I am making a plea for moderation. They should not be connected with the national pay agreement because the latter applies mainly to organised labour. Organised labour in general benefits much less from the abolition of car tax and domestic rates than do the wealthier classes—the multi-car family, the person living in a big mansion whose rates were perhaps £3,000 or £4,000 a year. They benefit more than does the worker in a local authority house whose rates bill came to £50 a year, who received a reduction of £1 a week in his rent on 1 January increased subsequently from 1 February by 50p. That was the clawback on the rates reduction to local authority tenants. Therefore, for that reason it should not be considered in the context of the national pay agreement.
The income tax concessions announced by the Minister for Finance in the budget are real tax cuts and I believe are being taken into account in the national pay agreement talks, as witnessed by the response of the trade union movement by reducing their pay claim to 8 per cent. This party welcomes that response to the budget. It is an enlightened one and is in the interests of the workers as a whole. It is somewhat above the 5 per cent limit to which the Fianna Fáil Party committed themselves in their manifesto and which the Government have been parading for some time. I should like to see agreement reached on a figure as low as 5 per cent if further tax cuts were forthcoming. I said in several speeches, some of which were reported in the papers, that the largest possible part of the 12 per cent —which I agree is approximately the right figure, slightly above the rate of inflation in the past year—should be borne by the Exchequer in tax cuts. The Exchequer has declared it is standing by the improvement in tax allowances and the trade union movement has responded by a reduction of 4 per cent in its claim. I note that the employers and unions are today meeting the Minister for Labour and the Minister for Economic Planning and Development to discuss further the present stage of the national pay agreement. The unions have declared that 8 per cent is their rock-bottom limit. I would make this appeal—and I hope it will be appreciated as a non-partisan one in the interests of the country— that the unions might agree to a further reduction of that 8 per cent, perhaps a half per cent or one per cent, if they can succeed in getting employers to commit themselves to some percentage increase in private sector employment. That would constitute a major contribution to our economic recovery, with all workers being better off in the end.
It is right to put on record this party's views on the national pay agreement and its importance to our economic future. It is correct also that we pay tribute to the restraint shown by the trade union movement and the work force generally in having negotiated and accepted a very moderate pay agreement which has contributed in no small way to the huge jump in productivity, in input and exports. I am afraid the trade union movement might be somewhat despondent because, while that restraint did produce the economic upsurge to which I have referred, it did not produce more jobs in the private sector; in fact there was some decrease in established manufacturing industry. That is no encouragement to the trade union movement today and holds out no hope that another moderate pay agreement would produce more private sector jobs. That is why I make the suggestion that perhaps a smaller increase than 8 per cent might be agreed—perhaps 7 per cent or 7½ per cent—on the condition that by the end of the year a certain percentage increase would be achieved in private sector employment. It is important that I make our party's position clear in view of the distortions which some Deputies and one Minister sought to make of our Leader's speech, in which he was quoted as saying that the budget would infuriate and in no way help the national pay agreement. As Deputy Callanan said, this budget favours and is all for the rich.
I have the honour to represent an entirely working class area, almost exclusively made up of local authority dwellings. There, apart from the huge number of unemployed, there are a great many on such small incomes and with such large families that they do not pay income tax. These people benefit very little from the abolition of domestic rates and they did not benefit at all from the abolition of car tax or from any reliefs given in income tax. I agree that there are people much worse off than them and I am disappointed that in his income tax concessions the Minister did not introduce a system of tax credits under which a person who does not earn enough to pay income tax would be given an allowance in respect of every £ he earns under the taxable limit. That would be one way to provide for the needy and it would mitigate against the terribly conservative nature of the budget.
The people of whom I have been speaking will benefit very little from the national pay agreement because getting the minimum increase will not affect lower paid workers very much. The gap between them and the better off sections of the community has been widened dramatically since this Government came back to power, and this budget has not given any confidence to workers that they would get a fair deal eventually while this Government are in power. This is a Government of the wealthy.
Although I say that, I wish to emphasise that we want income moderation, because anything else would be detrimental to the welfare of the economy. My main interest is in job creation, and when I speak on it I do not want to be party political. I will look at the budget's effects in the job creation area. It would be wrong not to recognise that most of the provisions in the budget arise from the promises in the Fianna Fáil manifesto, and to my mind it is essential that a party should seek to fulfil promises that helped to bring them to power. Otherwise cynicism would prevail.
