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Dáil Éireann debate -
Thursday, 5 Feb 1981

Vol. 326 No. 6

Financial Resolutions, 1981. - Financial Resolution No. 9: 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.
—(The Taoiseach.)

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.

I welcome an opportunity to participate in this budget debate. One thing that consoles me is that as time goes on this budget seems to gain both in substance and in significance. I think the message is now getting clearly across to all the people concerned that this budget is realistic. It is a bold and daring attempt to face up to the economic problems that confront this nation.

I was pleased to hear Deputy Boland speak in the manner he did. It is a clear indication that he at least is conscious of the day-to-day problems facing this nation; he is conscious of the existence of this nation as a democracy and realises that there is no soft road to prosperity or economic stability. I was pleased to hear his comments. They were the comments of a realist, the comments of somebody who is showing concern for the well-being of the Irish people and for the nation as a whole.

My contribution will be brief. First I would like to deal with the major concessions that have been granted in this budget. I would like to deal with the social welfare payments which have made a positive and significant effort to eliminate poverty from Irish society. Let me say here and now that it has always been the aim of Fianna Fáil to do their utmost to try to improve the lot of the weaker sections of the community, people who are not organised into strong pressure groups, who have no trade unions to take industrial action in their favour. They realise that they have a Government in office that is determined to look after their needs. I feel that the people who spoke against this budget did not take the time to analyse and study it closely and to examine its contents in the light of our overall national economy. The message has now seeped through that this budget has gone a long way towards helping the weaker sections of the community. Every old age pensioner, widow and orphan, every unemployed person, every person who has a disabled person's allowance has been fully recognised in this budget as being part of a community and equal in society. I believe that these people who will benefit will show their appreciation of the work that is being done for them whenever an opportunity comes their way.

Social welfare recipients are not the only sections of the community to benefit. The farming community have benefited a great deal from this budget, despite what is being said by certain members of farming organisations, by political commentators, and by members of the Opposition.

I would like to give a few figures for County Westmeath. As a result of Fianna Fáil's budgets down the years farmers with holdings of £20 and less enjoyed complete derating. This year a significant step forward has been taken by including in that category all farmers with valuations up to £49. In my county alone 1,800 small farmers will benefit from that decision. There are already 820 small farmers in the derating bracket and they will be joined this year by a further 1,800 small farmers reputed to be working their holdings. This means there will be over 2,600 small farmers in my county enjoying complete derating in 1981. That is a concession those farmers will appreciate.

There is another category of farmers who will benefit from this year's budget, those in the valuation bracket from £50 to £70. In my county we have 700 small farmers who will benefit from the 50 per cent derating. That is an added advantage, and they recognise it. They know the Government are aware of the problems they had to contend with over the past two years. They know this is a bold and determined effort to improve their lot and to ensure that the maximum number of small farmers stay in agriculture. In County Westmeath, which is regarded as a rich agricultural county, we have only 700 holdings over £70 valuation.

When these figures are analysed in every county it will be freely admitted that this Government have made positive efforts towards improving the lot of small farmers. Almost 3,000 holdings in my county will benefit from this derating programme. Many will argue that more should be done, because the farming community were neglected, but they would do well to recognise the value of the concessions they received since the end of 1980. They should realise the Government of the day saw the necessity for the introduction of a fodder scheme and a fertiliser scheme and they also saw the necessity for introducing grants for the making of silage. These are worthwhile schemes which were never properly analysed, unlike the situation in 1974-75 when 10,000 cattle died from starvation because of Government neglect. We had the Coalition Government in office then. At that time I was surprised the farming community did not realise they had a crisis on their hands. It took the veterinary association to highlight the fact that there was a fodder shortage. Neither the Government of the day nor the farm leaders realised they had a crisis on their hands.

This Government realised before anybody else that there was a need for winter fodder in 1980. Fortunately we had a comparatively mild winter and ample fodder was available. The farming community are enjoying enhanced prices for cattle. That is a point which is being ignored by the people who condemn the Government for their lack of interest and investment in agriculture. A Government cannot put all their eggs in one basket. They must try to spread their resources around the entire population. This budget is clear evidence that we are prepared to spread our natural resources as far as possible.

