Deputy Dowling was in possession and of the time allotted to him three minutes remain.
Financial Statement, 1977: Motion (Resumed).
Debate resumed on the following motion:
That Dáil Éireann takes note of the Financial Statement made by the Minister for Finance on 26th January, 1977.
—(The Taoiseach).
Two very important statements have been made in comparatively recent times and I think it is well worth nothing both of them. On one occasion the Taoiseach said: "We are living largely on borrowed time and the goodwill of our creditors". On the other occasion Deputy Barry Desmond said: "One would want to be blind and stupid not to be aware of the shortcomings of the present Government". Those statements about sum up the situation and give us a realistic look at the Government.
Neither we nor the people are blind or stupid. Since the budget on 26th January, a period of 12 days, we have learned from replies to Questions that 21 items have been increased and 45 other increases are on the way. That does not take into account bus fares that will increase by 25 per cent or the coal, tea, coffee and paraffin increases that were levied just before the budget. Therefore the handouts we heard so much about have been eaten up before the people get an opportunity of getting them. This is the unjust situation that prevails. The same thing will happen in regard to the national wage agreement. Whatever is given will be absorbed by the various increases in prices. One of the points in the 14-point plan was the stabilisation of prices. I want the Minister to deny, if he can, that there will be increases after the budget in beer, cigarettes, petrol, spirits and milk. We know from statements made by the Minister for Finance——
The Deputy might now conclude.
——that if this Government are returned to power children's allowances will be abolished. The Minister has clearly indicated that he will tamper with children's allowances and with the school transport system.
I must call on another speaker.
This is a sad situation for the people getting the benefits. The 50p children's allowance increase works out at 1p a day for a husband, wife and three children.
Order. I am calling on the Minister for Local Government.
I sympathise with Deputy Dowling. He spoke for 57 minutes the other night and he was surprised the House was empty. He should realise that anybody who was present, except those who had to remain, would want to move out as soon as he started. I sympathise with him because, having said nothing in 57 minutes the last day, he attempts in three minutes to get something on the record which will be remembered. I have gone through his speech very thoroughly and it was impossible to believe that somebody could speak for 57 minutes without making one telling point. He started today by making statements that he knew were untrue, must be untrue. He tried to get in a couple of half truths about what the Minister said he was going to do. Although Deputy Dowling's allegations were denied he says they are true and that certain things will happen. This is the sort of thing Fianna Fáil have been doing for quite some time and everybody is becoming sick and tired of it.
The succession of contradictory speeches from Fianna Fáil is amusing. For instance, Deputy George Colley, the Shadow Minister for Finance, said the Coalition Government had stolen their ideas, their clothes. If the Coalition Government had to go into the nudist colony of Fianna Fáil looking for clothes to wear they would be in a very bad way. They had not got clothes or ideas for themselves; therefore they could not be stolen from them. Two or three days before the last general election they stitched together a few fig leaves, when they put forward their famous rates remission proposal which they thought would win the election for them. Everybody in the country realised this was merely a pretence by Fianna Fáil that they were really interested in the ordinary people.
In case people have forgotten, we will remind them within the next 12 months that Fianna Fáil, out of the previous 40 years, have been in office for 34, for 16 continuous years during which time they had been apparently considering what should be done about rates. In December, 1972, they decided it was not possible to do anything about them. They said the only fair means of local taxation was rates. This was contained not in a Green Paper, as suggested by Deputy Faulkner, but in a White Paper. That is their considered judgement after 16 years of continuous government, that there was no hope of doing anything about rates. In their election manifesto in the following February, 1973, they repeated almost the same thing; they would consider hard cases but ... Then three days before the election they said they proposed to do away with all household rates, having decided before this that that was an impossibility.
They now want the people to believe that what we are doing in this budget is not the right thing and that if they are ever returned to office they will be able to implement what was suggested as a result of the hurried conference they held just before the last election. They did not say, though, whether this would mean a return to full rates on farms and business premises. They mentioned a figure of £57 million but that figure is very far out. Although the figures were available they did not bother to check them but they have the audacity to tell us that what we are doing is wrong. What emerges from all this is that Fianna Fáil have not a clue but, then, this was the position, too, when they were in office. They fought election after election without having a programme of any kind. By attacking the budget in various ways they are trying to give the impression that they have some ideas which they would put into operation in the event of their being elected to office again.
We have not heard from Fianna Fáil about the grounds on which they voted against the budget. Perhaps they do not agree with the 25 per cent remission in rates. Or it may be that they voted against the increases in social welfare payments. On the other hand, they may have been voting against the remission being given to income tax-payers.
Yes, on the grounds that the remission is not sufficient.
No one in that party has had the manliness to stand up here and tell us what he objected to in the budget. Deputy Brennan's contribution opened with the accusation that the budget was a savage budget and having worked himself into a rage he concluded by saying that it was an election budget and was recognised as such. This is typical of the double-think of Fianna Fáil, the type of attitude they have been getting away with for a long time but they are caught out now. They are in a morass from which they cannot extricate themselves. Either the budget is a savage budget or it is an election budget but Deputy Brennan cannot have it both ways. This has been the general theme of Fianna Fáil, not only in this House but throughout the country. They tell the farmers about the dreadful treatment in store for them because of the budget. They say that Fianna Fáil would not have imposed such taxation measures although their spokesmen, including spokesmen on agriculture, have said that farmers should be taxed and that in office, Fianna Fáil would tax them. That is what they say in the city but they change their tune when speaking in the country.
It is difficult to understand how that party can hope ever to be returned to office. They talk of disunity in the Cabinet. I can assure them that there is no such disunity among us but that, apart from the arguments about leadership of their party, there is a direct conflict among them in regard to policy. If necessary, I am prepared to produce various statements made by Fianna Fáil spokesmen, both inside and outside the House during the past couple of months which illustrate clearly a contradiction in that party on policy matters. These statements have been made by leading members of the party but, then, all their members are leading—they are leading in different directions. However, the statements that have emanated from them make no sense.
This year's budget is fair and well balanced. A tremendous amount of work was put into its preparation. It has been accepted generally throughout the country, even by former prominent supporters of Fianna Fáil, as being fair and reasonable. It is inevitable that some people are being asked to pay a little more but overall the budget is very fair. When they criticise it Fianna Fáil should be prepared to spell out what they consider to be the alternative. So far we have heard nothing from them in this regard. Their destructive criticism will not be heeded by anyone.
The books were "cooked". The Minister found, within two months, £120 million that had been lost.
Order.
Has anybody ever been subjected to such a mixture as that which we got from Fianna Fáil immediately before the budget in relation to rates and employment when they turned a deficit of £160 million into a deficit of £10 million which, in turn they wrote off on the basis that it would be covered by buoyancy in revenue? In other words, when they found they were working on the basis of a deficit of nearly £200 million they endeavoured to prove that the books could be balanced. It was obvious from the figures they produced that they could not be relied on even to count accurately.
The Government were broke in October.
The Minister.
We can ignore these stupid interruptions.
Why were the unemployed not paid the increases in social welfare payments?
If Deputy Dowling persists in interrupting I shall have to ask him to leave the House. The Deputy must obey the Chair.
No doubt these interruptions are annoying to the Chair but they do not bother me. Deputy Dowling is merely endeavouring to make some attempt to cover up for the wasted hour he spent talking about the budget. He should know by now that he will not prevent me from saying what I wish to say, either inside or outside the House.
We have been through a very bad world recession during which a number of countries have experienced great difficulty in regard to the normal running of their economies. In some countries both the Government and the Opposition were able to co-operate in an effort to improve the lot of their people but here Fianna Fáil have been attempting consistently to do as much damage as possible. This attitude is typified in the last words of Deputy Dowling's contribution when he attempted to interfere with the right of workers to have a free vote on whether to accept an agreement reached by their leaders and the employers.
They should have a free vote.
Regardless of the fact that the workers would suffer in the event of their heeding the Deputy, he would not be perturbed. He would be happy that he had been able to do some damage. However, I can tell Deputy Dowling that there is no chance of the agreement being defeated by the workers because that body of people are much too intelligent to be taken in by the sort of drivel that we have come to expect from the Deputy and from some other members of Fianna Fáil, too. I do not say all other members of that party indulge in this conduct because some of them are reasonable. The agreement will be voted on in a democratic way within the next couple of weeks. Having spent 27 years working for and with these people I know that they will be sensible enough to vote for the agreement.
The Minister codded them for a long time.
What I have done for the workers is there for anyone to see. Can the Deputy point to one iota that he has done for them? His contributions have never been anything more than an effort to stir up as much dirt and trouble as possible.
I wish to deal mainly with the local authority aspect of the budget since my responsibility is within the Department of Local Government. This Department, being of so much importance, merits some discussion during this debate and the figures which are given clearly under the various headings in the budget deserve some comment. In 1977 local authorities, county councils, county boroughs and urban authorities will spend an estimated £450 million on the range of services for which they are responsible. Central Government will provide £260 million of this by way of grants or issues to the local loans fund and a balance will come from rates and other receipts accruing to local authorities for such items as housing rents and duties and other charges for goods and services. The benefits the Government have conferred on the ratepayers are well-known in this country. No matter what way the Opposition try to decry it the rates in this country, if housing and health charges had not been taken from them, would be over £6 in the £ more than they are at present. The facts can be checked and have been checked by various people, including members of the Fianna Fáil Party. Not alone were the health and housing charges taken off but charges arising from damage caused by the disturbances in the North are taken over completely by the State. In addition, malicious injury claims up to 20p in the £ in any local authority area is met by the State.
If this is being criticised as not being enough, what did Fianna Fáil do about it when they were in Government? They did nothing in the swinging sixties and on into the seventies when, according to them, there was money for everything. They made no effort to meet a crippling burden for malicious injuries which affects quite a number of local authorities from time to time but which affects Dublin city every year. Fianna Fáil felt they could do nothing about it, that it was a matter entirely for the local authority. Fianna Fáil introduced a waiver of rates scheme financed by the local authorities, and it allowed local authorities to give the very badly off people some assistance towards paying their rates. After a gestation of 16 years a waiver of rates scheme amounting to less than £1 million the first year was the result. I was interested in the document they produced saying that it affected 10,000 people in the year 1972-73. They could not count, it affected three times that amount. Many people who felt that they should not have to pay rates because they could not afford them were told that the rates which were being struck could not carry any more.
When I took over as Minister, with the advice of the Government, I asked local authorities to be more generous about this, as I felt that there were a lot of people in the country who could not afford to pay the rates asked of them. A decision was taken by some local authorities that they would increase the number of people to whom they could give rates relief and that they would increase the amount they could give. The result was that up to 50,000 people got rates remission up to last year. Local authorities spent £1.8 million on this last year. I felt this was not enough, that we were not dealing with the hard core of really badly-off people who were paying their rates but were finding it a great strain. I suggested to the Cabinet that local authorities should be asked to raise the amount to be raised by them this year to £2 million and that a further £2 million of State money should be put into it. The result is that this year there will be £4 million for rates relief. This is what I would call taking care of the really needy, the people who have had to pay rates and who were not able to pay them. This is a Christian approach which is very much appreciated. Was that the section of the budget which Fianna Fáil voted against? Maybe they did not like the fact that we should give the taxpayer's money to people like that.
