: Today's increases in butter and bread prices constitute what one might call Fianna Fáil's anniversary present to the electorate. The two increases are 6½p on a pound of butter and 1p on a pound loaf of bread. The increase in the price of butter amounts to 12 per cent of the present price.
The failure of the Government to subsidise price increases brought about by the EEC represents a reversal of the policy followed by the previous Government. Even in times of the most stringent financial circumstances, even in the middle of a recession, they sought to subsidise basic consumer prices against increases under the CAP. The present decision not to subsidise consumers for the latest increases is, in our opinion, the first concrete indication that the Government are reviewing their policy of subsidising consumer prices to offset EEC price rises. We had an indication of that last weekend when the Minister for Finance in The Sunday Press foreshadowed the change of policy by the Government with regard to consumer subsidies. It is strange that every time a Coalition Government left office food subsidies were abolished. They are being diluted now and this is the first step in the direction of abolition. I do not think we have felt yet the full effect of that policy review. When we read the Green Paper tomorrow probably we will have another instalment of the burden that will have to be borne by the relatively less well off sections.
One of the clear-cut assurances and promises of Fianna Fáil in the last general election campaign was that there would be no cutback in food subsidies. They were challenged on the issue but they reiterated that they would not abolish subsidies. Yet, within 12 months of their return to office we have the first example.
There has been a substantial downward trend in inflation in the past 12 months and this is to be welcomed. We are at the lowest base line, but now the Government have sanctioned the increases we are discussing and we are told that there are more to come. For example, it is said that on next Monday the price of cheese and other dairy products will increase substantially as a follow-through on the increase in the price of butter. It is also suggested that there will be a substantial increase in the price of milk. The Government have squandered millions of pounds and most likely in next year's budget there will be taxation increases. If this kind of policy is followed by the Government there will be a substantial upward trend in consumer prices in the next two or three years, more particularly with regard to food prices. Those of us who are trying to rear families on limited incomes know that food prices bite hardest in the family budget.
I deplore the decision of the Government not to provide direct consumer subsidies for these basic food commodities, as the previous Government did in the past. It is ironic that on the very day this increase is being discussed we have been assailing the Minister for Finance for squandering £10 million this year on one item, the abolition of the wealth tax. At the same time, the Government cannot provide a quarter of that money for low income families and for the elderly who must buy a few pounds of butter each week because it is the only food they can afford. In the case of the pensioner who limits himself or herself to two pounds of butter per week, the cost will be £1.24 as from this weekend. This is happening in the context of the squander-mania that hit the Government with regard to the abolition of the wealth tax and also even in relation to the abolition of rates for families who would be well able to pay something for community services, or even people like myself who have benefited to the extent of £90 or £100 because of the abolition of road tax. Millions of pounds have been frittered away by the Government in the past 12 months and I think they could have well afforded the cost of providing subsidies for basic commodities.
I noticed a headline in today's Irish Independent by John Foley and Aengus Fanning—I am not saying they are responsible for the heading— which read: “O'Malley blames Brussels for the increase”. I have more respect for the Minister for Industry, Commerce and Energy but I think we should clear up the situation. The report stated that he laid the blame for the increase on the EEC Agricultural Ministers. Where does our Minister for Agriculture stand if that is true? Has the coalition in the Cabinet broken up? The report was written by two authoritative journalists and I presume they checked their facts. I do not think one can blame the Commission. The fact is that the increases have arisen because of changes in the green £. We have always recognised that farmers and anybody else in the agricultural community are entitled to green £ changes and the money should be brought home but it should be distributed fairly. We have always suggested that there should be a redistributive effect by ensuring that consumer subsidies take the brunt of the effect of such increases.
I noticed another report in the same newspaper of a radio interview with the chairperson of the Consumers Association, Joan Morrison. She felt that all consumer subsidies should be abolished. That was queer reasoning from a consumer organisation. I do not share that view and I do not think that most responsible consumer interests would share that view. We deplore the fact that the subsidy was not paid as it should have been.
The Minister for Finance promised at the Ard-Fheis that we would see a two-stage rocket of economic expansion. We are seeing a bit of the rocket now. The electorate got the first blast of the first stage of the rocket with the decision of the Government not to provide an additional subsidy. I should like to point out that we do not provide massive food subsidies here. The National Coalition were very careful about the introduction of such subsidies and only provided limited subsidies on a small number of products, bread, milk, butter and town gas which has also been cut back. We spent about £52 million per year on such subsidies. We should look at that figure in the context of the total budget expenditure of £2,400 million. Roughly 2 per cent of the budget expenditure goes on food subsidies which, relatively speaking, is a small amount of money being spent by the national Exchequer. It boggles my imagination that a Government with all the talents and the economic expertise they are supposed to have and the creation of additional services to assist the Cabinet could not, out of £2,400 million find a couple of million pounds to subsidise butter and bread increases of such magnitude. I feel strongly that the Government should be condemned for this major serious change of policy on their part, a change which the Irish people did not vote for 12 months ago. It is an anniversary present they could well do without but which they will have to pay for in the next three years. During that time they will realise what they voted for in the last election.
