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Dáil Éireann debate -
Thursday, 16 Feb 1978

Vol. 303 No. 9

Financial Statement, 1978: Motion (Resumed).

Debate resumed on the following motion:
That Dáil Éireann takes note of the financial statement made by the Minister for Finance on 1 February 1978.
—(The Taoiseach.)

Before Questions I had been drawing the attention of the House to the situation in which the wealth tax was imposed. I had reminded the House that this tax was imposed as part of a package whereby the Government of the day removed death duties. Now that wealth tax is being removed we are to have the situation, for the first time since 1894, in which wealth, no matter how enormous, will be subject to no direct impost either during the lifetime or after the death of the owner; and I expressed astonishment at the idea of the Minister for Economic Planning and Development that the wealth tax had no economic value. I tried to make the point that even though, and it may be so, the trouble in collecting it was excessive and even though, and it may be true, though I doubt it, it had a disincentive effect on this or on that, the very existence of the wealth tax was a signal of social justice and to remove that is reactionary and lunatic for any Government. I object very strongly and I want to promise the Government that when they come to repeal this tax with the Finance Bill of this year, I will give them a boring time in this House.

We sweated in 1975 to put that Bill through. We did it in the face of an opposition which I will not ever forget. It broke all limits of parliamentary common sense. There was no device that Fianna Fáil did not descend to in order to wear us down physically, because at that time we had a paper thin majority. I will not easily forget that opposition. I will not easily forget the kind of arguments we were met with. That wealth tax was not thought up out of the air, and was by no means a child of the Labour Party wished on the Coalition. As a matter of fact, I first heard the matter mooted in the Fine Gael Party. By no means was the arm of this party twisted, what-ever a couple of individuals may have felt about the wisdom of it. That was a solemn undertaking to the people before the 1973 election, which we carried out along with the other half of the promise in regard to death duties. I want to promise the Government personally, even if there may be the odd Deputy on these benches who does not think much of the wealth tax, a boring few days when the section of the Finance Bill arrives in which that tax is proposed to be repealed.

It is a unique situation that we now find ourselves in that capital wealth, no matter how enormous, is subject to no impost. This situation, unique in Europe, could have been avoided while at the same time respecting all the objectives the Ministers of the Government are interested in or say they are interested in, and I believe they are interested in, like maximising investment and trying to get the economy into a pattern of growth which cannot again be arrested. It would have been possible, and I would not have objected to this, to review the wealth tax, to say the threshold is unreasonably low. We, in any case, were due this year, because of our commitment in 1975, to review the thresholds upwards because of the intervening inflation. That would only have been justice.

I am quite open to the idea, and would not quarrel with figures, that the threshold was too low anyway and that maybe it ought to have been doubled or trebled. I am equally open to the idea that the percentage on which the tax was levied was too heavy. It does not seem to a man of little or no property that 1 per cent on something over £100,000 can be very punishing, but there are people whose wealth has an investment potential for the country who might find that a serious problem if they have cash flow difficulties and liquidity difficulties, and so forth. I am perfectly open to that. I would have been equally open to an amendment of the wealth tax on the lines the Minister for Economic Planning and Development implicitly suggested we might consider, when he said that one of the main faults he could find with the wealth tax was that it exempted things that should not have been exempted. He said ten days ago that the idea whereby exemption existed for one's principal dwelling invited people to live in ostentatious, unnecessarily big houses and, as he put it, stuff these houses with valuables.

I remember this very point being canvassed here in 1975. It was made clear, and it is quite clear in the statute law, that exemption of the contents of the house is not to be taken as being a licence to turn the house into a museum. I am quite certain that this paragon of parliamentary honesty, Deputy Professor O'Donoghue, does not believe that there are six people in the country who have turned their houses into museums in order to avoid wealth tax. I do not believe there are and I am quite certain that he knows there are not.

Nonetheless, it was an ostensible or potential source of abuse and I would have been perfectly open to the suggestion that that form of exemption should have been amended in some way. I think it is reasonable to exempt somebody's dwelling, the roof over his head. That would be necessary; otherwise, the threshold would have to be very much higher, even for people who by no means could be considered wealthy in the ordinary understanding of the term.

But, instead of making amendments, instead of pushing up the thresholds, changing the percentage at which the incidence of the tax arises, instead of changing the exemptions in regard to private dwellings and so forth, instead of doing all of these things, with many of which I might have agreed, perhaps even would have supported them in the privacy of my own party, they abolished the principle of the thing. That is what I object to. I would have gone a long way with any amount of re-form of the wealth tax for the purpose of removing any disincentive it may have contained, although I do not belive there was any serious disincentive, but I could not go along, and virtually all the Members of my party could not go along, nor could the Labour Party go along with the abolition in principle of the wealth tax, and I am quite certain there are queasy stomachs in Fianna Fáil about it too and they have every right to be queasy, because the people will not forgive them for it.

The economy since the beginning of 1976 has been on an upturn and people are in a mood of euphoria. I freely concede that a mood of that sort can be triggered off by a change of Government, not just in one direction, but may be triggered off just as easily in another. I freely concede that any sort of change in the conditions of life, of which a change of Government is a conspicuous example, can contribute to a mood of euphoria. I am told there is that mood and I cannot see an awful lot to contradict it. But, that curve will reach its apex sooner or later and it will start to descend. When it does, these chickens will come home to roost, and this will be the most important one. Minor hooflings like the ground rents swindle are relatively unimportant. We made fun of that here yesterday and will do so again. That kind of thing is relatively unimportant. Important is this distinction of a major signal of social justice which all sides in this State, I thought, had accepted. It is being swept from the scene. And, while I am by no means an ideological socialist, still less a communist or a man who is fanatical about redistributing wealth, I think that is a grave and fatal mistake. It is a national mistake. It is a mistake, the penalty for which, I console myself with this reflection, will be paid in the first instance by the Fianna Fáil Party.