We have been tackling this problem in an orderly and progressive way. In 1972-1973 health and housing charges absorbed 44 per cent of the total rates levy and the cost in money terms was £43.2 million. In 1977 the ratepayers do not have to contribute anything to health services or towards the loan charges on local authority housing provided for letting. This is a great idea and it is being appreciated. It is saving the ratepayers £90 million this year.
The position about malicious damage is generally well received. This year it will cost a further £2½ to £3 million. This saving of £93 million is the result of direct action by the National Coalition Government on the rates issue. As far as I am aware, if Fianna Fáil were in power that amount would have to be paid. The rates remission on top of that which is an extra £15.5 million will mean that where the domestic ratepayer is concerned the effective rate in the £ in all areas will be less in 1977 than in 1976 and the effective rate in the £ in 12 rating areas will be less even than the 1972-73 rate.
This does not take into account the change in money values. If that were taken into account, the real burden on each ratepayer for the same effective valuation will have fallen considerably below the real burden which obtained in 1972-73. This is an indication that the Government are anxious and willing to help the ratepayers. It is not a promise that it will be done a year or two years after the next election. It is direct action taken in the lifetime of the Government. After 34 of the 40 years before they were put out of office, having done nothing about it, and in the last 16 consecutive years, having done nothing except make a recommendation in a White Paper that they did not propose to do anything about it, is evidence enough that the suggestion of what they will do a year after they get back into Government will not be accepted by the people because they know this is just some more eyewash from the Party of eyewash.
I want to make it clear that this reduction in rates applies to the 25 per cent reduction in rates for 1977 which will be 50 per cent off the second moiety in most cases. It applies not alone to owners of private houses but also to tenants of local authority houses, tenant-purchasers of local authority houses and also to the occupiers of other rented dwellings with small valuations in respect of which rates are paid through the landlord to the local authority but the rates of which are increased by the landlord each year to take account of the rates increase. If anybody is paying to a landlord a rent which includes rates, that tenant is entitled to this rates remission because the landlord will get it. I am sure some people will be anxious to make a few bob on the side by not making reference to the fact that these rates are being reduced.
Local authority tenants in common with other domestic ratepayers are liable to pay rates on the houses they occupy and they will get remission.
Some people who are owners of property, particularly those who have been buying houses over the last five to ten years, seem to think that the tenants of local authority houses do not pay rates. I assure them that they pay the same type of rates as the owners of the houses pay and that in fact they are not riding on anyone's back as is often suggested. Rates relief will apply to farmers and business people in respect of the domestic portion of their valuations.
I have dealt with the waiver of rates scheme and I appeal to local authority members to ensure that each local authority does operate this scheme. I will go further and suggest that it might not be a bad idea if local authority members suggest to their county or city managers that they set up a small sub-committee to look into this question of waiver of rates because I am not happy that in every case the right people are getting the benefit of it. There are people who are too proud to look for what may be regarded as charity. This is the right which is conferred on them through their living in this State of ours and there should be no question of anybody being ashamed to look for rates waiver if he is unable to meet his rates commitments.
Some people have been writing to the newspapers and I was rather surprised at the chairperson of one national organisation writing a rather intemperate letter which apparently completely ignored the decision of the Government to put an additional £2 million into the kitty for the purpose of rates waiver this year. Such people would be much better off if they approached their local authority, public representatives and officials, and attempted to get the matter straightened out and get full value for what the Government are giving them, rather than complaining about the Government not giving them something which is already there for them if they ask for it.
Regarding rates, I would like finally to say that we intend as a Government to continue to face up to and find a solution for the whole question of local finance, and those who are embarrassed by what we have been doing over the past few years in contrast with what were merely promises will find little consolation in the assurance of the Minister for Finance in the course of the budget statement, and I quote:
The Government are determined to complete their work on rates relief for private dwellings at the earliest possible date without relying on alternative taxes or resorting to fanciful theory to achieve that goal.
The question of housing ranks very high in my Department and I would like to state that I am very happy to have been working with a group of people in Government who have been prepared to accept that there was what amounted to a national emergency in housing when we took over and who have been prepared to face up to the necessity to have people rehoused. It is my ambition to see, before I leave office in about the next 20 years, everybody who requires a decent house at a reasonable cost having such a house at such reasonable cost. We are aware that at present in this fair city of ours, Dublin, there are still over 5,000 families who need to be rehoused by the local authority. I am glad to say that throughout the country generally the situation has improved immensely and that we now have very few cases where families are a long time on the waiting list awaiting rehousing. Most of those in that position are people who have come back from England, or have moved from the area, or were in a reasonable housing situation and for one reason or another have found their position disimproving because of something that happened family-wise or because of an increase in the family over the last year or so which has put them in the position that they need rehousing now and did not qualify for it earlier.
However, generally throughout the country the situation is that very many people who three or four years ago felt that they had not a hope in the world of being rehoused now find themselves living not alone in houses but in good houses. I am proud of the fact that the Cabinet and the Dáil gave me the support in getting necessary money for this and in having the standard of the housing of the working class raised to the very good level it has reached. Even the members of the Opposition are prepared to agree that the houses we are building now are the type of houses which all of us would like to see provided for working class people. We had got into a rut and I blame some of the people in the Opposition—perhaps some of them were not aware of what was happening—who allowed a situation to arise where somebody in the Cabinet made a decision six or seven years ago that the houses being built for local authority tenants were too good and that there should be an effort made to build more houses at the cost of reducing the standards of the others. I have had the legacy in the Department of Local Government and the tax-payers have had the legacy until now of attempting to keep many of those houses in repair because they were substandard from the start and it was nearly impossible to do anything with them. I see a lot of merit in the case of those people who are living in those houses complaining about the terrible conditions in which they now find themselves. They left bad houses to go into these when they were new and they were glad to have them; they now find that they are almost impossible to maintain.
There is a backlog of housing to be met first and those who have no chance of getting a new house will have to be housed before we can consider the question of those who are in these substandard houses built five or six years ago. I hope that we will reach the stage where we can do something for those people also. While all of the houses are not bad and there have been quite a number of very good schemes of very good design built by good contractors far too many were substandard and thrown up in a slap-dash manner. The type of material used in them should not have been used for housing human beings in any country, let alone a country like ours. The position seems to be that these people, feeling that they were being rehoused in a new house, just went in and for a short while felt they were all right and then found that there was something wrong. The aggravating part of it is that the people who took the decision to build these what they call low-cost houses, in fact houses which it was estimated would last about 25 years, proceeded to sell them to tenants on a 35-year purchase. That is a type of fraud which should not be perpetrated on anybody.
I am glad to say that the standards now are first-class and that many architects, engineers and contractors who were involved in these low-cost houses—low-class perhaps is a better word—and who had their reputations badly dented as a result of their involvement with them are now again able to hold their heads up because the houses they are building for local authorities are good houses.
There has been a misunderstanding about the NBA. Some people think that the NBA are a type of building contracting firm who go out and build bad houses just for the hell of it. The NBA are a State body set up for the purpose of assisting in the building of houses and all they do is take the order from a local authority, or from the Department of Defence, or the Department of Justice, or the Department of Industry and Commerce, and they get a contractor to build the houses. They build what is required. It is entirely wrong that certain people, particularly those who were involved in the setting up of the low-cost housing scheme, should attempt to blacken the names of the members of the NBA by saying they were responsible for bad houses when the then Government deliberately made the decision to build those bad houses.
I am glad to say that throughout the country many people who felt they would never be rehoused are now living in good houses. This year we hope to go a long way towards meeting the remaining requirements throughout the villages and towns. The man living and working in a country district can have a house built for himself where a site can be obtained. These are lovely houses which are an embellishment to the countryside rather than anything else. It is nice to see this happening.
The cities are in a different category altogether, and particularly Dublin city. Dublin city has a big problem. The allocation of housing loans and grants for local authority housing in Dublin has to be looked at in relation to what was happening in 1972-73 to appreciate what happened last year and what is happening this year. In 1972-73 Dublin Corporation got £6.5 million for local authority houses. Dublin County Council got £3.3 million and Dún Laoghaire got £.397 million. That is approximately £10.2 million for what they call the three Dublins.
The year before last, the amount of money allocated by the State for local authority housing in Dublin city was £12.7 million. Last year I added £11 million to that, so they got £23.7 million. With the amount they were allowed to use through overdrafts, and so on, the total amount available to the Dublin area for local authority housing was £33 million. I am increasing the amount this year and I hope I will be able to increase it by about £6 million. We have gone up from £10.2 million to almost £40 million in four years. Yet a Fianna Fáil Deputy stood up in this House and complained bitterly about how unfair I was to Dublin in the allocation of housing finance.
Recently at a Labour Party meeting I referred to people who had been a long time on the housing list in Dublin and I ventured a guess or an estimate that the existing housing list of slightly over 5,000 should be cleared in about three years having regard to the way we are spending money. This does not mean nobody will be looking for housing in Dublin in three years' time. I would regret very much if nobody was looking for housing. If we have not young people getting married and looking for housing, we will have a dying city and a dying country.
I hope we will not have 5,000 families looking for housing after the 5,000 have been taken off the list, but we could have. It would not be a bad sign if we had many couples still looking for housing. Even if we bring the list down to a low level, we will still have young people getting married and families growing up and they will be looking for housing and they will be entitled to it. As long as I am here, I will see to it that the necessary money is available to ensure that they get it.
In addition, in a few years' time people will not be satisfied with the houses they are living in now. Nowadays people would not be satisfied with the houses they had some years ago. They want more facilities and better houses and they are entitled to them. That is as it should be. This year I hope to have about £25 million for Dublin Corporation, £9.4 million for Dublin County Council and £3.8 million for Dún Laoghaire, a total of £39.2 million, almost £40 million. I will be attacked by certain people who will say: "There you are again giving the lion's share to Dublin". I want to state here, as I have stated outside the House, that I make no apology to anybody for doing that. I believe the greatest need is in Dublin city. We must ensure that unfortunate people who have been looking for houses for so long are rehoused. The country people are the first to admit that people living in the city—their own kith and kin in many cases who have moved into the city—are entitled to be rehoused and that the money must be made available. The National Coalition are interested in seeing that everybody who needs a house is rehoused.
I want to come now to the question of loans. I came under attack in this House from people who felt the SDA loan limit should be increased. This scheme was introduced many years ago to help those who could not obtain housing finance otherwise. Even after the necessity for the SDA loans scheme was not as great, because other sources became available, the scheme continued to be used because it had a fixed interest rate. People who borrowed money at 6 per cent are still paying 6 per cent, although the State now pays 14, 15 or 16 per cent to borrow the money which is being made available to keep that loan alive.
If I increased the income limit qualification to £3,000, as has been suggested, and the amount of the loan which could be borrowed to £6,000, this would cost somewhere between £30 million, £35 million and £40 million, if the fixed interest rate remained. Last year a great deal of the money which was available for the SDA loans was not taken up particularly in the Dublin area—and this is very interesting—because the building societies, who were taking in and lending approximately £35 million to £40 million when I first took over, were able to lend £95 million last year. In addition, in the previous two years the banks made available £40 million. I am glad to say that, as mentioned in the budget speech, the building societies' level of lending will be even higher this year and the banks are putting in a further £20 million at least. Never was there so much money available for those who wanted to build houses. Throughout the length and breadth of the country houses are being built. Nobody can deny that those houses are there, and that they are good houses.
