Financial Resolutions, 1980. - Financial Resolution No. 19: General (Resumed).

Debate resumed on the following motion:
That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.
—(Minister for Finance)

The debate on the budget has been going on for a few days and it is remarkable for a number of things. The most important one, I think, is that some people on the Government side of the House do not seem to understand that this is not the first budget introduced by a Fianna Fáil Government since the last general election. In fact the budget was introduced by this Government and despite what the Taoiseach has said and what a number of his Ministers have been echoing this is not a new Government, not a Government elected by the people a few months ago consisting of Members who were not members of the previous Government. The new Government we hear all the talk about consists of ten outgoing Ministers, ten people who, if we are to believe the statements made by the Taoiseach, by his Ministers and particularly by the Minister for Finance a few days ago, were the people who put the country into such a bad state that very severe action had to be taken to bring it back on course. It would be amusing, if it were not tragic, to listen to the way in which again and again we have reference to the "new" Government, and to how bad was the condition of the country before they took over and the effort they will have to make in order to straighten things out.

Not only have the Government members been using this device but the propaganda has been fairly effective, as is borne out by the fact that the cummann menbers througout the country are now using the same terminology. Unless they are very careful, I fear that the former Taoiseach will become as unpopular as Cromwell in this country because about a half-dozen times this week I heard the former Taoiseach being described as a weak man who did not run the country properly, all of this coming from Fianna Fáil people trying to boost the new leader at the expense of his predecessor. This is very unfair and wrong.

The other scapegoat was the Minister for Economic Planning and Development. I had intended suggesting that he should intervene in this debate but before I could do so he did intervene. I listened to him with great interest because it would be amusing if it were not tragic for somebody who had been the author of the success which Fianna Fáil had in the last election and who attempted to carry out the policies in which he believed, with the assistance of the Taoiseach and other members of the Government— although, as appears to be the case, a terrible mess was made of it; they just would not work—to come here and to attempt first, to blame the economic chaos we are in on the National Coalition Government and then to attempt to say that everything was all right.

Deputy O'Donoghue did make one comparison. He said that the efforts necessary to get the economy into the position in which they wanted it were like a space probe in which there were three stages; the first stage was fired—it seemed to be going slowly but in the right direction—the second one was reasonably successful and the third one went off course. He did not seem to remember that it was a manned spaceship that was sent up, that he happened to be one of the pilots, that a new director to control outer space was appointed while he was in orbit and that he was sent off into the wilderness, into empty space. Obviously it was his voice coming back here in an endeavour to straighten out what he had done or what he felt should be done. I felt it tragic that we should have such a situation. While I and a lot of other people believe that his theories were all wrong, he did his best and thought he was doing the right thing.

First of all, before the last general election—and I shall not bore the House with the Fianna Fáil Manifesto, a copy of which I still possess; some of the Fianna Fáil people say they have lost theirs and they can make a photostat copy of mine—what was suggested could be done was something which we said at the time, and which time has proved to be correct, could not be done without creating chaos. Fianna Fáil got into power, produced their budget and believed that there was such a practice as spending money without worrying where that money was to come from. The result is that we find ourselves in a fairly sad mess.

How that mess is to be straightened out is what we are now talking about. We have had the first O'Kennedy budget before the House. I was in this House when the present Taoiseach was Minister for Finance. I can recognise his finger on an awful lot of proposals in this budget. I believe he is the person who was sitting at the Minister's shoulder pointing out what should or should not be done. It is important to remember that what happened here on budget day is one small facet only of the overall economic chaos. A typical example of what I am talking about is that during the Minister's budget speech he made great play of the fact that bottled gas in this country cost considerably less than in Britain. If the stories we hear about the left hand of the Fianna Fáil Government not knowing what their right hand is doing are not true, then the Minister, sitting at the Cabinet table, must have been aware that an increase in bottled gas had been sanctioned to come into operation two or three days later and which completely reversed the position. It was a very bad joke to play on the many poor people who depend on bottled gas for heating and cooking. The fact that the Minister picked out that item shows that the person who wrote the document read in this House either was not aware that this was being done or, if he was aware, could not care less. It passed for the time being and got him out of an awkward position. It was a good political point while it lasted, two or three days. That typifies the attitude of the present Government to what is happening at present.

Since the New Year we have had so many budgets, all of them budgets, that it is almost impossible to keep track of them. Early in the New Year the Taoiseach wisely decided not to go ahead with the proposed Taoiseach's residence in the Park. That was a major decision. It could have waited a couple of weeks and could have been included in the budget. Indeed such a proposal should never have been mooted in our current economic circumstances. Mark you, there was nothing about the executive jet costing about half or a third of the proposed Taoiseach's residence—£2 million or £2,250,000, I think, was the figure. There were no gold taps on the £2 million one, so the £2,250,000 one was bought instead. That should have been scrapped along with the Taoiseach's residence. If we so short of money that we have to cutback as we have been doing, then it was wrong to have spent that amount of money. God knows we would send an awful lot of Ministers and officials to Europe on £2,250,000. And that is only the beginning of it because the running of the jet must be added to everything else and will be very costly.