What must be questioned, however, is the wisdom of making lavish promises at election times. It has been said that the Taoiseach and his Cabinet deeply regret the promises they made, first because many of the promises were not in the best national interests and second, if the Government had had a free hand, some of the promises were ones they would not have pursued. The extent of Fianna Fáil's victory suggests that power, without such an embarrassingly large majority, could have been achieved without some of the promises.
It became clear long ago that Fianna Fáil in Opposition would sell their mothers to get back to power, and to that extent there is not the same determination among these benches— we would not sell our mothers. Differences among Deputies at the moment are very slender because all Deputies want job creation to progress. Many figures have been bandied about in this respect. Late last year the Economic and Social Research Institute published a paper stating that up to 2,000 jobs per year would achieve full employment by 1986. Before Christmas I came across a Department of Finance paper published in 1968. It was entitled "Towards Full Employment by 1978". The same sort of arguments and figures were produced then. We have achieved nothing like the figures suggested. Indeed we have gone into reverse in this regard. In one such document full employment has been described variously as allowing for a 4 per cent or a 5 per cent unemployment level, although the NIEC some time ago said that full employment would allow only a 2 per cent level of unemployment.
There is also make believe about this figure of 28,000. Speaker after speaker, Ministers included, seem to think they can talk that figure down. It appears as 28,000, 25,000, 20,000. I even saw it at 15,000 or 10,000, as if you could talk the problem away and talk the requirements down. The fact is that the figure is much higher.
The Economic and Social Research Institute projections contain the serious error of defining full employment as 5 per cent unemployment. They contain two major omissions. First, they make no allowance for the trend in recent years of a rapidly increasing participation rate for women workers. I have extracted from the EEC labour survey of 1975, and from the Minister for Economic Planning and Development, the fact that the participation rate for Irish women between the ages of 25 and 55 years is half the participation rate of women in the rest of the EEC. That means women in the rest of the EEC are more than twice as likely to work than women here.
The ESRI projections, which are used by the Government and others, deliberately ignore, and say they ignore, the increasing trends of participation by women in the past five years. Instead they choose the previous five years, which is a mistake. The fact is that a proportion of married women not currently on the unemployment register will seek jobs out of every 1,000 jobs we create. The more jobs become available, the more women will seek them and, therefore, the more jobs we will need. There is no doubt that, if you look at the trend over the past 15 years in the rest of Europe, the participation rate of women has zoomed upwards. That started to happen here in the past five years. Projecting that trend onwards, by 1986 women will be working here at the EEC rate of participation.
As I said already, we are just below half the rest of the EEC rate. If that rate continues to increase, and if we are to catch up—and I am not suggesting we should aim to catch up; but I believe this will happen as a normal, cultural, social and economic happening—women will seek jobs more and more as they become available. We have to provide for that. We can almost anticipate by 1986 a desired female participation rate perhaps as much as three times and certainly as much as two-and-a-half times higher than the present female participation rate in economic activity. That is a major omission in the ESRI projection.
The second major omission is this. It does not take into account the fact that, as a country, we produce per head only half what our German, French, Dutch, Belgian and even Italian competitors do. It takes two Irishmen to produce what one European man produces, and possibly two Irishmen to produce what one European woman produces. That is a fact to which we as a country have to face up. It is another unpalatable fact. If we were sensible we would accept in our projections that we have to be competitive if in the long term we are to survive and prosper. We have to be as productive as our neighbours in Europe. They are our main competitors. There is no use in our basing our economic future on producing half as much per head as the others. We have to produce the same and we must aim to produce the same.
No matter what is provided in this budget, no matter what incentives are in the budget—and there are some incentives—no matter what clauses are in the national wage agreement—and I believe there should be clauses about private sector employment—the fact is that private enterprise has to operate on the basis of the profit motive. They have to compete to survive. Private enterprise will continue irreversibly to seek to produce as much as possible with as few people as possible, because that is the natural and logical follow up to the profit motive. They have to be as competitive as their competitors.