Has anybody on the Opposition benches told us the alternatives to increased tax on spirits, beer, imported wines, tobacco, petrol and diesel? The previous speaker said there were alternatives but he was not going to tell us what they were. Is there any other method by which this revenue could be provided? I would like our political commentators who write so glibly in magazines and certain newspapers to tell me the alternatives. I am convinced there is no immediate alternative to the present method used to provide additional revenue for those in greatest need.

People talk about the savage and brutal increases imposed on beer, spirits and tobacco. Where else would the Government look for revenue but from luxuries? The people can do without alcohol. We have the highest rate per head for alcohol consumption in Europe. If this budget acts as a deterrent and reduces the amount of alcohol consumed, considerable progress will have been made. I am convinced we have been drinking too much beer and spirits. We all know many homes have been broken because of excessive drinking. If this budget goes some of the way to remedy this situation it will gladden the hearts of every Irish person who is concerned with real progress.

It has been said that there will be redundancies in the distilling and beer industries. This claim has been made repeatedly, yet those industries seem to be able to exist and to develop their markets. In my view they have a duty to develop markets abroad and to try to help the balance of payments by exporting as much as possible. They should not depend on the home market for all their products.

Perhaps before the end of this debate we will be told the alternatives for raising extra revenue. I would like to know where we go from here.

To the country.

Another argument was put forward about the savage increases in the duties on petrol and diesel. We all agree it is a very unpopular decision to impose additional taxation on petrol and diesel, because we realise that, one way or another, those increases are going to filter right down through the economy and will have an effect on day-to-day living costs. There is another aspect of the situation which must be borne in mind — our huge bill for imported oil. If, as we were led to believe, there was a reduction in oil imports in 1980, we should look forward to further reductions in the import of this costly product in 1981 because it is creating an enormous drain on our reserves abroad and on our balance of payments.

We are not as energy conscious as we should be or as all other European countries are. It is appropriate that the Tánaiste embarked on his nationwide tour this week to encourage people to conserve energy. The sooner everyone realises the need for conservation, the better. The increased taxation on petrol, diesel and other oils will induce people to become more energy conscious and to use their cars less. Unfortunately, there is little that can be done about cutting down the use of commercial diesel, because all our goods are transported by heavy diesel trucks. Therefore, the consumption of diesel oil will continue at a high level because no other means of transport is as economical. The level of diesel consumption will not decrease to any great extent. I am convinced the level of petrol consumption will decrease, people will see the need for conserving energy and the increases in duty may prove, in the long run, a blessing in disguise. It will save our balance of payments and our external reserves.

The fuel voucher scheme is a comparatively new scheme which was introduced last year by the Minister for Social Welfare in conjunction with the Government. It is heartening to see that the value of the vouchers has now been increased by 50 per cent. That is a clear indication that the Government are concerned for the old, the weak, the disabled and invalids. I am less than satisfied with the way that members of the health boards are administering the scheme. The Minister and the Government should contact the health boards to ensure that people in greatest need are getting the benefit of those vouchers, which are a major concession and a great benefit to the recipients. I hope the Minister for Social Welfare will review the working of the scheme throughout the health boards. I often wondered if the scheme should be administered directly by the Department of Social Welfare, through the employment exchanges, as we have social welfare branches in every county who would be competent to administer the scheme. It would probably be cheaper, because it complements all the other benefits which are being administered by that Department. I believe the Minister will review the position to see if improvements in administration can be made and that people in real need get the benefit of this very generous gesture of the Minister and the Government.

