Yes and, indeed, both to industrial development and to productive capital formation. Our country we must appreciate has grown considerably in the late fifties, throughout the sixties and in the early seventies. It has grown in economic expertise, in economic management, and I would also think in political judgment. The problem of politicians in Government and in Opposition is how to be willing and capable of making constructive contributions towards that further development. It is frightening to think that many tens of thousands will be leaving school this year and next year and we may not have jobs for them—in many cases we will not. The recent estimates of the NESC, which have now become very fashionable since Members of the House have begun to read reports which are about three years old, indicate that a net increase of some 25,000 jobs will be required to absorb new entrants to the work force, to make up for redundancies and falling job opportunities in agriculture.
The question arises, how best can Government strategy of economic and social planning assist our economic recovery? It is particularly easy for somebody in the Labour Party to wear a simplistic, ideological badge in favour of economic planning as a solution. It is a different exercise to spell out in some detail the precise mechanisms one would favour in practice. I share the view of a man outside politics but one I respect, the managing director of the Industrial Development Authority, who spoke at a symposium of the Statistical and Social Enquiry Society last November. He pleaded that we do not waste time seeking simplistic solutions. He correctly pointed out that the environment for industry today is far more complex than in 1958: we must cope with EEC membership, with closer world economies, more volatile industrial technology and markets, with rapid job losses in some industries, and with growing costs of new investment in technology. Any kind of planning in that climate is a very formidable task. If anybody in the House on either side says it is time the Government produced a plan, or time that the Department of Finance produced a one-on, one-off economic and social plan encompassing all the issues involved in economic recovery, we should stand back coolly and see whether this proposition has the merits it is supposed to contain.
Irish politicians have a peculiar capacity to wait until the other fellow produces a plan and then proceed to tear it to shreds. I believe we need a short-term plan for three or four years ahead which would take into account unforeseen conditions and the accumulation of information over a short period. Because of the pace of economic change anything else would be rather a waste of time. Far too many Irish politicians and business people think that all one has to do is to produce a series of Department of Finance projections up to, say, 1980 and automatically everybody will know where they are going. This is not reality, but I think some of my parliamentary colleagues in Government and in Opposition suffer that sort of delusion. Having worked for a long time in the trade union movement and in politics I have begun to appreciate fully that the real life of investment, employment, export promotion and social planning, of which we do very little, is far more complex. My plea, therefore, is that those with entrepreneurial ability, or political, or public administration ablity should not sit back waiting for the Government or the Department to produce another major plan: they should get on with what they are doing, do their jobs efficiently and help in the task of economic recovery, not in any haphazard manner but rather with the will to recover, which is the most important factor of all.
Since they can no longer avoid paying the taxes which they should have been paying in any event, some business people profess to have lost the incentive to work. Some would regard as another solution the nationalisation of everything. Again, that is a simplistic solution on which we should not waste time here. The reality, as I see it, is that we have a basis for future economic development. We have a strong agricultural base with farmers who pay almost no taxes; we have food based industries in which farmers and those who work in them became about twice as well off in the past five years as they were in the previous ten. We have a private industrial and service sector which has done remarkably well even in recession, particularly in manufactured exports. It has suffered unemployment in the domestic import competing sector but generally it is remarkable how, despite great difficulties, manufacturing industry has survived. We have a construction sector which is now more efficient and is rid of a considerable amount of speculative fat. The days of the chancy builder are more or less gone when he could hope to make £4,000 or £5,000 on a couple of jerry-built houses in a row. That is too costly now. The construction industry is much more efficient. Admittedly, it employs fewer people. It has shed much speculative fat, and that is no harm.
We also have State-sponsored bodies which, despite criticism frequently levelled at them, are in general efficient and reasonably well managed. All the sectors I have mentioned are interdependent, and the tens of thousands of men and women who work in them represent the future productive wealth of the country. Each of them can contribute to our economic recovery. I do not believe in a grand strategy of a plan based on wordy exhortations and a national planning body superimposed in a new, huge office in Merrion Square staffed by 25 Departmental secretaries seconded to this great new body. As a socialist, I strongly believe in planning, but for 3 million people in this country I do not believe our requirements have reached that stage as yet. Each of the sectors I have mentioned can, with State assistance, contribute substantially to economic planning and recovery.