Early in the New Year cigarettes went up by 1p, coal by £3 per ton, gas in Dublin by 60 per cent, the fourth increase in eight months. Gas in Limerick, the homeland of the Minister for prices himself, went up by 30 per cent. The price of flour was increased. On 18 January there was a notification to the effect that local authorities would receive only a 10 per cent rise in 1980 to carry on their activities. I heard some people talking here today about how little would be required to carry on the business of local authorities. It is interesting to know that one rural authority of which I have knowledge estimates that their cost this year of maintaining the level of last year will be approximately 32 per cent to 33 per cent more. Raw materials and everything else have increased and, on top of them, wages. Therefore, there is no way in which they can maintain services at the same cost.

We have had talk in this House about appointing Ministers for this and that. I honestly believe we should appoint a Minister for potholes because there are now more in this country than there ever were. It is true that many people have had a lot of damage done to their motor vehicles. In fact one county manager—although he was not responsible for the cutback in expenditure—had the back axle of his car broken. And there is no point in talking about suing the local authority because apparently it has been ruled by the courts that unless some type of repair has been carried out on the road at the particular time the local authority are not responsible.

In my county there are three swimming pools—I was glad during my time to be able to assist in their building—fairly well used but it has been decided now that one only will be used in any one week, leaving the remaining two closed. This is life in Ireland under Fianna Fáil. We built them and Fianna Fáil cannot even afford to run them. Yet they tell us they know how to run the country and the local authorities. There is no money available for the repair of roads or the resurfacing of roads. Local authorities are now in a catch-22 situation in which, if they keep all their employees, they have no money with which to buy materials and, if they dismiss their employees, they will be in trouble with everybody particularly the trade unions.

I read in the papers yesterday that the Minister for the Environment had announced that £50 million was to be spent on roads. It was announced at a place and in such a way that many people who would not know the facts would be under the impression that this was an additional £50 million being found somewhere, that nobody knew anything about. The Minister just found out and announced it. That is a lot of cod. What is being spent is the minimum amount which must be spent to try and keep the roads in repair. Similarly we hear a lot of talk at present about the building of various types of motorways around this city. I expressed my views on the subject when I was in the Custom House. My view has not changed. Apparently now some people have made the decision that they should go ahead, but they cannot because the money is not there with which to do it. However, it looks good in a newspaper for somebody to say that they will rebuild portion of this city. I know better than anybody else what was done about the centre city by Fianna Fáil for 16 years. I was in the Custom House at the time. I know there was absolutely no effort made by anybody either in the Fianna Fáil Government or in local authorities to get anything done. The city centre was simply falling down. I was glad to be a part of an organisation which helped to revitalise and rebuild the city centre. Now we hear talk of an expenditure of something like £800 million on the rebuilding of portion of the city when we know that that sort of money is not available. But such statements look nice and it is hoped it will keep people happy, thinking that something is being done about it.

As regards home loans, this matter was tied up with the budget and the money was not available. I remember when I took a decision in the Custom House that we should not allow grants to people who wanted to repair their homes if they were wealthy, in other words I had a means test, Fianna Fáil were foaming at the mouth. It was the most terrible thing anybody could do and they gave me a thousand reasonably good reasons why. In their manifesto they said they would increase and improve grants for home owners. Instead of that they abolished them completely. When they did, they did it in such a way that over a period of three or four weeks about 47,000 applications were received in O'Connell Bridge House. The average number received each year was about 15,000. That means that a person waiting for a grant will be put at the end of a three-year waiting period because in normal times it would be three years before that number of applications would be dealt with.

This is the kind of muddle the Government are in. At the same time they are trying to give the impression that they are running the country properly. They increased the number of people who could borrow money for the purpose of building houses. That is something I would not have done. They also increased the income limit. What they did not say was where the person would get the money to repay the loan. The repayments are now approximately £30 per week for a loan of £12,000 over 30 years. They told me we were building too many local authority houses. They proved they thought that because they built fewer houses. The outlook this year is very bleak and more people will be pushed on to the private loan. I do not know where they are to get the money to repay loans. Sites are ranging between £5,000 and £7,000 throughout the country and these are not select sites. This is the kind of mix-up we have at present.

Grants for solid fuel heating were abolished. The object of the grant was to get people using oil to switch to a different system. It did that in a big way but what was forgotten was that grants would have to be paid. About one-tenth of my mail every day is from people wanting to know when they will get their heating grants. The administration of this grant was wrong because people who used solid fuel and oil were eligible for the grant and no effort was made to close that loophole. People who had the job done and really need the money cannot get it. I was touched by questions asked yesterday by a Fianna Fáil Deputy who wanted to know if local authority tenants who bought their houses but who had not got fireplaces would get the grant. The Government he supports did away with those grants. I produced them but they did away with them.

