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Dáil Éireann debate -
Wednesday, 4 Mar 1981

Vol. 327 No. 5

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).

Deputy O'Leary to reply on behalf of the Labour Party.

I have no intention of utilising my full time here on this concluding part of the debate on the budget. We have had over a month of discussion on the implications of the budget and its consequences and so on and this debate itself takes place at a time when there is a national strike gripping the country, the petrol dispute. Fuel to industry is being cut off with the possibility of total closedown of the nation's economic life. That in itself shows the way public affairs are tending here. Therefore, I will simply confine myself, for the period for which I intend speaking this afternoon, to referring once more to some of the failings in the budget, some of the rather gloomy consequences we can see flowing from it and to reiterating our call that the only decisive action left to this Government now is to clear the decks and permit a mandate to be given for a new Government.

On every front our economy can be described without exaggeration as being in a state of dire crisis. Unemployment stands at a record post-war level. Redundancies outstrip job creation. Agricultural incomes have been halved in the past two years. Inflation is running at 15 to 20 per cent. For the second year in a row the balance of payments deficit has exceeded £700 million. Our trading resources are dwindling. That is why it can be said without exaggeration that our economy is in a state of dire crisis. If the country could be seen as a business trading organisation, the wise advice that would be given at this stage would be that it should be put into receivership. This country has not yet been put into receivership, but there are many economists who think that, sooner or later, the patience of our creditors abroad will snap. Many observers point out that there are certain circumstances which presently permit us to borrow at our present rate. Such circumstances may change in the future. If the situation changes in the Middle East, if the instability of certain of these regions disappears, then undoubtedly our borrowing capacity will quickly come to an end.

Of course, the whole industrial relations situation could be described as being very serious indeed, as is characterised by having in the past two weeks both the Minister for Finance and the Minister for Labour engaged generally in an effort to avert the strike now taking place. Therefore, on all the characteristics of good government, of the way a country is proceeding, one can talk of chaos, failure, immense difficulties, inflation, unemployment, the adverse agricultural situation.

On the budget our main charge is that it funked the task of dealing with the central problems of the economy. It contributed nothing to reducing unemployment. On the inflation front, instead of combating rising inflation, it added to our rate of inflation. It is reckoned that something like 3½ per cent will be added to price inflation as a result of the indirect taxation of the budget, and there are commentators who think that the rate of inflation this year will go nearer 17 per cent than the 15 or 16 per cent earlier thought.

Of course any budget which seeks to make a contribution to improving industrial relations should address itself to the problem of inequity which is felt to exist in the PAYE sector. We know the effect of the budget changes will be that this year the Exchequer will take about £140 million extra back from the PAYE sector, despite changes made in the budget by way of allowances. The budget, therefore, did not address itself to the question of equity.

I have held the view for some time now that, if we are to talk about improving industrial relations, while there may be some contribution to be made by setting up committees, by hearing the views of all sides and getting wisdom from all sources, one of the most significant contributions towards improving industrial relations would be the contribution of the Government in providing a fairer tax system. Many of the disputes we have seen are a reflection of the revolt of the PAYE sector at what they see as their overtaxed position. The self-employed person can, legally and properly, seek every loophole in the law to lessen his tax burden. The only avenue of resistance open to the PAYE taxpayer is the strike weapon. That is the only area in which those fortunate enough to be still in employment can exert pressure for higher wages. As a result we get these disputes, there is a long investigation and the causes of industrial discontent will be laid within the four walls of industry itself. But the causes lie elsewhere, and a good area of search to lead us in the right direction is the overtaxed condition many PAYE people feel themselves to be in. The budget did not confront that question. Certainly it has not convinced the organisations representing the PAYE sector that it marked the first instalment of a programme of rectifying the injustices that their members feel exist in that system. So, we have simmering discontent there and we face a good deal of difficulty of an industrial relations nature over the coming months such as we have been facing this very week and over the last fortnight. A court is sitting on the matter today, and we have had this very serious dispute. Unless there can be a resolution of that dispute this very week many businesses will grind to a halt and there may be Members of this House whose activities as Members of parliament will have to cease from tomorrow or the day after because they will have no petrol to enable them to drive about.