The increases to disabled persons are another recognition by the Government of the need to look after the weaker section, who are unable to look after themselves. Nobody can point the finger at the Government and say we are not doing enough for the old, the infirm, the deserted wife and children. The Government have demonstrated time and time again they are concerned for the welfare of the weaker sections of the community. Sometimes I boil with indignation when I hear people saying that the Government are not doing enough and could do better. Who could do better? We had another Government in office during a former period of economic recession from 1974 up to early 1977. It was ironic that that recession also was caused by the huge price increases in oil. It demonstrates that the economies of most European countries are dependent, in some shape or form, on the importation of fuel. That is the cause of our problems at present. It is the cause of the recession in industry.

Other European countries are also caught in the grip of the economic recession. Germany was regarded as the economic miracle of modern times in the way its economy advanced and developed. But at present they have 1,000,000 people unemployed and have sent home thousands of immigrant workers — Turks, Yugoslavs and Indians. They sent those people home because the economic recession began to bite deeper and deeper and their overall economic strength was affected. Germany is a typical example because they were an industrious people who worked hard. By and large, we have come through the economic recession in much better shape than most other economies. If every section of the community get together, pull their weight and decide they have a contribution to make to the economy, we will come through this recession with an economy that is stronger than most other countries.

Our exports have been adversly affected by the recession in other countries. That is something members of the Opposition fail to realise in their contributions to the budget debate. Apart from the economic recession, we must never lose sight of our competitiveness as a manufacturing nation. We must ensure that the goods which are produced here can be sold competitively on the world market. That is one of the advantages we have derived from membership of the EMS. I would like to see some changes made in the stock exchange quotation which only quotes the Irish pound against sterling and the dollar. As we are part of the EMS, why not quote us against the French franc, the Deutschmark, the Belgian franc, the Danish kroner or any other currency? They continually quote the Irish £ against sterling—

The truth is bitter.

—ignoring the fact that we are a member of the EMS. For that reason changes should be made in the method of reporting stock exchange prices. One would think we were only concerned with the punt against an overvalued sterling. When in Belfast recently politicians and businessmen told me that they were demanding something on the lines of a green £ to match the punt because they were losing business in the South as a result of our membership of the EMS. The EMS aided our industry to a great extent and that fact has not been fully ventilated.

Thousands more jobs would have been lost today were it not for our membership of the EMS and that must be made clear to all sections of the community. That does not mean, however, that we should permit the sky to be the limit or that we should not make any attempt at controlling inflation. I was pleased to hear Deputy Boland talk about pressure groups and their continued influence on political decisions here. A responsible approach is called for from all such pressure or organised groups. We have too many greedy and selfish people in our society who demand too big a slice of the national cake. They are too selfish to give any thought to the other sections of the community or to job losses in other sectors. The time has come for all such people to have a long and hard look at their situation and ask themselves if they can make a further contribution to our society. They must ask themselves if they can do anything more for their local community or those who do not have jobs.

There is nobody who can dispute the fact that 120,000 people are unemployed but, as Deputy Boland stated, there are too many people holding down two jobs at present. For that reason it is not possible to have an equitable distribution of our resources. Those people should take others into consideration before their selfish inclinations. They should ensure that everyone gets the opportunity of doing a day's work. The trade union movement and other organisations will have to face up to that because they have a role to play in this regard. They should do so with courage and a determination to serve the needs of those who are without jobs. Those people are anxious to make their contribution to society. They should be given that opportunity and that is one reason why I believe the budget represents a bold and realistic attempt at ensuring the commencement of the maximum number of job creation enterprises here in 1981.

The national investment plan is another sincere and bold attempt at getting our infrastructure properly organised. I welcome the increased allocation for road improvements. My county will receive £2.3 million this year for such work compared to £1,100,000 last year. That is a clear indication of the anxiety of the Government to improve our infrastructure. It is the correct approach and my only regret is that those problems were not tackled many years ago. However, it is encouraging to see that we are tackling those problems in the middle of a world-wide economic recession. We are one of the few nations geared towards that type of investment and development in 1981. As the year progresses more jobs will be created because of the massive investment programme embarked upon by the Government.

