abuses of social welfare. I would suggest, and I am sure Deputy Dowling will agree with me, that these spokesmen should for a while live on £10.90 per week for themselves and £7.10 a week for their wives and £3.10 per week for their children by way of unemployment benefit and they would quickly learn that a great deal of the reactionary talk about the abuses of social welfare is utterly unbalanced. I would point out that some of the socalled entrepreneurs who denounce the Minister for what they call his anti-business attitude—such rubbish— and who at their poverty stricken business lunches denounce alleged abuses of social welfare would be better employed in ensuring that export delivery dates are met as promised and in raising the level of productivity in their own firms. They would certainly be better employed in ensuring that this Government are not unfairly attacked. These firms must live up to their responsibilities instead of trying to shove their responsibilities on to the Government.

We have listened for a considerable period now to Deputy Desmond, who might be described as the shock absorber of the Government. Last night we listened to his attack on the IFA, on the clerics, to a bit of bishop bashing, and today we listened to his attack on the farmers, the industrialists, the entrepreneurs and the people who talk about abuses of social welfare benefits. He has attacked almost every section. I would point out to him that the Parliamentary Secretary to the Minister for Health has already spoken out loudly about abuses in social welfare and the corrective measures that will be taken to ensure this practice is stopped at the earliest possible moment. Of course this is typical of Deputy Desmond's approach. He seeks to be on both sides at the same time, but I think the public have now become aware of the double dealing approach of the Deputy and his words now go unheeded.

In relation to the budget and this Finance Bill it is difficult to rely on statements made by Ministers. There is a confusion of thought. There is a change in attitude from day to day. All this makes it very difficult for the man in the street to understand what exactly a Minister means when he makes a statement and whether that statement has the support of the Government or whether it is a personal view. It is difficult to know in what capacity he makes the statement. In the not too distant past statements have been made in the capacity of private individuals. Statements have been made and repudiated by official sources. As I say, it is difficult to assess what Ministers really mean when they make statements, difficult to know if the statements are an indication of Government policy, an indication of a desire to implement some particular measure. Like many people I have completely lost interest in ministerial statements. Emphasis is placed on one thing today and another thing tomorrow and repudiated the next day.

I no longer examine the statements made by the Minister for Finance in any depth or detail because I feel that in a matter of hours the statement will be repudiated, twisted or rejected. Instead I read the Minister's horoscope every morning to find out exactly what will happen. We are told here under "Your Lucky Stars": "Your sense of loyalty will keep you going today when it seems you would be a lot better off if you threw in the towel".

Under what star was I born?

The Minister is a November boy. I checked to find out the right star.

The Deputy is misinformed.

The situation is rather peculiar. Who, in fact, is running the country? In the Minister's speech introducing this Bill he told us that £34 out of £100 has to be borrowed. That figure was increased recently by another Minister to £35. We have the appalling situation in which £35 out of every £100 has to be borrowed. In the case of a person receiving a possible £10 benefit £3.50 of that benefit is borrowed money. This situation is difficult to understand. Money has been offered if it is spent in the way the people who offered it have indicated. Therefore, we have lost control of the situation. This is a serious matter in a particularly critical time in our history.

The Government are a bankrupt concern. It has been said by some people that they have not enough left to pay a compliment. Those are the people who are dealing with the crisis we are facing. Is it worthwhile discussing the situation in the House? Deputy Desmond, when discussing this Finance Bill, was flying his kite about a second budget, an emergency budget. The Taoiseach and the Minister for Finance told us some time ago that if the pay pause was not honoured the Government would have to act. We are now faced with another budget. I am quite sure when there is an examination in depth made of the problems that have been placed on the country by the Government, by their inactivity and irresponsibility, the people in due course will make their voices heard. If our situation is an example of what we can expect by the compiling together of two policies, the just society and the new republic, then the people will answer in a short space of time.

When the Minister for Finance is replying to this debate I would expect, if he has an important statement to make, that he would make it in the House not in Killarney. The House here is the appropriate place to make important statements. We have been told in the press that the Minister for Finance has an important statement to make which will be made in Killarney. We hope that he will instead make that statement in the House. There are other Ministers parading through the country trying to deflect people's attention from the real problems of inflation, unemployment and the other matters which the Finance Bill seeks to remedy.

We hear talk about family limitations but people at the moment are more concerned with bills than with pills. The Minister for Posts and Telegraphs would be better off devoting his time and energy making some suggestions about alleviating the terrible problems which confront the country rather than dealing with his suggested limitations of family as a solution to the economic problems. Our economic problems are vast but we must have a look at the situation in general.