The problem is even more horrific in its implications for industry and jobs. Unemployment is historically high and this is giving rise to a good deal of insecurity. There are, perhaps, tolerable levels of unemployment with which a community can live, but we are passing that point here in our own community. Since September the rate of unemployment has intensified to the level of a job loss of 300 almost per day. Speaking honestly from either side of the House, one cannot claim to see any upturn in the Irish economy or any basis of hope on which one can say to those unemployed that we believe that such is the improvement in the economy that the possibility exists that later this year they will find gainful employment. All the omens point the other way, to an increase in unemployment throughout the year.

In so far as the budget did not adopt any long-term strategy to defeat inflation it shirked the central problems facing our economy. The budget shirked the question of winding down inflation and, in fact, added to the rate of our inflation. This means that hope for our economy should have been based on the premise of attempting to expand our industrial sector on increased exports later this year as the economies of our trading partners revived. Most commentators agree that this would have been the correct point of recovery for the economy to adopt. If we were to avail of this revival in export markets later this year our exports would have to be able to compete with those other countries. We would be up against the problem of our present rate of inflation and we would be competing with products with lower cost increases. Instead of assisting us towards getting ourselves into a position of greater competitiveness, the budget has added to our burden of costs. It has put pressure on the unions representing employees in the national understanding second phase to look for compensating increases for the increases in indirect taxation that took place in the budget. The budget repeated the error of the previous years budgets in relying excessively on an increase in indirect taxation. The increases in petrol and other items will have a very adverse effect on the state of industrial relations. It does not take much foresight to say that. Every Minister who addresses himself to the necessity of improving industrial relations will have to look at the fact that the Government's own budget has contributed to a worsening of industrial relations because greater pressure, as a result of the budget, will be placed on the negotiators to look for compensating increases in the second phase. Indeed, whether the second phase of the national understanding will survive is anyone's guess. It does not take much imagination to come to the conclusion that trade unions will be forced to demand compensation for the taxes on the various items in the budget.

A good deal of comment has been addressed to the question of the effect of the increase in petrol prices. It is reckoned that the cost of running a small, average car now with the present increases involved would be something like £55 per week. That is serious enough for the ordinary citizen and God knows, around the country a small car is a vital necessity to enable many to get to work, such is the bad condition of public transport. One can imagine the effect the increase in the budget on diesel fuel and so on will have in the increased costs for industry itself. That high industrial burden of increases in diesel duties again will add its own quota of difficulties to the competitiveness of our industry later this year.

No sector of industry that I know of from any report I have read, and no meetings I have had with businessmen recently show much confidence of an improvement during this year. The picture is very gloomy indeed with no improvement visible on the immediate horizon and nothing taking place that can give us any grounds for confidence that there will be an about-turn, improvement or revival. All we can see in the immediate future is the continuation of the same deterioration that we have been observing over recent months. We may see the usual seasonal improvement in employment over the summer months. That will evaporate quickly by the autumn and it is anybody's guess as to what the unemployment figure will be next winter. Certainly it will exceed the figure we see here this winter.

Presumably, the budget could have addressed itself to these problems. It did not do so, and the opportunity of sending the message forth to the country that the Government with their mandate running into next year were anxious to face squarely the problems before the country was lost, as it was lost in the previous budget. Our neighbouring country has had what was referred to as a winter of industrial discontent. Looking at the number of difficulties and negotiations at present reaching an impasse in various parts of the economy, one can speak without exaggeration of a spring of industrial discontent in Ireland this current year. We have the present national strike and there are areas known to those who have any interest in these matters and, I am sure, to the Ministers concerned with the economy and so on where similar trouble is in the offing and where one can see further confrontation and further strikes.

There have been cutbacks in local government spending and obviously we are going to see a deterioration in the quality of service being offered by the various local authorities later this year. We are going to see many difficulties arising there and, again, little guidance is given to local authorities on how they are to cope with this situation.

The overall criticism that can be made arising from the budget is the sense of the lack of direction that appears to emanate from this budget. Its greatest weakness was that it attempted to face in many different directions and did not quite succeed in convincing any one of the sectors it sought to please that this package in the budget was meant as a serious package. It went a little part of the road with everyone but not quite far enough and, as some people have said, fell between two stools. The only amendment I would make to that is that it is worse than that.