On 28 January CIE fares went up by 20 per cent. As regards the standard loaf which the Minister, Deputy O'Malley, did not hear about—he said it was not a very common loaf—obviously he does not do the shopping or he would know that the loaf on which 5p was put is a common one. Milk went up to 13p. On 1 February the ESB increased their charges by 20 per cent, that is 60p a week on a £25 two-monthly bill, and this followed on a 10 per cent increase in October last and a 20 per cent increase last June. Coal went up by over £2 a ton. In February the pint went up by 2p and a half glass of spirits by 3p. On 18 February petrol went up by between 7p and 10p a gallon while home heating oil went up between 6½p and 9p per gallon. On 20 February massive cuts were announced in education, housing, health, agriculture, public spending and the Public Capital Programme cut all forms of social spending.

The Minister for Education has just left the House and that is a pity. I put down a number of questions for written answer to him on Tuesday as I do not believe in cluttering up the House with oral questions if I can get the information which I require for my constituents by way of written answers. I am not in the habit of getting discourteous replies from Government Departments because they are not made up that way. It would appear that if these are coming the officials have been told to do them that way. The majority of the replies suggested that they were not intended to give me the information I was looking for. What they intended to do was politely to tell me to go to hell.

A smokescreen.

One of the questions I asked him was if he had sanctioned a grant for the repair or replacement of the roof of Dunboyne primary school, County Meath and, if not, when he proposed to do so. The reason I put down the question was because of the cut-backs in education. The school roof was leaking badly and the people wanted to know if it would be repaired or replaced. The reply I got was that the question of a grant towards the cost of works to the roof would be considered when the necessary result had been received. Does anybody know what that means? To make matters worse "considered" is spelled "ocnsidered" and it has been typed over a couple of times. If that is the way a Member of the House is to get replies from a Minister something must be done. I wrote to the Minister yesterday afternoon telling him that I considered it an insult to the House and to my constituents. I did not get a reply yet although I could have got one because we are quite close to the Department of Education. There is no point in saying that some official slipped up. It is not an official's job. As Minister, replies were given to me and I approved them before they went through. It is obvious that that was not done in this case. Does it mean that we are so short of cash that we cannot even have questions answered properly? Is that the situation? I should like the Minister for Education to give me information about that as quickly as possible. That is only one of a number which I will not bore the House with where the replies I got seemed to suggest that he was being smart at the expense of the person trying to take a reasonable way out by putting down questions for written reply rather than having them here today for oral answer as I could have done.

Is the Minister for Education in a position to say whether he proposes to build schools this year? He spoke about the reduction of £5 million in his Department as affecting the building of only a couple of schools. I do not know what he meant by "a couple of schools". What is the situation? Are the schools which were approved going to be built or will they be put on the long finger? Are the usual stupid questions going to be sent out in order to delay them so that no one will know that there is another reason why they are not being built? Will he tell us what the future of the school bus is? It is getting more and more chaotic as days go by. In my area the school bus picks up children at 7.30 a.m. and leaves them outside the school at 8.10 a.m. both winter and summer although the school does not open until 9.30 a.m. It does three runs. In the evening the same thing happens. If they are lucky the children who left at 7.30 a.m. arrive back at 6.30 p.m. We should know whether the Minister proposes to continue this or improve it or whether the stories we hear, that because of the cuts in the Department of Education there will be no school buses except in special circumstances, are true. It is in order to ask the Minister that and he should tell me what the position is.

There is also the question of the big increase of 22p per gallon for petrol and diesel. If it was simply a question of a small number of people being involved, we could write that off as easily as the Minister and the Government seem to have done. But surely they must realise that, if the cost of haulage of goods is increased, then the costs of goods must increase. People using diesel or petrol must get compenation for the extra money they are paying out. Apparently this seems to have been completely overlooked by the Minister, when drawing up this budget. One must consider the number of people using vehicles to go to work. There was a time when people travelled only a limited journey to work and cycled or walked, but over the last 25 or 30 years the radius has been widening and people travel a very long journeys. It is very usual for people from my part of the country, right around County Meath, to drive to Dublin in the morning to their work and to travel home again in the evening. They will be paying the extra 22p a gallon on petrol five days a week. As they would use two gallons a day at the minimum, that is £2 a week, which seems to be written off by the Government as not being terribly important.

During the time when I was in the Custom House—and this is no secret, it is not revealing something which should not be revealed—I had a proposal that it would be possible not alone to replace road tax but to replace third party insurance. The State has made third party insurance compulsory and therefore the State should supply it, replacing it with a petrol tax. First, this tax was set at 11p. Then the Department of Finance made it 19p and then it became 21p. Then the general election took place and we were left paying the insurance.