It is necessary to refer to the fact that we have a very serious unemployment problem. The result has been that many people who normally would have been anxious to build houses were not prepared to undertake that burden until they were sure of a regular job again. Normally this would have a dampening down effect on house building. Even with that dampening down effect I am very proud of the fact that within the next few weeks we will have over 100,000 new houses. I took office on 14th March, 1973. Let us take the end of the financial year, 31st March —we can take the 14th if we want to— and between that or any date from mid-March until mid-March of this year and we will have over 100,000 houses built which were not in the country when this Government took over running the State. There is no point in the Fianna Fáil Party saying that they would have built more houses because I have on record in their White Paper on local government reform a statement in which they referred to the fact that they felt that by the eighties there would probably be a demand for about 18,000 houses per year. To suggest therefore that they would build more than the 25,000 that we estimated we should build is only nonsense.
In the budget we are making available the money necessary to have our programme carried out but I do not feel that there is any onus on the State to spend money on the erection of houses surplus to our 25,000 if there are other sources from which that money can be obtained. Last year, because the SDA loans were not taken up I was able to take from that fund, from the unexpended amount, over £9 million which was used for sanitary services throughout the country to make a total of almost £25 million as against the miserly £8 million given in 1972-73. This year, with almost £25 million in the budget I again hope, if I find there is money available, to be able to switch money to the sanitary services because I believe that one thing the country fell down on from the beginning—I blame every Government including Fianna Fáil and the two previous Coalitions—was that we did not recognise the urgent necessity for sanitary services without which you cannot have modern housing, industry or agriculture. The Government have made this money freely available to me. On the other hand, if I find there is a greater demand for money for SDA loans or any other type of money during the year and if we have not the money which we require for house building for any strange reason I shall do as I did in 1973 and 1974 and have no hesitation in going back to the Cabinet and getting that money, because I did get very substantial sums of money, particularly in 1973, when the money I had got was not sufficient to support our housing programme.
This year we have included something which may have a very big effect on SDA loans. It is a loan for people who are either applicants for local authority houses and have been approved for 12 months and who are married with at least one child, or people who are living in a local authority house and are prepared to hand back that house to the local authority. We have provided money in the budget to make loans of up to £7,500 available to those people to purchase either new or secondhand houses. I am sure very many people will avail of this, people who would otherwise be waiting to go on a local authority list. For the first ten or 12 years their repayments will be heavily subsidised by the State so that the people purchasing these houses will find themselves able to afford the repayments—the repayments on this large amount of £7,500 if they have to be made immediately are substantial—and the interest rate required.
I think this is a very good idea and I am sure local authorities throughout the country will adopt it. Many of them have welcomed it and are now making the necessary arrangements to put it into operation. I suggest they should consider circularising people on their lists, telling them what is available and suggesting they consider building if they have sites. One or two local authorities have been playing politics and have been stalling and attempting to prevent the scheme from being put into operation. We might expect this from some people, but I appeal to the Opposition, many of whom have told me that they welcome the idea, to try to ensure that as far as they can, they will influence people to avail of this loan which I think is in the interests of our people and when that is the case it is in the interest of Fianna Fáil to facilitate its operation. While we differ with Fianna Fáil on politics and on policies, normally the people elected to this House will put the people they represent first. This is as it should be. It is particularly so in housing and I ask Members to try to ensure that the scheme for which provision is made in the budget will be carried out.
In 1975, 8,794 local authority houses were built, breaking all records. The previous record was made by another Labour Minister for Local Government, the late Tim Murphy. Those who knew him knew him to be a tremendous worker and he is a man I consider worth emulating. The number of houses built in 1975 was almost 1,300 over the number for which we had provided that year, 7,500. The early completion of so many extra houses caused a reduction of the 1976 target to 6,500. This reduced target would still have given almost 300 more completions than the original combined target of 15,000 dwellings for the two year period, 1975 and 1976. But preliminary figures for 1976 indicated that the capital allocation by the Government for the local authority housing programme 1976 may once more have resulted in a substantial excess of completions over the target for the year. As far as houses generally are concerned I cannot give firm figures here. As soon as I have them for all types of houses, they will be made available. So far, we have been able to get figures for local authority houses and they seem to show that the number built in 1976 exceeds 7,200. That gives at least 700 completions more than the target of 6,500 and a combined two-year record figure of 16,000 an average of 8,000 houses a year. This was the designated ultimate target of the National Coalition Government.
As regards local authority houses, the leader of the Opposition and myself had an exchange of words on more than one occasion because before Christmas in 1975 he said in a speech here, a copy of which is available, that there were too many local authority houses being built in relation to the total number being built. When I first quoted him I did not use the last three or four words because I did not think they were important and I still do not think so. Perhaps according to his logic he was right but we believe the proper thing is to house the people who really need houses. We have done this. An average of 8,000 houses per year has given this result.
The Minister will encourage people to house themselves?
Yes. That is why I introduced the new scheme to which I have referred.
That is what the Leader of the Opposition was getting at, as far as I know.
I do not know if that is so because Deputy Faulkner, Shadow Minister for Local Government, has consistently questioned me on the basis that there are not enough local authority houses built in certain areas. If what the Deputy suggests is what his Leader said or meant, Deputy Faulkner does not agree with him. I should not like to get involved in that matter. As I said earlier, the standard of construction and environment has been and will be maintained at the high level on which I have insisted. Prices continue to rise. In other countries, in Britain particularly, the bottom fell out of the housing market completely and housing a couple of years ago was down to one-third of the number they had been building normally. This has not happened here. We continued to build and will continue to do so. Party because of general improvements in standards but mainly because of inflation, prices have gone up. Local authority houses in Dublin and other high cost areas are costing £10,000 or more. Some of the central city redevelopment housing schemes will cost considerably more than £10,000 per house. I believe Dublin Corporation are right, and I have given them every encouragement and will continue to do so, to rebuild the centre of Dublin for housing. Anyone who has travelled abroad and looked at what happened in areas where the centres of the cities were allowed to die will realise the necessity to have this done.
Employment in local authority houses has increased. In 1976 there was a big increase; we had an excess of 6,000 men employed building local authority houses. The amount of capital being provided for the local authority housing programmes in supplemented by a massive amount of subsidy paid by the Exchequer. In 1972-73 the previous Government provided £5.8 million in housing subsidies. This year, 1977, the amount will be £34.4 million, over 600 per cent. These are the facts.
With regard to housing we are doing very well. The Government are meeting their housing programme commitments. The country will hear in a few weeks that we have completed our target for four years of 100,000 new houses. The reason why we have not been able to get the final figure for 1976 is that when grants were being paid in respect of practically all houses, it was easy enough to keep a record. It is not so easy now and we have to find a way which not alone would be possible to estimate but would also result in a figure that everybody would accept. We had a lot of trouble about the actual figures for a number of years and eventually it was discovered that the way we were doing it was right and everybody is prepared to accept it now.
With regard to the low-rise mortgage scheme, for the first nine years of the purchase the State will pay a fairly substantial subsidy and the local authorities are empowered to pay a supplementary subsidy if they so desire. The Building Societies Act passed last year should make it easier for those dealing with building socities. I have a building regulations draft which was published by my Department in November and I hope it will be in operation by next September. This too will be welcomed.
The construction industry play a great part in the life and economic and social development of this country. Because we depend on this industry the Government this year, through the public capital programme, the amount of money provided to generate work in this industry, is up in current terms on the amount of capital spent on similar projects during 1976. This does not take account of the £55.5 million which the Minister for Finance announced in his budget statement would be provided for job creation projects under the national wage agreement when it is accepted. Of this £55.5 million, £14 million have been earmarked for construction work on roads, schools, hospitals, and other public buildings. As well as this, a substantial proportion of the £24 million capital expenditure to be provided for industry, harbours, farm modernisation and telecommunications will go towards building and construction and overall the boost to employment in the industry should be significant. I have dealt with sanitary services and will deal now with roads.
Local authorities have been notified of the amount of money they are getting for road works in 1977. The total amount of these grants, including the extra £2 million provided for road improvements works in the budget, is over £26.5 million. In 1972, the year before we took over, the total amount allocated was £14.4 million and we increased that in 1973 to £18.9 million. This year's total means that we have increased the State's annual contribution to roads by £12 million since 1972-73. There are many roads to be done but this year as in previous years I have given allocations for the upkeep of national primary and national secondary upkeep, which is fully met by the State, an allocation for the construction of new national primary and new national secondary roads to each local authority and the construction of a number of bridges—a large number of bridges have been erected over the last couple of years and many more are needed. In addition I have given a block grant which the local authority members can get the county engineer to use where they think it is most needed.
The Minister for Local Government is a very vigorous and energetic man. He has been giving a very good account of his housing activities. It would not be fair to blame him for the situation where, because of the fiscal policy of his Government, fewer people can afford to buy their houses and, therefore, there is a greater demand for houses provided by the taxpayer and the rating system. He stressed that he believed the Opposition had not given any real reasons for opposing the budget. I would like to assure him that if there was any danger of the Opposition supporting this budget, I would be encouraging a vote against it because I do not believe it will solve our serious economic problems.
A recent survey suggested that there may be a marginal improvement in the economy this year, but it warns against false optimism in view of rising prices and a recent increase in unemployment. That warning is very necessary and the effects of recent and coming increases must be taken into consideration before anybody can jump to the conclusion that the recession is over. We had a recent steep increase in some commodities, particularly coal. Petrol and oil are gradually creeping up and the Minister's budget speech forecast other substantial increases. He disclosed that the telephone section of the Department of Posts and Telegraphs is currently losing £500,000 per week. He said increases would be announced in due course by the Minister for Posts and Telegraphs, including not less than 25 per cent in telephone charges and approximately 13 per cent in postal charges. It is not clear at the moment whether the increasing cost of public services, tabulated at around £46 million, is included in the estimate the Minister gave of what the telephone section is losing each week.
Another increase referred to is the addition of 69p to the cost of the social welfare stamp. Last year's increase in that area was approximately the same. The overall increase for any company was about £1,000 per 20 workers and the increase of 69p works out at something similar. This in itself must have a marginal effect on the level of employment because anybody employing people in the competitive area must bear in mind not only the cost of wages but the very high level of social insurance which has to be carried substantially by the employer.
There are also substantial increases coming in transport charges due to the increasing deficit of CIE. When one takes into account all these extras, together with other increases which one must presume are coming in electricity and the recent increases already mentioned this morning by Deputy Dowling, it would be foolish to be optimistic about our competitive ability. In the last analysis our own prosperity depends on our competitive ability to sell overseas. It is a truism to say that the prosperity of any community depends on the energy and hard work of its citizens but it also depends on the quality of leadership and integrity of its politicians. It depends to a considerable extent on the example given and the measure of confidence injected into the community itself.
I really cannot find in this budget the massive stimulus that is needed to get this economy out of the rut into which the Coalition Government have driven it. I note the £18.9 million in the Estimate for employment creation which will go some of the way towards resolving the problem but only a small part of the way. I fail to see what will create the large number of jobs necessary to generate expansion and enterprise and make an impact on the large number of unemployed we have at present and the significant number of young people who will need jobs. I believe that this problem must be dealt with by a major injection of incentive, of capital and of enterprise into the economy and I do not see that in this budget.