It has recently been revealed that the unemployment situation is much worse than people were led to believe over the past three years. We are told now that there are approximately 180,000 people unemployed. There are 115,500 people on the live register plus the 20,000 small farmers and between 30,000 and 50,000 school leavers. This party have indicated on many occasions that the live register is not a true indication of the number of people unemployed. Last December 23,000 people were unemployed in the building trade. This increased in January to 24,500, that is an increase of 6,424 over last year's figure. As the same time we are told by the Minister for Local Government that the Government are building more houses than ever before despite the fact that 24,500 fewer people are employed in the building trade, that 10 per cent less cement and 10 per cent less sand is used and the yards of the builders providers are full of timber and other essential items for the production of houses. The Minister, therefore, is building houses without sand, cement and men. We have the "Jim-will-fix-it" situation in the House. Every time the question of housing the people is mentioned the Minister trots out that the record breaking house building programme is reaching its target, but when one examines the matter one finds the situation is different.

We find in the food industry at the moment that 6,877 people are unemployed, that is 1,817 people more than last year, so the position in that industry is a major cause of concern. In the clothing industry 5,240 people are unemployed; in the metal manufacturing industry, 16,016; transport and communications, 5,181, an increase of 1,097 on last year's figure. In yesterday's paper we find that more jobs are to go, that the "Stock Exchange switch hit jobs" because a printing contract is to go to Britain from the Irish Stock Exchange, a £12,000 contract, which must mean additional unemployment in the printing industry. We are told that there will be a reduction of one-third of the work force on the Dublin docks, which means there will be substantial redundancy there.

Perhaps the Deputy would give us the source of his information in respect of the paper he referred to.

It is the Irish Independent of Tuesday, April 27th in relation to the Stock Exchange. We also see on the same page headlines of “Redundancy tussle in Court,” 37 employees of British Rail for lay-off, “Ballsbridge picket”, the Dublin College's Branch of the Teachers' Union pickets the headquarters of the Vocational Education Committee. “Mum should not work unless she has to”. There is also a criticism of Deputy Desmond on this page for some of his outbursts. We have a vast number of people unemployed. If we look at the figures submitted by the Central Statistics Office we find that last year there was an increase in unemployment in the building trade of 6,424; in agriculture, 2,277; the food industries. 1,817; the distributive trades, 1,529; the personnel services, 1,171: transport and communications, 1,097; the professions, 753; unspecified, 601; public administration, which includes national government and local government service, 588; the fertiliser and chemical industries, 541; paper making, stationery, printing and book binding, 474; mines and quarries, 295; woodworking and furniture, 275; finance, 264. This includes pawnbroking, money lending, hospital sweeps, and so on. I am at a loss to know how pawnbrokers are reducing their staffs at a time like this. Bricks and artificial building materials, pottery and glass show 263 more than last year; gas, electricity and water, electricity undertakings, 260; vehicles, 244; entertainment and sports, 166; other industries, 154; drinks, cider and so on, 130; fishing 123.

Right across the board there is a decline in the work force. In the case of the building trade we are told it is the result of general slackness; in agriculture, seasonal slackness; in finance, short time working; in the clothing factories slackness, layoffs in some factories; in metal manufactures, short time working; vehicles, short time working; food, slackness, layoffs in some factories and in the professions, transport and communications and woodworking, general slackness; in bricks, artificial materials, pottery and glass, skins and leathers, layoffs, short time working.

We have this desperate situation and there is no plan to relieve it. Some time ago we were told by the Minister for Finance that until they had sufficient information no plan would be forthcoming. Apparently, they have not yet sufficient information notwithstanding that over a considerable period the position has been allowed to become worse and worse up to the present with the vast amount of unemployment we have on an increasing scale. While some areas are showing signs of improvement the general trend is one that does not give much hope. No plan has been forthcoming, despite a whisper from the Tánaiste recently that we should have a plan. It is a pity that he does not make those noises at Government level. His whisper was probably a sound coming before the drum to indicate that a member of the Labour Party was producing a plan to save the nation. We have seen this plan in some detail recently.

The big problem is to get people back to work, to ensure that school leavers, professional workers, those in public administration will get to work as quickly as possible. We must have some productive employment to offer people. Many suggestions have been made here about schemes that could be introduced by the Minister to provide employment. Perhaps the Minister will produce a plan in Killarney or perhaps this is just another anti-Kerryman joke. I hope we get some indication that there is a positive plan for the future to ensure employment for our people. We have a bubble-bursting Tánaiste, a buck-passing Taoiseach and a runaway Minister but we want people here who will not talk about bursting bubbles or pass the buck but who can come here with something positive that can be examined in detail. We want to know on what information such a plan is based, if it exists or has been formulated. We want the Government to seek the advice and assistance of the Opposition in this regard. Captains of industry are often invited to discuss matters with the Government but they have been so often in and out of Government offices that they are disillusioned like many Members of the House with the promises of the present Government.