What I am saying is that in 1977 it was possible to replace third party insurance and road tax by putting 21p a gallon on petrol. Now we have the petrol price gone sky high with an extra 22p a gallon and we are getting nothing in return and we still have to pay insurance. There has been a large increase in the cost of motor insurance, which is extremely high. There are some who are able to get insurance at a reasonable price because they have been driving for a long time. I have a no-claim bonus on my driving record. When I left office I bought a new car, a Mirafiori, and on my application for full comprehensive insurance I was asked for £400.75p. I considered the sum was ridiculous and was able to get accommodation in another way. There are many cases where people now are unable to pay insurance and it is not at all unusual to find cars being driven around this country with no insurance. They have not the sticker on the windscreen of the car because they have not got the insurance which would buy it. This is a terrible situation. When Fianna Fáil abolish something they replace it with something else. The road tax is now £5 and then it will be £10 and I would like to have a bet with the Minister that by the end of the year it will have gone even higher. Then one must consider the cost of repairs to cars. If you go near a garage at all you get a bill for £100.

The increase put on bottled gas was absolutely disgraceful. The Minister for Finance referred to this bottled gas as being so much cheaper than in Britain and then he decided to put a tax on it when he must have known already that it was agreed by the Cabinet to put 79p on it. This will affect the poorer in the community. I know a lot of people who have got heaters and gas cookers. They were able to use them when the bottled gas was 30p but now it will be over £4. I hear Fianna Fáil members, particularly the Minister for Social Welfare, Deputy Dr. Michael Woods talking about the tremendous increases which he granted from his Department. But take a bag of coal, it costs £3.70 and most old people to keep warm would require two bags of coal and a bottle of gas to cook and where is the old age pension gone? Half of it is gone already.

I have heard Deputy O'Donoghue saying to-day that Fianna Fáil were the people who introduced many new schemes in social welfare and that they were the only people to give a reasonable increase. I remind the Government that the old age pension in 1908 was 9s. a week and a farm worker's salary was 10s. a week. That is very interesting. When the war was over the old age pension was still 10s. a week and it was not until the last Coalition Government came into power that the social welfare recipients were brought up from being second class citizens and paid a reasonable amount right across the board. In addition, the old age pension age was brought down to 66 years and following that we had the inclusion of quite a number of new recipients, particularly those now receiving single women's benefits. Under those a single woman who stayed at home looking after her parents and who on their death, having been dependent on their old age pension, would be destitute, was given a pension up to the time when she would be of age for the old age pension and there was also the unmarried mothers' allowance. The year before last and last year, Fianna Fáil allowed the pension to go down. This year they have given what appears to be a reasonable increase but it is no more than one might expect, since it is only what these people are entitled to.

I asked the Minister for Social Welfare on a recent radio programme if he proposes giving another increase in October, to make the increase twice yearly. He was not prepared to offer a comment on that, and we can make up our minds about that. That must indicate that these people have got partial compensation to bring them up to date now, but between now and the end of the year they will be again falling very far behind. There are different schools of thought concerning the increase in the cost of living this year. I noticed that the Taoiseach yesterday said that it would be 4 per cent. Now, I am not an expert, but I have had a certain amount of experience in this House and I estimate that it will be at least 6 per cent. Before we know where we are we will have another 6 per cent. We remember that Deputy O'Donoghue, who today was telling us how good their programme and policies were, is the fellow who said we were going to be down to 5 per cent inflation this year. Where does he stand or what does he think of the whole situation? He did not express his views on it this morning.

We have had another round of farmers' tax. There are a number of things about that. I happened to be at a meeting in the Ardboyne Hotel in Navan two or three nights before the last general election. Deputy Bruton here was present and so also was the Fianna Fáil TD. The programme as presented by Deputy O'Donoghue was ready and presented and a solemn guarantee given on a number of things, (1) the multiplier would not be increased (2) there would be no question of everybody being made to produce accounts (3) there would not be a reduction in the valuation which would be taxed. Now we find that (1) the multiplier was increased to 120 (2) the valuation has been pulled down to 40 this year and (3) Fianna Fáil have thrown overboard completely the promise that they would not insist on accounts and now they insist on accounts being produced by everybody. Is it any wonder that they got the vote they did? Really they codded the farmers.

Last year they introduced a 2 per cent tax. Everyone of us, including I am sure a lot of Fianna Fáil people who have a little savvy, felt that the 2 per cent was a lot of nonsense, it was not workable, it was not fair and should have not have been considered. This year we had an new approach. Last year's fell down because the Minister for Finance, having said that in no way would he or the Government be prepared to back down, proceeded to back down within hours of having made the statement. The new Minister introduced his resource tax and yesterday the Taoiseach took the ground completely from under his feet by talking about it being negotiable. I do not know what Fianna Fáil mean when they say they were going to do something and stick to it. Whether the thing was fair or unfair—and I am not happy that it was the correct approach—having done that the Taoiseach then said it is negotiable.