I have a few questions I would like to address to the Government in regard to the consequences of this abolition. I should like to know how the effects of the abolition will be, to use a favourite word of Departments, monitored, how they will be kept track of. Suppose the abolition of wealth tax does not have any visible effect on the inflow of funds to this country, suppose it does not have any visible effect in the creation of employment, suppose even the very small number of millionaires that we have compared with the kind of wealth that exists in other countries in the EEC do not turn around and start putting their money into schemes which will be productive in the employment sense, what will be done about capital taxation then?

There is something I would welcome it if it was said—it might be useful if the Minister for Finance were to say it in closing the debate; I should like it to be said—that the extreme wealth in this country is being given a chance now but if it does not take this chance, this whole matter will have to be looked at again. A sensible Government would not have taken this step to begin with, but if any titter of sense is coming into their minds at this late moment, even at the last moment of this debate, even at the last moment of the Finance Bill debate, they should say that. This relaxation is unique in western Europe. I am not certain about Switzerland, but I believe that there is not another country in Europe in which there is no taxation in life or in death on accumulations of wealth—a unique situation in Europe. I would like that at least at a late hour the Government might say that this is intended to be a chance for a really heavy investment and that if those millions which they are now not going to tax in life or in death are visibly put to work in this country to make Irish jobs, they will leave the situation as it is but if there is no sign of that, if they are being put to work merely on a calculation of what will produce the most profit for the people who own them, then the Government will have to look at the situation again and may go back to what the National Coalition did. I should like to hear the Government side on that point.

In regard to the criticism of the Leader of the Opposition by the Minister for Economic Planning and Development, I should like to know what he expects the Leader of the Opposition to say in a budget debate when he forms an opinion such as the one which Deputy FitzGerald expressed two weeks ago and which I am expressing now. Deputy FitzGerald said that the abolition of the wealth tax would have a very unhelpful effect on the negotiation of a national wage agreement. I said the same thing on radio. I do not take part in these negotiations, nor does the Minister opposite. I do not know what goes on in the minds of the people on the trade union side in the negotiations; but I am certain that if I were one of them I would stiffen my determination not to give in too easily. Is not the Leader of the Opposition entitled to warn the Government that their proposed measure would do exactly that? Is he to sit tight and hold his tongue about this piece of lunacy? That is a babyish conception of Opposition. A Minister who holds such an office and has that conception of Opposition is likely to have a very dim appreciation of what Government is all about. I have the same respect for the Minister for Economic Planning and Development as most other Members have, and I am saying this about him only because of his speech last week.

A few years ago I remember the present Minister for Finance, Deputy Colley, boasting in regard to a couple of people on the Labour benches that Fianna Fáil "did not take anyone in off the street and make him a major-general". I think this was intended to refer to Deputy Thornley; I am not quite sure. That expression was proudly used. That is precisely the situation in which the Minister for Economic Planning and Development now finds himself and I wish him the best of luck, covered in the decorations of the rearguard of the political army of which he is a member, getting to the front in one jump. I would have done the same thing myself if I could, and so would the rest of us. But when I find that the Minister has such little understanding of what an Opposition is all about, I have to ask myself if he has much grasp of the functions of a Government. I will be watching that Minister with double attention from now on because of the idiotic speech he made 10 days ago.

I make allowances for saying things in the heat of the moment which one does not really mean, but the Minister read a lecture to Deputy FitzGerald on academic probity, on presenting the full picture and not being selective. If I had been exiled in Mars or had been in orbit for the past five years, and had returned to earth and been given no information about the economic situation in the meantime except what was contained in the Minister's speech, I would not have known that there had been an oil crisis and I would barely know that there had been a recession. The recession was mentioned quite marginally at two places. He was very free in heaping blame on what he regarded as the insane policies of the Coalition in regard to foreign borrowing. This borrowing has been far outstripped by his own figure. The speech does not contain one word of understanding of the whirlwind through which the Coalition had to pass within 12 months of taking office.

Academics are flesh and blood and are as frail morally and every other way as the rest of mankind, and I can say that from first-hand experience. I can assure the House that anyone setting out an academic argument will not enjoy the respect even of his most junior colleagues unless he takes account of what has been said on the other side. He may mention it only in order to dismiss it, but he will take account of it. When I read this speech I find that the oil crisis is never mentioned and the recession is referred to only marginally in what is supposed to be a devastating review of the mess into which the Minister alleged the previous Government had brought the country. There is no mention of the orthodoxy which I understood was axiomatic, according to which one is supposed to borrow and spend oneself out of a recession and that the most dangerous thing to do is to deflate the economy. There is no mention of the cruel burdens— quite gratuitous burdens—coming from Northern Ireland which the last Government carried, with little enough help from the other side of the House.

I say this without offence. If it were the Minister opposite who had made that speech I would not take it as a point of criticism, but when I find these things are done in a speech which is topped off by a lecture on academic probity to Deputy FitzGerald, I must call attention to it.

I would be offended by that comment if I were a sensitive soul, which I am not.

Slightly offended, but I would suggest that the Minister should disregard it at the moment.

The Minister was full of indignation about how shocking it was that it should be alleged that his party should not have made promises or, having made promises, ought not to carry them out. He was full of pride, like a turkey, about how they were being carried out, but there was not a word about the abolition of ground rents and the weekly dissemination of prices. If ever a party was firmly nailed to two things, the party of which he is a member is firmly nailed to these two things. We are waiting for the performance. One, of course, is incapable of performance unless the Government spend a lot of money in paying compensation. The other is capable of performance, but it has not been done because the Minister of State at the Department of Industry, Commerce and Energy, Deputy Geoghegan-Quinn, has not been able to twist the arm of RTE and persuade them to disseminate prices. There are lots of good excuses, good for everybody except a party which had given a firm and positive commitment to the dissemination of prices weekly. This is not being done.