The politicians' job is to provide democratic institutions to enable these sectors to develop in confidence. Our financial institutions must provide for the short-term liquidity and investment needs of these sectors. I am not sure that our commercial banks have fully faced up to that responsibility. They made a fair share of profit, as we all know, in the last two or three years. In that regard I would urge the taxation of banking profits as something which would need careful study here and which could be a useful source of revenue.
We have to accept also that our external reserves and our level of domestic savings were never better in our history. I do not accept the Jeremiah cries of woe from Fianna Fáil, because we have a sound economic base of external reserves and of domestic savings. The level of deposits with the building societies in the last 18 months was exceptionally high and these are, therefore, in a position to contribute effectively to economic recovery. The job of our public service must be to provide a flexible administration capable of protecting the public interest as determined by the Houses of the Oireachtas. Our trade union movement has also special responsibilities at all levels, including responsibilities in relation to national wage agreements. I have no doubt we will hear a lot about that in the next few weeks.
Economic and social policy formation, and planning, is a complex interaction of these forces. To suggest that the Department of Finance should simply produce an omnibus five-year economic and social plan is to see it almost out of date before publication. We need a consultative, flexible form of review structure for the key economic and social sectors of the nation wherein the major representative bodies would have regular and adequate opportunities of effectively alerting one another to their individual problems and to their anticipated needs. That kind of structure would be more flexible and more open to beneficial results rather than yet another massive office block in Merrion Square inhabited by the gurus of a National Planning Commission.
The Government should, as an integral part of their current evaluation of economic policy strategy, envisage a more positive and more flexible role for the existing National Economic and Social Council. In my view the NESC should develop as a common meeting ground between its members and the economic and social committees of the Cabinet. There is need for a direct discussion and debate on commissioned and internal reports in relation to these matters. I hold the view, having looked at past administrations and the present administration, that Cabinet status does not necessarily create a full awareness of the complex series of economic situations which can arise. There are grounds for a more effective liaison between the Government and the NESC.
There is also a great deal of need in the planning process for a very effective relationship between the Government and the National Employer Labour Conference. In recent months, it could be said, the National Employer Labour Conference has assumed a certain role of Government in relation to the development of pay levels over the next 12 months. I suggest that we should consider the development of existing institutions rather than the creation of new planning institutions. Our country has a sufficiency of institutions, including the self-appointed institutions. A good example of effective social planning was the development by my colleague, the Parliamentary Secretary to the Minister for Social Welfare, Deputy Cluskey, of a programme of social welfare reform in that Department, with the full co-operation of the departmental staff. He did a magnificent job. That is social planning in my view. Another example of the development of an existing institution was the giving to the Department of Industry and Commerce of a precise sense of policy, of function and of purpose by the Minister for Industry and Commerce in relation to the advancement of mineral developments. That was purposeful planning and the development of an existing institution rather than setting up of a massive new mineral body on a State-sponsored basis.
For those two jobs there was no great need to set up any great new monoliths in order to create essential work. The tragedy on the Irish scene is that Fianna Fáil in Opposition have not yet begun to think about these concepts. It is a performance reminiscent of a firing squad who gathered around the man they were going to execute in a semi-circle in order to make sure he would not get away. It is arguable that the other major area, if I may sound rather conventional and conservative tonight, and one of the most effective and sensitive short term mechanisms for economic policy, is our annual budget and the capital budget. We tend to underestimate the importance of these mechanisms here. This, I agree, is a traditional view. I hold the view that where a Cabinet evolves a fairly definite line of economic and budgetary policy to implement in the lifetime of the Dáil the annual budget is a reasonably fair method of implementation of economic policy. We need a revolving capital budget with a future perspective of some three to five years hence.
I urge that in the preparation of the capital budget for next year they should look ahead for about three years. That is about as far as one can go in terms of using the capital budget in order to ensure that it makes an effective contribution to economic development. As a member of a local authority I know of no more frustrating experience than to be dependent on the fluctuations of capital allocations for housing, roads or sanitary services on a year to year basis, sometimes on a six months basis. One has to plan further ahead on the capital budget. Therefore, there is a need for more effective forward capital allocation. I am convinced that we do not make enough use of it at present.