There are not two different races in this country, farmers and others. We all belong to the one race and we should all be asked to pay tax in the same way. The decision by the Government to remove the right of the farmer to include machinery for taxation purposes was wrong. That is not done in industry and the same terms should apply to industry as to farmers. If all people paid their fair share we would all be a lot happier. But the Government, being afraid of the result of the marches which took place over PAYE, decided that they would give the impression of laying it on the farmers. They decided then that they would again give the impression of giving something for nothing to the PAYE taxpayers and they did something which all of us in the Labour movement down the years have been opposed to. We have been opposed to indirect taxation being substituted for direct taxation, and that is exactly what the Minister did in his budget. He took off taxation at a certain level and then proceeded to put it on again and the same people who were getting it off at one end were going to pay it at the other.

If there was a complete changeover with no direct taxation at all and all indirect taxation he might have a case. He might be able to say that people are going to spend what they are going to spend. But he said it was optional whether they should spend money on drink, cigarettes or minerals. He did not say anything about spring water yet but I am sure that will come. Also he mentioned petrol. Many of these things are not optional. In addition there is the extraordinary situation that the Government, having decided that they would do this and giving the impression that it was a continuation of the Taoiseach's campaign against cigarette smoking and drinking which he was so hot about last year, then under pressure agreed that they expected a reduction of about 2 per cent. In other words it was simply and solely a revenue raising tax. I do not drink or smoke so I suppose I can look at things in a different way from other people. I have no objection to people drinking or smoking if they wish to do so. I think they are mad if they smoke or if they drink one or two more than they can afford. However, even if additional taxation goes on, people will continue to drink as much as ever and the household will suffer as a result. That does not seem to worry the Government very much because they have budgeted for what the taxes will bring in and they seem determined to get it anyway.

One thing in the budget which got very short shrift was the question of prices. The Fianna Fáil Election Manifesto laid down very definitely that not alone were they going to control prices but they were satisfied that some manufacturers were getting more than they were entitled to. If there is any doubt about the wording of it I will read it out. In a debate here last week on prices the Minister responsible, Deputy O'Malley, proceeded to tell us that we had the strictest price control in Europe and that he often felt that he was being unfair to manufacturers in that he was not allowing them enough of an increase. Either he was terribly wrong when he was in Opposition or he is terribly wrong now, and I give a fair bet that he was wrong on both occasions. Price increases have been listed here. The Prices Advisory Body make a report which goes to the Government. We got one the other day. It was not the March one, it was the December one and there were 55 or 60 increases listed. When we were in Government we issued a newspaper advertisement of the increases every time the report came in and we issued this immediately so that people going to a shop would know what the increases were. Deputy O'Malley said that that was foolish and he was not going to do it, that he was going to take other steps. People, including myself until I realised what the answer was, were complaining that the press and radio were not giving due publicity to the increases. Who in the world wants to know about an increase which occurred last December? People have been paying it for three months. It is not news and newspapers will not bother to publish it when they get it. Why should they? If the Government want to be fair to the people of the country they should deal with the prices report and submit it immediately. I counted over a number of months and found that the average per month was 44 increases. I suggest that in November that went to 55 and to almost 60 in December. Nearly all of those might have been published because every range of goods and service has been increased.

There are two other things about which the Minister for Finance should have done something. One of them is the fact that not alone those items which we read about in the report but other items also have been increased in shops and supermarkets. Somebody showed me the price on half a pound of margarine which was 23p the week before last and 29p last week. These things will not hit the headlines, but that means that margarine is now almost as dear as butter and that is only one item. You can go right across the range. Go into any shop and see a young mother buying a pair of shoes for a baby or toddler and the price will be from £7 to £12. A pair of trousers for a nine year old boy will cost about £12 and will not last very long. Deputy O'Malley was echoed by the Minister for Labour and the Minister for Finance on the necessity for workers not to look for more wages. I was a trade union official for 30 years and I know that some workers will never be satisfied. However, the vast majority of them are prepared to acaccept a reasonable wage. I never met workers who would be prepared to accept an increase in the price of every item they must buy without asking for a wage increase. If the Government do not do something to control prices, the kickback from the wages front will shake them more than they expect.

Apart from the fact that there will be very little money for the erection of local authority houses, I understand that a circular was issued to at least some local authorities asking for particulars of the earnings of tenants of local authority houses. The Dublin County Council have issued their circulars and they want to know about bonus or shift earnings in addition to normal earnings and have warned that unless these requests are complied with properly, they will impose the full rent on the tenants. This is an attempt to reverse our decision to give tenants a reasonable rent. The Government are putting themselves back into the position in which I found them when there was a rents strike lasting from two-and-a-half to three years which it took some time to straighten out.

