: How can the same man be responsible for drafting the paper and then sending out a report to say the Green Paper did not tell the truth? This places an impossible burden on one person and it should never have been put on anyone, even someone of his exceptional ability.
When we move from social welfare to health, the delphic obscurity of the paragraph suggests that the Minister for Health was more successful than the Minister for Education and the Minister for Social Welfare in postponing the evil day. Rising health costs, we are told, cannot be allowed to pose excessive problems in the context of our general economic and public finance policies. Ominously, for Deputy Haughey, Minister for Health, while hand on Fianna Fáil heart, there is no intention of departing from the objective in health policy expressed in the White Paper, the considerations expressed earlier in this Green Paper require that detailed study now be given to the possibility of adopting alternative measures other than those at present in use to meet some of the health objectives of the White Paper. So the Green Paper here is going to go back on the White Paper at the expense of the Minister for Health.
Later we are told that the number eligible for health benefits will be stabilised or decreased—paragraph 7.28. These are delphic utterances indeed. We on this side of the House have no difficulty in interpreting them. The knife is in, and barring an early "off" in the succession stakes and a particular outcome, it will be twisted with ill-suppressed pleasure in the months to come. What a fate for the health services that they should become the plaything of Fianna Fáil internal politics regardless of the effect on the health of the people.
As for education, it is to be the fate of Deputy Wilson to preside over the destruction of much of Donogh O'Malley's achievements. The doubling of fees for university students, paragraph 7.33, will make Donogh turn in his grave; and new charges for students at training colleges, paragraph 7.34. These are the only two cuts actually mentioned, but we all know that the Fianna Fáil Party are currently in travail over proposals to cut the school transport service which was on the agenda for a recent party meeting.
Then there is the price of food from which the National Coalition removed VAT and in the case of key necessities we subsidised. There is no mention yet in the Green Paper of restoring VAT on food and on clothing, from which we also removed it. That, no doubt, will be part of the £285 million extra taxation package to come. We are told the subsidies are to go, not "abruptly" but over a period of years. We are told there will be 3½p more on milk, 30p more on butter, 5½p more on the loaf, 4½p more on the kilo of flour, not to speak of 17p more per therm of town gas. These are not my figures but those of the Green Paper as set out in a table there. These subsidies will be removed not "abruptly" but, it is quite clear from the wording, completely.
How big in total are these cuts in spending going to be? This is calculable from the figures given in the Green Paper, although they are not directly displayed. The Green Paper figures in Table 7.1 applied to the Government's forecast of GNP allow for a £200 million increase in current spending in current money terms in 1979. But in his speech the Taoiseach told us that £150 million of this is already pre-empted by unavoidable commitments: servicing the enormous extra debt incurred, which at the now rapidly rising interest rates could cost much more than was provided for in the budget, and the carryover effect of public service pay and social welfare increases. Even if inflation raised the resulting bill of £2,518 million by only 7 per cent—I say "7 per cent" because public service pay is such a big factor that the inflation rate in Government expenditure is always more than the consumer price index—this means that the cost of existing services will be about £2,700 million in 1979 without any improvement in or extension of public services.
The Green Paper tells us there will be 4,100 extra jobs per year provided for in the public sector which are bound to involve extra costs. This figure of £2,700 million excludes those extra jobs and the extra jobs referred to in the chapter dealing with how to eliminate unemployment altogether. This £2,700 million is the minimum figure of the cost of these services in 1979 and is clearly an underestimate because it makes no provision for the 1,400 extra jobs that Government have promised to provide in that year. The Green Paper says that the sum available when calculated will be only £2,574 million. Therefore expenditure cuts must be at least £125 million in 1979 with an almost identical figure of £175 million in 1980.
The stage is thus set. The Government have announced in this Green Paper that they propose to deflate the economy by about £270 million in each of the next two years, namely, in total by twice the cost of the Fianna Fáil manifesto package. They gave us the money with one hand and took twice as much back with the other. In each year there are £345 million more in taxation and £125 million in cuts in expenditure on the social side, which added give £550 million of deflation in two years.
In a recent report the OECD assessed the short-term effects of the Government's expansionary measures in 1978 as adding 2 per cent to GNP. No matter how the Government and the Ministers play around with the figures their attempt to retrieve the damage done by their manifesto and budget will involve a total 4 per cent deflation of the economy, a 2 per cent deflation in each of the years 1979 and 1980.