The Taoiseach, speaking here on the budget, wrongly took Fianna Fáil to task for what he described as "promising when in Opposition what they will not do when in government". If the Taoiseach was referring to the emergency economic package published by the Fianna Fáil Party last September which proposed to turn around the economy and create about 20,000 jobs in the first year of a Fianna Fáil Administration, including 5,000 jobs for school leavers, let him understand that this is the sort of proposal that is necessary in our economy and that a dynamic proposal of that kind would not be needed if Fianna Fáil had been in office. I firmly believe that if experienced, competent people had been in charge of administration over the past four years many of the mistakes that have been made would not have occured. We can assure the Taoiseach that our proposal, our economic package, which is a short term one, is no idle promise but represents a determined effort in future commitment by this side of the House, if elected, to do what is necessary to restore the Irish economy after the Coalition's term of office. The Taoiseach's view of what he calls Fianna Fáil promises contrasts oddly with the loss of thousands of jobs during the past few years. I will grant that the unusual economic circumstances of the past three or four years would have involved some considerable disruption of our economy but nothing like what has occured as a result of the Coalition's Administration. Hundreds of thousands of new jobs were created in industry and services under the previous Fianna Fáil Administration, not due alone to the efforts of any individual but due to the fact that the Administration which then existed was a cohesive one which understood the prevailing situation and was able to give the kind of leadership that encouraged expansion.
I do not have to remind any Member of this House that the creation of those jobs between 1957 and 1973 was forecast by the late Seán Lemass many years before the 1957 election. Indeed, it should not be necessary to say also that the target which he forecast was not alone achieved but was considerably exceeded. Judging by the efforts of the Minister for Finance to go some way towards imitating the Fianna Fáil proposals and judging by the remarks of the Minister for Foreign Affairs, on the other hand, about the Fianna Fáil economic package neither of them appears to understand what our proposals really mean, nor do they seem to understand the thinking and philosophy that lies behind those proposals.
We have now had what may be described as a disastrous four years of governmental incompetence in economic terms. The accounts just completed show a reduction in the estimated deficit for last year from £327 million to £201 million. When this was revealed some weeks ago shortly after the accounts closed, one got the feeling that some Government agencies were practically boasting about it. What did this reduction from the estimated £327 million to £101 million, plus the increase in tax revenue, reveal? In my opinion it has amounted to a major blunder in terms of over-taxation. One economic correspondent at the beginning of this year headed his article with the question:"Why the hair shirt", and went on to say "it was not necessary to have proposed £107 million extra tax in 1976."
It must be obvious to anyone who has experience in economics that such additional tax collected on top of the high level of tax that existed must have created considerable unemployment, increased wage demands leading to even higher prices, and created a greater demand for social service payments in unemployment and other areas. In other words, that mistake on the part of the Minister imposed an even greater burden on the Exchequer and must also have affected the level of inflation to some degree. Even under the Coalition the economy would have been that little bit better off if the Minister had been able to do his sums correctly a year ago.
From time to time Government spokesmen have suggested that this side of the House place all the blame on the Government and on the Minister for Finance for the level of inflation. This is not correct. Responsibility lies on the Government for the level of inflation that arises internally. One of the inflationary factors we cannot control here is the increased cost of goods being imported. The main factors in internal inflation are the lack of restraint and discipline in the domestic market and the lack of leadership in the Administration resulting in over-borrowing and easy-way-out budgetary policies. In that respect I would submit that this Government have been a disaster, because, unfortunately, motivation has been largely influenced by the desire to avoid hard decisions, the kind of decisions that real political leadership must face up to.
Looking back over the past four years, I believe the greatest mistake of all has been the failure on the part of the Government to grasp the nettle when the oil crisis developed in the autumn of 1973. At that time the Government took the easy way out. On top of an increase in the price of petrol from abroad the Minister for Finance increased steeply the tax on petrol thereby increasing the cost of transport and indirectly increasing the level of wage demands. Therefore, the policy put forward and administered by the Government at that time was the reverse of what was needed, and at that early stage, in the first 12 months of the Coalition Government's life, we warned against the steps the Minister was taking. The Government's policy was one of laissez faire: Do not look ahead or plan. Let us borrow our way out of trouble. I believe this week, inexperienced approach to the job of Government has resulted in our having now the highest level of inflation in Europe, in a situation where over the same period of years our main competitors have reduced their level of prices and inflation to single figures. The public must be warned continually that our higher rate of inflation and prices in all goods must inevitably affect our ability to export. While there may appear to be marginal improvement, I do not see it in the long term, and I do not see this budget grasping the nettle.
In the tabular figures given it is revealed that in four years this Government have over-spent hundreds of millions of pounds in current house-keeping expenditure. The national debt has more than doubled. The service of the national debt is up from £127 million in 1973 to £448 million for the present year, plus the cost of any additional money that may be borrowed during the course of this year. Therefore, in a short period of four years the service of the national debt has been increased two-and-a-half times.
The Taoiseach revealed one of the most frightening aspects of our present fiscal situation. He said that State expenditure as part of the gross national product for this year will be something in excess of 55 per cent and for next year it will be at least 60 per cent, that is to say, the level of the GNP has moved from 29.4 per cent in 1973 to 55 per cent for the coming year. It is interesting to note that the cost of services from the year 1960 to 1973 moved from 28 per cent to 29.4 per cent, that is, 1.4 per cent over a period of 16 years, but that in four years under the Coalition Government it has increased by 25.6 per cent. In other words, what we are dealing with now is a public service expenditure, percentage to the GNP, of 5 per cent this year, whereas the figure for West Germany is 16 per cent and for the US 20 per cent. This is one of the most serious aspects of the consequences of the past four years of Coalition Government.
On the national debt side, our position has changed rapidly from that of a creditor to that of a debtor nation. It is little wonder, then, that people have become cynical in recent years in regard to politicians and governments. Even the media are cynical in regard to the motives behind some of the budgetary changes. A few weeks ago one headline read that Richie Ryan's kind-hearted budget set the Coalition ship firmly on a course for an autumn general election. Another said that Deputy Ryan's budget will be popular, that it will very likely help the Coalition to win a general election some time this year. In other words at least some journalists concluded that tax changes in the budget, far from being for the purpose of restoring the economy, are aimed at winning the next election for the Coaltion.
However, so far as those people who wish to be at work but who cannot find jobs are concerned and those large numbers of young people who are seeking work, the real need is to restore the economy. Is there any reason for believing that the figures produced by the Minister in his budget for the coming year are likely to be anywhere near correct? I pose this question because in 1975 expenditure was under-estimated by many millions of pounds and in 1976 the tax yield was under-estimated by several million pounds with further disruption to the economy. Can the electors in the forthcoming election trust this Government not to reverse the charges, as it were, in the event of their being given another opportunity?
Some six months ago the McKinsey Report said that far from being on a positive course for achieving major targets the economy is actually pointed in the opposite direction. Do the Government believe that an extra £18.9 million for the creation of employment plus a reduction in tax of £56 million will effect the turn around in the economy as proposed by us in September last? The McKinsey Report states also that unless we make drastic reductions in our economy and sustain them for a long period we shall soon be heading for disaster. Where in this budget is there evidence of drastic adjustments of the type necessary to restore our economy? Admittedly, some of the tax reductions are noteworthy. At least they go some of the way in an effort to recover incentive. There is encouragement for the higher wage earner but those on the lower rung of the ladder in terms of income will be back to square one as a result of current price increases.
In the company area the 5 per cent reduction looks good except that one must consider again this year the increasing cost of fuel, telephone and postage charges, social welfare contributions, wages and so on. The advantage will apply next year and not this year.
I should like to make a few points in relation to the export market and to comment on the results of recent years in that area. We are very fortunate in that agricultural prices have been maintained as a consequence of our membership of the EEC. Failure in this regard would have resulted in the economy being in a much worse condition than it is. There was an increase of 18 per cent in money terms in respect of industrial exports to hard currency countries last year and a fall of 6 per cent in so far as the UK was concerned. One must ask what is the real value involved. How far are we measuring up in terms of competing?
During the past four years the £ has fallen to 54p compared with 100p at that time. Is it any wonder, then, that the monetary value of industrial goods to hard currency countries has increased when one realises that these countries are paying only a little more than half price for our goods while we have to buy theirs and any raw materials we require from those areas at double the price? One need only cite the extraordinary price of motor cars here and try to equate that with what has been happening to the £. When one takes the 18 per cent increase in exports to the hard currency areas one realises that as this is merely in money terms there is little or no improvement in actual value. The export level to the UK which may be on a seasonal basis, fell by 6 per cent in money terms.
What this really means is that we are not getting control of our economy and getting ourselves into a position to compete abroad. If we fail to control our home expenditure situation, we cannot expect indefinitely to go on increasing social welfare payments and we cannot continue to enjoy the standard of living to which we have become accustomed. What this country needs is a plan to restore the economy to the level at which it was four years ago when this Government was elected. Only a vigorous injection of confidence such as was proposed by us last September can get us back on our feet. This country needs confident political and economic leadership to do the job. I hope the people will soon get the opportunity to provide that leadership at the forthcoming general election. It is only after that that the real end of the recession will be in sight.
This budget shows the Government's commitment to putting our economy on the right road. Over the past three years we have seen the perilous economic state of Europe and the world. There is an accepted gradual upturn now in world economy and consequently the same is taking place here. This budget has been structured to meet and cope with this upturn. We must squarely face the fact that unemployment is one of the major problems in our society. Measures have been taken in the budget to cope with this problem. I have no doubt that when employers see the growth in our economy and in world economy they will start to expand and will use the £20 employment premium. The Government are alive to the serious problem in relation to youth and the £10 employment premium for young people shows that the Government are serious in tackling this terrible social evil which is with us today. This problem is with every country in Europe. It behoves the Government of the day to get on with the job and to solve this social problem. As well as the employment premiums, there will be additional State investment in education, health, local government expenditure, telephones and so on and this will improve the employment situation. The overall confidence that the budget will generate within the business community is important. With this confidence people will invest and expand to meet the growing markets. This will contribute to a very meaningful increase in the employment rate.
The Opposition made play of the problems of unemployment. We never ran away from the problem. When they were in office the world and European scene was quite good and still we had a very high rate of unemployment and we also had a major emigration problem. The safety valve was the boat. Had we not got emigration in the swinging sixties, as Fianna Fáil refers to them, we would have had over 100,000 on the unemployment register. It is well to remember that. Despite the booming era in which they were in Government their attitude to employment was very poor. Their record will back me in what I am saying.
We have reversed the emigration situation. People are coming into the country despite the fact that we have this unemployment situation. It is a tremendous thing that people now have confidence and want to stay and work for the country. This budget is the stimulus to get things moving, to get out of the period of economic gloom in which the world found itself as a result of the oil crisis and other problems caused in the last two or three years. A new era is dawning for this country and when one reflects on history at a later date it will be noted that it was the budget of 1977 which spearheaded this revival.
The Opposition have been mute in relation to tax reform which is being tackled in this budget. When the Minister was reading his budget speech some weeks ago it was a rather interesting exercise to gaze across the House and watch the expressions of the Deputies opposite. As the Minister unfolded page after page, the gloom and the depression in their faces was very eloquent. There were tax concessions right across the board. Tax rates came down by as much as 20 per cent. This is the type of tax concession that is required to give people an incentive to work harder, so that when they work they do not get a clawback of a very unequal portion of their income being taken from them. In industry it is important that the incentive and the profit motive must be there. An industry is not there just to make money for the Government. It is there to create a profit to reinvest, to generate more employment, to pay dividends to the people who invest money and to give a general air of confidence. It is clear that the tax proposals in the budget meet this need.