I will not take any lectures from the Minister for Economic Planning and Development about academic or any other kind of probity, while he stands as part of a Government defending what he chooses to defend and absenting himself from the dirty work, leaving it to the Minister for Justice and the Minister for Fisheries, the jokers in the pack.

The employment situation is a central part of the strategy of the Government and rightly so. It was a central part of our strategy, even though we were facing much more difficult conditions. I have said before and I will say it briefly again that I do not believe in "pretend" jobs or in soft-option employment schemes. I do not want to be facetious at the expense of PT instructors or anybody else. A community which is thriving and which is producing a surplus of wealth can afford these luxuries in life, but there is a limit to the number of them that we here can afford. I do not believe it is important to argue about whether 1,000 jobs have been created here or there. Anyone who borrows money can recruit a few thousand PT instructors or clerks and there is no problem whatsoever. That is not the test of the success of a Government in creating productive jobs, which will create wealth rather than just consume it. This needs to be said again—these are soft-option employment schemes. I do not want to make a party point of this, because I know that my side would be sensitive to the very same problem. In particular, all these forms of direct public sector employment—I except the building sector from this—are a subconscious response to the job aspirations which more and more a too generally and not sufficiently vocationally educated population are beginning to develop in frightening numbers. This is not just a political nettle. It is not one which Fianna Fáil are better able to grasp than we are or the other way round. It is a major national problem and is one which is just beginning to show in enormous dimensions over the horizon.

We are educating a rapidly growing young population better than ever before and we are all glad about that. We are educating them; however we are doing it, in such a way that they will all have job expectations of a kind that the country simply cannot meet because an overwhelming proportion have expectations which are directed towards the service sectors which are not wealth producing. A Government which find themselves in charge of a population like that for a few years between elections have to make up their minds what way they will handle this situation. Are they going to try to re-educate them to teach somebody who wants to be a doctor, a pharmacist or a civil servant? Are the Government going to take their courage in both hands and say: "We simply cannot afford to train and we certainly have not got jobs to employ the number of people who want to join those professions and, accordingly, whether you like it or not, people who fall below the very high level at which we will set entry standards will have to be content with technological jobs and ones which are not of a particularly high grade?"

That is a horrible thing to have to say to parents or children. I frankly admit that I would not like to be given that message about my children. I would hate it. I instantly think, just as every other person in the House would, that my children have to be a bit different. But we are in a worse position than most other Enropean countries, because all studies of this problem have shown that Irish people are less content to work with their hands and they aspire in much larger numbers to white-collar jobs than do people in other countries.

In other countries this has been faced up to as a problem. I was in France not long ago and I saw that there were advertisements in the Paris underground, which were part of an orchestrated campaign, carrying the message: "Blue is Beautiful". I cannot remember if that was the phrase but it was something along those lines. They were all showing chaps with plastic helmets, blue shirts and pneumatic drills in their hands.

(Interruptions.)

It is some time since I saw this. It is perhaps a few years. That is a fairly pathetic way of changing people's minds. I would be surprised if an advertising campaign like that had much effect.

I can promise the Deputy that we will not start a campaign "Blue is Beautiful".

The French Government had the idea that this was a national problem which had to be faced. Still, it is not such a serious problem for them for two reasons. They do not have an exploding juvenile population nor do they have an inbuilt inherent hankering after white-collar jobs in anything like the measure that Irish people have. Any Government here have to face up to this problem. Are we going to take this thing by the throat and more or less re-educate, by advertising campaigns or otherwise, people into lowering their expectation thresholds; or are we going to do the opposite and try to provide channels through which they can emigrate? That is an ugly option and is one I certainly would not wish to have applied to my children any more than the Minister would.

These are very ugly options, but a Government are elected to face ugly options as well as beautiful ones. We faced a lot in our time. We made our choices, and sometimes perhaps made wrong choices. The Government have run away from this one. I can see nothing but disaster in this job creation programme if they concentrate on public sector jobs of a white-collar type and do not somehow —even if it means innovation of a kind never seen before, even if it means involvement in public enterprise in direct food production on the land or indirectly getting into some kind of manufacturing industry which private enterprise have not yet thought of, the kind of thing Deputy Bermingham spoke about three days ago—turn their minds to some innovation which will stop this rush into white-collar employment, which the Government by their job creation programme are only encouraging. Unless they do so, they will have a disaster on their hands of a size never yet seen in the country.

In the meantime the real jobs are getting away. While all this is going on and while those "pretend" jobs and public sector jobs are being created the real jobs are going down the drain. I am glad the Minister of State at the Department of Industry, Commerce and Energy is sitting on the other side of the House because I brought into the House part of a speech he made in Castlebar the other day. I got on so badly the last time I mentioned in the House the authorship of speeches that I had better not raise this topic again. The Minister, speaking at a programme for the promotion of Irish goods, with which I wish him all the best, in Castlebar, referred to the fact that the share of the Irish market taken by imported goods appeared to be growing out of hand. He said:

When over a few years we find that textile imports have doubled, clothing imports are up 250 per cent, furniture imports have trebled and footwear imports have increased fourfold, then obviously Irish industry must become more marketing-conscious, more aggressive in their salesmanship, more active in seeking out and winning new business.

That is an incredible speech, because he has singled out the very sectors in which the real reason why the share of foreign goods has increased in Ireland over the last few years is the British temporary employment subsidy. It is not the only reason; but it is a very major one, and there is not a word about it in this script.

The British temporary employment subsidy has been met with lethargy by the Government. I asked a question about it before Christmas and I was told by the Minister for Industry, Commerce and Energy that he had made some approaches to the European Commission to complain about it. I have another question down now which I had to postpone because the Minister was not here; it looks now as if it will not be taken for some weeks.