All of the interest groups are equally discontented with the budget which itself suffered from indecision about what was being sought in it. It was thought it would be an election budget. In a sense, all budgets are election budgets since the House comes into existence as a result of an election. Most commentators would have given it a better welcome if it was seen as an honest attempt to face up to the numerous problems which we are facing. It received some legitimate praise because it sought to solve the problems faced by the under-privileged by increasing social welfare payments. That section is so buffeted in recent years because of inflation that it would take a far greater effort than simply the alms of one budget to improve their lot decisively. But there was an attempt to keep the standard of the incomes of the poorer sections ahead of inflation. I do not know if it is possible to do that.

There have been constant price increases in recent months in items which comprise the major proportion of spending of such groups. One would have thought in their fourth year in office that the Government could have attempted, at least in one of their years in office, to match the record of the previous Government. The previous Government attempted to lower the qualifying age for the old age pension. In what could presumably be the second last year of the present Government, I am disappointed that the qualifying age for the old age pension has not been reduced.

My main criticism is the budget's failure to attempt the very difficult task—I concede it is difficult—of winding down inflation. If we fail in that task, everything else drops with it. If we do not remove the pressures on unions to seek compensation in higher wage claims, we will price our products out of foreign markets and it is only on trading with those markets that we can base any recovery of our economy. Our balance of payments difficulties prevent us continuing the formula of the 1977 manifesto of refuelling on the basis of increasing demand in the home economy.

The greatest tragedy that afflicted this Government was the presence in their midst of a qualified economist. Never before had a Fianna Fáil Cabinet been burdened with such knowledge and qualifications. The advice apparently administered from that source and included in the Manifesto was that it was possible to bring about almost full employment by fuelling domestic demand as though our economy was one of those models spoken of in the comfort and security of university seminars. It was supposed to be a closed economy when, in fact, it is probably one of the most open in western Europe. As was pointed out in 1977 by many economists, to the degree we were fuelling demand in the home economy, we were improving employment prospects in those foreign countries with whom we traded, and the foreign cars and goods which we would import would not add to jobs in the home economy. No one in the present Government would now concede, looking at our balance of payments, which was a direct consequence of that kind of policy in 1977 and 1978, that we could do that.

It will be a slow recovery. Nobody pretends we can have a rapid recovery in job creation, if it is based on the only secure base for increasing jobs which is in industry, trading with the outside world. We can only get an increase there if we are able to compete with foreign market competitors. If our rate of inflation increases our costs to the point where our goods are not competitive in those markets, there will be no expansion in employment. This Government have made many protestations on the principal political aims of the national interest. The principal economic aim, of equal importance, perhaps of more importance, to the political aim of unity, is to maximise the conditions for increasing employment.

In a previous administration, I regarded my role as pre-eminently contributing to that prime national objective. Every action of the Government must be measured by the effect those actions can have on maximising employment. How do we make our industry competitive and so efficient that it will be able to sustain more jobs in the future? If we forget that national economic objective, we commit treason and ignore the reality of the great numbers of young people looking for jobs. Of course, artificially, from one year to another you can suggest by certain figures, by increasing the numbers in the public service, based on external borrowings, that you have increased employment appreciably. It is a mirage to think that the expansion of the public service means that we have a productive base on which jobs can be sustained in the future. The only productive base on which jobs can be sustained is industry, exporting to countries abroad. I do not rule out the question of industry based on export markets. My political beliefs would incline me to the conclusion that we should also explore very fully the possibility of expanding State industrial employment in partnership with private industry and see if that would produce more jobs.

Little progress has been made in convincing the PAYE sector that the Government were anxious to meet their demands to make the taxation system fairer. The budget did not address itself to the problem of inflation. It added to the rate of inflation. Ministers may say it was a half per cent less or a half per cent of one per cent less, but most commentators agree that the budget added three per cent to our rate of inflation. Since the rate of inflation did not loom very large in the minds of the architects of the budget, one wonders what they were basing the revival of the economy on, whether they considered it or what were the factors uppermost in their minds. There was no winding down of unemployment or inflation in the budget.

We look forward with no great eagerness or joy to the fact that by the end of the year we will have about 140,000 people out of work. Unemployment has been sharp in the construction industry. Spokesmen for that industry have pointed to increased difficulties in the future. There has been a very great number of redundancies in the food processing industry and the textile industry is also severely affected. There have been job losses even in the semi-State sector, an area which up to now was regarded as one of the most secure in terms of employment. But the chief casualty of this budget has been the area of industrial relations. Instead of relieving the pressure on the unions to seek higher wage claims to compensate for the increases in the cost of living, the budget has had the effect of intensifying pressure on them.