There is a commitment by the Government to do everything possible to create more jobs. The closures and job losses that took place last year can be blamed on the world-wide economic recession. We cannot hope to escape when powerful economies like those of France and Germany are suffering. I am pleased with the efforts being made to develop our national resources. Our greatest national resource is our soil. I appeal to all farmers to make a special effort in 1981 to increase livestock numbers and output. The markets are available and we have a great variety of them. Some regard our live store cattle trade as damaging to some of our industries and as being responsible for the closure of many of our meat processing plants but I should like to remind those people that if those meat plants enjoyed a monopoly situation they would operate their factories like the way they did in 1975 when they paid what they liked for live cattle. At that time there was no other outlet for them. We must at all times have an element of competition.

I would like to see every beast produced here processed in our factories but, unfortunately, that cannot happen because many farmers are convinced that without some sort of opposition our factories would cash in on a monopoly situation. It is believed that they would depress meat prices here thereby reducing the income of farmers. The Government have done a lot for agriculture and the end has not been reached as far as increased prices for the farming community are concerned. We have a team in Brussels under the leadership of the Minister for Agriculture, Deputy MacSharry, who I believe will succeed in extracting a worthwhile package for Irish agriculture and those engaged in that industry. We have heard in recent hours about 7.5 per cent and 6.5 per cent but we can expect a higher percentage increase and that is going to benefit our farmers. That is going to be a further boost to the agricultural industry.

Nobody denies and I will be the first to concede that agriculture and those engaged in that industry have gone through a period of stress and strain. There is no doubt about that, but it is not the first time it has happened. I mentioned a few moments ago that it happened in 1974 and 1975. It has been happening down through the ages, but now the outlook is bright in agriculture. Further price increases are on the way and my message to every farmer concerned for his own future is to increase production in so far as it is possible. The market outlook is right. He should avail of the opportunities that come his way and he and the Irish nation will be the sole beneficiaries in the long run.

A lot more could be said with regard to the budget, the state of our finances and so on. This budget has been well accepted by the Irish people. They have realised that it is a realistic document. It is not an election budget, as many people had thought it would be. If it was it would be far more popular. The increases imposed on petrol, diesel, spirits, cigarettes, tobacco and so on would not be as steep if it had been an election gimmick. It is a realistic attempt by the Government to ensure that this country is kept on an even keel, that out economy remains stable and that we will be in a position to move forward in conjunction with every other progressive democratic state when that opportunity comes our way when the world recession lifts. We as a people will respond much more quickly when the incentives come our way than any other community in Europe. For that reason I appealed a few moments ago for the support of the trade union movement, the farm organisations and all those engaged in industry to get together and work together for our people and our nation. If that is done then our future is assured.

With regard to income tax, again the Government are conscious of the need to relieve as much as possible the burden on the PAYE sector. On the other hand, the members of that group realise that they have a job while thousands of their neighbours may not have jobs. They should not begrudge paying the few additional pounds by way of PAYE if they know that some of that money is being made available for job-creation enterprise, for schemes that will help their weaker brothers along the way. That is something that every PAYE worker should consider. Every country in the world has a system of taxation. Countries raise taxation through the process of levies direct and indirect, PAYE and so on. No Government have funds other than the funds raised from direct or indirect taxation. If the Opposition have a new plan, if they have some cards up their sleeves that we have not seen, the public would like to know about them.

Tax on cars.

If they have something hidden or stacked away in the manifesto that we have heard so much about——

Keep away from manifestos.

——the Irish people would like to know about them now, because up to now the Opposition spokesman have not put forward any real alternatives to the measures which have been imposed in this budget. If they have the alternatives they should tell the people about them.

I have mentioned the farm package and I will not go over it again. I gave the figures concerning my own county. I see that my time is up.

The Deputy has two minutes and if the Deputy L'Estrange starts interrupting him it could go on until tomorrow. Perhaps the Deputy will go home and have it out outside the chapel gates.

That is the place I would love to have it.


I often tried to draw the Deputy, but unfortunately he never took me on. I hope he will do it because I will be a beneficiary from the public debate that may take place.