I do not believe the Minister has made any serious protest in Brussels about this illegal British temporary employment subsidy, which has, by making it £20 a week cheaper for English employers to keep people on in industries which are labour intensive —the very ones which the Minister of State mentioned here, footwear, clothing and textiles—made the English market impenetrable to Irish goods and has made the Irish market only too vulnerable to the English producers.

There are only a limited number of options, which I have set out in my parliamentary Question, and when it comes to the answers I hope I will be able to show that. There are only a limited number of options open to the Government, all of which are disagreeable. It is a hard option which has to be faced up to in order to produce a reasonable, rational employment programme rather than giving away paper jobs and "pretend" jobs. We either sue the British in the European Court for breach of their Treaty obligations or we introduce a matching subsidy. I recognise that something has been done, but it is very little and is simply not enough. A payment of £5 will not match £20. That must be done, or we must impose a tariff on the stuff which comes in which has had the advantage of this employment subsidy.

These are three very disagreeable options. Does the Minister know a fourth one? I do not know of one, but one of those options must be taken. It is no use the Government being here for seven months while every other day the Confederation of Irish Industries, which I think have made all the running in whatever protests have been made in Brussels about this, with perfect justification, are crying about the effects on Irish industry and Irish employment of this subsidy. Nothing is done until the budget—I recognise that it is something but it is not enough— and the £5 subsidy is announced.

The other day we read the incredible piece of news that the Erin Foods potato processing plant in Tuam was to be closed. Is it not beyond belief that in east County Galway, the one part of Europe which is associated in European folkore never mind mere Irish folkore, with the potato, a potato plant has to be closed because it cannot get a reliable supply of potatoes? I would not wish my children to be directed into the potato industry against their inclination, and I would not wish it on anybody, but it is the Government's job to make up their minds that here is a possibility for gainful and productive employment. I know the reasons why this Erin Foods plant has had to be closed: some of their contracts were not met; producers found that prices were higher elsewhere and they sold their potatoes in breach of their contracts; other people did not bother to grow potatoes at all. But what is to stop the sugar company—I realise they are an independent company, but that they would be sensitive to being pushed by the Government— from growing their own potatoes and employing their own people to do it? Because it would not be private enterprise it would probably be wasteful, probably they would be "soldiered" on in a way that private enterprise would not tolerate, probably the thing would not show the same profit as private enterprise, but if they even broke even and managed to keep their workers going and give employment to the people who would be growing the potatoes for them, would that not be something?

That is the kind of question the Government should be asking themselves, not where they will find £20 million to creat 5,000 jobs for clerks and PT instructors. Take the question of energy. We still have not got an energy policy—it is barely mentioned in the White Paper published a couple of months ago. Serious, economically deadly decisions are likely to be made about this without the matter being properly debated.

Let us just take the wastage of energy through defective house insulation and poor house building standards. It is reckoned to be twice what it is in a comparable country, Denmark. Surely there is room for increased employment in the improvement of house insulation. There is an enormous amount of work in it for tradesmen. I do not expect the Government to pay for that, but could there not be grants for it? Or surely it could be made tax deductible? Surely there are possibilities here for real job creation? That kind of work is wealth-producing, because implicitly it reduces the amount of money we have to spend abroad for oil, the fuel for the vast majority of our energy production.

These are the hard questions the Government should be spending their time thinking about, not how they will borrow millions of pounds creating jobs which will not produce one blade of grass, let alone one matchstick or one pair of pyjamas which could be sold to somebody else to buy the things we need. I accept that in a time of difficulty any kind of job is better than no job, and I would not wish any of these theories to be put into effect at the expense of my children or myself, but a Government must face up to these things and ask themselves how these things can be made workable and physically and humanly acceptable.

When a Government come to office on such an enormous raft of utopian promises, that Government, having got 84 Deputies into those benches, could at least say: "Let us take a month off from doing anything else, except facing up to questions like this: What are the implications for our economy, for our Constitution, of the way educational aspirations are going, and what are the implications of the way in which we are shaping our employment pattern?"

I should like the Government to realise that a Government alone, let it be backed by the best civil service in the world, cannot get prosperity if the people are lulled into a condition of mental dependence. The people are being increasingly so lulled, and I am sorry to say that the experience of the last election will have augmented that. During the last election I met people in prosperous suburbs—I sit for a constituency in which there are many prosperous suburbs—who wanted to know why the State would not buy schoolbooks for their children. I realise it is a burden to be buying schoolbooks or anything else for children these days, but there is some limit to what a State like this can afford. Unfortunately, the kind of political game we play—and the party opposite play it far more ruthlessly than we would have the nerve to think of doing—forces people into that condition, sometimes against their instincts.

Unless the Government can recruit the people's serious will, not a transient frivolous will, to work for themselves, to do things for themselves, we have got a dim future ahead. We will be the reservoir in the EEC for PT instructors and clerks, while expecting the Germans and the Dutch to rise at 5.30 in the morning and go home at eight in the evening to maintain us in this comfortable situation. No one will do that. They may do it for a little while, a transitory period while we have a small population, but they will not do it in the early 21st century when our population will be bursting through the four million level and will go on increasingly rapidly thereafter.

When the Government take the month or two months off that I have suggested, they should consider also how the people could be got to dedicate themselves to doing something for themselves economically. I should like to see them creating pilot co-operatives in selected or even random areas and equipping them with pioneer teams of people drawn from the various State agencies such as An Foras Talúntais, the IIRS, the IDA, CTT, the Management Institute. There are also special places, for example coastal areas, which would require specialist skills. The Government should try to see people developing structures in their own districts comparable with that which they have for a whole range of other activities.