Ministers who have spoken during the debate have defended the additional indirect taxation by saying that it applies to discretionary items. Regardless of what play there may be on words, the unions regard the consumer price index as the reliable index on which to base wage claims and, despite the efforts of anybody to alter that criteria, that index remains the basic measurement for wage increases. Whatever about increased duty on cigarettes or on alcohol, the increased duty on petrol is not discretionary. Having regard to the state of public transport in many parts of the country, to the location of work in this city and to the fact that many employees must start work at a very early hour, it is essential, obviously, that workers have their own transport. Therefore, there is no question of discretion so far as the price of petrol is concerned. I have referred already to the effects on industrial costs resulting from the increase in the price of diesel oil. We are not far from the day when a gallon of petrol will cost £2. We face further increases in the cost of this commodity this year, either from OPEC or by way of the continued deterioration of the púnt against the dollar.

Considering our predominantly young work force and the predominantly youthful nature of the population, one would have expected something to have been done by way of reducing housing costs. A very high proportion of a person's income is necessary to meet the cost of housing. If the Government had taken some action to reduce the initial cost of house purchase, the effect would have been very beneficial and would have relieved some of the pressure on the unions to seek higher wages for their members. Action on those lines would have played an important part also in improving industrial relations because of the strong pressure that must be applied in wage bargaining as a result of the cost of housing in itself.

The case for the farmers has been put frequently in the House. Many Deputies have referred to the halving of farmers' incomes and to the conditions in which that sector are operating. I understand that part of the reason for our coming out of the previous recession rather well was the buoyant state of agriculture at the time. We were helped then also by reason for our membership of the EEC because the price structures and the financial assistance that emanated from Brussels were favourable to our farmers. Unfortunately, such a situation does not obtain today. I heard with interest within the past day or so the statement of one farm leader that the gains of the previous few years as a result of our membership of the EEC had been wiped out in the past two years. I do not know whether that statement would stand up to scrutiny, but undoubtedly there has been a deterioration in the living standards of farmers in the past two years, and that in itself had an adverse effect on the rest of the community. Our economy was in reasonably good shape in the early part of 1977, though we had not at that point witnessed the carry-through into an increase in employment of the recovery that had taken place. That increase in employment was experienced later in 1977. Everything we did between 1976 and 1977 was designed to exploit the opportunities of the recovery that was evident in the economies around us and to ensure that our economy, which had been through a bad recession and which had suffered very sharp increases in fuel prices, would be in a position to benefit from the recovery.

I am sure there are many who will agree with me when I say that the action we took in 1976 and 1977 contributed in no small measure to the very significant increase in industrial employment in 1977 and 1978 and to the recovery in those years. There are Government Ministers who, having fought the election on the basis of the Fianna Fáil manifesto, would claim that the policies of that document were responsible for the recovery. There are dangers in any Government accepting in toto the advice of any one expert in any one discipline. That danger manifested itself when the new Fianna Fáil Cabinet listened to the economist in their ranks but found that his advice was the incorrect advice. I am sure that the majority of economists would agree that the strategy adopted in the years 1977 and 1978, as outlined in the manifesto, was wrong in that it fuels the economy when the recovery was well under way. The borrowings that were undertaken at that time robbed us of the manoeuvrability that was needed badly later.

The Minister made the point that he was attempting to cut down the rate of borrowing as a proportion of GNP. He made the point that, if we cut back too sharply on our rate of borrowing, the effect on the economy would be disastrous especially at the time of such deep recession. I agree that the reduction had to be gradual, but time is running out in that regard. There are some who say that our creditors abroad are losing their patience with us. None of us can put a final date on when that will happen, but it may be sooner than some of our policy makers seem to think. There is something very seriously wrong with an economy which has a deficit of the magnitude of our deficit. One need not belong to the monetarist school at all to realise that. There is every need to be alarmed at the extent of our foreign indebtedness. What is even more serious is the way this borrowed money is being spent. We have not ensured that in all cases it is being spent on capital infrastructure and, even in terms of the investment there has been in the capital area, this investment has not been of the wisest type possible.