Looking at the pressures that have been exerted on previous Ministers, for example, Deputies Colley and Haughey and the present Minister for Finance, the tendency has been inevitably to resort to short-term experience and the long-term perspectives tend to be forgotten. I urge that in our economic planning process we take a longer look, because the longer one is in Leinster House the shorter the year is. We need budgetary policy of some two to three years hence.
One of the major difficulties in the current situation facing the Government is the re-emergence in the Opposition of the pragmatic Fianna Fáil economico-politicos. They are well known in the House, and one of them has just contributed, Deputy de Valera. He and his other colleagues, Deputies Colley, T.J. Fitzpatrick of Dublin and Brennan. I call them the past men of yesterday, unfortunately, the men of the 1960s who did not believe at all in any kind of economic or social planning. That has been very evident in their contributions in the past three years. With Deputy Lynch, Deputy Blaney and a former Minister, former Deputy Kevin Boland, they believed through the 1960s that the first and second programmes for economic expansion were purely public relations political exercises. They did not believe in economic or social planning at all. We all remember that when the third economic programme collapsed it was abandoned by Fianna Fáil and there was not a Fianna Fáil mourner in sight. As a matter of fact, I recall Deputy Garret FitzGerald on the Opposition side as the only mourner who turned up for that particular funeral. Perhaps there was a telegram from the Irish Congress of Trade Unions. I think it was more for diversion.
In that context one has to consider some of the proposals at the moment for a much greater rate of job creation. I hold the view that some of the propositions are not likely to create even one new job. I believe the setting up of a national planning office will not create one new job. It is arguable that the creation of a national pension insurance fund would create some new employment. I would like to see more details in regard to that proposition, modelled on Swedish lines. Perhaps it has some prospects in so far as one might be thinking of some of the State-sponsored bodies on the industrial side, such as Irish Life. There, I think, is an argument for the creation of a national insurance fund.
There is too, possibly, an argument for the formation of a State holding in our commercial banks. That might be useful. It might be of some benefit in terms of current issues, like the bank strike, but I am not so sure that it would necessarily create new jobs. We have to bear in mind that the only jobs many of these propositions would create are those for the bureaucrats and, God knows, we have enough of these already. I hold the view that the last place on earth for an expert here, who might have a flair for smelling out a corner of the international market for a new Irish industrial project, is a national planning office in Merrion Square. This, I would stress, is not to denigrate the concept of economic and social planning and the mechanics thereof. It is simply to point out the obvious need to give to manufacturing and State-sponsored bodies the full opportunity to engage in competitive, viable joint interests. I believe we have been over-careful about, for example, the competitive role in the export field of many of our State-sponsored bodies. We should be giving them more freedom to engage in commercial activities and indulge in joint ventures in the national interest. That would be a useful development. I can see new employment coming from that kind of development and I would certainly commend such a development to the Government.
In this context one is compelled to point out that there are those in private enterprise who bitterly resent the role of State-sponsored bodies in commercial undertakings and who decry what might be described as State participation, and these are the people who have no hesitation in demanding taxpayers' money for their own firms from Fóir Teoranta, or AnCO, or the National Manpower Service, or Córas Tráchtála, or from a multiplicity of Government Departments.
That brings me to the point that ours is a mixed economy. In that context there is every reason why the State-sponsored sector should be given substantial freedom to engage in exports on a competitive basis in the same way as the private enterprise sector of the economy. That freedom should be given. There is there an area in which one could have very effective development in the national interest.