When we took office one of our priorities was the question of social welfare. We inherited an area which was depressed over the years and which was not intended to keep abreast with the cost of living. When we took over the old age pension was £6.20. In April it will be £13.90 and in October there will be a further rise. The same applies right across the board to our social welfare benefits. For an old person living alone there will be £1 extra a week. That is again looking at the situation as it should be looked at, with humanity, and knowing that the cost to the person living alone would be higher than for a person living with a family.
The question of extending the free travel, free electricity and free television licences to people who for health reasons cannot work again is a humane one. It is necessary to give such people these benefits and the State has an obligation to provide them. When one examines the record of social welfare we can be happy that we are along the right lines. We hear a lot of criticism that social welfare is being abused. As long as we are in a human situation there will be abuses, have no doubt about that, but we have got to look at the other side of the coin. There are tax evasions and there are abuses. We do not hear much about them but they are there and people who claim that these social welfare abuses are taking place wholesale should examine their own conscience and they will find that they themselves are indulging in some sort of evasion. Nobody condones this and the Government and the Department are taking the steps necessary to curb this without giving the impression of witch-hunting because social welfare benefits are not handouts. Social welfare benefits are a right and as such people should not feel that they are handouts or that there should be this handout mentality attached to them.
The question of rates has been a burning one over the years. We have read and heard a lot about it and in 1972 a White Paper was brought out which clearly indicated that rates could not be done away with or if they were done away with that it would cost the taxpayer something in the region of 12p or 14p additional in the £ to meet the cost. The Government of the day then said this could not be done and there was no question of any rate adjustment, that the rates were there and would have to remain.
One of the points on the 14-point programme of the National Coalition was that we would remove health and housing charges from rates over a period of four years and this would help to alleviate hardship suffered by some people under the rates situation. This idea caught on and was gathering momentum in the election campaign. Some days before the election Fianna Fáil introduced their abolition of rates from domestic dwellings. It was a death-bed confession and the people did not accept it. They voted in the present Government and we proceeded to adopt the policy of removing those charges over the four-year period and that has resulted in a reduction of £6 in the £ from the rates. That is no mean or small reduction. The record is there. Because of inflation and rising costs obviously other costs went up and it was not easy to measure one against the other but had housing and health charges not been removed from the rates the rates bill would be £6 in the £ more and it is important to remember that.
Having done that in the four years, we did say in the programme that there would be a general review of rates. In the present budget the Minister has brought in the reduction in domestic rates of 25 per cent. On the second moiety for 1977 there will be a 50 per cent reduction. That is, indeed, facing up to our responsibilities and commitment, the commitment that we would review and take any necessary steps. The Opposition over the past four years again glibly talked about the abolition of rates and brought out some sort of scheme a number of weeks ago that they would, indeed, be doing away with rates. The manner of how they were going to cost this and to meet their payments was farcical. It did not catch the imagination or confidence of the people. People are not fools. If you are bringing out something like that, you have got to convince them that what you are doing and how you are going to finance it are right. The talk about the creation of jobs and the resulting clawback in tax and as a result of people working social welfare will not be paid and as a result of this, that and the other some of this will pay was the greatest clap-trap I have ever heard from any source. It is incredible that people will buy that sort of nonsense. To say that they were removing the rates, full stop, would be more honest. To try to justify it on a cost basis that would not mean additional taxation is drivel. It is nonsense and that rates policy has been condemned and consigned to limbo because nobody accepted it.
In contrast, over the past four years we delivered the goods. We are making a further commitment to the rates problem. These are facts. There are no ifs and buts. Three months before Fianna Fáil left office they said rates could not be abolished. They said that quite clearly. They accepted the White Paper. Due to political expediency they changed horses in midstream but the people would not believe them, and rightly so. When they had the power, the authority and feet to vote, they did nothing. When they saw the writing on the wall they decided to take action. We on this side of the House can be quite happy that our commitment on rates has been fulfilled and we are now moving on to a further reduction without any clap-trap about how it will be financed.
When we took office we had a commitment to build 25,000 houses a year. Basically, I am not terribly concerned whether the figure is 25,000, 26,000, 28,000 or 22,000. The important thing is to ensure that people are adequately housed and that we create employment. I am a member of the housing committee of Dublin Corporation. We have a problem. We inherited a very long waiting list. We also inherited what was known as the low-cost housing programme. That would give the impression that we were trying to build houses as cheaply as possible, but they were houses of low quality. The cost of maintenance, repairs and heating is enormous. It cannot be called low-cost housing. We are now building houses of high quality. In my local authority area we are certainly building high quality houses. That can be checked. The materials, the design and the quality of the insulation are excellent. We got away from the concept of badly built houses. Initially, it costs us more but ultimately it will work out cheaper for us.
When we took office, Dublin Corporation were getting £6 million for local authority housing. In 1975, the allocation was £11.7 million. In 1976, there was a commitment to develop the inner city, the core of Dublin city. These were not idle words. We have acquired over 150 acres of land within the city centre for housing development. The development of the inner city is costly. Last year the Minister raised the allocation from £11.7 million to £23 million, at a time when we were having economic problems, and money was a scarce commodity. We did not shirk our duty or run away from our commitment and our social obligation to improve the terrible conditions in which people were condemned to live in this city.
The previous Government made no effort to develop the city and keep people in it, or to plan in any way. Our plan is in motion now, and houses are being built in the Liberties. We are developing City Quay, another area of old Dublin. We are developing the cattle market site on the north side of the city, another Dublin landmark. There is a further housing development in Ringsend. These schemes are all in progress together with other ones. The record speaks for itself. We mean action; we mean business. Our record on housing is good.
This year Dublin city will receive in excess of £25 million for housing. That is a substantial sum of money and it will create employment and lead to an ongoing employment situation. That £25 million has to be compared with £6 million some short four years ago. The Opposition can talk about inflation and rising costs, but those figures are a clear indication of this Government's desire and will to solve the tragic housing problem we inherited.
I should like to discuss how we can reduce the waiting list. No expanding city will ever fully solve its housing problem, but we must always strive towards that end. The Government announced a low mortgage scheme. This is a tremendous scheme because it is designed for and beamed at people who for one reason or another may not be able to get a loan from building societies or other institutions. This loan is up to £7,500. There is a stipulation that a person living in local authority accommodation, house or flat, if he wants to buy his own house somewhere else, once he hands over the key to his accommodation he will qualify for this loan. That makes accommodation available for the waiting list, and it also gives the local authority tenant, if he wants to move, the option of doing so more easily. As a Dublin Deputy and a city councillor I know that when a family of three come to me looking for a house I have to say that I am sorry but they will not get a house and may not get a flat or any type of accommodation. That is a sad situation for people living in bad, overcrowded, unfit, rat-infested dwellings—and these are all there. These people will now come under this low mortgage scheme of up to £7,500. The corporation will lend 98 per cent. The deposit is only 2 per cent for this value of house that the person is buying and that is about right. The 2 per cent represents £140 on £7,000. There is also a subsidy of £9 per week on the repayments on a particular loan depending on the scale but knowing the current prices people will tend to borrow about £7,000 or £7,500. There is a subsidy of £9 per week for the first year, £8 per week for the second year, going on down to zero. Rising costs and inflation with money losing its value will mean that when these people come to the end of the nineyear period their repayments will not be as difficult as in the initial period.
There is great justice and very clear thinking in this low mortgage scheme. For the first time people with no hope are being given this offer. I speak particularly of those I know; it may be a little easier to get houses in the country. In addition to the £25 million being invested in city centre housing —speaking in a Dublin context—we also have this low mortgage scheme with a very good subsidy available and people for the first time have an opportunity to buy their own houses if they wish to do so. A corporation tenant may want a transfer and while the corporation might be able to offer a transfer it might not be suitable. Such a person will now have the option of buying a house elsewhere, making a vacancy for somebody else who needs housing.
Looking at the whole package, one can see the thinking behind it. As the Minister for Finance said, we can now see the light at the end of the tunnel and it is a matter of creating the right economic climate. This budget is doing that. The ball is now at our feet. We are given the tools and the incentive and we must regard this as a package and ask ourselves: what do we want as a people or as a nation? What are we prepared to give? It is not a question of what we will take. There is give and take in society. The Government have given in the budget the concessions needed to get the economy right. We must now ask if it is right and I think if we examine all the facts we will find that the tax concessions with the national wage agreement will mean an average increase of 10 per cent in take-home pay. That is a significant increase. There is a further meaningful reduction in expenditure in regard to rates. That is a consideration for very many people.
I think this is a great budget and I believe it is what we want. I think we should accept the national wage agreement because if we do not we will have problems. We can price ourselves out of the world market. The consequences of not accepting are clear to be seen. This is not a matter of a threat but one of common sense and I have no doubt common sense will prevail in the acceptance of the national wage agreement and the package that goes with it.
Some pundits suggested the trade unions are running the Government. That is utter nonsense but the time has come for the Government to work with all sections of society. The Government are not Big Brother talking down to us; they must work with all the institutions and organisations of society for the greater good of all. This budget and the national wage agreement and the concept of the social partners working together to develop our economy should result in producing co-operation and goodwill and the real spirit of patriotism that the nation requires if it is to move forward.
I wish to pay my own personal tribute to the Minister for Finance who in the past three or four years took an amount of stick from the somewhat misguided scribes and pundits. He has vindicated himself in this budget and when history comes to be written the present Minister for Finance will be recognised as a man of vision.
I will differ from other speakers. I am prepared to give credit where credit is due. There are some good points in this budget. As Deputy Colley said, the clapping might have been for some of the points taken from the Fianna Fáil document. A number of items from that document were included in this budget and for that I congratulate the Minister. People are saying that the Minister for Finance is beginning to think because he has brought in the best kind of budget possible.
This budget is city orientated. It is biased against the rural community. Before I finish I hope to be able to prove conclusively that it is orientated towards a general election and the five new seats in Dublin city. The Minister for Local Government made it clear that a large amount of money was being provided for housing in Dublin. Deputy O'Brien said we needed to house people in Dublin and not to have them running out of the city. Anybody who has been coming to Dublin for the past 30 years knows that people have been running to the city. This has been the case from all over Ireland. If the present trend continues everybody will be coming to the cities and we will have an isolated countryside. This will not be good socially or otherwise for the country.
I am sorry there are no Labour Members present and I must speak to empty benches. Accusations were made that nobody gave the rural slant on this budget and the rural Deputies had let the people down. We back-benchers have to wait our turn but I hope to put the rural point of view before this empty House and for the record. I welcome the social welfare benefits and tax reliefs. As the Parliamentary Secretary to the Minister for Social Welfare said "this Government is a Government of concern for the lower income group". Where is the concern for the lower income group in the tax reliefs when you compare the percentage bias to the lower and higher income groups? Deputy Halligan complained a little about this as did Mr. Ruaidhrí Roberts on television. What did the Taoiseach say when he answered? He said: "You are talking about tax concessions but you negotiated a wage agreement which gives £4 to the lower income group and £8 to the higher". How can the socialists and trade unionists justify this?