Perhaps the Minister could clarify some points in the Finance Bill, on which I think he knows our views. Section 23 speaks of benefits in kind. We are told the section provides for the introduction of a minimum charge where an employee has available to him for his private use a car provided by his employer, and it is stated that it seems reasonable to hold that the availability of a car for private use is a benefit in kind. Does this apply to local authority officials who have cars? Does it apply to State and semi-State bodies whose members have cars from these bodies? Does it apply to Ministers in respect of the cars they have? Or does it only apply to workers who have cars for the purposes of their work? Some of these are on 24-hour call. Will the Minister tax such a man, whose car is a necessity at all times, in the same way as he proposes to tax people who can avail of a car for private purposes? Will the benefit of cars to Ministers be tax-free as against the workers who are taxed to the hilt? How will this affect vans used in the same way as cars the Minister spoke about? Perhaps there will be a different type of vehicle in future. Does this apply only to private cars provided for workers or does it apply to State and semi-State bodies and to local authority members who have cars for one reason or another and who are on 24-hour call?

The Minister and Deputy Desmond have told us about the benefits people enjoy. The Minister spoke of the typical family of three children who in return for paying taxation, enjoy various things. These are certain rights they have: primary and secondary schooling for which he puts down £750 annually; medical services to parents and children, the protection of persons and property from wrongdoers, £150; social welfare children's allowances, £120; benefit of State subsidisation of rates for domestic rate-payers, £45; subsidisation of foodstuffs and transport, £100; Exchequer contributions towards the cost of roads, £33 per private vehicle. This is what they enjoy, according to the Minister, but education is by right and medical services are by right——

Is the Deputy suggesting these should not be paid for by anybody?

No, but this is whitewashing.

For every right there is a corresponding duty.

I understand that and that with every duty goes a right but by the way in which this is framed one would think that many of these things are enjoyed by people just because the Minister says so. This is not the case. If we go into this in any sort of detail we find that it deals with tenants of local authority houses and income tax relief on housing loans. These were all put there for one purpose or another. For instance, they were put there to encourage people to buy their own homes and to have a stake in the community. It is not as simple as the Minister has indicated—that the State is making a massive contribution to individuals. The State has a responsibility. The whole theme of the Minister's speech is an indication that the essentials of life in relation to primary schooling would be reduced if taxes were not increased. I hope the Minister will reach a stage where he will understand that these are basic rights and that no amount of camouflage will change that situation. In connection with changing taxation from one sector to another, a subsidy on foodstuffs is fair enough, but we are told that there will be a reduction in certain essential services if the Minister cannot get certain taxations.

I understand that other Members will deal with the speech in greater depth. Therefore, I do not propose to deal with the particular sections in any way other than to ask the Minister if the figure of £34 per 100 has increased and how far it will affect benefits in kind, because Ministers have a variety of benefits in kind which other people have not got. Are they going to be taxed? We must restore confidence in the country and we must have a policy geared towards the eighties and the nineties. There has been no indication yet that any effort has been made to formulate a policy for the eighties or nineties. The Government are dealing with our present depression in a way that will create problems in the eighties and nineties. We want a positive approach. We want to know where we are going and we want the necessary information to base policies on. Much of that information can be obtained from statistical sources such as the census of population. I hope the Minister will relent and make the necessary moneys available for a census. We are told that 85 per cent of a person's previous income can now be obtained in social welfare benefits. The collection of data of this type is surely a labour intensive job. The Minister would be well advised to spend the extra 15 per cent to accummulate the information that is required. Talk is not enough in relation to the problems of the future. The Government Information Service does not produce policies but it produces excuses on occasions. We want a positive policy so that our young people will have a future. At the moment parents are being followed on the ever increasing dole queues by their children.

Deputy Desmond asked what was our solution to the problem. Our solution is for the Government to resign. When they do so we will produce the necessary policies to inspire confidence, ensure a future for young people and create employment. We will create policies to ensure that we are not classified as political paupers on the Continent. The time for talking has run out. We have had a variety of excuses from time to time in relation to the manner in which the problems of young people will be tackled. Nevertheless, in relation to unemployment we are told in Industry and Society, which is a weekly booklet from the EEC, that our unemployment rate as a percentage of the civilian labour force in 1975 was 8.4 as against the Community average of 4.1. Our unemployment rate as a percentage of the labour force is the highest in the Community. It is 4.5 in Denmark, 4.5 in Germany, 3.9 in France, 3.7 in Italy, 4.4 in the Netherlands, 4.8 in Belgium, .7 in Luxembourg and 3.6 in the United Kingdom. The forecast for 1976 as a percentage of the labour force is a Community average of 4.6, Ireland 10.1, Denmark 3.7, Germany 4.6, France 4.00, Italy 3.9, the Netherlands 5.2, Belgium 5.6, Luxembourg 0.7, United Kingdom 5.3. We are twice as bad as the worst, and that would be either the Netherlands or the United Kingdom. Again, in 1975 we are twice as bad as the Community average. This reflects the serious situation we are in. Efforts have been made by other countries to correct the situation. One would at least have thought that corrective action would have altered the situation but we have this increase from 8.4 per cent in 1975 to 10.1 per cent in 1976.

