I had been talking about the adverse effect on companies in the private sector who might have been those expected to provide whatever additional employment could possibly be hoped for this year, in particular, the moving forward of the payment date of company taxation, so that there would be three instalments of company taxation in one 12 months period, which obviously will cause a liquidity problem for a number of firms. I was contending also that the increases brought about by the budget, such as the increased petrol and diesel charges, will have a crippling effect on small firms and might well have the effect of accelerating or mushrooming the unemployment syndrome about which I spoke earlier.
The Minister was remiss in not giving particular attention to labour-intensive industries. If the general premise I put forward, that one of the main aims of a properly framed budget ought to have been the creation and maintenance of employment, then those firms in the private sector which were labour-intensive were those which are, and have been for a number of years, under threat because of trends in world markets, inflation and high wage costs. They are major employing groups within the private sector, groups that are under particular threat. The Sunday Independent of 1 February 1981, contained remarks attributed to Terry McSweeney, chairman of the Apparel Industries Federation and a director of the ailing Dublin rainwear exporter, Janelle Ltd. to the effect that his company had actually discussed the possibility of taking militant action against the Government to highlight the neglect of the industry. The relevant article, written by Martin Fitzpatrick continued:
This militancy could take the form of a refusal to pay over social welfare contributions and PAYE payments.
Then Mr. McSweeney was quoted as saying:
We are simply acting as tax collectors for the Government and getting absolutely nothing in return.
The article continued:
Like the other "labour intensives", the clothing sector was urging the Government to provide for a continuation of the £5 per week temporary Employment Subvention or to construct other devices — perhaps a reduction in their social welfare contributions — to compensate for its loss.
Mr. McSweeney is further quoted as saying:
But the industry got no help, despite assurances at all levels, including at Taoiseach level, that it would be helped out.
In the same paper another spokesman of the labour-intensive sector, Denis O'Neill of the Winstanleys shoe firm said that he was staggered by the budget. He was quoted as saying that he was quite appalled at the burden the non-protected must shoulder. It was contended that he too was extremely worried at the fact that nothing was done to replace the temporary employment subsidy. He was quoted as saying that it was a disgraceful budget and was quite irresponsible.
If I revert to the premise I was putting forward that the main aims of the budget and proper budgetary policy should have been to curtail and contain the growing unemployment level — if new employment could not be created — to contain inflation, by reducing the balance of payments deficit and current budget deficiting, if one accepts that they were reasonable aims of the budget surely particular attention should have been given to these industries under threat for a considerable number of years now and which have suffered large job losses in the textiles, footwear and leather industries? Surely the case put forward by those industries should have been given some attention by the Minister. But, as has been exemplified by those quotations, they have been absolutely ignored.
It is quite obvious also that the so-called old reliables are no longer old reliables. One would have thought that Ministers would have realised at some stage that the point of diminishing returns would arrive, that the indications were that that point of diminishing returns in respect of indirect taxation on the brewing and distilling industry had been reached during 1980 because of the falloff in volume of sales. But once again the Minister turned to what he apparently felt was a bottomless pot into which he could dip, and provoked — as a result of this increase on the distilling industry — the quite extraordinary response of a group like Irish Distillers issuing a news release after the budget commenting on it, unheard of before, in which they pointed out that the home market, already feeling the cumulative effect of two duty increases in 1979 and again in 1980, must now contend with a further large duty increase which means that in under 24 months the duty on spirits has been increased by 108 per cent. Old reliables they may be, but I do not think there are very many industries in any sector that could tolerate having a Government impost increased by over 100 per cent in two years. Further on in the course of their news release Irish Distillers Group Ltd. give an example of what that means in cash terms when they say:
Fourthly, consumers should be fully aware of the new price make-up of a bottle of whiskey costing, say, £9 — Government £7.06; Distiller and Retailer £1.94.
I must admit, even for someone who would endeavour occasionally to support Irish Distillers, I was not conscious that the levels had reached those proportions. Irish Distillers Group Ltd. conclude their remarks with this sentence:
It is with great regret, therefore, that we feel we have now been impeded in our expansion programme and it is a matter of grave concern, not only to our employees and shareholders, but also to our many suppliers of goods and services.