The Minister for Finance should have been a lot more interested in job creation. That was not mentioned in the budget and the Minister seemed to be under the impression that it did not matter. Deputy O'Donoghue this morning talked about areas where there were plenty of jobs and nobody available to do them. I would like the Deputy to show me these places as I have yet to find any place where an employer was paying a decent wage where it was difficult to get labour. In my constituency a big carpet factory is being crucified by imported artificial fibre mainly from America. As long as that sort of thing goes on there is no point in talking about job creation. The Government should do something at EEC level, if possible, to prevent the importation from America or elsewhere of this sort of thing, as it is putting people out of jobs. As far as I know the EEC cannot do anything unless representations are made by the native Government. It appears that this Government have not asked the EEC to do anything. This was the impression given from a reply to a question put by Deputy Liam Kavanagh a few days ago.

For the Deputy's information we made representations in the European Council. I was involved in trying to do something about man-made fibres coming in from the United States, with the subsidised oil and gas prices available to manufacturers in the US.

Did this Government make a formal complaint?

I have complained as have a number of other countries. This is an on-going situation which has been discussed at two or three meetings.

I suggest that the Minister might make a formal written complaint.

Two or three other things require attention. The Minister has already warned that Post Office charges will go up. I cannot understand why the Post Office, above any other service, should pay their way. If the Post Office did not pay their way they would be brought before the House, whereas other services are not dealt with in the same way. To test the service of the Post Office I posted a number of letters, one of them addressed to my home from Leinster House yesterday evening and the letter to my own home arrived this morning on the first post. The Post Office are giving an excellent service and I do not see why they should be pilloried in the House because they are not paying their way.

Since the social welfare stamp disappeared things have changed considerably. I know that the workers in the Department of Social Welfare are very humane and efficient and do a tremendous amount of work which people do not realise, but I have noticed that in one or two sections recently there is a tendency to give a short answer, to ignore letters and to say that something has been lost when people are hungry because it has not been dealt with properly.

I note that there will be a 3½ per cent increase in costings to the worker for social welfare benefits and an increase of 8½ per cent to the employer as a result of the budget. Will people get value for this extra increase? Old age pensioners who qualified last year before the postal strike and who got their books at the end of last year can be told on inquiry that their arrears of perhaps hundreds of pounds will be paid in several months. That is not the way to deal with people. It is unfair that people who applied for sickness, disability, occupational injuries or unemployment benefits are dealt with in that way, especially when they are now being asked to pay more. Has there been a reduction in the staff? Is this one of the cut-backs? Has it been decided to have a smaller number of people doing that work so as to save money on the budget? At the moment if one tries to phone any Government Department, it is a miracle if one gets through and even if one does one could be left quite a long time waiting to get through to a section. I was told recently that it was not unusual to have to wait for an hour to get on to a section. I would like to know if it is true that money is saved by reducing the number of staff employed.

The Deputy has five minutes left.

The Government do not seem to understand a number of things about agriculture. They do not understand that the decision about the rates abatement has created an almost impossible position for a number of farmers. An old man told me last week that his rates which cost him £138 last year would cost more than £450 this year. That man has between 40 and 60 acres and he, and people like him, were badly handled in the budget and before it. Something should be done to straighten this out before such people are put into the poor house. Most people, if they are getting fair play, do not like complaining but I am afraid this decision by the Minister and the Government will lead to such dissatisfaction that more people will take to the streets stating that there is no point bringing such matters to the attention of politicians. It is bad when the public decide that this House is not the forum to deal with such matters. The Government should be very careful about this matter.

I should now like to deal with the questions of employment and unemployment. The Fianna Fáil Manifesto suggested that there would be a reduction of 5,000 unemployed in 1977, 20,000 in 1978, 25,000 in 1979 and 30,000 this year. If we take that statement at face value there should have been a reduction in the number unemployed of 50,000 but we all know that nothing like that has happened. Our young people who were promised the sun, the moon and the stars are now aware that they were not offered anything. We were told also that it was necessary to tailor borrowing in a certain way and that this was responsible for the situation with regard to the amount of money that was available. According to Fianna Fáil in 1977 they would borrow 11 per cent, 13 per cent in 1978, 10½ per cent in 1979, and this year it would be 8 per cent. Last year Fianna Fáil borrowed 13½ per cent and this year they expect to borrow 10 per cent. The IR£ is taking such a hammering now that it is necessary for people to borrow more in order to carry on. The reduction in the value of the IR£ has also meant that imports from Great Britain cost us a lot more than before and it is not unusual to find a 10 per cent mark up on British goods. It may be suggested that we should buy more Irish goods but my reply to that is that it is not possible to buy them if they are not displayed. One is considered a sort of a nut if one asks for Irish goods in a shop. The result is that British goods are displayed to a greater degree and our people are being charged more for them.