May I speak without interruptions?

Yes, I think you should.

Thank you, a Leas-Cheann Comhairle. I would prefer that Deputy L'Estrange would get up and say his bit like everybody else and not just interrupt those who are speaking. This budget has been well accepted by the people. They realise that it is an attempt by the Government to try to meet the needs and wishes of the people in 1981. I have no doubt that whenever the election comes the Irish people will be willing and ready to give Fianna Fáil an endorsement once again.

Having listened to Deputy Keegan for the past three-quarters of an hour, it does not surprise me that a disastrous budget such as has been produced by the Minister for Finance could emanate from the Government. If that is the level of contribution a rural Deputy gives to his party and advice to this Minister for Finance, it explains to me why this budget has been perceived and received by the people of Ireland as a complete and utter disaster. To say that it has stunned the people into disbelief and despair is an understatement, and for the 30 minutes or so which remain to me I will try to edify the Minister and his colleagues with the true perception and reception of this budget in rural Ireland, particularly South Tipperary. It has come across as a complete disaster. There is nothing innovative about it, no flair, no dash. It gives no hope to the various sections of the community, to the farming sector, the industrialist, the hapless unemployed or the PAYE workers. It is a monument to the Cabinet's incompetence and their aridity of thought on anything original. It was unveiled on this occasion not by the Taoiseach but by the hapless Minister for Finance whom the Taoiseach pushed into this portfolio.

Indeed, I do not blame the Minister for Finance; I pity him, as do the people of Ireland, This budget is indicative of a Government who are completely bankrupt not alone financially but of ideas also. It is totally insensitive to what the country needs at this moment and it will go down and be noted for its total mediocrity. Much was expected from the Taoiseach. The people did give him a year's trial run in office. I suppose this could be regarded as his first budget, because this time last year he had been in office for only a very brief period and the people in fairness waited and gave him an opportunity to see what he could unfold. I am afraid that they are utterly and totally disillusioned and disappointed. The slow realisation is coming to the people of rural Ireland particularly that in the Cabinet we have a fifth division team masquerading as a first division team. I have no doubt that when the opportunity comes this fifth division team will be relegated to the sideline and to the Opposition benches.

When the Coalition were in power the then Opposition had all the answers. They were shouting across to the then Government to resign and get out of office, that they had all the solutions for the problems of the day. The election was held and the then Government was removed from office. Fianna Fáil put all their promises into the now totally discredited manifesto of which I have a copy here and they placed this manifesto before the electorate. Unfortunately, the electorate went for the soft option and returned Fianna Fáil to power with the greatest majority in our history.

I would have thought Fianna Fáil would have been ashamed to mention the word manifesto but to my surprise last Monday I heard the Tánaiste on the radio refer to it. Apparently, the Taoiseach has not yet told him that he wishes to stand back from the manifesto and have it buried. He sacked the Minister responsible for it and pulled down the shutters on his Department. Apparently, nobody has yet told the Tánaiste of the Taoiseach's thoughts on the manifesto. Perhaps this is indicative of the split Cabinet we have when the Tánaiste can laud the manifesto while the Taoiseach is trying to forget it.

I may quote one or two amusing statements from this discredited manifesto. I think it will go down in Irish mythology, among the fairytales of Ireland. It should be consigned to the archives. In the section on the economy, number 6, it talks of the Fianna Fáil prescription for recovery. Apparently they were referring to the economy as it was then but unfortunately the patient, Kathleen Houlihan, has had a severe and almost fatal relapse and is now virtually comatose. I could take up time quoting some of the promises of the manifesto. It said that by 1980 we would have 30,000 fewer unemployed. We know that there are at least 122,200 idle, not including those on three day weeks and others who are excluded. We were promised a reduction in prices of 2 per cent in 1979 and no increases in prices in 1980. Last year inflation ran at 18½ per cent. This year there are disputed figures as to whether it will be 15½ per cent or 13½ per cent.