Another proposition that has emerged is that in regard to a national development corporation. This has been put forward by, for example, Deputy Halligan. I would draw a parallel with that proposition, which might find favour with the Minister for Industry and Commerce, and a State holding. There is merit in that proposition from the point of view of future industrial development because we now have substantial State investment in Cement Roadstone, and so on, and we also have a substantial slice of the taxpayers' money invested by IDA, Fóir Teoranta, Irish Life in the private sector, and there is need in my view for monitoring in the aggregrate by the State to ensure proper co-ordination of investment and policy. It is quite impossible for either the Department of Finance or the Department of Industry and Commerce to undertake the complex task of public accountability for this evergrowing State investment in the private enterprise sector. While I do not share the view of my colleague, Deputy Halligan, about a national planning department, one should, I believe, have a national enterprise board. There is logic in the concept of a State owning company, and anybody who favours, as I do, a mixed economy could not take exception to that because there is need to protect public money, to protect the substantial investment of public money in the private sector, rather than have a dozen Departments chasing after the Department of Finance and the Committee of Public Accounts trying to account for the money dished out to the private sector. It would be interesting to hear the views of Government in that regard. It is a development I certainly would favour.
We must also give greater scope to the IDA in terms of job creation. Some may not be sympathetically disposed towards the IDA, but I have always been of the opinion that this body has a pivotal role in job creation. Too many gloss over the fact that the scale of investment by the IDA since 1970 exceeded that of the life span of the IDA since its inception by the Coalition Government in 1950. Between 1970 and 1975 the IDA approved industrial proposals from home and overseas with a potential of 95,000 jobs at full production compared with 68,000 in the preceding 20 years. The IDA in the last five or six years have really done their homework and a great job and they should now get greater encouragement in terms of authority to proceed with even greater investment.
Having made some very astringent comments which, no doubt, Deputy Gibbons will probably take up, about economic planning and some of the more simplistic concepts that are knocking around, that is not to decry the urgent need there is for a more effective short-and long-term strategy in the management of the economy. I was one of those who first took the Minister for Finance to task some years ago when he had some doubts in that regard, and I think he has now become somewhat more convinced of the need for both economic and social planning.
I believe it has been a failing of all Ministers for Finance—we witnessed for example, the sullen hostility of Deputy Haughey and Deputy Colley to the first, second and third programmes for economic expansion—to believe that all collective wisdom resides exclusively in the Department of Finance. I do not share that belief. I take a wider view. We should keep a sense of perspective about the corrective role of economic planning, the generation of economic growth and economic activity and the expertise required to reach a given investment decision in a particular firm trying to project the cost of an export price 12 months ahead. All these are very difficult economic decisions. The day-today industrial relations in any one firm, trying to cope with monetary fluctuations in the sterling area, all these decisions are not easily amenable to the grand planning strategy. Therefore, one must keep a sense of perspective.
It is too much to expect that we will have detailed answers to all of these problems in a comprehensive tenth programme for economic expansion, to be published at a future date by the Stationery Office, with a joint foreword by the Minister for Finance, Deputy Ryan, and Deputy Colley. The answer will come not from politicians who exhort in platitudinous terms about self-help or the local development of enterprise. The mere exhortation of politicians who wash their hands of the difficult task of creating an effective economic climate for job creation will be of little consequence. Certainly, the answer will not come from those conservative business spokesmen—we have no need to name them because they are well known in the construction area and in chambers of commerce—who, as an excuse for not having any constructive proposals, talk about the abuses of social welfare. I suggest to some of these spokesmen that they should try to live on £10.90 per week for themselves, with £7.10 per week for a wife and £3.10 for each child in unemployment benefit. If they did that they would be cured of some of the rightwing reactionary propaganda they put out in the last few months. They would quickly wonder why some of the textile and construction industry employers failed to restructure their firms when they had the opportunity to do so in the 1960s. They put their workers into redundancy in the 1970s having lived on the speculators' fat throughout the 1960s.
Such spokesmen—and one in particular in the construction industry— have a nerve to talk about abuses of social welfare when there was not a murmur out of them when many builders from 1963 to 1973 made a cool profit of £1,000 per house erected. They did not even pay half of the taxes they should have paid but now they grumble at the National Coalition Government when scarce housing capital is allocated far more productively to local authority housing. In this sector we get better and cheaper housing contracts and we get better value for money. Where were these gentlemen when some of the builders' representatives did not even stamp the insurance cards of their workers? It is time we had some honest talk from the Opposition with regard to such matters.