We end this budget debate in the middle of a national stoppage brought about by the fuel supply situation. That situation is having its effect on factories throughout the country. All credit is due to those institutions who are attempting to bring about a resolution of this very serious dispute. The public might be pardoned for thinking that perhaps the centre of interest today in terms of our problems is not here in this Chamber but is elsewhere. To some extent we in this Parliament are on-lookers of the real action that is taking place elsewhere. The country has no clear indication of what is the overall recipe of the Government for economic recovery. They appear to be an administration who are operating between crises in so far as coping with our problems are concerned. It must be said that at times they are coping with some imagination but that overall they are lacking in terms of a sense of direction. In a sense the Government's actions are being dictated by the election, because an election is already underway, though not declared. No date has been given but in fact we have a Government who are almost at this moment electioneering.

It is bad for the country that this electioneering hysteria is taking over, It would be much better to have firm announcements of dates and that the Government should go back to the task of governing since they have a mandate until next year or else they should come clean with the country and declare that an election is to be called. The country cannot much longer afford to stave off real, hard decisions that must be taken. We can no longer pussyfoot with such matters as inflation; we must tackle unemployment. Action on these matters cannot be postponed while this electioneering hysteria takes over. Therefore, we need from the Government more leadership. The leadership I should like to see would be that of deciding to tell the country clearly what the Government's intentions are about the election date.

Obviously, the budget shirked the task of dealing with the major problems of the economy. That is our main criticism of the budget. Valuable time is being lost. We need either a new administration or the present administration returned with a fresh mandate. We must start afresh. This is something I have mentioned before: I believe that all of this Government's mistakes owe their origin to the mistaken assumptions of the manifesto programme. That document had the wrong recipes for the Irish situation and those incorrect recipes were followed to the letter for too long by the present administration until it was too late to switch. Now, late in their administration, they are unclear as to what exactly they should do.

It seems, therefore, that collectively as a Cabinet they should decide whether to go their full term and by doing so take decisive action in dealing with some of the problems before us. Otherwise they should call it a day and seek a fresh mandate. There is, I think, among the electorate a realisation that there are matters seriously wrong with our economy. There is genuine anxiety among parents of young people who are unemployed. They will not be codded by a renewal of promises that cannot be implemented. They want to see real action in regard to unemployment. They realise that artificial expansion of the public service based on foreign borrowing is no lasting answer to the problem of providing secure jobs. There is great insecurity even among those in employment as to whether their jobs will be there this year not to speak of next year. One way to banish that insecurity would be for the Government to start governing at this point or else call it a day.

I think I agree with Deputy O'Leary that the Government should call it a day and get out or else start governing. With all the changes we have had in the Fianna Fáil Party in the past couple of years the people expected that the Government would govern. One of the indications that they would govern this year would be the budget introduced at the end of January but in the few weeks since since then the budget or, since the pattern of 1979 and 1980 appears to be followed this year again, the most recent instalment of the budget has evoked a storm of criticism around the heads of the Minister for Finance and the Taoiseach and the Government party generally. Given the contents of the package the only surprising thing about it is that the Government themselves are surprised that it is criticised. The measures proposed by the Government do little or nothing to further the stated aims of Government policy and the figures on which these measures have been based are now generally considered to be totally unrealistic. That has been pointed out umpteen times in this debate. For the third year running Fianna Fáil are relying on what amounts to cooking the books in order to avoid choosing between unpalatable measures or credibility. Deputy FitzGerald on these benches has been hammering home the failures and damages of the various positions adopted by the Government but in not even one case—and I have read most of the speeches by Ministers, unless the Minister does it here today—have the charges been refuted which Deputy FitzGerald, Deputy D'Arcy, Deputy Ryan and others on this side made. Instead, various Ministers have relied on spurious and unfounded optimism, an optimism totally invisible to those outside the Government party. Some of that optimism from the opposite benches is backed by what I can only describe as scurrilous attacks on the good standing of independent economists who are critical of the budget.

I do not propose to waste time repeating what already has been said on the detailed proposals offered by the Minister for Finance. The reaction of farmers, industrialists, consumers, business people and independent economists who are not open to the charge of being politically biased are far more eloquent testaments to the bankruptcy of what has been put forward as a policy than any criticism of mine could be. It is very difficult to recall a budget that has so succeeded in uniting every section of society in condemning its contents. At the same time it manages to do nothing to secure a measure of control over the growth of Government spending.