We were also told that in 1980 borrowing would be reduced to 8 per cent. In fact last year it was 14.5 per cent and this year it is expected to be in the region — again there are disputed figures — of either a massive 18 per cent or 13 per cent.

When the Coalition left office in 1977 inflation was down to single figures. National growth was at 5 per cent or more; last year it was 1 per cent. Borrowing was at £3,600 million; last year it amounted to the mammoth sum of £7,500 million or more. This year national borrowing is expected to be in the region of £1,500 million or more. The then Taoiseach in his honesty remarked, as is written in the records of the House in December 1977, having reviewed the economy after we had left office that this was the basis on which to build the economy. Now after three and a half years of misrule and mismanagement by a succession of Ministers for Finance and two Taoiseachs we find the economy is crippled. In a year when people would have expected some indication of Government policy, some incentive for farmers and industrialists and for the people to move forward and right the economy, we have this mediocre budget statement that offers nothing. It has not a new concept or an original idea to offer. No wonder the people are totally disillusioned and disenchanted by the present Government and are only waiting an opportunity to translate these feelings into votes and relegate this inept Government to the Opposition benches.

Time was when a budget did mean something. There were good Ministers for Finance even in Fianna Fáil Governments and in their budgetary statements they outlined fiscal, financial and economic policies to be pursued during the year. Last year the then Minister for Finance indicated that he would take a certain line but midway through the year he totally abandoned that line leaving us with a deficit of £547 million. This year again we have a deficit budget of £513 million. That is a disputed figure; some argue that it should be £645 million. No doubt there will be another succession of supplementary budgets towards the end of the year if the present Government are still in power. The whole idea of budgets has lost its relevance. Perhaps it gives the Minister for Finance of the day a moment of doubtful glory on the political stage, gives him his annual gallop. He then hands over the running of the country perhaps to faceless bureaucrats for the remainder of the year. Until there is some honest budgeting and until we get direction from the Minister for Finance we cannot make good progress. The budgets of the present administration in the past two or three years had little significance or relevance.

I shall deal briefly with some of the points that I think should have been attended to in the budget. I shall refer to the problems of agriculture, industry, unemployment, the PAYE sector and some other facets of the budget. It is accepted by all that for the past two years agriculture has suffered its greatest crisis since the economic war. It is undisputed that in real terms the farmers have had a reduction in income of 43 per cent. In the coming year their living standard is expected to drop a further 13½ per cent. It amazes me to hear Deputy Keegan say that the farmers were content. If so, why were there 40,000 or 50,000 farmers marching in Limerick and Kilkenny? Why did all farm organisations show their dismay at the crumbs they received in the budget? This indicates to me that the Government are totally insensitive to the problems of the farming community. They do not realise the depth of the crisis in the farming community, the gloom and the lack of confidence. We know from printed figures that milk production last year fell 2½ per cent, that the total milch cow numbers fell 3½ per cent. Today we see that artificial insemination fell by 8 per cent, so that next year there will be 8 per cent fewer calves and in two years' time the meat processing trade will suffer accordingly. We also know that employment on the farms in the year to mid-April 1980—this is the latest figure available, I think — fell by 3,000.

Despite repeated warnings from this side of the House, when we urged the Government to be aware of the problems facing the farming community, the Government did nothing. Contrary to what we expected, they insisted on introducing levies and taxes on the farming community. It is no wonder there is doom and gloom throughout the country. Farmers thought the Government would take account of their difficulties but, having listened to the contribution of Deputy Keegan, I know now they could not have done so because they were not informed of the situation by their own Deputies.

It amazes me that any rural Deputy could be so completely unaware of the difficulties facing the farming community. We know that agriculture is our greatest industry and, apart from our young people, that the wealth of the country is in the top soil. We know that when we have a strong agricultural industry wealth percolates throughout all sectors because employment is maintained in the processing and ancillary industries and business in general is helped. Unfortunately there have been closures in the meat plants and in the fertiliser industry. Machinery and equipment plants have also been affected: demand for machinery and equipment fell by 12 per cent in the past year. We know that the jobs of 6,000 people in the meat plants are in jeopardy. Every sector of the community is concerned about the crisis in agriculture. Everyone is aware of what is happening except our Ministers for Finance and Agriculture.