Take a place out of the air, say Athlone, which has a political structure of a kind; it has got an urban council and a whole range of structures in which people run their own social, charitable and religious lives. To a large extent they have a say in how their children are educated. All these things can be done by people themselves, and I should like the Government to experiment in giving to the people—not throwing it to them but they would have to be guided and equipped for it—a responsibility for communities of a manageable size in which could be secured not just the professional but the economic future of their children and grandchildren.

The Lord has given the people of Athlone, of Roscommon, a certain place to live. There is a Government in Dublin to which they pay taxes but there are limits to what that Government can do. The time has come when the Government must say: "We have reached our limit, we have done all we can for you and, even though it is a function you have never had before as a community, you will have to get used to planning things for yourselves, such as calculating the value of the land you sit on and all the other natural resources that are there." They could be asked what would be done if a battalion of Dutchmen parachuted in and found the place uninhabited— what would they do to keep alive? They should think that out and do the same themselves.

I should like to see a certain number of communities chosen arbitrarily and equipped in order to start in this way and see whether the national problem, namely, the increasing dependence of people, could be remedied by getting them to try to provide as far as possible for their economic future instead of casting more and more of their burdens on the State.

Could they not support Irish goods?

I completely agree with the Minister. I hope they will support them. These things I have listed are serious national, long-term problems. They will be there perhaps after this and other Governments have gone. They are not peculiar to Ireland; in certain ways they are shared by other European countries also. We will have to solve them for ourselves.

Although I am sorry to end my speech on this kind of note, I do not think the Government have enough guts to do what is necessary. If one were to sum up the performance of the Government so far—apart from the small-scale hookery of the ground rents swindle and that kind of thing; I do not think it is all that important— they have shown very little guts. They have displayed very little anxiety to grasp nettles. That was a famous phrase of the Taoiseach's in 1972. He was all out to grasp nettles, but now it is the Opposition who are being left to grasp the nettles and when they do they are criticised for being "unnational". The era seems to have changed.

Of course nettles have to be grasped, but I do not see any sign on the part of the Government of grasping nettles in regard to Northern Ireland. I call that gutless after what this country has been through, and doubly gutless of them when they acquiesce in or even invite criticism of people on this side for recognising that we will never have peace in this country until we can live in harmony. That means making concessions to people who, at the moment, violently differ from us.

The Government are gutless also in the matter of law and social reform. For instance, on the matter of contraception about which we are supposed to be getting a Bill——

We can hardly discuss contraception on the budget. I do not know how the Deputy can relate that topic to the budget.

Money is being raised by the budget for the Department of Health.

As far as I am aware there is no expenditure in the budget for contraceptives.

Money is being raised by the budget for the Department of Health and that is the point I want to focus on. It is gutless of the Government to pretend that this matter is a health problem. It is not such although, of course, it has strong health dimensions.

It had for the Deputy's Government.

I prophesy that any attempt to solve this problem on health lines will be a disaster. It is essentially an issue of individual privacy and liberty, and only in the second place is it a health problem. Except for seven or eight Deputies in our Government whose conscience would not allow them to support our Bill, our Government faced up to the issue. Any attempt by this Government to duck those questions will end in disaster.

The Government are gutless also in their pretended commitment to reform the public service. If one thing stands out in my mind from the speech of the Taoiseach on 5 July it was his insistence on "political will" in regard to reform of the public service. I am sure I will be allowed to quote a public servant by name when he uses the Government Information Services to put out a speech of his own under his own name. I am referring to the Secretary of the Department of Economic Planning and Development, Dr. Whelan. On 9 February he said that "the creation of the Department of Economic Planning and Development represents a fundamental change in our structure of Government, probably the most important since the foundation of the State. It is a major step in the reform of our public service". My impression of that Department is that it is staffed largely by the same people who were formerly active in the planning section of the Department of Finance and who would still be there if the advice of some of our senior economists were followed.

I do not even pause to make fun any longer of the retitling of the Department of Local Government. That Department have not got what would fit on my thumb nail of extra functions since the change of title. That, too, is gutless. I admit I would be hard put to see how changes for the better in the public service might be made. If changes are to be made they will not be made by that kind of cosmetic retitling and shifting around to a new Department with a new set of letter-heads of what is essentially a section of the old Department and one that was working quite well.

The problems I have tried to outline have been made more difficult by the proposed abolition of wealth tax. They will sharpen social suspicion and unrest. The enormous national problems that we face need to be met by the Government with courage. From the examples we have seen in the last seven months, I do not believe the Government have this courage or if they have, they have not yet summoned it up.

My wish to contribute to this debate is prompted primarily in that as a woman and as the youngest Member of the Oireachtas, I feel well suited to speak both on behalf of women and of youth. It is only natural that I would have a sympathy and an understanding with the problems concerning both these sections of our society.

I congratulate the Minister for Finance on his obvious regard for the need to improve the financial position of these sections of our community. My own youth gives me a natural advantage in understanding the hopes, the fears, the aspirations and the ambitions of youth and the younger age groups in our society. Be that as it may, I feel it my duty no less as the youngest Deputy in the present Dáil to voice my opinions on certain aspects of the present budget proposals. I compliment the Minister for Finance and the Government on their sensitive regard for unemployment among the youth and their obvious appreciation of the present difficulties in which a large proportion of the younger age groups find themselves in this regard. Would, however, that the Minister could do more, but with the limits which must necessarily confine a Minister for Finance to ensure justice to all our citizens he has done well.

Even in the short time I have had the honour to represent the people of mid-County Dublin, I have been disturbed by the plight of unemployment especially among the young and especially in a region such as Tallaght, which is fast becoming a city in itself. It seems to me that the main spirit of this budget is conceived for the provision of more jobs and employment generally. This indeed will be welcome and long overdue in my constituency and most especially in Tallaght and its surrounding areas. Tallaght is an industrial area and boasts of many factories. These concerns will welcome the incentives contained in the present proposals which must lead to the creation of new jobs and support the existing industries and especially the smaller ones.