If we are to attract foreign investment on the scale required we have to be able to show that we can produce, man for man and woman for woman, as much as our competitors. Otherwise we are living in a fool's paradise and our economic base is a false bottom which is liable to collapse eventually. That fact is not included in the gloomy projections of job creation requirements of 28,000 per year between now and 1986. We have twice as many people at work today as are really needed to do what they are doing, and that does not cover the agricultural sector where, again, we compare very unfavourably with our Danish competitors. We have twice as many people working as is necessary according to European standards. That means that if we are sensible and intelligent we include in our projections the need to create real jobs for half the present workforce, together with many more married women working, together with a realistic full employment figure.
Why I dispute the 5 per cent unemployment figure is that historically this country has had high unemployment. We have never had anything like full employment. We have never been able to put anything like all our people to work. Consequently—and I know this as a person who has come up from the shop floor, a person who, you might say, comes from a long line of labouring people—the attitude is that you protect your job and make it better for the next person. That means you create as many jobs as possible. You exercise as many restrictive practices as possible in order to protect and create jobs because of this terrible problem we have always had as a nation of huge unemployment and huge emigration.
Now that emigration as a choice has almost gone, I hope never to return, we are forced to face up to a serious job creation problem. I am pleading that account be taken of the other factors involved: extreme underproductivity, extreme under-participation of women. If these factors are taken into account and if we go for true full employment—and I agree with the NIEC estimate of ten years ago—then we are talking in terms of creating over 50,000 jobs per year.
To every economist in this country I would pose this question: please assess annual job creation need between now and 1986 taking into account (1) our present school-going population; (2) average annual retirements and natural wastage; (3) no net emigration; (4) a European level of female participation in economic activity; (5) European levels of productivity; (6) true full employment; (7) redundancies and (8) drift from the land. They are the factors that have to be taken into account. I would wager that no economist would come up with a job creation figure of less than 50,000 per annum, because that is the true dimension of our problem. If we were to accept this loose 5 per cent we would be fooling ourselves, because a lot of our problems are caused by a lackadaisical attitude which shows in other areas, for instance, in sloppiness, in unhygienic cafés, in dirty towns. This comes from the fact that we have two men doing work where one woman would do. This has an enormously bad influence.
To talk about 5 per cent is taking a figure which looks like full employment but it is not and which will not solve the problem. We must face the necessary solutions. I do not think private enterprise is capable of providing a solution. That is where the budget is terribly wrong. It is an ideological conservative budget, probably the first ever such budget the country has known. A new ideology has crept into Irish politics. Fianna Fáil have become the conservative party of Ireland. The Taoiseach could be said to be to the right of Margaret Thatcher. Private enterprise is depended on by the budget but private enterprise cannot hope to solve the problem, because as I have already pointed out private enterprise has already more people than it needs.
Where does that leave us? The budget asks private enterprise to increase employment by 3 per cent. We are making work in the public service. The approach is to create jobs which are not real jobs. It will look good. People will be paid to do nothing. The figures look better than to have them on the dole, but this does not contribute in any way to a solution of our problem and is ignoring the true extent of the problem. I support the idea of private enterprise and I recognise the need for private enterprise. Radical solutions are required. The Government must think in terms of massive public enterprise. The problem about public enterprise is that it has a terribly bad name. Unfortunately, when thinking of semi-State or State bodies one thinks of CIE losing perhaps £40 million a year. This week I asked the Minister if he would not consider presenting the Government annual subvention to CIE in a different manner. It is given as a subvention to commercial loss. CIE is a social service. Most public services are social services. It saps the morale of the personnel in CIE to have to work under this sense of commercial loss when there is no hope of anything else, when they are providing services which are purely social services. The results should not appear as a financial loss. It should be handled differently. The morale of management and workers would be greatly improved and the name of semi-State companies would be greatly enhanced, if there were a different approach. That is one of the main reasons why semi-State companies have a bad reputation. Low morale in CIE causes strain and bad public relations and results in strikes which further diminish their reputation. When thinking of semi-State companies one does not think of Bord Bainne, the Irish Sugar Company, Bord Fáilte, the ESB. Many State companies do a very good job and we have a lot to be proud of and thankful for.