The cost of living has increased, as has inflation, for the man in the lower income group and he gets £4 to meet these increases while the man in the higher income group gets £8. Last year in Britain £5 across the board was given. If the Labour Deputies can justify that I would like to hear it. As a Christian socialist I cannot see why the cost of living does not increase to the same extent for a man earning £40 a week as it does for a man earning £100. I cannot see how that can be justified but I would love somebody from the backbenches to tell me how it can be justified.
The Social welfare increases are biased against the farming community. Everybody on social welfare got an increase except the unfortunate farmer with a valuation of £10-£20. This Government must think he is a very rich man. In my area a man with a £10 valuation would have about 12 or 13 acres, yet he got no increase in social welfare.
I listened to the Minister for Local Government talking about expenditure in local government and the number of houses being built. I admit a fair number of houses have been built. He also said it was better to build more local authority houses and to get loans from building societies than to provide a higher loan and higher grants for people to build their own houses. The remarks made by the Leader of this party, Deputy Lynch, were taken out of context. He never said that too many local authority houses were being built. Nobody would say that. We could not have too many built in my county.
A man earning £2,500 is excluded from everything. If he earns £2,350 he cannot get a loan. A single man, even if he intends marrying, earning over £1,950 cannot get a grant. Now, unless you get the grant from the local authority you cannot get the local government grant. Therefore, any single man earning £2,000 cannot get a grant but a married man with no children earning £2,050 cannot get a grant and if he has more than £2,350 he cannot get a loan. I know many people who would be prepared to build their own houses if they got the loan and the grant. If the loans were increased to £6,000 and the income raised to £3,000, which is not a big salary in 1977, many people would build their own houses. What benefit would this be to the country? Local authorities build standard houses which have no variety and are in housing estates. If a man builds his own house he builds it to his own specifications and can pick from a variety of plans. This would improve the look of the countryside. It must be remembered that a person in a local authority house must pay under the differential rent system. He would be better off if he could get a local authority loan and repay that loan and own his own house.
At the moment the demand for local authority loans in my county is almost nil because nobody qualifies. Nobody works for the type of money needed to qualify for the grant or loan. I agree with the Leader of this party when he says that the more local authority houses built the better, but an incentive should be given to the man earning £2,500. Remember a man earning more than £2,350 cannot get a loan. If he is a married man with no children with over £2,050 he gets no grant and therefore he has no incentive. Such people have to look for local authority houses for which they pay very high rents. If they could get the loan they could build their own houses. This would lead to greater variety in the designs of houses throughout the countryside and would prevent people from having to live in big housing estates. The vast majority of those people would get sites in the country, possibly from their own people, and the children of such families would grow up in a good environment. There is no encouragement here to anyone to build his own house and I cannot understand why the Minister will not give some assistance.
The question of rates has been mentioned. Fianna Fáil have said that they will remove the rates on private houses and they will be able to provide the money. It looks as if the Government have taken a leaf from the Fianna Fáil book; they are prepared to go part of the way but they will not go the whole way.
I refer also to the question of roads. The Minister said that the amount spent on roads had been increased but it is totally irrelevant to quote figures for 1972 and 1973 because the value of money has changed so much since then. I was disappointed that no attempt was made in the budget to provide money for sewerage schemes in small villages. It is unlikely that anything will be done about this for some years because no money is being made available for sewerage. I should like to see the Department of Local Government provide grants for groups of small villages so that such work could be carried out.
I welcome the food subsidies in the budget. I also welcome the money being provided to give employment to young people. This is something that we have been suggesting for a long time and let us hope that we will be able to put a large number of young people back into employment. This is our most serious problem at the moment. It is bad for the country as a whole when young people with the leaving certificate have to stay at home because they cannot find work. They are educated people and if they are left unemployed they are likely to turn to violence and this is possibly the cause of much of the violence in our towns and cities. Incentives should be given to anybody who will employ school leavers. The State itself will have to participate more in creating employment while at the same time encouraging private enterprise.
We must examine the emphasis in our educational system. We have been educating people to pass examinations with a view to clerical jobs but such jobs are no longer available. We should place a greater emphasis on technology and educate people for work in industry.
I welcome the allowances to be given by the Minister for Health to single people residing alone. However, I think that the Minister should give allowances to people to keep elderly relatives at home. It is very dangerous for old people to live alone. During the very cold weather of the past few months quite a number of old people were found dead in their homes. The Minister should provide decent allowances so that the elderly can be cared for by relatives and so will not have to go to the local hospital or county home. Such a scheme could save the State a lot of money because it is very expensive to maintain an old person in hospital. Anyone who looks after a person at home will get some money for it but if that person is a relative there is no money available, unless he or she is bed-ridden. Obviously people should be encouraged to keep their elderly relatives at home and the Department of Health should give some assistance. Whether we like it or not, money talks in many languages. If an elderly relative gets a cold in a household where there are five or six children, the doctor will say: "This person had better go to hospital." If there was a reasonable allowance paid for keeping him at home, people would think twice before letting such a person go to hospital. In any event, old people would be happier to die at home in the environment in which they have lived all their lives.
While I welcome the payment made to people living alone, I am not in favour of so many old people living alone. When bad weather comes old people living alone are all right while in bed but they have to get up to provide heating and unless they have an apparatus which will supply heat immediately, by the time they try to light an ordinary fire they are perished to death. Therefore, I would ask the Minister to give serious consideration to the question of giving an allowance to a prescribed relative so that old people can be cared for properly.
I said at the beginning that I would prove that this budget is city-orientated and biased against the rural community. Let us make one point clear: farmers do not object to paying taxation as such, and we on this side of the House agree that everybody should pay his fair share of taxation. What we do object to is the biased way in which it is being operated. What should be remembered is that the machinery, replacements and everything else that a farmer pays VAT on has more than trebled in price over a number of years. It has been said that allowances were given too freely under the last taxation and that only £6 million was collected as against the £30 million which it is expected to collect now. It may be that some people did not produce correct accounts or that there was something wrong with the accounts, but under the new proposals the farmer will get no allowances except in respect of rates so that the national figure system really goes out now and farmers are compelled to keep books and to produce exact accounts, and that is very costly.
No reasonable farmer objects to paying tax, but there should be a fair method worked out whereby the farmer would pay one tax and have what he should be entitled to get relief on assessed. Farmers are in a different category from other people in the community. If a man draws a salary he is taxed on that and it is straightforward. Let the Minister and the farming organisations get down to discussing a proper system of taxing farmers so that on the one hand nobody will be justified in saying farmers are not paying their fair share of tax and, on the other hand, farmers will not feel victimised. As was pointed out by Deputy Ruairí Brugha on a previous occasion, if it were not for agriculture and for our agricultural exports our balance of payments would be in a serious position. That is not understood on the far side of the House.
Let me deal now with the farmers under £50 valuation. There is a complete bias against the small farmer. There is talk about the race to the city, but the race away from the country was never as serious a problem as it is now. The farmer under £50 valuation, if he is in a profession or business, is on a figure of £65 from zero. We all understand what a profession is, but what is the interpretation of a trade or business? Will small farmers, for instance, who do a little contract work, say, constructing a yard or a shed, be classified as being in a trade? All the small farmers are worried about this, and these are, for the most part, the people I represent. Perhaps, we could be told what is the definition of a trade or business. This is the thin end of the wedge to get in those unfortunate farmers who never had a decent income and have to go out to earn this type of money.
I have already said that social welfare was biased against the rural community. Social Welfare benefits have gone up for everybody except the farmer with from £10 to £20 valuation. In my area a man on £10 valuation might have 12 to 15 acres of land, and everybody knows he could not make a living on that. At £20 valuation he might have 25 or 26 acres. The man from £10 to £20 valuation gets absolutely no increase under this budget. Is that not bias against the rural community? Does that not indicate a city-orientated budget?
It is about time somebody spoke here on behalf of rural Ireland. I would remind the people over there who are looking after five seats in Dublin that the people in rural Ireland still count. What many of them are saying at the moment is: "Where did all the money come from suddenly to give a little bit to everybody except the small farmer?" Six months ago we were supposed to tighten our belts. There was no money. There is a little money now, but this is an election year. I would hope that inflation does not increase to erode any benefits given by the budget. If the Government think that, they will hold an election fairly soon. If they do not—and I hope for the sake of the country inflation does not increase—it is my opinion that the general election will not be called until after the few increases have come into effect. Be that as it may, my concern is for the small farmer who is being brought into the tax net. We are told that if he is engaged in a trade he will be liable to income tax. Can anybody on the other side of the House define the word "trade" in that context? Will the small farmer selling hayseeds on commission, for instance, be regarded as carrying on a trade? There are many small farmers who have never been employed by anybody but who endeavour to make ends meet by engaging in contracts of a minor kind.
Why is there to be no increase in social welfare payments to the man whose valuation is between £10 and £20? There is no money in the budget for land settlement. The amalgamation of the Department of Lands with the Department of Agriculture was a move mooted first from this side of the House. I trust the change will prove to be successful but the land problem is so great that I do not know how the Minister for Agriculture will find the time to study the many directives that will reach him in respect of land policy when one considers the huge amount of work involved in dealing with agriculture. The man who, because of his valuation being within the £10 to £20 range, will not qualify for an increase in social welfare payments is also the man who, by reason of Directive 160, is not likely to qualify for additional land because of his not being in a position to be regarded as a potential development farmer. I should have thought that any young farmer who was interested in working his land, regardless of the size of his holding, could be classified as a potential development farmer but that is not so. I have inquired about the position as it would affect some people whose holdings were as much as 40 acres but was told that the farmers concerned would not qualify within the terms of the directive.
I understand that recommendations are being received regarding the abolition of the Land Commission. While that body may have their faults, it would be a matter for another debate entirely if they were to be abolished and replaced with some other form of administration. In my county which, by no means, can be said to be a county of the smallest farmers in Connacht, only 4 per cent are qualifying as development farmers. If the advisers' document were adopted, about 50 per cent might qualify. Some of the people here may not know what I am talking of since there are very few country people present but for their enlightenment I would point out that in the ordinary way the Land Commission were free to allot land which they had acquired to those they considered to be deserving of it, even if these people happened to be small farmers but at a result of Directive 160 such land can be alloted only to potential development farmers. The result of this is that people find it very difficult to qualify in accordance with the guidelines laid down.
I fear that while the whole new system of advice and so on that is being introduced will result in helping some farmers to qualify as potential development farmers, the smaller farmer will be ignored totally and that, as a consequence, more than 50 per cent of the farmers in the west of Ireland will be wiped out. These are the people who are not receiving any increase in their social welfare payments. The man whose valuation is between £10 and £30 will not qualify for grants, either. In other words, he is to be neglected totally.
Again, I express the hope that the Minister will find it possible to deal fully with both aspects of his ministry. The whole question of land is becoming more important and more involved especially since anybody from within the EEC is now free to purchase land here. In this regard it is noteworthy that the Minister has announced his intention of imposing a ceiling of 200 acres in any case. I was the first person here to have raised this matter. Our aim must be to give the land to those people in rural Ireland who are in need of it.