These budget proposals must likewise give fresh hope and incentive to the building industry—an industry which has been so disgracefully neglected by the previous Government and which is, and remains, one of the main sinews of our industrial life. This latter industry is of such vital importance to the citizens of mid-County Dublin as an area growing and expanding. It is gratifying to see the Minister's proposals for such a vital industry.

I return to the problems of the youth. We hear much criticism today of the indiscipline and lawlessness among young people. How could it be otherwise if they are idle and without work? "Idleness is the Devil's comforter" they say. What may we expect then if unemployment is widespread and rife?

We can, Sir, take comfort in the sensitive and realistic appreciation which the Minister has shown in his budget proposals which show positive and constructive action towards a more stable economy and in particular job creation and fostering of industry thus providing greater opportunity especially among young people.

In the last few months we have heard Deputy Horgan expressing his concern for youth. I must look on Deputy Horgan's regards with suspicion for, as each Deputy in the House will know, the 1975 EEC Labour Force Sample Survey showed that almost 50 per cent of the total population is under 25, yet in 1975 the party of which Deputy Horgan is now a member did not bring about any proposals to alleviate youth unemployment, which at this time constituted almost 44 per cent of the total unemployment even though the labour force under 25 years of age represented only 30 per cent of the total.

The leader of the Fine Gael Party is being watched with some amusement by young people as he desperately tries to drag some of them into the ranks of his party. But, as I said in my speech at the Fianna Fáil 4th National Youth Conference down in Cork last month, Deputy Dr. FitzGerald is finding the transition from blueshirt to tee shirt a rather painful experience. This budget, on the other hand, proves once again Fianna Fáil's commitment to the youth of this nation, by the allocation by the Minister for Finance and the Government of £5 million to provide schemes for youth employment.

Fianna Fáil have increased the number of training opportunities with AnCO and I was particularly pleased to have been present at the opening of the new AnCO Centre, in Tallaght, County Dublin. Fianna Fáil are once again the party to take the initiative, this time in the setting up of the Employment Action Team. As a result of this team many young people will now be engaged in a work experience programme, in an environmental improvement schemes programme and 150 first year construction industry apprentices will be recruited by local authorities. In all, Sir, the Minister for Finance estimates in his budget that such special employment schemes targeted specifically at young people will generate 5,000 jobs.

What has disturbed me most about this budget debate so far is the way in which the Opposition parties have rejected the budget out of hand, while it has been accepted—indeed, welcomed—by the overwhelming majority of our people. It strikes me that both the Fine Gael and Labour parties have no conception of the true role of an Opposition whatever its ideological base. They do not seem to understand that the role of an Opposition is not just to practise obstructionist and negative policies, but rather to be enlightened and broad-minded enough to realise when the Government of the day are bringing in measures for the obvious good of the country and to support such measures for the betterment of the people. The present stance which is being taken by both Opposition parties can only be accounted for by one, or perhaps both of the following reasons: either they are so blinded by bigotry or prejudice that they find it beyond them to support any measure which is being implemented by Fianna Fáil even if this measure will mean better living conditions for the poorer sections of our community, or they may believe that by opposing Fianna Fáil they might score some party political point.

Where now have vanished the high-flown phrases from prominent members of the Fine Gael Party concerning their "Just Society"? But, Fine Gael are not alone to be blamed. What of their partner in the previous Coalition Government? Where else in Europe could you witness a labour party refusing to support a budget, the primary aim of which is job creation? Where else in Europe would you find parties unwilling to support a budget which introduced measures to improve the plight of handicapped children? Where else in Europe would you find parties so ready to criticise a budget which recognised for the first time the right of single women, including school-leavers and widows, to claim unemployment assistance on the same basis as men? One need not be so surprised by the Fine Gael Party with their traditional sectional interests but one finds it hard to believe that any Labour Pary should react so violently against the social reforms that the Minister for Finance and the Government have proposed in the budget.

I have said that my special interest is in youth, but as a woman I have an equal interest in any provision in this budget which will benefit women. My only regret is that the Minister did not find it possible to do even more for women, especially for mothers, the widow, the deserted wife, the unmarried mother, working wives and women old age pensioners. The proposals do however recognise the plight of such persons and have given a substantial measure of relief and further assistance, which I am confident will be appreciated by those citizens in the sectors I have mentioned as needing extra consideration.

As a woman, too, I am struck by the compassion which the Minister has so clearly shown and which comes under the headings of social welfare and health. This clearly shows, Sir, that this Minister and this Government have from the first opportunity afforded them shown in practical and substantial terms that they are ready to stand by their election promises, a welcome change from the Coalition parties whose promises never came to fruition. I am gratified in the certain knowledge that when these advances and increases proposed in this budget are ratified they will be administered with the utmost efficiency under the driving force, expertise and deep dedication of our present Minister for Health and Social Welfare.

As a teacher I was particularly pleased to see in the budget that the Minister for Finance has approved an increased rate of equipment grant for special classes and remedial classes in ordinary national schools. There is a great need in this sphere of education for the provision of more remedial last decade an enormous strain has been put on pupils from a very early age to fare well in examinations. Classes have grown in size. Although the present Minister for Education has succeeded in lowering the pupil-teacher ratio, it is still extremely difficult if not impossible for the slow learner to keep abreast of the work without constant help from a trained remedial teacher.

It is important to remember that the slower learner is found in all socio-economic groupings and that he may exist at the primary or secondary level. I am gratified that the Minister for Finance recognises in his budget that the need of the slow learner is a serious and urgent one. I hope that this Government in the coming months and years will be in a position to improve the situation of the pupil who is in need of remedial teaching.