I should like to draw the attention of the House to several misrepresentations on which the budget has been based and to expose the total absence not only of a policy but of any understanding of what Government economic policy is about. In two major respects the Taoiseach and the Minister for Finance have sought to conceal the truth about Government finances from Members of the House who are supposed to approve of them. They also sought to conceal them from the people, the unfortunate taxpayers who eventually will have to foot the bill. In the first case they produced figures of Government spending for 1981 which even on the most casual examination can be seen as utterly unbelievable. I refer to the Book of Estimates published before the budget. In the second case both the Taoiseach and the Minister have tried to confuse the House and the media about the methods of financing the Government's capital programme.

In his budget speech the Minister for Finance stated that current spending other than on servicing the national debt was budgeted to rise by only 9 per cent in 1981 while the non-pay elements of this spending would rise by only 3 per cent. The Minister stated:

Never the less, the total of non-capital Estimates for the Supply Services — generally speaking the ordinary day-to-day expenditures on salaries and services by Departments — shows an increase of only 9 per cent in cash terms on what was actually spent in 1980. Non-pay services have been severely pruned.

Frankly, these figures are simply unbelievable. The Minister more or less admitted as much later in his speech. In the passage dealing with public sector pay, he signalled clearly that he regarded the allocation to meet special claims already in the pipeline as being inadequate to meet these claims. He said "I am therefore allocating in the budget a further sum of £80 million to cover any increases in pay and pensions for which provision has not already been made in the Estimates." Again, in what I can only describe as a display of the Government's weakness in this sensitive area, he explicitly threatened and implicitly promised an increase in the tax burden of the private sector as a means of financing further increases in the public sector. He says:

The Government fully appreciate the contribution that public servants are making to national development, but in the present critical situation they would hope that public servants would have regard to the greater degree of security attaching to their employment and be prepared to moderate, or not to press, claims which they otherwise would consider justified. I would earnestly ask all concerned to consider the matter seriously in the national interest. Failure to respond to this appeal will regrettably mean the imposition of further taxation and reduction of services.

That is the Minister for Finance speaking in Dáil Éireann on 28 January 1981. On 27 February 1980, the then Minister for Finance, same Party, same Government, different man again speaking about special increases says:

If, in the event, this provision has to be increased, I am determined that we will not have a recurrence of last year's experience whereby such excess expenditure added to borrowing. I shall, if necessary, introduce supplementary proposals whether by way of increasing revenue or decreasing services, to cover any excess costs.

On Wednesday, 7 February 1979, same Party, same Government, different Minister again, talking about the White Paper on National Development, said:

I earnestly hope that it will succeed. I must make it clear, however, that if it does not the Government will not abdicate their responsibilities. We cannot allow a "free for all" to take place which would damage everyone's prospects but especially those of the weakest and poorest people in our community.

Three Ministers, same Government, same party, one year after the other — all threatening because they have not done their own job as Minister for the Public Service in charge of keeping the lid on public sector pay. If they do not do their job, they are going to vent their ire on the general public by raising taxes even further. We all know that this means absolutely nothing. These are only words. The Ministers, Deputy Colley, Deputy O'Kennedy, Deputy Fitzgerald, utter precisely the same words, the same threats and have the same record of not having done their job and of not fulfilling the threats. This is a sorry trio presiding over the virtual collapse of the Irish economy because they do not have the guts to take the necessary action. This is at a time when, for all sorts of social and democratic reasons, they should have been turning their attention to governing the country in a practical fashion instead of engaging in in-fighting within their own party.

As far as the non-pay elements in the Government's spending are concerned the three per cent ceiling in nominal terms, if we are taking it on a 13 per cent rate of inflation, indicates a 10 per cent cut in real terms. That is completely undermined by the contents of the 1981 Book of Estimates. In the first place, it is hard to accept as serious pre-budget estimates any figures for Government spending introduced by an administration which, in the previous fiscal year, under-estimated its spending requirements by £460 million. They were wrong by that amount last year. Supplementary Estimates for that amount were introduced during 1980 and the increase in actual spending was roughly in line with those Estimates. How could anyone believe the 1981 figures? It is obvious that it is going to be wrong by a larger amount this year, especially when the Minister who introduces these figures has this to say about the Government's performance in the previous year. This is quite funny.