Ironically, the recession has had some beneficial side-effects. For example, it has got rid of a good deal of ugly fat, some of it capitalist fat. We had rampant speculation in land throughout the 1960s and the early 1970s and Fianna Fáil promoted it up to their tonsils. It is good that the Government in their taxation measures have caught on to some of it. We had speculation on property and in shares. The holding companies wined and dined the Fianna Fáil Ministers. There is no need to name them; they are now in trouble and rightly so for some of the blatant speculation they indulged in. Some of them have gone into liquidation and I shed no tears for this. They should never have been set up because they were set up on a speculative basis.
These so called entrepreneurs now denounce the Minister for Finance and the Labour Party but of course, they denounce them at their povertystricken city lunches. They would have been better when they set up their firms if they had kept to export delivery dates as promised and if they had raised the level of productivity in the firms they established. They should have done this rather than try to shift their responsibility on to the Government of the day. I make that point very strongly.
I would even make the point about a few trade union officials whom I know. There is a tremendous contradiction in a trade union official who looks for an increase of £15 per week for his Irish members from an Irish employer while supporting the acceptance by his own union executive in England of £6 per week.
I suggest to the capitalists and to the socialists of the country that they should unite. They have nothing to lose and it is about time they united. I have news for some of them. The real socialists in this country in the last few years have been not so much the Labour Party but rather the Revenue Commissioners. The current Minister for Finance accepted their advice. They knew where the loot was going and they collared a good deal of it in the national interest. The Revenue Commissioners took the Government at their word when we said we favoured taxation reform and they made sure that at least some of those who could well afford to pay their fair share of taxation at long last are obliged to do so. Those who loudly complain can console themselves because at the next election Fianna Fáil will privately promise the well-off that there will be all forms of tax relief. Probably the party will vote for the poor at every opportunity but they will assure both sides they will protect one from the other. Fianna Fáil might get back on that basis but I do not think they will get much respect.
In Opposition Fianna Fáil have had a smell of political bankruptcy about them in terms of any real economic and social policy. I have said already that they are the most impoverished Opposition in the history of the State. They have not a thought in their heads except to suggest the abolition of rates at a cost of about £50 million a year. They are going to abolish the wealth tax at a cost of £6 million and the taxation of co-operatives at a cost of £3 million. As Deputy Gibbons knows, farmers pay about £100,000 in income tax at the moment and this is just peanuts; farmers pay no income tax worth talking about. In the by-election campaign Fianna Fáil promised they would give a 10 per cent reduction in personal income tax at a cost of about £45 million. They have promised to reduce social welfare contributions for employers at a cost of about £10 million and they have promised to abolish income tax on farmers at a total cost of about £3 million. I suggest that Fianna Fáil are no more than a "bring and buy" party at this stage. Any night out on the town with Fianna Fáil would cost about £150 million but they have not the faintest suggestion where the money will come from.
Fianna Fáil should be challenged to spell out in explicit terms how they would reduce public expenditure by £150 million, which is the amount they would need if they were to fulfil all their promises. For example, would they reduce public service pay by 10 per cent as they suggested at one time? It is time they came clean on those issues. They have been celebrating their golden jubilee recently and they owe it to their own party not to soil it with pre-election "con" jobs, as they tried to do in the recent byelections in order to woo the electorate. To paraphrase the words of their late founder and leader, to do things like that is to bring no credit on their movement and to fool the people.
However we in the National Coalition might deserve to be criticised, the performance of Fianna Fáil in Dáil Éireann in the past three years has been one of unmitigated mediocrity. I said before that one would need to be blind and stupid not to be aware of the shortcomings of the Government and it was put into the Fianna Fáil election literature, but I also said that at least we have tried to give some return to the people in the past threeand-a-half years. Fianna Fáil, instead of acting as a watchdog in Opposition, have looked after their farms, their professions, their jobs. They have trotted off to Europe, getting the few quid expenses, instead of looking after their own party, and advancing alternative constructive economic and social policies in Dáil Éireann. They have not earned the right to return to Government. I am afraid my esteem for the Opposition is nil. My regard for the Government has always been one of very critical concern. I have always had a very critical and open attitude towards the Government but we are streets ahead of Fianna Fáil and I have no hesitation in continuing my support for them for as long as they wish to stay in office.