The budget is a continuation of the economic and social policies which Fianna Fáil have followed throughout the years. Who could have been surprised by the emphasis that was placed on the Buy Irish Campaign in the budget? Fianna Fáil have always believed that such a campaign stimulates employment. One looks back on the boom of the 1960's with a wistful eye, but I feel we can now look forward with confidence to a stabilising economic climate, a stability which can only be brought about by a single party Government.

Anois, a Leas-Cheann Comhairle, deirim leis an Aire agus leis an Rialtas, ar aghaidh leis an obair agus bail ó Dhia air.

Since the introduction of the budget a couple of weeks ago much has been said and written about it by politicians business people, the media generally and the ordinary man or woman in the street. There has been criticism. One must expect that, particularly from the area it is most likely to come from—the Opposition benches. Much of the Opposition criticism has not been of a very heavy nature. This is not surprising because the budget has been accepted by the vast majority of the people as a very satisfactory one which has done a lot to stabilise the economy for the future.

The budget was designed, as our pre-election manifesto stated, to get this country moving again economically and particularly in the jobs sector. The people who elected the Government last June wanted a strong Government which would bring in a worth-while package. That we have done in accordance with our manifesto. It is apparent now that a great deal of thought and consideration went into the manifesto. The projects and the plans set out in the manifesto have been acted upon with all possible speed by the Government and they are clearly shown to be workable and in the interests of the nation. They are the only measures likely to restore the economy and bring it back to something approaching the 1960s and early 1970s era of steady progress and advance.

Since Fianna Fáil came back into Government there has been a very colourful display of our manifesto on the Opposition benches. We would assume the pages are well thumbed and well digested. The amazement expressed by the Opposition at the budget proposals is quite unwarranted because the Government's economic plan was set out in detail in the manifesto. It is very satisfactory that after only seven months in office the Government have achieved the remarkable feat of fulfilling the majority of the commitments entered into in the manifesto.

The Chair will forgive me if I continue to put the emphasis on the manifesto. We must refer to it. I should not like to think that the Opposition had a monopoly so far as our manifesto is concerned. The budget proposals include a substantial increase in the personal allowance where income tax is concerned, the abolition of road tax, a reduction in the social welfare stamp for the lower paid worker and grants of £1,000 for first time purchasers of houses. There are also bigger SDA loans, higher social welfare benefits and, above all, price stability—something we have not had for some years—and a new jobs creation programme well on target.

How does all this contrast with the achievements of the former Government? Prior to the 1973 election we had the famous 14-point plan. In their years in office, however, these 14 points were quickly shelved to the detriment of the economy and employment. To be fair to the former Government, there were difficulties caused by a worldwide recession, but those difficulties were multiplied by inept and indecisive handling and by a succession of blunders that really should have proved embarrassing. The country suffered. Prices and unemployment rose frequently and steadily.

This budget is firmly based on a set plan, a plan accepted by the vast majority of the people last June when they returned Fianna Fáil to Government with an unprecedented 84 seats. That is conclusive evidence of how the people felt about our manifesto.

As the Minister pointed out, the budget represents the initial stages in implementing a strategy for economic and social progress in the immediate future. It is positive. It is a challenge to all, to employers, trade unions and workers, to seize the opportunity presented in order to achieve sustained growth and a fulfilment of the Government's plan to create the thousands of new jobs required for our young people. Some commentators have described the budget as a gamble. The Minister himself labelled it a "calculated gamble". Of course it is a gamble. Is not every worthwhile thing one does a gamble? One must take risks. One must take chances. But these must be well planned. In our circumstances we must take risks in order to create the jobs required for our people. It would be disastrous to sit on the fence and not make some investment in creating jobs in the hope that one morning one will wake up to find the problem has been solved but, as we all know, economics are not like that. The budget is a gamble, but it is well planned and well calculated to achieve the best possible results in, we would hope, the most favourable economic climate.

Speaking on the Industrial Development Bill some months ago, it was argued that everybody would have to make some sacrifice to enable the creation of jobs for the less fortunate. In the light of the budget proposals those in full employment must be more modest in their demands and cooperate fully with the trade unions in helping to achieve the Government's plans and objectives. As we know now, agreement has been reached, somewhat above the suggested or recommended figure, and we all hope this will not have serious consequences as far as the creation of new jobs is concerned.

Not so long ago the nation was in the throes of galloping inflation which affected the lives of all of us. Rising costs swallowed up the real value of pay increases and resulted in the worker taking home less in purchasing value. However, it is satisfactory to know now that there has been a dramatic reduction in the rate of inflation since last year and that is being maintained. To reduce inflation to the target set by the Government pay restraint was obviously an absolute condition. Opponents of the budget appear to have gone out of their way deliberately to antagonise trade unions and workers by stating that the Minister was dictating to the unions. Since last June spokesmen for Fine Gael and Labour have constantly maintained that the target set by the Government was just not on. In the circumstances, who is really dictating to the trade unions?

A lot of emphasis has been put on this point and on the participation of the workers. However the onus does not lie entirely on the worker; far from it. Private enterprise has been given excellent encouragement in the budget proposals. In return business and employers must accept their responsibility in a positive and decisive manner. They must pursue any scheme that seems worth while. Above all they must be prepared to invest, to expand and to honour their commitments to the creation of further employment. A number of important and badly needed concessions were made to industry in the budget. Corporation profits tax has been cut. Free depreciation has been extended to buildings, plant and equipment and there are considerable stock reliefs. These, combined with the other steps taken, must give to private enterprise the encouragement and above all the capital so badly needed. In recent years under the Coalition Government private enterprise and business were generally discouraged, very much to the detriment of employment and of the economy and with the resultant loss of many jobs.

Regarding the abolition of wealth tax, I feel that very few people, irrespective of their position in life, have lost any sleep over it. It was made an emotive issue in 1975, and, despite all the trumpet-blowing at the time of its introduction, it yielded only about £7 million in 1977. It was a very difficult and costly tax to administer but, more important, it reacted serioously on investment in business. The less prosperous section of the community were the real sufferers from the wealth tax as it brought about loss of jobs. It may be very unpalatable to some people, but the fact is that wealth creates business and jobs, and jobs are one of the country's main requirements today.