The whole question of the taxation of farmers has been presented by the Government in a biased and city-orientated way. There is no appreciation of what farming is all about. To give an example of the point I am endeavouring to make, I would illustrate the case of a person in my locality who was being very successful in the sphere of milk producing but now brucellosis has been detected in his herd. The absence of testing for this disease during the past three or four years has brought about this sort of situation. All those city-orientated people talk of how much farmers can earn but they are talking of circumstances being right. What happens, though, when things go wrong? The salaried person, so long as he is able to perform his duties in regard to his employment, has nothing to fear but the story is very different for the farmer who must contend with a variety of factors that affect his returns. Therefore, we must consider farmers to be in a totally different position from the salaried person in relation to income tax. Farmers are willing to pay their share of taxation provided that they are asked to pay in a way that is just. All I am endeavouring to do is to remind those city-orientated people among us that the situation for people in the rural areas is different from the situation in urban areas. I would remind the Government that the rural dwellers still have a voice and that voice is likely to be heard.
When the Minister is replying I should like him to spell out the position of the man whose valuation is less than £50 but who is being brought within the tax net. Also, I should like to hear a definition of "trade" in relation to these farmers. Is there to be a multiplier from zero upwards applied to them?
These questions are being asked everywhere. As far as I can see many people do not realise what farming is about. I have given the viewpoint of the farmers and the Fianna Fáil Party in relation to taxation. Every farmer is willing to pay his share of tax but the system of taxation should be arrived at in consultation with the farmers. To say that the national figure had gone up only from £40 to £65 is totally wrong because the allowances which one got under the old system which has now been done away with brings that figure up to about £95. The farmers have been unfairly treated in the increases in social welfare. Anybody in the west of Ireland with a £10 valuation and up to £20 valuation is a very small farmer but they got no increase in social welfare although every other section of the community is getting it. The rural Deputies should stand up and give the rural viewpoint. Anything that is good in this budget I will praise but I must point out that it is biased against rural Ireland.
There is not a halfpenny in this budget to help the small farmer if he wishes to buy out a land annuity. There should be some sort of cheap loan available for this purpose. Depopulation has been going on for years in the west of Ireland and nothing is being done. We are now threatened with complete annihilation of the small farmer in the west. The land policy which is likely to come and the inflationary price of land are contributing factors in this. In previous years the Land Commission could give out land at a reasonable price but due to the European situation it is not possible now. This situation must be faced. This problem in relation to small farmers and the putting of young people into employment are the most serious problems facing this country. I would have liked to see a man who knows more about the situation and what is likely to happen as Minister for Agriculture. Land should be made available to any young energetic fellow whether he is a potential development farmer or not. I thought that any person with 10 or 15 acres of land on which he was doing a good job was a potential development farmer but apparently that is not so.
The increases in social welfare do not apply to small farmers. The method of bringing farmers into the tax net leaves a lot to be desired and the Minister has not defined what is meant by trade. None of the farmers wants to avoid taxation. They are all prepared to pay but they are not being fairly treated under the social welfare payments because of inflation and because of indirect taxation which the farmer faces. If some Labour TD will stand up and justify giving allowances in tax on a higher level, when they negotiated a trade union agreement which gives the lower income group half what it gives the higher income group to meet with inflation, I might change my views. Farming organisations want to know what the rural Deputies are doing for them. I have given my views. I have always given my views independently of any organisation and I take the consequences. This budget is a biased city-orientated budget aimed at getting the five new seats in Dublin and apparently the country no longer matters. That is a mistaken attitude, the country always counts.
Being a Dublin based Deputy, I cannot attempt to enter into the argument put forward by the last speaker. Knowing him, I have no doubt that he has researched his case because he always speaks with a perfect conviction and knowing what he is speaking about. To generalise, farmers are probably not as well off as some city people and trade unionists would think they are but at the same time they are much better off than they would be ready to admit. Somewhere in between lies the true position.
The only other thing that I can tell the Deputy is that the abolition of the office of the Minister for Lands definitely was first mooted from that side of the House and, as Deputy O'Kennedy can verify, it was mooted by none other than the man who at the time occupied the position himself.
A decent man.
A decent man, and I am sure Deputy Callanan will join with me in wishing him a speedy and full recovery and that we will soon see him back fit and well in this House.
To come to the budget itself, I, like all reasonable people, wish to congratulate the Minister on this year's budget. Even supporters of the Opposition to whom I have spoken agree that it has in all been quite a good budget. Some supporters of the Opposition have wondered why the Opposition allowed this debate to be prolonged. They wonder would it not be better for the Opposition to let the budget debate die because the budget debate earns no credit for the Opposition and will serve as a very useful means of increasing the popularity of the present Government.
Last year's budget was rather a hardship because at that time the Minister realised that there was a need for sacrifice and effort by all sections of the community. He realised that this efort and sacrifice were necessary so as to lay the foundations for taking advantage of the economic growth which he foresaw at the time. Nobody will deny that there has been a recession and a fairly serious one over the past few years. Since the present Government came into office there has been a period of recession but this is in no way due to any action of the Government. We all know that this recession was practically entirely outside the scope of the Government. We also know that this recession was not peculiar to us in Ireland but that there has been even a greater recession in Britain, Europe and America. As a result of the careful and sound management of the Government, we are lucky that we have avoided the full rigours of this recession and have not suffered as severe consequences as our neighbours in Great Britain and some of the European countries and the USA.
Last year when the Minister presented his budget he had very many critics. Naturally, he had critics on the opposite side of this House. He also had many critics among the political pundits and many of the alleged economic experts. He had critics in the media, Press, radio and television. Some of them talked of the folly of his actions in adopting the courses and the very stringent measures which he did. Others even went so far as to question his ability as a Minister. However, as the year went on, people began to realise the wisdom of his ways and some time ago quite a lot of people began to realise that the Minister's policy was a sound and suitable one for curing the ills of the time. I mention in passing that it is evident in the Man of the year poll that he scored quite highly. He was one of the highest placed members of the Oireachtas in that poll. Of course, he was not quite as high as the other Minister, the present Minister for Fisheries, who could be called Man of the Year as far as that poll was concerned.
Now after 12 months and with the advantage of hindsight everybody sees the wisdom of the Minister's action and it is clear to all how well he plotted his course. He has been completely vindicated for taking the action he did. He saw that he would now be in a position to take advantage of the economic growth which has returned during the year. The Minister last year diagnosed the problem and applied the remedy that he felt justified in applying. At that time the remedy was unpopular and unpalatable. That brings me to regard last year's budget as being objective in its output inasmuch as having diagnosed and realised the problem he set about planning a proper course.
This year's budget, on the other hand, now provides the incentive to take full advantage of the economic growth that has been created as a result of the Minister's action. As the Minister himself said, it may truly be called an incentive budget. It is an incentive in as much as it helps to create even faster growth in future years and it encourages all sections of the community to work towards that end. It encourages and creates motives for greater enterprise and productivity and fuller employment. It provides an incentive to all sections of the community, to employers, management and workers, to see that a greater effort is made to overcome the effects of the recession and to advance towards full employment and a better standard of living for all. Let me illustrate how all sections have benefited by this. For the workers there is an incentive through the national wage agreement which is matched by tax relief, rates relief, food subsidies, increased children's allowances and increased social welfare benefits. For employers there has been a substantial reduction in corporation tax rates, lowering of tax thresholds and the introduction of a low tax rate incentive scheme related to increased output and increased employment. The budget reaffirms the Government's determination to concontinue their policy of increasing benefits to the more deprived sections of the community, which has been a very marked feature of this Government since they took office.
To give some examples of tax relief, reduced rates and changes in taxable income, I refer to the document issued in conjunction with the budget. On page 4 we find income tax payable under existing and proposed structure on earnings of a single person. A single person earning £2,000 a year or roughly £40 a week, a rather low income, will save £50.05 per year. A single person earning £80 a week has a saving of £115.30. A married person without a family earning £40 a week saves £57.40 and earning £80 a week he saves £117.40. We all hope the national wage agreement will be confirmed in the very near future. If we couple that with the tax reliefs we find a person earning £40 a week will have an increase in weekly pay of £4.05. The increase in net weekly pay after the tax concession will be £3.77. If there were no tax concessions this would represent an increase of £5.78 to a person earning £40 a week and an increase of £10.19 to a person earning £80 a week. The Government have provided great incentives for the ordinary worker.
Even more marked are the increases in the social welfare section. These are best illustrated if we compare them with the position when this Government took office. In 1973, contributory old age pensioners got £6.20. Under this Government they are getting £13.50, an increase of 124 per cent. The increases are similar in practically all social welfare codes.
And the old £ has the same value all the time.
I am glad the Deputy reminded me of something I was forgetting. There is an extra £1 for pensioners living alone. This makes the contrast even more marked. The Government increased contributory and non-contributory old age pensions and they also increased widows' contributory pensions, invalidity pensions, deserted wives' allowances, unmarried mothers' benefit and prisoners' wives benefit. Benefit for deserted wives was introduced in 1973. It did not exist under the Fianna Fáil Government. They did not even think of it. The unmarried mothers' allowance and prisoners wives' allowance did not exist under Fianna Fáil. They are entirely new. They were introduced by this Government.
The Minister has invested roughly £55 million towards job creation, £36.61 million in capital schemes and £18.90 millions in non-capital schemes. There is an additional £6 million for educational buildings which on a conservative estimate, should result in the creation of 450 new jobs. There is an increased IDA allocation of £3 million for capital grants for industrial projects and £1 million for advance factory construction. There is £3.5 million extra towards the hospital construction programme and £2 million for office building by the Office of Public Works. There is an increase of £1.5 million for bog development.
All that will create extra jobs, and not the illusory jobs the Opposition speak about in their pamphlet which they issued not so long ago. There is an increase for fishery harbour development. There is an increased allowance for AnCO towards the completion of a new training centre in Athlone and the commencement of another centre in Cork. There is £¼ million extra for Bord Fáilte for resort development at tourist centres. There is £2 million extra for major road works adjacent to cities and towns and £1.8 million extra for education for recruiting and paying 1,100 new teachers for posts in first and second level schools mainly in urban areas. This will help considerably to relieve over-crowding in many of our city schools.
The Government are continuing to give the £20 incentive to anybody who employs an unemployed person, and £10 to anybody who employs school leavers. This should help considerably in the employment sector. In addition, the Government have provided an extra £9.5 million in food subsidies. I was rather amused to hear Deputy Colley saying the Government were taking Fianna Fáil's advice in this area. Everybody knows that some years ago Fianna Fáil were the famous party who promised to maintain food subsidies and, as soon as they were returned to power, they slashed them and did away with them. To suggest the Government are taking a line from them in increasing the food subsidies is too ridiculous to be believed. Food subsidies now total £48 million and this helps to alleviate any increases in the price of bread, milk, flour and butter.
I am glad to see that in all this the Minister did not adopt the attitude adopted by previous Ministers who, if you like, did not bother to find new means of getting money. It was only too easy for a Minister who lacked imagination to go back to the old reliables of drink and cigarettes. This was done by successive Ministers. In this case the Minister had sufficient initiative to think of other means of raising this money. He realised that last year drink, which is no longer regarded as a luxury for the ordinary working man, played its own part in raising money for him. Last year it provided £128 million, I think, and he realised that he could not rely on further taxation on beer and spirits. He realised that under the Government and the Minister for Agriculture the farmers were doing much better than most other sections due to our entering the EEC and were in a better position to pay their share of tax. Although Fianna Fáil while in office at no time decided to tax farmers, I am glad to see they now realise the wisdom of the present Government in introducing farm tax. Deputy Gibbons, who was himself Minister for Agriculture for many years said, as reported in The Irish Press on 6th October, that if Fianna Fáil were returned to office income tax would be extended to include all farmers. He would not be content with the present methods.