On the basis of the information available to the Commission in 1976— information which Deputies do not have—they forecast a substantial increase. While other countries' economies are on the upsurge ours is falling. We must consider unemployment with consumer prices. We should have another look at the Commission's forecast for the change in consumer prices in 1976 as against 1975. While the Community average is 9.6 per cent, Ireland's is 16 per cent; the average for Germany is 5.5 per cent, Luxembourg 8.5 per cent, the Netherlands 10 per cent and Denmark 8 per cent. This shows that the consumer price forecast of 16 per cent for Ireland is very serious.

People receiving social welfare benefits got an increase of 10 per cent, but this means they will be worse off than they were. It is desirable to ensure that social welfare benefits are paid to the weaker sections of the community. The Minister for Finance, the Parliamentary Secretary to the Minister for Social Welfare and the Government should examine their consciences in relation to people in receipt of social welfare benefits at this time and ensure that those in need of assistance will get at least an amount that will be sufficient to meet the increased consumer prices which result from inflation. Unfortunately, these people have been dumped on this occasion. They got half the amount they needed.

In answer to Deputy B. Desmond, there are people abusing social welfare benefits. On the other hand, there are people on social welfare who are not receiving enough. We must try to strike a balance to ensure that people requiring assistance get it. In our present abnormal situation to reduce the standards of the old age pensioner, the widow, the orphan, the sick, the disabled or the unemployed is very serious. Social welfare benefits must keep abreast with the rising cost of living. Abuses must be done away with. We must ensure that the system is fair and equitable and that the people entitled to benefits will get them.

We have heard some talk about the building trade. In recent times a number of circulars and documents dealing with the finances that would be available for the future issued from the Department of Local Government. They dealt with the vast cutbacks which will be followed by substantial rates and rent increases that will result from recent Government action. This comes on top of the unemployment situation, the reduction in social welfare benefits and the fact that there is no future for school leavers. The substantial increases in rents and rates will reduce further the purchasing power of our workers. I forecast a very dismal future for the few people who will have the capacity to pay.

We are told that the building trade is booming in the country. There is no evidence of this in Dublin. I want to correct an erroneous impression created by the Minister for Local Government on the situation in Dublin city. There are 24,699 unemployed. In 1975 in Dublin, the year of the records we are told by the Minister for Local Government, money was pumped into housing and a record number of houses had been built—1,529 houses. In 1967-68, Dublin Corporation built 1,964 houses, 435 more than were built in the record year.

The Deputy is getting away from the Finance Bill.

Money must be made available for housing. The Finance Bill is the vehicle which provides money. A greater effort must be made to provide more money for housing in this city. It is not unreasonable to point out how the Minister has been misled by his colleague. As I said, in 1967-68 under Fianna Fáil 435 more houses were built than in the record year mentioned by the Minister. In 1968-69 Fianna Fáil built 1,996 houses, 467 more than last year.

The Chair would ask the Deputy not to get into a housing debate at this stage.

I am pointing out the necessity for more money to be provided for housing.

We are concerned here with taxation, not expenditure.

The Government get their finances by way of taxation. Deputy B. Desmond has indicated that another budget will be introduced. To stimulate the economy and the building trade, perhaps the Minister will ensure that the 24,000 people now on the breadline are put back to work as quickly as possible. An effort should be made to ensure that work is made available for those who are willing and capable of working. Assistance is needed in the building and construction industry, yet we are told that there will be substantial cutbacks. I was at a housing meeting of Dublin Corporation and alarm was expressed at the documents which issued from the Department of Local Government recently.

The Deputy will agree that that would be more appropriate to a debate on Local Government, and not the Finance Bill?

The only reason I raised this point was that I feel the Minister for Local Government has misled the Minister for Finance in the same way he misled the country. I am just producing the facts to show that the statements made here in the House and outside it by the Minister for Local Government about the number of houses produced are erroneous, and I want the Minister for Finance to be aware of the facts. I know his concern for the people of this city. He was a member of the Dublin Corporation and he knows the problems.

The Deputy has got his point across now.

The Deputy is aware of the housing statistics over the last three years.

We were told that local authority building in Dublin was the area where the major portion of money would go in the future. This is what the Minister for Local Government stated when he opened a housing estate outside Dublin recently. I hope there will be no impeding of this desire of the Minister for Local Government——

The Deputy must come back to the Bill.

——who now finds his mistake. The building industry provides substantial employment, and these 24,000 people can be put back to work at an early stage if moneys are made available.

I hope the Minister will give serious consideration to formulating a policy on housing and providing employment, because the taxpayer has to foot substantial bills in Dublin as a result of ministerial interference. Because of ministerial interference, the taxpayer has to find the rent arrears of Dublin Corporation, which amount to £1,500,000 at the moment. Had the Dublin Corporation members been allowed to solve this problem without the interference of a Minister, the Government would not have to foot this bill. There is also £8 million worth of property tied up in Dublin as a result of Government inactivity in relation to squatting. A great deal of money is also spent on security every year. This money has to come from some source, namely, taxation.