How in the name of common sense could the Government imagine that after such a deflation, and having provided no higher proportion of GNP for productive capital investment in the private and public sectors in these years than we did in 1977, they are going to achieve a 7 per cent growth rate? This would imply that there would have been a neutral, undeflated growth rate of 9 per cent in these years without any stimulus by way of expansionary budgetary measures or increased investment finance. It implies that left to itself the economy would be expanding at twice the normal growth rate and the Government are cutting it back from 9 per cent to 7 per cent.
Is it any wonder that the Government cannot find a single independent economist to stand over their phoney figures? In all this there is nothing, I quote the Taoiseach, "to enhance the career prospects of a vibrant new generation of Irish people". The proposals are novel all right and they are dramatic, but I wonder if the Taoiseach had the kind of novelty and drama in mind that most Irish people will find here—drastic deflation and its consequences on employment. As for fuel to fire the imagination, to which he also referred, there is enough fuel here to fire social discontent of a high order as the ordinary workers and small farmers come to understand the price they are being asked to pay, not to put people to work—they would pay for that, but, as I have shown, that is not what the issue is about here—but to pay for the remission of the wealth tax, the road tax and the other Fianna Fáil promises.
I will spend no more time on this document. I was going to insert an adjective, but I remember my father gave an instruction to the Department of Defence that all adjectives were to be dropped from official minutes as they all represented expressions of opinion inappropriate for civil servants. Though not a civil servant I will avoid any adjective before the word "document".
We shall let it rest until the Government have finished what the Minister for Education described as the "fight" to decide where the cuts are finally to fall and where the taxes are finally to be levied. Let them get on with this fight, fight it to the finish and end the display of disunity and backbiting that has disedified our people during recent weeks as the leadership battle is fought through leaks to the papers on who is being chopped and who is fighting to the death.
Then, when the Government on present promises, if they keep them— 18 months after their election on a platform of providing "tens of thousands of secure jobs only waiting to be created"—have decided on what their policy is, and have perhaps sorted out their leadership, we shall then give our considered views on that policy, when we know what that policy is. It may well contain good things; I will not be surprised if it does. There are good things even in this Green Paper if you dig deep enough, though they are few and far between. If the Government policy contains good things we shall not hesitate to say so when they are finally revealed.
On work sharing, I know the Taoiseach's scepticism about this idea of the Minister for Economic Planning and Development but I feel it should not be dismissed. I recall what he said two months ago at the IMI meeting in Killarney. He said there were no easy solutions and because of the difficulties there was a temptation to turn to other solutions which appeared to be less arduous. For example, one suggested panacea was to share existing employment through such steps as shortening the working week, having longer holidays, curtailing overtime and earlier retirement. He said that this posed many questions. He must have been answered in a hell of a hurry in the intervening two months.
This scepticism cannot be ignored, although I should add that I will not dismiss this idea out of hand. What I must say is that, while keeping an open mind on the issue of work sharing—what is really involved is income sharing through the process of work sharing—this could work only if all groups in society were brought into the process. There is no way in which our workers will share their income when they see the rest of the community who are not in the category of being employees not being asked to share for the purpose of creating employment. When we talk about work sharing let us be clear that it means income sharing and that the burden must fall equitably throughout and not, as has been the policy of this Government to date, with the whole burden falling on the poor and underprivileged and with all the benefits going to the wealthy.
The Green Paper shows no awareness of the need for equitable distribution of the burden and I am afraid that the idea of work sharing which I think has potential merit, although it brings great difficulties with it, is bound to fail unless this need is recognised. We share the same aim as the Government although we differ on the means. We can ignore the Taoiseach's uncharacteristically arrogant statement that Fianna Fáil are the channel through which the aspirations of the ordinary men and women of Ireland take solid shape.
There are other aspects of the Taoiseach's speech on which I should comment briefly. First, there is his deeply disturbing figure for the rise in the value of industrial exports—just more than 20 per cent in the first four months. During our period in office the rate of growth of value of manufactures was well more than 50 per cent in the first half of last year. That rate was sustained up to September, a month after our departure from office. Even allowing for some dampening of inflation since then, it is clear that under Fianna Fáil the manufactures export growth which perhaps was about 30 per cent in volume in the first half of last year, allowing for an inflation rate of just less than 20 per cent, has now been reduced to a tiny fraction of this figure. Although the inflation rate has been reduced it is still significant. Therefore, there has been a sharp falling off in manufactures export growth. This is a danger sign and it was unwise of the Taoiseach to give this figure as if it were a great bonus or benefit achieved when in fact it is a very serious danger sign. It is a reduction from a value rate of increase of more than 50 per cent to merely 20 per cent.