There is nothing inherently wrong with State enterprise. There would be if State enterprise were replacing private enterprise. I would take objection to that. But, where private enterprise cannot cope, it is incumbent on the State to move in. The State has done so in some areas, in what could be called essential areas. I am advocating a new departure, a new dimension of State participation. The time has come for the State to involve itself in manufacturing ventures. That is the only way in which we can tackle the unemployment problem.
The budget and the actions of the Government in the last six months have been so ideologically conservative, so much in the wrong direction, as to be unbelievable. The budget abolishes the wealth tax. I do not care whether it does or not. There was not much coming in from this tax although I think it is iniquitous that very wealthy people should now be able to get away without paying one penny tax while a widow on a widow's pension who happens to have a few shillings extra from some other source will have to pay income tax, like my own mother does. A wealthy person might have paid £5,000, £6,000 or £8,000 in rates on a large mansion. That is gone.
Such people benefit by the budget considerably more than poor people living in council cottages, because they were already so poor they did not have to pay rates and they certainly did not have to pay tax on several cars. They do not have to pay wealth tax now and they can live off their capital gains. They are contributing nothing to the State and yet ordinary people in the PAYE sector have to pay 87 per cent of all income tax. There will be a revolution eventually if that percentage is not radically reduced. To do that means getting others to pay, but this budget goes in the reverse direction. The farmers will pay less income tax than was budgeted for last year and there is no wealth tax. Everybody, with the exception of the PAYE sector, is getting away with murder.
On the matter of rates, I agree that many young people found the charge penal but the matter could have been handled so that everybody got equal benefit. For instance, the first £30 household valuation could have been remitted so that all would benefit to that amount. In the case of a person with a higher valuation he could pay on the excess amount. That would be fair because it is obvious that anyone with a house in excess of that valuation owns a very sizeable property. It would be an equitable way of giving relief across the board. The poorer section and the young married couples would get as much relief as some of the gentry throughout the country who benefit now to the tune of many thousands of pounds each year. For them the rates are gone and the tax is gone.
Prior to the official budget we had a few mini-budgets. The Government abolished subsidies on cheese, butter and on town gas. Again, the poor people were clobbered. The budget did not lower the age for old age pension benefits, and this is wrong certainly in the context of job creation. There was no increase in children's allowance even though, as was pointed out several times in this House, this is the only direct income of many women. As Deputy FitzGerald said, and he is unquestionably right, this was an antisocial budget.
I would accept the measures in the short term if real jobs were created in the long term. I am not referring to "make work" jobs, getting more people to do the same amount of work, thus making us even less competitive than we are at the moment as compared with countries in Europe. The Minister for Labour introduced what he called the employment action team. He issued a statement last August about this matter and said that the emphasis was on action, but seven months later we find that not one job has materialised as a result of that measure. There is a rumour in the Press that they have come forward with a suggestion of 800 jobs dealing with physical fitness courses. The Minister told Deputy Kenny recently in a written reply that the matter had been referred to the Department of Health for consideration. That is the only suggestion they have come up with.
They are also talking about work experience programmes. What does that mean? People want work; the experience will come if they get work. The great employment action team have done nothing and I think they should be disbanded. The whole business is just a charade. There are about 30 people involved and nine Departments are represented but nothing has come of it. I cannot think of anything more cumbersome. It is clear from statements by the Minister and from answers to questions here that they are looking for ways and means of making up jobs. They are living in a make-believe world, as are the Government. They are making jobs in the public service that are not necessary and they are asking private enterprise to adopt the same course. It is all false and wrong and they are deluding themselves.
I am sure the Government will realise that they must reverse their policy, that they cannot expect private enterprise—which is only half as productive as its competitors abroad—to create jobs that do not exist. We must look at the possibility of a public manufacturing enterprise. Every day as I travel to and from this House I find myself in traffic jams. All the cars are manufactured abroad. I realise that private enterprise could not operate in this area. If we were to produce cars the unit costs would be much higher but if the State had regard both to the units costs and the social benefits I am sure it could come into the realm of competitiveness. The same applies to other types of machinery. Even with regard to coat-hangers, one sees printed on them "Déanta san tSualann" or "Déanta san tSeapain". Machinery, fridges, and washing machines could be made here. Private enterprise could not do it because the scale would not be big enough, it would not be economic and the unit costs would be too high, but if the social cost were examined I think it could be within the competence of the State. It would stand up to any cost/ benefit analysis so far as the State is concerned.