I have read with interest the expressions of disapproval by local authority members throughout the country of the recent circular indicating that repairs——

The Deputy is continuing on housing. He must come back to the Finance Bill.

Before I leave that I want to point out that if houses are not repaired there must be a greater housing problem in the future because more money will be needed.

The budget and the Finance Bill seriously affect the housewife. The Minister's hand is in the housewife's pocket all the time. Every housewife knows the name Deputy Richie Ryan, the Minister for Finance, only too well. He is not very popular with them and he will realise that when they get their hands on him during the next campaign. There have been substantial increases in many items as a result of VAT. There has been a rise in the cost of education. Education is no longer free, as indicated by the Minister in the earlier part of his Second Reading speech. Parents are asked to make contributions in all schools now. There is also the increases in fares, thus raising the cost of transporting children to and from school, of travelling to hospitals, shops and so forth. There is the increase in television licences, central heating, ESB and Post Office charges. The prices of books and newspapers have increased. One would have thought that at least medical appliances for people who are disabled would have been excluded from VAT increases, but even the disabled are attacked in this Finance Bill. The Minister at some later stage might think of releasing medical appliances from VAT. Medical expenses are steep enough at the moment without people having to meet a further imposition by the Minister through value-added tax.

One would think that furniture, cleaning materials, haberdashery, electrical appliances, kitchen equipment and so on were not essential in the household. No one has an objection to the taxing of commodities which are not essential, but it is a fairly serious situation when essential commodities are heavily taxed. Many tears have been shed in this House about the working man's pint. Now we are told that the drop in consumption will mean a reduction of 10 to 15 per cent and that the breweries will have to allow people to go as a result of the last budget. Social welfare benefits were up by only 10 per cent; the pint is up by 20 per cent. This means that the working man and the old age pensioner will be in a fairly bad way in the near future.

The direction of finance into productive employment-giving activities is all-important and is a matter that cannot be stressed too much. Apparently the thought of giving people employment is a forgotten one by the Government. We hope that the Minister's speech that we are promised will produce something substantial because the publicity given indicated that he had something fairly substantial to say in Killarney. We hope it will be a plan for the future, something that will give hope to young men and women, school leavers and those on the bread-line. This major statement that we are going to hear we look forward to with great anxiety. I hope that the Minister does not meet the same problem that he met in Slattery's when there was nobody to meet him. It would be a pity to make the journey with petrol so dear and have nobody to listen. For that reason I hope the Minister will give us some indication before he goes of the content of his speech, whether it will have some hope for the future or if it will be the usual cover-up.

The Labour Party have lost their identity with the Irish worker now that they are completely submerged in Fine Gael. As a party, they have no further use. We have a one-party Government dominated by Fine Gael, pressurised by the various groups within Fine Gael. The Taoiseach does what he is told by the pressure being applied. If he did not, he would not be a man at all.

The Deputy should stay relevant to the Finance Bill.

In relation to some of the provisions of the Finance Bill it would seem that pressures were used by a variety of groups to pressurise the Government in a particular direction. I have a document here that was sent out in an Oireachtas envelope. It is called "The Irish Marxist Society. Public lecture, Capitalism and Unemployment" and I quote from it:

Dear Comrade:

Annual Conference in Dún Laoghaire (October, '75) passed Composite Resolution No. 10, calling on the Labour Parliamentary Party to introduce a Bill in Dáil Éireann before May, 1976 to bring natural resources into public ownership and control so that the development could be a basis of industrial job creation in Ireland instead of creating wealth for the Multi-Nationals.

The document goes on to tell about Labour Party branch meetings. It is signed by a variety of Labour Party officials. We wonder if Sam Nolan would come up with any solution for the Government in regard to this lecture to enlighten Labour Party members. Now that the Labour Party is tied up with the Marxist Society and again embodied in Fine Gael one does not know where to turn to get a comment that would convey something that was not complicated by a variety of Fine Gael, Marxism and the past Labour Party policy. If the situation we are in now is a result of the combination of the Just Society and the Labour Party policy we heard so much about in the 1960s, then we can say both that the Just Society document was a failure and the Labour Party policy at that period was a failure also.

The Minister should ensure that moneys are made available to stimulate the construction industry to put the people back to work, so that we can have a real look at the developing situation as a result of ministerial statements that come from time to time in relation to this aspect. It is one on which there is utter confusion, one in which local authorities are unable to decipher statements on account of complicated messages coming from the Custom House. I hope that at least in Killarney we will get some indication of hope and of a positive effort being made to plan for the future, and that the school-leavers, the unemployed and the housewives can look forward. No doubt it may be an election gimmick on the Minister's part, maybe a build-up for Donegal and Dublin South-West, but I hope we will be able to sort the Minister and the Government out as we proceed on these election campaigns. Nevertheless the Minister has this opportunity between now and polling day to make some reference and give some hope. These elections may stimulate the Minister into some endeavour to produce some policy that would give a hope to the repressed section of the people.