The Government proposed to do something about taxation but all they did was to comply with a decision of the Supreme Court. With regard to the PAYE concessions it is obvious that those earning a lot of money will come out of this very well but those at the bottom of the pile get practically nothing. My friend who drives to Dublin in a car has told me that while he will get £140 off his income tax he will have to pay an extra £130 for petrol. The budget is a flop and if that is the best Fianna Fáil can do it is a good job they will not be in Government much longer.

I have always been pleased to listen to contributions by Deputy Tully and on this occasion he made an excellent job of a very poor case. He acquitted himself with distinction. When in Opposition I always gave credit where credit was due and offered constructive criticism where it was needed. Although this budget was introduced by a Fianna Fáil Party there are elements in it which I would criticise such as the system under which reliefs are given. This is something which I hope the commission on taxation will change. I am surprised at the amount of play being made of the extra taxation in the budget. Common sense must tell us all that even the smallest business must take in a certain amount of money before any can be given out. That is the situation the Government found themselves in. I do not believe there was anything wrong with what Deputy O'Donoghue said today. In the first budget introduced by Fianna Fáil on returning to office we were told that the Government would borrow for the first year and the emphasis would be on getting the unfortunate people on the unemployment register back to work. Young people found it very difficult to get a job three years ago but the situation has changed today. In my area while they may have to wait a short time they will get a job. Up to 1977 they were like droves of sheep going for interviews. While employment is not as high as we would like it Fianna Fáil will endeavour to create more work. Taking into consideration the number of school leavers and the number of people on the unemployment register, Fianna Fáil did a very creditable job.

The most important question for us is energy and the new Minister responsible, Deputy Colley, faces the greatest task of any Minister. Oil is all important but we may not be able to get it. It has been the cause of many of our problems to date. People like myself might object to the increase in the price of petrol but the money must be got from somewhere. There is no fairy godmother to create finance. Only one Opposition Deputy, Deputy Deasy, gave credit to the Government for the manner in which they distributed the national cake. The Government did a good job in this regard under difficult circumstances. However, the system of distributing the national cake is so wrong that the lower income group have never benefited to the extent they should. Since I became a Member of this House I have preached against percentages which are biased against those in the lower income group. The same situation applies to national pay agreements, Deputy O'Leary drew attention on television last week to the fact that the higher income group benefited to the tune of £40 per week under the budget while those in the lower income group only got £4 extra per week but that is the system that has been accepted by the Labour Party—with the exception of Deputy Bermingham—and by this House. With the exception of a few of us who are social minded, that system has been accepted by the House for a long time either in respect of wage increases or of increases in allowances.

I have contended always that increases should be on a flat rate basis but the situation is that those people who are at the top in various organisations and who are therefore very highly paid are quite happy with the percentage increase system. However, that is a point that I shall be developing later. My views may lead people to regard me as a socialist but I make no apology in that regard. I consider myself to be a genuine socialist. For the person earning £3,000 a year an increase of X per cent in the cost of living will mean every bit as much as it will mean to the man earning £20,000 a year. I urge whatever committee may be established in relation to investigating the tax system to adopt my suggestions in regard to flat rate increases. I will have more to say in that regard so far as land valuations are concerned. There are cases in my constituency in which land is valued for rateable purposes at an old halfcrown per acre while in other cases the figure is £1.50 an acre. In terms of the farm modernisation scheme I fail to understand why the adjusted acre system is not used. Valuations are not in any way a fair system of determining a person's income.

On the question of the increase in the price of petrol, I think everybody would have expected some increase in this respect and I do not think anybody will quibble about the increase to £10 in the registration fee for cars of specified horsepower. While I am not a drinker as such I consume a fair amount of soft drinks so that to that extent I will be affected by the increased duty on such drinks but that is not of any great import.

What is most important about the budget is that it indicates a realistic approach to borrowing. While we are not ashamed to have borrowed for the purpose of creating and maintaining employment it is obvious that we cannot continue to borrow at these high levels. We are well on the way in terms of our employment targets and I am sure that there will not be any cutting back in this regard. We must ensure that the the IR£ will not be devalued.

It has been devalued. It stands at 91½p against the English pound.

I am not concerned so far as the IR£ is concerned but we must reduce our borrowings. An effort has been made in the budget to deal with the situation. I am confident that so long as the people are told exactly what the position is they will agree with our efforts to reduce borrowings.

I consider the increases in social welfare payments to be reasonable but there are a couple of points that I would make in regard to some of these allowances. The first refers to old age pensions. Successive Ministers for Social Welfare in the past number of years have failed to raise the income limit for qualification for an old age pension.

We raised it considerably.

That is not so. I understand that for a single person the income limit for qualification for an old age pension is £6 while the income at which a married person would not qualify is £17. While this year we are giving substantial increases in social welfare payments I am disappointed that the figures to which I have referred have not been changed.