The Minister during his speech restated the policy of the Government to maintain and improve the social services generally as far as possible. Pensions, health allowances and unemployment benefits are all to be increased by 10 per cent from April next. Every Member, particularly Deputies representing such a constituency as I do where unemployment is at its hardest and many old people live alone, should continue to strive to raise the standard of living for those people. In the past Fianna Fáil have never overlooked the old age pensioners or the unemployed, and the Minister will undoubtedly endeavour to improve their lot in the very near future.

Many thousands of couples in Dublin cannot find proper housing accommodation. I meet this situation in my constituency all the time. We must all accept and agree that the housing situation in Dublin has deteriorated seriously in the past four or five years. The previous Government repeatedly referred to their record in housing during their term in office, but the real answer to their claims can be found in any clinic in Dublin on any week-end morning or any evening. I invite Deputies from the opposite side to come to my constituency to see the problems that we have in housing. Nothing has been done about housing in that constituency over the years. The figures that have been thrown about here for some time suggest that there have been 25,000 new houses each year. I do not know where they are. They are not in my constituency. In Dublin North Central the prospects of people unfortunate enough not to have housing are very slim at present. I will do everything possible to stress the importance of this matter to the Minister concerned. I am not being critical of the housing section of Dublin Corporation. They have their problems, but over the past four years there has been very heavy unemployment in the building trade. Obviously this area was not a priority on the Coalition Government's list. I have learned recently that some Opposition Members have been saying that the Government's White Paper on Economic Planning and Development planned to cut back on local government housing. This is completely untrue. I suggest to those Deputies who are anxious to spread this rumour in Dublin that they should reread the White Paper.

Discrimination against women in unemployment assistance has been one of the ugliest aspects of our society, and in recent years much has been said about social equality for women. The Minister is to be congratulated on eliminating this injustice so quickly. There is disappointment of course that much more could not be done, particularly in relation to widows and deserted wives and also to the married woman who is in employment on a very low tax allowance. Many such women are working because they need to supplement the income coming into their homes.

There has been a general welcome for the long overdue increase in personal income tax allowances. The relief is real and meaningful. It means that the worker earning £70 a week and with two children will save about £4 per week, which is a saving of 40 per cent of the tax deduction prior to this new allowance. These increased allowances combined with all of the other savings, such as rates, road tax, increased improvements in grants for houses and so on, and all the other areas that I have mentioned are of real value. Above all they restore to the people's minds confidence in the country, and this is important in so many ways today.

No one will begrudge any measures provided for improvements for veterans of the War of Independence. Each year the numbers are growing smaller and smaller. I should like the Minister to give some consideration to abolishing the assessment of such pensions for general income tax purposes. The other measures taken granting telephone rental subsidies, free travel for spouses and other increased grants are all to be welcome and indeed are overdue.

Nobody—and least of all the farmers themselves—will object to paying their fair share of income tax. As we all know, farmers' incomes have improved substantially over the past few years and the Minister's proposal would seem to have struck a fair balance. The allowance of rates as a deduction has been one of the main bones of contention so far as farmers and income tax are concerned. This has been so since the former Government first introduced farming taxation. Unlike other professions, farmers run into many problems relating to weather, market conditions, animal and crop losses, and so on. It is fair and proper that farmers should be allowed also a single payment rate in the year following assessment.

Having listened to Opposition speakers it would appear there is total opposition to all measures introduced excepting, perhaps, the abolition of wealth tax, although Deputy Kelly does not agree with that. Fine Gael Deputies have already spoken in this Debate and have expressed personal satisfaction that wealth tax has been abolished. I would hope, therefore, that the opposition to the concessions granted to workers, taxpayers, the unemployed, health beneficiaries, and so on, has been noted.

It would seem likely that if Fine Gael and Labour had their way we would have had the reintroduction of home rates with all the injustices of the rating system we experienced. Obviously these would be restored. Perhaps there would be no real increase in tax allowances or, as we experienced last year, a concession of £60 would be given with one hand and a new rate struck to take the concession away with the other. Many taxpayers discovered this at a later stage. The Coalition would obviously sit still and do nothing to bring about the necessary creation of new jobs for young people. They would reimpose motor taxation and perhaps even apply a vicious increase as they did in 1975 when, one must recall, tax on private cars necessary to travel to and from work was increased in some cases by as much as 75 per cent. We cannot forget either in the same year the additional imposition of 15p on a gallon of petrol.

Obviously the Coalition would do nothing about halting price rises. The people have experienced this over the years in regard to the price of food on the table and the other necessaries of life for families and mothers with young children. I would suggest that neither Fine Gael nor Labour are in any position to criticise the budget on social or economic grounds. Any benefits given to social welfare recipients over the past few years were quickly eroded by price rises. As we know economically there was no plan, no policy. The Coalition Government stumbled into crisis after crisis of their own making. They had no policy and they were not able to agree on any policy for obvious reasons.

The aim of the Fianna Fáil Government has been to restore stability to the economy and the budget will contribute by not having taken any action likely to fuel inflation. It will give substantial incentives to industry specifically with the aim of providing more employment, which is the most important point in the budget. To finance the budget the Minister has estimated a borrowing requirement of £821 million, which of course is a lot of money even in 1978. This is 13 per cent of our GNP, exactly as envisaged in the election manifesto. Opposition speakers have condemned the extent of borrowing required, conveniently overlooking their own large scale borrowing, which did nothing for the economy, at a rate of over 16.2 per cent.

Debate adjourned.
The Dáil adjourned at 5 p.m. until 2.30 p.m. on Tuesday, 21 February 1978.
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