Again I condemn the Government for their failure to honour their commitment to the people on social welfare benefits, that is the repressed section who this year are getting only 10 per cent instead of the amount required to meet the upward spiral that is continuing in both the cost of living and the cost of dying.

I have the highest regard for the intelligence of the Irish people. I am sorry Deputy Dowling is running out. I am sure he will recall that the West Mayo by-election was a tragic disappointment for his party when they lost a seat. It should be recalled that that by-election was held in the middle of the present international recession. He raised the question of the coming by-elections. They are going to be interesting and they are going to be a test. The outcome, to my mind, would be that the Government will gain at least one extra seat to what they now hold.

In passing I would like to add my personal regrets and condolences to the relatives of both Deputy Cunningham and Deputy Lemass, both of whom, as Members of the House, were indeed gentlemen.

The last two years have been most difficult for this country. We are sharing with many countries other than those of Europe the international recession which was triggered off by the energy crisis. We are in the middle of negotiations for a partial pay pause and a new national wage agreement. I hope that the outcome of those will be such that the Minister for Finance and the Government will be satisfied with it.

I am, I suppose, by profession an economist in so far as I hold a Master's Degree in Economics. I am not particularly enamoured of the economics I have seen in relation to the budget deficits over the past few years. I realise the necessity for them to a certain extent, but I doubt in the long run if they can be continued. I was pleased to hear the Minister saying that he intends to restore the budget balance over the next three years. It is important because the part a budget plays in the development of an economy can be overrated. Indeed, perhaps a budget imbalance may be more of an incentive to development than an expansionary or deflationary budget especially in times of inflation. The atmosphere within a country is far more important from the point of view of investment.

I consider the country will prosper when we can—it is vital that we do so—restore the inflation rate to a level at least comparable to the lower rates existing in European countries and the countries to which we export our goods. The inflation question should head the list of priorities. Also of importance is the question of good industrial relations. Good industrial relations are vital to the future expansion of our country and to the attraction of capital from within the country and from outside. On occasions I put forward the suggestion that we should introduce a cooling-off period such as exists in America in relation to strikes. That system is one to be commended. I mediated in two strikes in my city recently and I found that a cooling-off period and a time for negotiation would resolve many strikes.

The question of incentives is also important for our future development. The IDA, the ICC and, in these difficult times, Fóir Teoranta, have played a vital role in maintaining employment and in encouraging expansion of our industrial base. I do not think that the work of those bodies is appreciated enough by the public. I am not tremendously impressed by all the prognostications that are published by the Economic and Social Research Institute, the Confederation of Irish Industry and the various banking reports. I do not know if they do any good. Invariably they are pessimistic; they want more money spent here and less money spent there. I believe too many reports are issued and too much advice circulated. Too much is written by people who are not that well qualified.

And one thing they never do is admit they were wrong the previous year.

They vary every year to suit their own purpose. The lack of statements from people qualified to speak on such matters— such people exist in our universities —surprises me. We get plenty of unqualified recommendations and advice which changes as much as the weather. They do not do any good although the comments may be used here to throw at each other now and again. The Minister has pointed out that taxation is necessary in order that benefits can be given and I believe our people understand the position. I do not think the budget was a popular one because there was increased taxation on such items as beer, motor tax and expenses for the use of company cars. I was disappointed that VAT was put on hired cars. The decision to impose VAT on hired cars should have been deferred until after the tourist season. When I was in America recently Americans told me they could not understand why they had to pay VAT on cars they would have to rent when visiting here. In my view there was a case for withholding the imposition of VAT on hired cars.

The Minister has dealt with the question of taxing farmers. Frankly, I was not very happy with the decision to introduce taxation on farmers with £100 valuation or more. Those who were taxed are annoyed and those with a valuation of £50 and over fear that they will be taxed in the future. In my view the farming organisations realise, and accept, the necessity and correctness of their paying an equitable share of the tax burden. An equitable solution could be found by the farming organisations meeting the Minister to hammer out a proper system which could be based on income rather than on valuation. I also agree that in changing this system consideration should be given to abolishing rates on agricultural land as exists in England. The present taxation system has not gone down well with the farming community from the point of view of equity. I have great respect for the farming community who have worked hard and have come through hard times. They experienced lean times in the thirties and forties and they had their ups and downs in the fifties. In the sixties they had good years and have had very good years in the seventies. The value of their land holdings has increased tremendously in the past decade. They realise that. They are quite conscious of the part that they can and should play in our community and they are willing to play it on a equitable basis.