Secondly, there is the Taoiseach's figure for emigration. While accepting his caution that past censuses have shown that actual net emigration has tended to be only two-thirds of the net outbound passenger movement by sea and air, we still find an estimated 9,000 net emigration figure for the 12 months ended January and we are told that the net outbound sea and air figure was 13,000. By some coincidence this 9,000 figure is just the amount by which unemployment has fallen so that it seems that whatever jobs may have been created since Fianna Fáil came to office, there has been no apparent effect on unemployment. This suggests that the jobs may be fewer than the Government try to suggest. Certainly, they are no more than are needed to keep up with the growth in the labour force.
Thirdly, I wish to comment on the Taoiseach's reference to the £100 million job-creation programme. Has the Taoiseach forgotten that in the budget £15 million was knocked off that by cutting to £5 million the £20 million youth employment programme with the result that there has been virtually no improvement in the area of youth employment? We have had such excuses as there being more obstacles than were expected, that everything is slower than had been anticipated, but the fact remains that 5,000 jobs were to have been provided within one year in office for young people by way of special employment projects. Where are these jobs? They have not arrived yet.
The employment action team put forward four proposals. There was the community fitness programme which was supposed to yield 800 part-time jobs. That passed to the Minister for Health but has disappeared since. Under the environmental improvement scheme, £4 million was allocated to provide 1,000 jobs of a temporary nature. Where are these jobs? There is also the work experience programme but that is not to begin until July. The proposals for it are only being worked out now by the National Manpower Service. This is a year after the Government assumed office. There was the apprentice recruitment scheme to be operated by local authorities but at the end of April only five people had been recruited under this scheme. For the Ballyfermot survey there was an allocation of £10,000 but the number employed was 33 for a period of one month at an approximate cost of £7,500. Therefore, the youth employment schemes simply have not happened and they were a major priority of the Government. What they represent is a major failure by the Government because this is the area where unemployment pinches most and where hopes were raised most by the Government. It is the area in which failure to deliver will cause most unrest, most distress and which perhaps will be remembered longest in terms of the Government's failures.
The fourth point of the Taoiseach's speech to which I wish to refer, and again this has not received any comment of which I am aware although it is a matter of major importance to the country, is his reference to—and I quote—"Indications of a rise in the volume of consumer goods coming into this country, an accentuation of which could aggravate our balance of payments to the point where corrective measures would be necessary. These could affect prospects for employment". This is a very serious warning. It led me to look at the figures. We are a far distance from Fianna Fáil's proposal to create 10,000 new jobs by switching 3p in the £ of spending to Irish products during a period of three years.
Since Fianna Fáil came to power we have been moving at breakneck speed in the opposite direction. The figures should be told and told bluntly. Between August and February last—the latest period for which retail spending figures are available— retail spending increased by 19 per cent while imports of consumer goods increased by 39 per cent or twice as fast. While we have no retail sales figures later than February we know that the import trend has continued because for the nine months from August to May there was an increase of 38 per cent. Therefore, imports of consumer goods are increasing twice as fast as consumer spending and given that in 1977 21p in the £ of all personal consumption consisted of imports of consumer goods ready for sale as distinct from products coming into the country for manufacture here, this means that the figure of 21p in the £ has been increased to about 24p in the £. So much for the 3p in the £ that Fianna Fáil referred to in the manifesto. It is a loss to imports and not a replacement of imports and it has occurred in six to nine months rather than in three years.
I endorse the Taoiseach's warning note that this is a most dangerous trend. If the 3p in the £ of imports to be replaced was to yield 10,000 extra jobs as the Fianna Fáil manifesto stated rather simplistically, the first 12 months of Fianna Fáil rule have seen 10,000 jobs put in jeopardy by increased imports which the Government have done nothing to offset. Where is the great campaign for buying Irish or selling Irish? Why have we not seen signs of it yet? So much damage has been done already by the failure to take the action necessary that the job to be done now is a great deal larger than it was when the Government came to office.