Would one have thought that one would see the day when one of the old reliables — and I have condensed their statement because of the few minutes remaining to me — would have had to issue a statement in those terms?
In the Sunday Independent of 1 February 1981, to which I have referred, the managing director of the Guinness Group is also quoted as saying that the effect of the budget would be to effect a drop in volume sales of some 5 per cent to them during 1981.
The law of economics has been turned topsyturvy in the last decade through the attitude of those supplying our energy sources. Nonetheless there are fairly accepted tenets, one of which is the law of diminishing returns, and it does not require a scholar of world renown to come to the conclusion that the law of diminishing returns has been reached, and was reached during 1980. Once the point of diminishing returns has arrived, one must step back; otherwise one begins to penalise oneself as well as the person on whom one is seeking to impose the additional taxation. It is quite obvious that the old reliables are no longer old reliables and cannot be expected to bear the increases any longer. The point has been fairly made by Irish Distillers Group Ltd. and by the people in the brewing industry.
I endeavoured, before Question Time, to confine my remarks very much to those of a non-party political nature, to dwell instead on the prospects for the economy, the employment situation and indeed the question as to whether democracy would stand the strain we are all placing upon it. Because of our failure to provide employment opportunities for those still at school, because we are mortgaging the employment places of our children through our irresponsible attitudes in insisting on the continuation of deficit budgeting to the level at which it has been over the last number of years and which is doing nothing except jeopardising the employment opportunities of those who have not yet joined the labour force, we are placing democracy at heavy risk over the next decade or so, just as it will be at risk throughout Europe because of the failure of the European countries to provide employment opportunities particularly for young people.
We all bear a heavy responsibility in that regard and that means not only Government and employers but also the representatives of organised labour. The appeal must go to all of those people to realise that the onus is not upon us any longer just to fight for our selfish sectional interests at times of recession because that can only be to the short-term advantage of our members. But any of us who represent any group also represent the sons and daughters of the members of those groups and they have an equal responsibility to ensure that a standard of living is provided and maintained for the sons and daughters of our adult members. We have, all of us an equal responsibility to ensure that we provide a market place, job opportunities, for those who cannot yet speak for themselves because they are still either in the kindergarten or the primary or post primary schools or, indeed, perhaps in the overcrowded third level institutions here.
At a time when high technology and inflation and changing attitudes are threatening established employment places, it behoves all of us to examine the alternatives that I outlined, the suggestions such as collectively exploring a move towards earlier retirement, shorter working hours, work sharing, massive retraining of people. I did not dwell on it earlier but it is one of the other important options now. Even throughout their adult life people should be given the opportunity to retrain for other areas of employment that they might not originally have had the opportunity of entering into. If this sort of thing is not entertained and explored by all of the representatives, whether of employer, employee or Government, then, by our neglect in looking at the alternatives and in seeking to provide employment for those who have not yet become old enough to sign on the dole, we are placing democracy at risk, we are threatening democracy and the democratic institutions and threatening the continuance of this House.
Budgets such as we saw this year cannot be blamed entirely on the Government. I blame the different pressure groups and the forces throughout our society that make Governments and political parties so sensitive to bringing about any reform or bringing about order in the public finances that they are afraid to move in the way that they know, collectively and privately, is the proper way for the management of the economy. If all of those groups who bring about those pressures, employers, employees, individuals, farmers, the unemployed, politicians, trade unions and so on, do not accept that the good times are over and it requires sacrifice and a proper approach for the future of our children, then democracy as we know it will not survive either in this country or in any other known democratic institution. The type of budget that was brought about by all of those forces this year and last year is the sort of budget that is placing at risk the continuation of a free democratic system, where people in the exercise of their franchise can elect democratic parties. Whatever faults and failures that system has, I would far prefer to see it continue than to see any of the very few alternatives that are about to replace it. Consequently I can only appeal to everyone to realise that we may be mortgaging a little bit more than our electoral success at the next contest.