In relation to the proposed taxation of agriculture and fisheries co-operatives under section 32 of the Bill, I am pleased to note that the Minister is fully aware of the problems and is studying the matter. I believe he intends to introduce amendments on Committee Stage. I live in a constituency with two major processing co-operatives, the Clover Meats group and the Waterford Co-operative Society in Dungarvan, both of which have done great work down the years. When a Minister introduces a tax net to a new sector he is obliged to do everything in his power to ease the burden in a transitional period. The Waterford Co-operative have made substantial investments on the assumption that their cash flow would not be subject to taxation. Now they find that it will be subject to taxation on profits arising after 6th April, 1976. This upsets the decisions that have already been made and implemented. They and other co-operatives should get the benefit of the doubt and get certain alleviation in respect of investments already made. When the tax is introduced it should be introduced as if for a new company. Therefore the co-operatives would be entitled to tax relief up to 1990, which is the last year allowed. They should also be allowed free depreciation, which already applies to private companies, on their equipment, even equipment purchased before this budget. This would benefit the societies.

The greatest benefit that could be bestowed on co-operatives, and indeed on private companies, is the proposed exemption from taxation on reinvested profits or services. In the present recession there is a valid case for giving some incentive for reinvestment of profits. The simplest way to do this is to relieve reinvested money, to some extent at least, from taxation. It would help employment, and it would encourage firms to go ahead with expansion plans which may be in the balance because of tax proposals or existing tax. Taxation on co-operatives should be phased in. I would suggest a three-year phasing in of the taxation on co-operatives.

The question of fisheries co-operatives has already been raised by Bishop Casey. There is a valid case here for allowing in underdeveloped areas where fishery co-operatives exist about £20,000 of a profit before the tax net would become effective. It would be an exception but it would be an incentive in underdeveloped areas. Small co-operatives in underdeveloped areas, where small communities come together and try to do something for themselves, deserve our support. The Minister might consider allowing a certain profit before tax is imposed. I must admit that certain parts of co-operatives are in direct competition with private enterprise. It is unfair that a shopkeeper with five children is taxed whereas a co-operative nearby is not taxed and therefore would have a price advantage. However, the Minister should give sympathetic understanding in a transitional period to co-operatives.

There has been controversy recently about the establishment of State development corporations, planning, and the taking over and nationalisation of banks. I do not agree with it. The British experience will prove of no benefit to the British economy. The institutions established—the Industrial Development Authority, the Industrial Credit Company, the Agricultural Credit Corporation, Fóir Teoranta and the other semi-State bodies are sufficient to handle the development of the Irish economy at every level, assuming that they are given the necessary finance from central funds. We do not need a proliferation of new State bodies. We have enough, some might say we have too many of them.

The Parliamentary Secretary to the Taoiseach has made his views known that parishes and local communities should be more active and should be more aware of their own existence. That is a valid point but I suggest that the IDA are a flexible authority, that they are a very well manned authority and I have the highest regard for them. I am not aware of any disinterest on the part of the staff in relation to any matter of the establishment of smaller businesses. Perhaps the IDA and community councils can come together and adopt an approach such as that suggested by the Parliamentary Secretary.

The Chair might allow me to digress slightly here and say a few words about the way in which we deal with business in the House. I am impressed by the European Parliamentary committee system of discussing various departments. The position here is that we discuss each Department in the House on the occasion of the relevant Estimate but it is my opinion that the time of the House would be utilised better in dealing with more vital business. That is why I advocate a committee system for discussing individual Departments. The committees would have the same standing as this House. This would allow the Dáil to deal strictly with legislation. However, the matter may be more relevant to be discussed by the Committee on Procedure and Privileges.

I am optimistic in so far as the future of the country is concerned. As a member of the Council of Europe I travel abroad regularly and I have detected the return of an air of optimism regarding the future of European economies. The American economy has improved faster than expected and there has been an increase in activity in Germany and France, for instance. Despite the position of the £ the British economy seems to be settling down. At least, it can be expected to improve substantially within the next year. It is reasonable to look forward to an upturn in our economy during this summer and early autumn.

Our principal objective must be the controlling of inflation but our success in this sphere will depend on the national wage agreement, on the pay pause and on whatever action the Government may consider necessary from time to time although I trust that no harsh action will have to be taken. We must return to a rate of inflation that does not outprice our products on the export market. This is essential to our development and must be a key factor in Government policy in the coming months.

In the period that has elapsed since budget day the people have had an opportunity of experiencing what the budget's provisions mean for them. Many comments and suggestions are made at the time of a budget's introduction and many theories are put forward as to which groups or individuals will be affected adversely or otherwise. In the case of this budget nobody has benefited but everybody has been affected. It has disastrous effects for many. But the budget was only consistent with the successive budgetary policies, with the lack of overall planning that this Government have displayed during the past three years.

It has been said during this debate that the Finance Bill we are discussing is a direct result of the mismanagement of an economy during, admittedly, a period of recession. Deputy Collins is a sensible Deputy, but it was obvious that as a backbencher he was embarrassed and ashamed of the Minister's performance. Of course he would have liked to have been able to hand out credits but there were none. From moving through his constituency the Deputy realises the dreadful impact that the budgetary provisions have had on so many people.