Fine Gael have promised the farming community that when we get into power we will build up confidence in the farming sector. We attempted to introduce an emergency provisions Bill but it was not allowed by the Chair. In Private Members time we introduced what has become known popularly as the Fitzgerald-Bruton six-point plan. This was an attempt at least to spur the Government into action and to bring the crisis to their attention. Unfortunately it was voted down by 66 warriors of destiny who marched through the lobby and registered their vote. That was their response to an honest attempt by the Opposition to give some confidence to the agricultural community.

Very briefly I should like to refer to some of the points we put forward. We proposed the abolition of the resource tax and we said we would refund any tax already collected. We know that only £252,000 of the proposed £6 million was collected. This was because the farming community had not got the money. Belatedly the Government, under extreme pressure and motivated by the Fine Gael proposal, announced in the budget that they would remove the resource tax. We welcomed the move because we were always totally against the tax. We considered that in a time of crisis there should not be any further taxes imposed on farmers and we urged the Minister to hand back the £252,000 already collected.

The second point in our plan provided for the abolition of the bovine diseases levy. Belatedly the Government have seen the light and have decided to abolish the levy. We welcome this move. The Government were ill-advised to introduce the levy. It was penal imposition on the farming community.

We dealt also with the question of agricultural rates. This system of rate collection is 140 years old and has no relevance to the agricultural scene today. We proposed the total abolition of agricultural rates. The Government partly took over some of the measures we suggested and gave some relief to farmers. However, what they have proposed is not sufficient and I have no doubt that in another manifesto that will come eventually from the Government there will be a proposal for the total abolition of agricultural rates.

We indicated in our Bill that there would be an interest subsidy scheme on loans up to £25,000 that were taken out for genuine family farm development. We were told by representatives of the farming community and by our constituents of the crushing weight of interest rates especially on development farmers. This group have been under severe pressure from the ACC and banking institutions. They took the agricultural advisers and the Government at their word: they developed their farms and negotiated loans at what were then the reasonable interest rates of 11 per cent or 12 per cent. Unfortunately interest rates have escalated to 21 per cent and all their schemes went awry. It is deplorable that the Government have done nothing to help in this matter.

We have been told there is a serious decline in our breeding stock. From figures available regarding artificial insemination we learn there has been a shortfall of 89,000 cows as compared with previous years. That will mean there will be a serious loss of beef in the near future. In an attempt to restore the level of breeding stock we indicated we would treat breeding stock as capital for income tax purposes. However, this matter has been neglected by the Government.

In an attempt to encourage people who may be considering transferring land to trained young farmers the Fitzgerald-Bruton Bill proposed the two-year abolition of stamp duty on land transferred to such farmers. This was to encourage people to transfer land to younger, energetic young farmers. This proposal should have been adopted but unfortunately the Government decided otherwise and voted it down.

Deputy Keegan has told us that everything is rosy. If he would remove his rose-tinted glasses and see rural Ireland as it really is, he would know, and must know if he is in touch at all with the farming community, that the picture of agriculture is vastly different from the one he would like us to believe. The Minister must be living in cloud cuckooland if he believes that the farming community are satisfied.

We have the present Minister for Agriculture going to Brussels with begging bowl in hand, trying to bring some advantage to the Irish farmers. Indeed, from present indications, which I hope are wrong, a figure of 7.5 per cent is being quoted as the increase. That, pitched against an inflation rate of 13 to 15 per cent this coming year in Ireland, will be of absolutely no benefit at all to the farming community. The Minister would be better served in sitting down and discussing the problems with the leaders of the farming community here who understand the predicament they are in and giving them some concessions instead of burdening them with levies and other taxes. I hope for the farmers' sake that his attempts in Brussels will be successful.