Dublin Corporation are building houses in the inner city. The cost of each unit is £26,000, about double the cost of a house in the outer suburbs. People may say it is not economical to build in the inner city, but one must take account of the services already available, such as schools, shops, buses, churches and the tradition of a settled community. It is intelligent to build houses in the inner city even though the cost is twice as high as building elsewhere. On the same basis I am arguing that we have to look in a thorough and businesslike way to providing many of the items that up to now we have imported.
Unless there is a complete reversal of the Government's direction we will have an alarming swing to the right. This must be due to the influence of the Minister for Economic Planning and Development, the new economic wizard, who has pushed men who showed themselves in the past to be socially conscious and concerned for the poor. I am referring to men such as the Minister for Health and Social Welfare, who is concerned for the poor and the less well off. Since last June they have adopted a strategy and a series of decisions that can only be described as right-wing ideological decisions.
I do not think, even if we go into the manufacturing enterprise to which I referred, we could create in the immediate term the kind of jobs we need. There are other areas that need attention. Perhaps they need a strong and firm line from the Government and no Government are better placed to take decisions than the present Government with their unparalleled majority. We know that in Connacht there are 1,000,000 unproductive acres. Connacht is the smallest of our four provinces. We all know how unproductive we are as an agricultural country compared with Denmark. We all know half the world is starving.
I have some little advantage here in that, though my family has lived for many generations in Dublin, I am married to a farmer's daughter. In the last number of years I have got to know something of the problems and ills of farming. Every year we have either gluts and surpluses or else shortages. Only last night I was reading about what should be done with the milk surplus. In a year or two there will be grants designed to produce more milk. I cannot understand this. We had the beef mountain followed by a beef shortage. At the moment we have a potato mountain. A year ago we had a shortage of potatoes. There are all these swings in supply. In no area does the nation stand to benefit more than it does in agriculture by more intensive farming, better planning and proper control of production. It is a very big area. The whole question of owning and husbanding the land is a very emotive one, for good historical reasons, but we cannot afford to let acres which could be made productive lie barren. We must look at the whole area of agricultural production.
I do not like the word "radical". People talk about "radical" solutions when they mean nothing of the kind. Certainly radical solutions are needed to solve one of the big problems in the agricultural area. I have never been emotive about taxing farmers but those who can afford to pay tax should pay their fair share. I have an uncle who is a very wealthy farmer. Up to recently he did not pay any tax while his sister, my mother, was taxed on her widow's pension. That can hardly be described as fair. At the same time I know farmers plough their money back into the land. There are many wealthy people, self-employed and professional, getting away with absolute murder. I would like to see a tax system for farmers which would not stifle production or act as a disincentive. The notional system helps to avoid that. If I could devise it, I would have a tax on unproductive land. It would probably need the wisdom of Solomon to design such a tax, but that is what I would do, because we have abundant wealth in our green fields if only we use them properly. We could produce three times what we are producing and sell many times more than we are selling to the starving world.
I am spokesman for Labour on this side of the House and I am determined to the utmost of my ability to prevent industrial relations and job creation becoming part of a political issue. The matter is far too serious to be made a political issue. I trust the present Minister for Labour will take note of that. Recently I asked the Minister for Economic Planning and Development if the Government were considering as part of their economic and social plans such things as a higher school leaving age, possibly an earlier retirement age —something that is not helped by the budget since this year there is no reduction in the qualifying age—possibly a shorter working week and possibly compulsory national service. It goes against the grain for me to suggest the latter but I am appalled by the vulnerability of the country where defence is concerned. If tomorrow the British withdrew from Northern Ireland—this is something the Taoiseach spoke about recently—we could not do a sausage about it because our troops would get no further than Newry. We are in a most vulnerable position defencewise. Many people visit my clinics and every time a soldier comes in, even though he is in mufti, I know immediately he is a soldier. He is smart and intelligent. He knows what he wants. He knows how to express himself. National service would be one way of giving some outlet for energies. It would provide a valuable training for our abandoned youth. I hope this budget will provide some real jobs.