We might ask who are those that these measures affect most severely; who will stand to lose most and with what areas should we be concerned mainly. We have had a surfeit of problems created by this Government. Let us take first the unemployment situation. On the admission yesterday of the Parliamentary Secretary the unemployment figure from June this year will be at least 180,000. Naturally, as a member of the Government and as Parliamentary Secretary to the Taoiseach, Deputy Kelly's figure would be conservative. It is my opinion that if we add to the live register the school leavers of last year and this year the figure will be nearer the 200,000 mark or almost 20 per cent of the total work force. This is a very serious situation but the most serious aspect of it is the number of young people who are frustrated, disappointed and have no opportunities open to them. Instead of assisting them, encouraging them and giving them a ray of hope for the future, this Bill further harms their prospects. This is also a very grave social problem. Our young people have been educated within our system. We may complain about the educational system. We may suggest that possibly some of them should have been directed into other channels. That is not important. They have been educated and there are no opportunities open to them.

Their parents are appalled. What are we creating? The Government seem to be closing their eyes to the situation. We were told yesterday by the Parliamentary Secretary that we always had school leavers. Certainly we had. Because an opportunity was given to people to avail of further education we have more young people educated today. In the past the vast majority of our school leavers had employment opportunities. Now the reverse is the case. A boy or a girl at school today is looking dismally to the future and is becoming disillusioned with the structure of our society. This will create serious social unrest for us. The Minister has not taken steps in this Bill to solve that problem. Instead, he has created further problems for them and greater disillusionment. The result is that young people are taking a greater interest in drink. The Minister tried to excuse the increase in the price of drink by saying people were drinking too much. This may well be so. If it is, I would prefer to see steps taken to prevent that situation other than providing a negative remedy.

We have many serious employment problems. Many jobs have been lost which could have been saved. The Government are relying on the payment of unemployment and social welfare benefits. I do not want to be misrepresented. I have often spelled out the fact that I realise the need for a social welfare structure to assist those who are underprivileged in our society because of age, infirmity, or genuine loss of jobs. The Government have allowed industry to run down. They have created problems for industry particularly in measures such as this. The only solution they offer is unemployment assistance. This is necessary in the case of genuine job losses but it should not be the only solution.

Deputy Collins spoke this morning about upturns. There is no point in talking about upturns in America, or in Europe, or in England, unless we have the courage and the determination to tackle our own problems. Nearly 20 per cent of our labour force is unemployed. This places a greater burden on a diminishing work force, the burden of supporting a growing group of unemployed. This cannot continue indefinitely. Something has to collapse. The Parliamentary Secretary was so bereft of ideas yesterday on the Finance Bill that he used ludicrous arguments and attacked this party. He referred to us as the legion of the rearguard because we referred to what the British Chancellor did in his recent budget.

I am proud to be a member of a party with such a proud record of achievements in Government. I have not buried my head in the sand and said Fianna Fáil achieved everything. They did not. They achieved a great deal. They were constructive and progressive. They had courage. They showed leadership. Deputies have probably read a very interesting article on this party by a well known man of high repute, a political commentator who served this House long and well. In The Word magazine he referred to our achievements, leadership and loyalty. This is very important at a time of economic stress.

There is no point in saying the American economy or any economy is on the upswing unless we inspire confidence in our people to grapple with the situation. Money is lying in the banks. People will not take it because they have not got the confidence to invest it. Young people are playing pool and drinking and perhaps taking drugs because they have no other outlet. I charge the Minister and the Government with neglecting those young people and with turning a blind eye to the situation. I admire the Parliamentary Secretary's integrity but I am surprised that he said such things yesterday evening because three or four members of this party quoted the performance of the British Chancellor of the Exchequer.

As a people we must look within ourselves for a solution to our problems. We must try to learn how to solve them within our own resources but we must also study outside factors. Thank God for our independence. Thanks are due to the many people who struggled for it down through the centuries. We are not serfs. There is no serfdom in looking at what a neighbouring chancellor does with an economy which is having its difficulties too. Before the budget the Taoiseach and the Minister appealed to the workers, the trade unions and the employers to accept a pay pause. I believe a modest increase was possible and would have been accepted if the Government had taken the necessary steps in the budget to create a climate for such a development. They failed to do this and it will not be forgotten to them.

I challenge the Parliamentary Secretary to say why we should not compare like with like. We have many economic relations with our neighbour who is having troubles somewhat similar to our own. The British Chancellor tried to slow down the rate of inflation to encourage the acceptance of modest pay increases. Our Minister is creating further inflation but at the same time saying: "We want a pay pause but this is the kind of budget we will give you." It was not on from that day onwards.

Debate adjourned.
Business suspended at 1.30 p.m. and resumed at 2.30 p.m.
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