Thinking back to one of his illustrious predecessors, Deputy Mark Clinton, when he was in a position to negotiate he always came back with the goods for the Irish farming community. He always brought back an increase of 12 to 15 per cent. Deputy Keegan had the audacity to say that during the time of the Coalition Government from 1973 to 1977 the farming industry was in crisis. I am informed that the income to the farming community increased from £250 million in 1973 to £950 million when Deputy Clinton left office. For the benefit of the Minister, I remind him of what was said in the famous manifesto document in which was published the following paragraph on agriculture:

Fianna Fáil believes that Agriculture can and should provide the main thrust for the recovery of the National Economy.

The volume of farm output must be raised and everything we produce must be processed and packaged through to consumption stage. Fianna Fáil will introduce a National Livestock Development programme to prevent short-term cyclical reductions in the breeding herds, improve genetic stock and health status and encourage the retention of cattle under 4 cwt to rebuild the

All this is gobbledygook, making a complete farce of the farming community. They also undertook, among the promises which were never fulfilled, that they would retain the notional system of farm taxation and allow rates on agricultural land as an instalment of a farmer's tax bill. The farmers now realise that, by accepting the manifesto they have been sold down, if not the Swanee, at least the Shannon. Once again they hope to put all their confidence and their trust in Fine Gael in office. They know that Fine Gael have always accepted the importance of agriculture in the economy and realise that, if we had a sound agricultural industry, the economy was sound.

The Taoiseach is well known for his lack of sensitivity towards the farming community. On one hapless occasion our farmers were lying on the ground in Merrion Row and the present Taoiseach walked across their prostrate bodies and went into Government Buildings, totally insensitive to their plight. They know that they cannot expect anything better from a Government under this man's leadership. We will have continuing farming demonstrations asking for some concessions. The farming community are not looking for charity. They are one of the few sections who are prepared to and want to work. All they are requesting is a realistic return for their honest labour. They do not want hand-outs or charity; they want prices for their work which will give them an average standard of living, and not a falling standard, as has happened in the past two years and will happen this year. This budget has been a disaster to the farming community. It has done nothing to give them any confidence in themselves or in their industry. Doom and gloom still continue in rural Ireland.

Another aspect that I would like to dwell on for a few brief moments is the contribution of this year's budget to industry. It amazes me, with industries toppling like ninepins, with closures, bankruptcies and firms going into receivership, that the only thing this budget does for industry is to further penalise it. The Government are seeking to collect one and a half year's capital taxation within the coming year. It is incredible, when every effort should be made to encourage private industry and help it to stabilise, maintain and even increase the labour force. It is not alone penalising them financially by insisting upon collecting the one and a half year's tax in one year, but also indirectly penalising them with savage and massive increases in the price of petrol and diesel oil and with the forthcoming third or fourth mini budget with the extra telephone, telex and postal increases.

It is no wonder that the industrialists who are concerned with employment have given up in despair. Many have come to me and indicated their total abhorrence of this budget. True, there is an element of hibernisation in the budget, but unfortunately that only affects, to my mind, the speculators and gives hope to the big building contractors and does nothing at all for rural Ireland or the smaller industries in the various small towns. I am abhorred at the Government's total insensitivity to the plight of industry. Nothing has been done to help them to increase their work force, rather they are being penalised. Surely the Government must realise that, with the ever-lengthening dole queues, this further imposition on industries will further add to them? What hope is there for the young boys and girls leaving school this year finding work in industry? Again I quote from this famous manifesto on what was to be done for industry:

A revolution must take place in the management of industrial expansion if the essential employment targets are to be achieved.

A revolution is certainly taking place, but it is not the revolution anticipated by the industrialists and people in commercial life in 1977. Also, further down it says:

Payments to the State (taxation, social welfare, etc.) will be reviewed periodically to help maintain competitiveness under severe trading conditions.

Here was a golden opportunity for the Government to give some ray of hope to the industrialists to help them over the present crisis. They looked in vain to the budget.

Debate adjourned.