I am glad to note the reform in the taxation of working wives though some people on the other side may say that the Government had no option in this matter as a result of the court case, but the Government have been very generous in regard to the PAYE sector. On this whole question of PAYE people, we must realise when we talk of this section contributing about 70 per cent of our total taxation that included among PAYE workers are some very highly paid company directors and some others who are among the highest paid people in the country. I say this because very often when people think of PAYE workers they think in terms only of the ordinary worker.

Another matter in respect of social welfare that I should like to bring to the attention of the Minister whom I believe to be a man who will be sympathetic towards the lower income groups, is in respect of the allowance for prescribed relatives. This is a matter that I have been raising for some time in the hope that someone will listen to me. This allowance is paid only in respect of a person who is bedridden and the recipient must be a relative. Another condition of this allowance is that it is paid only in cases where there is nobody but the person needing attention and the person providing that attention in the house. This means that if the relative caring for the old person gets married or if somebody else comes to live in the house, the allowance is not paid. Most old people wish to be able to remain at home until they die. We should do everything possible to ensure that people can be kept at home in their old age. Another factor in this regard is that the cost of keeping an old person in an institution is very high. If I were Minister for Health I would take a chance and give a decent allowance to prescribed relatives so that old people might be kept in their own homes. In that way I believe I would save money in addition to seeing the very human factor of the wishes of the elderly to remain at home being fulfilled. If, say, an old man is being looked after by a daughter who has a few children and if the daughter becomes ill or for some other reason cannot continue at some stage to care for the father, she has no option but to put him into a home. It would cost about £60 or £70 to keep him in a home. I suggest £20 a week be given to keep him at home. The daughter could be supervised by a social welfare officer to ensure that the old man is well looked after. I would be grateful if the Minister would consider this proposal.

Nearly every farmer is willing to pay his fair share of taxation. In my view there is nothing wrong with the accounts system. It is the fairest way to pay taxes but I do not agree with taxing farmers according to the size of their farms. What I liked in the budget was the simple form of accounts for farms between £40 and £49. I cannot understand why that form of accounts could not be accepted. I have a farm with a £43 valuation. Since farm taxes were introduced I am in the tax bracket and have to keep accounts. My nephew went to a few lectures about accounting and he keeps my accounts which are submitted to my accountant. The accountant does the accounts his way but there is hardly any difference between the two. What people in the small farms complain about is this. If a man with a large family has a farm of £41 valuation he is not liable for tax but he must prove it by employing an accountant. This is wrong. The farmers would not have any objection if a simple form of accounting were introduced.

Deputy Tully mentioned an important point. He said that the biggest grievance will not be on the question of tax, because if a man does not make money he will not pay tax, but on the agricultural grant in the rates. If a man is taxable he puts his rates against his tax, but if he is not taxable he cannot claim on his rates.

I am prepared to be critical of the Government if it is necessary. In the circumstances the Government's proposals have been reasonable. Maybe I am a bad politician. I am my own man and always have been. It is up to each person to give praise where it is deserved. This way a man will be listened to. A person giving a lecture about how politicians should broadcast said that when two politicians come on the screen the neutral observer turns off the television set. If Deputy Bruton and I were on television the neutral observer would expect Deputy Bruton to say one thing and me to contradict him. If either of us said what we thought was good, our constructive criticism would be listened to.

Years ago I knew two great politicians in my area. Before meeting publicly they would have a drink and A would tell B to attack him immediately because he said he was no good unless attacked. When the constituency was changed one of these men—A—was outside a church gate. A very cute man from an opposing party with a great sense of humour said: "There is a very fine gentleman who has not been in this constituency for some time. I want you to listen carefully to him because he is a man of common sense and is well worth listening to." A went to B and asked him to tell the other politician to attack him over anything because, he said, he was not able to say two words unless he was attacked. That was the old game of politics but I do not believe in it. I believe in being as fair as I can.

I do not like the resource tax but the Taoiseach has been misquoted on this. He did not say it could be negotiated this year. What he said, as far as I recollect, was that it was a temporary measure. He also said that farming taxation will not be operated properly for another 12 months. As I said, I am against the resource tax because I do not believe in a tax that does not take into account whether a person is making money.

The new commission on taxation may come up with another system but I do not know how one can tax anybody unless it is on his income. A purchase tax hits the poor as well as the rich, but if a man is below a certain income he does not pay income tax. I would be very glad to hear of a system that is fair to everybody. Many people say that a tax on income is a disincentive and I agree, because the higher the income the more tax a person pays, but is there any other system? If so I would be glad to hear it.

I met a number of farmers at fairs and they are not too satisfied with the budget. Nobody is satisfied when he is taxed, but the Government must get in the tax. I shall have a good deal to say about the redistribution of that tax.

Debate adjourned.
The Dáil adjourned at 5 p.m. until 2.30 p.m. on Tuesday, 11 March 1980.