Deputy Colley as reported in the Irish Independent of 24th January said that farmers should be taxed on the basis of an average income. He said the present tax on farmers was derisory, that the income of many farmers had increased substantially in recent years and that they must pay their fair share. Mr. Paddy O'Keeffe, editor of The Farmer's Journal writing in The Irish Times on the 24th January said that contrary to suggestions otherwise the farming industry agrees that it must carry its fair share of the national tax burden unpleasant though it may be. With farm organisation leaders he agreed that farmers and the farming industry must carry a fair share of tax. Mr. Andy Mahoney—I think Deputy Kennedy will agree that he has no connection with the present Government; he is a well-known Fianna Fáil councillor—stated on being elected chairman of the General Council of Committees of Agriculture that there were many farmers who could well afford to pay income tax but were exempted because their poor law valuation was less than £100. He said that the General Council of Committees of Agriculture would sanction an increase in the number of farmers liable for income tax through a reduction in the exemption figure of £100 PLV to between £70 and £80.
Everybody is now converted to the idea of farmers paying income tax and the farmers themselves realise that they must bear their fair share. When Deputy Colley was speaking on the budget he accused the Minister of being "converted" to the Fianna Fáil idea of relief in rates. In giving 25 per cent relief on rates he said the Minister was copying Fianna Fáil who had set the example. Prior to the last election the National Coalition parties announced that they would take housing subsidies and health charges off the rates. Fianna Fáil said it could not be done. In their term of office Fianna Fáil had a committee inquiring into local finances. After sitting a number of years the committee issued two or three interim reports and in December, 1972, when Fianna Fáil had been in power without interruption for 15 or 16 years they issued a White Paper in which they said that rates could not be abolished and would have to remain as the form of local taxation.
They maintained that attitude during the 1973 general election campaign right up to the week before the election. If proof were needed of the sudden change it is on record that it came so suddenly that they did not give time to Deputy G. Collins and Deputy Noonan to change their advertisement in The Limerick Leader. After Fianna Fáil had announced their intention to abolish rates on private dwellings— about three days later—an advertisement appeared in The Limerick Leader saying that it was impossible and wrong for the National Coalition parties to say that they could take health charges and housing subsidies off the rates. This illustrates the very quick conversion of Fianna Fáil on the eve of an election when they realised that they had no hope of winning.
Desperate situations require desperate remedies and that was Fianna Fáil's situation then. They did not tell anybody—there was no time—how they proposed to go about it. They had said previously that the only alternative to rates would be an increase of at least 14p in the income tax rate for everybody. That was their view at a time when they were in government and could coolly and calmly assess the position with the full backing of the civil service but when they found themselves in a desperate position as an election gimmick they announced that they would abolish rates on private dwellings.
They are now stuck with that and regard it as their policy and they say that within one year of their being returned to power they will put it into effect. This does not matter, of course, because, by now, they realise that they will not be back in power and will never be called upon to put this promise into effect. They produced a makeshift list of statistics and figures to try to justify their position.
The National Coalition promised over a four-year period to take health and housing charges off the rates. They have already done this and now the Minister has said—and it is actually quoted in the pre-election manifesto—that they will continue to relieve rates and replace them by something that will be better suited to the ability of the people to pay. They have made a start on this. I am sure the ordinary people are not so gullible as to be deceived by Fianna Fáil promises to abolish rates within a year of getting back to power. The people realise that Fianna Fáil had 16 years in which to do or try to do this but they did not make an iota of effort towards doing it. The people realise that Fianna Fáil are desperately hoping to get back to power and they recognise this for what it is, a gambler's last throw. Actions speak louder than words and people can see the actions of the Government backing up the Government's promise before they came into power. The Government have started to abolish rates gradually. They do not want them replaced by a more horrible means of taxation. They do not want to increase income tax by 14p or 15p in the £. When the Government come back for a second term, they will continue to give this necessary relief in rates. They have doubled the allowance for rates waiver which will be of considerable help to people in dire circumstances who find the rates burden too heavy. As promised, they reduced the qualifying age for old age pensions. This has resulted in an enormous increase in the numbers now qualified for old age pensions.
I remember in the 1940s when Fianna Fáil were talking about giving the old age pension at 65. I also remember a rural Deputy who had the same speech for every chapel gate. He started off something like this: "Fianna Fáil promised they would abolish the land annuities and so they did. Fianna Fáil promised to abolish the oath of allegiance and so they did. Fianna Fáil promised to give the old age pension at 65 but we cannot do everything in a minute. Give us time, my friends, and we will do it." That was back in the 1940s. They have had a lot of time since. Not alone have they not reduced the qualifying age to 65 but they did not reduce it by one single day.
I was not very long in this House when I put down a question to Deputy Brennan who was then Minister for Social Welfare and asked if he had any intention of reducing the qualifying age for old age pensions. He admitted that this was desirable and something to which Fianna Fáil were earnestly applying themselves and said they were seriously looking into the matter. They have been looking into it ever since. They will probably tell us before the next election that they will give the old age pension at 60 and full pay to everybody who wants to retire. They will promise anything because they know in their hearts they will never be called on to put those promises into effect.
I want to refer to what Deputy Colley said—that the Minister was converted on the road to Damascus. He asked if the Minister was able to give social welfare increases now, why could they not be given last October. He said the Minister had changed his mind in four short months. I would remind him that Fianna Fáil changed their minds four days, not four months, prior to the last election.
I wonder if Deputy Colley was trying to have a dig at his predecessor, the Minister for Finance in the Fianna Fáil Government, when he referred to this conversion? As we all know, it is recorded in regard to the conversion of St. Paul at Damascus that he fell off a horse. It is on record that a certain Minister fell off a horse on budget day and it was not the present Minister. I can assure Deputies that the present Minister has no desire to emulate that feat. He is content to make steady progress and to see the national economy advance on a sound and secure basis. He will continue during this term, the next and probably several more terms, to lay firm foundations so that this country will advance and take its proper place alongside other countries in Europe.
I do not know if he will be flattered but I will use a sentence used by Deputy Belton as my opening text. I took it down exactly as it was said. The purpose of this budget will "serve as a very useful means to increase the popularity of the Government". That may be a legitimate purpose but it is not the fundamental priority or purpose of any budget. The purpose of budgetary policy must be to maintain a consistent economic development plan and to outline Government policy in the economic area so that the public who are concerned in the various sectors, whether industry, farming trade unions or otherwise, can identify where they have been going over the last number of years and judging on a consistent policy, where they are likely to be going in two or three years. This way they can make their plans for development in the confident knowledge that there will not be any change of Government policy which will affect their development policies.
This is one of the criteria by which any Government's budgetary policy must be judged, not the criteria of immediate popularity comparing this year's budget, which was popular, with last year's, which was unpopular. The Minister is the third or fourth man of the year in that very reliable Sunday Independent poll. If this is the purpose of budgetary policy——
This was long before the budget. There was great rejoicing when Deputy Lynch was mentioned.
The Minister will probably move up one or two points in the popularity poll but at what price? At the price of the Irish people and the overall development of our economy. You must look for consistency within an overall development plan which the Government will present to the people so that the Government can be judged on their own terms. What happens if you do not have an overall development plan? On the admission of the Minister for Finance who is charged with this responsibility, there is no intention to introduce a comprehensive plan. The Government gave various reasons for this at different stages over the last few years.
This Minister, who is the managing director of this nation's business, differs from other managing directors because he is not prepared to tell his employees and those who do business with him what his programme is. When he does not tell them his programme from one month to another, or from one year to another, obviously the people cannot have the confidence in him they would have in a managing director with foresight and confidence or a managing director who is capable of motivating a response from people.
We start with the fact that there is no plan. If somebody tells me there is, I will concede my first point. If there is no plan, how can the budget fit into one? That point has caused confusion and chaos. It is responsible for the collapse of morale and confidence we have witnessed here for the past three or four years. There is no evidence whatsoever of the introduction of such a plan at this stage. An economic plan cannot exist in isolation. If Germany, Holland, Switzerland and America have made great strides in economic development, and they have, it is not just because of the fiscal policies which they have implemented. It is because of the way in which their Governments have motivated their people to respond to overall targets, not just in the economic area but in every area of national life.
This can be seen not just in the democratic countries of the West but also in eastern Europe and in Russia. They base their economic development programmes on overall concepts which are based on an awareness of the country's history, respect for its culture, a definition of the country's national ethos and character. Their economic programmes are geared towards achieving targets which are consistent with these overall concepts. Hence the success which these countries have enjoyed; they are proud of their past and they are determined to motivate their people to honour that past and honour their own character through their culture and language. When their chancellors tell their people what they expect from them they are talking the same language and they get the response.
We have a Government here who express no definition of what this country really represents. What is our concept about our culture, our history? What consistent programme is expressed by anyone on the Government side representing the Government point of view? I am not referring to the gadfly Minister for Posts and Telegraphs who speaks, we are told, personally. Has anyone on the Government side presented to the Irish people the concept of what is really worthwhile in our community? The Taoiseach, by definition the Leader of this nation, has certainly not done so. It is not surprising that from time to time the Minister for Finance can tell the trade unions that they are making too many demands, that he can tell the farmers they are too selfish and are prepared to concede too little or that he can tell others they are not prepared to recognise national or community responsibilities. It is probably fair to say that he is right in this. We have all become too selfish because nothing has been presented to us by way of a national concept or national plan which would bind us together rather than divide us, which would make us respond together to achieve the programmes that are essential for economic development. Even if there was an economic plan, which by the Minister's acknowledgement there is not, it would have to be a broad comprehensive national plan involving every aspect of Irish life. In the absence of such a plan we have the kind of selfishness and indifference that has been evident over the past three years. We have witnessed it in the past to a varying degree but it seems to have been aggravated to a considerable extent over the past three years. The first obligation of Government is to motivate people and they have not done so.
Let us consider some of the statements made by Members of the Government. Some months before the budget the Taoiseach told us that there would be no primrose path. I acknowledge that Ministers for Finance have generally conditioned the public before a budget to expect the worst so that when they deliver something less than the worst there is a good reaction. Perhaps the Taoiseach was doing this. According to Deputy Belton the budget "will serve as a very useful means to increase the popularity of the Government". Where can the public look for some consistency? The Taoiseach said there would be no primrose path and shortly afterwards the Minister for Finance said that the recession was over. The magic wand had been waved. Who can blame people for becoming cynical? When we see a path strewn with roses, we must remember that the roses have thorns and there will be many torn feet before this year is out. People do not know what the Government expect.
How does this budget, as an expression of the Government's economic policy, fit into the pattern of previous budgets over the past few years? Last year we had taxation which, by any standards, did not leave the Government too popular. That is understandable—taxation never does make a Government popular. The level at which the taxation was applied meant that the revenue from the budget exceeded the Minister's estimate by £150 million. In fact, the Minister was introducing a tax structure the outcome of which he did not himself anticipate. We do not have such a swelling Exchequer that we cannot budget reasonably accurately within about £50 million.
Debate adjourned.