The other point I wish to make is the one to which the Taoiseach did not refer although it is very important. I refer to the fact that since the beginning of this year, under Fianna Fáil, this country's external reserves which almost trebled during the period from 1973 to 1977 to £1,200 million, have fallen by £150 million in four months. This represents an annual rate of decline of more than £450 million. This is highly sinister and taken in conjunction with Central Bank data whose analysis suggests a significant outflow of capital from the country as the implications of Fianna Fáil policy for the few years ahead sink in to more sophisticated financiers, augurs ill for the period ahead. It is a curious paradox that the autonomous net capital inflow considerably more than doubled in 1974 compared with 1973 with the announcement of the wealth tax at the beginning of 1974. Contrary to the figures the Minister has given, all of which relate to the period after 1974, the outflow, if it occurred, would have taken place when the wealth tax was announced. The people concerned were hardly going to wait until the tax was introduced and when they would be caught but so far as there was any outflow it must have occurred in 1974. In fact, though, there was an inflow. The reason for this is simple. In a brochure prepared by a Liverpool stockbroker he advised his clients that after the introduction of the wealth tax in Ireland, the new conditions of the abolition of estate duty and the substitution of wealth tax were so favourable that the flow of capital to this country in 1974 was on such a scale that the British Government before the end of 1974 would be bound to impose restrictions on the outflow of capital to Ireland. They did not do so, so that the warning turned out to be unfounded but that was how English financiers saw the effect of wealth tax.
Now Fianna Fáil have abolished wealth tax but the money is flowing out of the country. Why? Because, while there are short-sighted people who are willing to cash in on the immediate benefits of Fianna Fáil policy this year, anybody who has any economic knowledge or insight, anybody in the financial world and the more sophisticated people in the industrial world, know what lies ahead in 1979 and 1980 and are taking appropriate steps at this stage. These are all worrying signs not to be glossed over —a sharp fall off in the growth of manufactured exports, the sudden and now very rapid replacement of Irish goods by imports instead of vice versa as promised, the fall in the reserves, the outflow of capital and, above all, the outflow of people, the new tide of emigration which is the real explanation for the 9,000 drop in unemployment.
I believe the other evening on television the Minister for Economic Planning and Development asked Opposition spokesmen what we would do in these circumstances. We are flattered to be asked, even if only rhetorically, for advice. There is only one possible answer. That is the answer the man gave when asked for directions in the Irish countryside— you should not be starting from here. We would not have the economy in the position it is in because we would not —and we made it plain in our election manifesto that we would not—risk the future of employment for our people by buying votes at the cost of £300 million which would then have to be recovered by deflationary measures which would leave the country in a far worse position than it was to start with. We believe in continuous and accelerated progress and we were achieving it, leaving behind us to Fianna Fáil, God help us, a 5 to 6 per cent growth rate, inflation falling to 6 per cent and unemployment declining—though not, I will admit, as fast as we would have wished. We rejected the idea of a mad rush linked to the election, followed by precipitate withdrawal from a worse position than we started from, which has been Fianna Fáil's recipe. That choice was open to us. It was a possibility before us in Government when we considered what we should do in the budget of 1977. We decided against it. We have suffered the political consequences. We are willing to take those consequences, but those who chose the opposite path must then take the consequences of that path as those consequences emerge in 1979 and 1980.
Having said that I should like to say that we wish the Government luck and lots of it. As an Irishman I hope they succeed even though my party would then find it more difficult to come to power. But if Fianna Fáil fail the damage will be not only to them; this failure will spread cynicism about politics and politicians. While it may be healthy that in future people should be more wary of promises of goodies now combined with jobs later, it would not be healthy that the credibility of our political system be put in jeopardy by irresponsible politics. We do not seek to climb to power on the back of Fianna Fáil's failure, nor do we have any desire once again to come into office to clear up the economic mess left behind them. We shall seek power on our own merits, our own plans, programmes and ideals—not on the basis of Fianna Fáil failure.
In the meantime the Government should get on with it. Most of the projects in the manifesto have never been heard of since. I was glancing through it in the period immediately before this debate and made a most incomplete list of things which I had not heard of since. Perhaps I missed one or two; perhaps there are one or two that are happening and escaped my attention. There is a Buy Irish campaign—that certainly escaped my attention and I have told the House what are the consequences; the restructuring of the Prices Commission the investigation of middlemen's margins, for example, in fish and vegetables; the alignment of prices with Northern Ireland, steps to be taken to bring them into line; the State-owned smelter which was to yield and quote: "tens of thousands of secure jobs only waiting to be created"; all the various agricultural boards, too numerous to be listed; the Land Development Authority; the new body to co-ordinate agricultural export agencies; the domestic agricultural marketing council to set standards; the 50-mile limit; a central fish marketing agency; a scheme to lead to the abolition of ground rents—we all know where that ran into the ground. There was a major road development plan; a children's service authority, an energy authority; a transport authority; legal aid in civil cases, first of all, on family law—what happened to that and where is it? Eventually this Government will be dragged, kicking and screaming, to the point of introducing it because otherwise they will end up in the dock and possibly expelled from the Council of Europe for failing to carry out their obligations. It is only when it is brought to that point, as far as I can ascertain, that they will introduce a scheme.