Supplementary Estimates sanctioned last year represent for the most part deliberate and considered departures from budget and went to meet the needs of the emerging economic situation.

Deliberate and considered departures from budget — this was the £460 million by which the Government got their figures wrong for 1980. It is reassuring to know that their failure to hit the target and their over-spending were not incidental. This raises an important question about the budget. We have become accustomed to the strategy of announcing tax changes in instalments so as to avoid serving up all the bad news at once. The classic and possibly the first example of this, was the stealth with which the food subsidies were removed over a New Year's weekend two years ago. This was a budgetary measure at the time and the Government hoped to hide this bad news under the general New Year celebrations. In the last two years one could associate nothing but bad news with this Government and they have become very experienced at releasing bad news at times when they hope it will do least harm to themselves. A favourite time is Friday morning, when the Dáil members have gone home and perhaps the sports fixtures of Satuday morning will distract attention.

Now, however, we are being asked to accept overall budget policy in discreet packages, without even being offered a coherent explanation of the overall strategy, if it exists at all. As estimate after estimate is amended, we are asked to believe that this is part of a thought-out plan. The reality is that when these estimates were being introduced before Christmas in the House — and I am sorry that this point did not occur to me earlier or I would have looked it up — the Minister for Finance said in his budget speech that this was not something that happened by accident, but was a deliberate part of the plan. I would like to have the opportunity of looking up the debates on the Supplementary Estimates in the autumn of last year. I would be interested to know how the Minister claimed at that time that they were introducing Supplementary Estimates which were to be regarded as part of a thought-out plan that had been conceived beforehand and was now being brought to fruition. The reality is that they were introduced, in spite of the high-sounding phrases and the rhetoric of strong Government and no industrial relations problems, during the current Dáil.

Having engineered a coup among the backbenchers in the party to bring him to power, the Taoiseach is now stealing around in fear somebody else is doing the same thing to him. For that reason his judgment and assessment would be that the economy is in serious economic difficulties. Last year it was said a strong Government was needed. Because he was afraid of a coup the Taoiseach had to give way to the pressures from those sources at the end of last year and blow the budget estimates of February 1980 of the then Minister for Finance, Mr. O'Kennedy. This year he introduced this spurious volume which will suffer the same fate, unless there is an election in the meantime and there is a change of Government, because the figures on which it is based are false.

We put forward a Dáil reform policy most of which was put together by Deputy Bruton a few years ago. There is a case for reviewing the question of the desirability of annual budgeting on current and capital accounts. A 12-month time span may be too long for current spending in so far as it is designed to fine tune the economy. Equally, capital budgeting on a one year basis would not be acceptable to private industry, and should be less so to the Government. Budgeting would be better expressed in terms of flows of revenue and expenditure per unit of time rather than in terms of amounts received in an arbitrary time period. This latter practice enables the Government to get away with the kind of sleight of hand displayed in this budget by bringing forward tax payment dates for corporation profits tax.

This is one of the items in the budget which appears to have been thrown in as the Government scrambled around looking for money to put into the revenue side of the budget. The tax payment dates for the corporation tax was put in to give £60 million. Once it is in, it will become part of the Finance Bill which will be passed, much as we oppose it, because the Government have such a majority. One of the greatest weaknesses of this Government is that even with their big majority they are afraid to do the slightest thing that might be considered to be unpopular by one small section of the community. Contained in that Bill will be a measure to bring forward the payment of £60 million into 1981. There will be three tax payments where there would normally be two in the financial year April 1981 to April 1982. This was done by a Minister and sanctioned by a Government who apparently do not have the slightest conception of how many businesses are teetering on the verge of bankruptcy. The only way these people will get that £60 million is by putting themselves further in debt by borrowing from the banks, interfering with their cash flows and bringing in, on top of already almost non-existent profits, a further charge of the interest on that money. If firms go out of business in that financial year, the Minister and the Government will have to take a large share of the blame for the resultant job losses. What the Government are doing is increasing the amount of tax to be paid by businesses by 50 per cent in one year. I am sure every business organisation in the country has been making representations to the Minister in this regard. I appeal to the Minister between now and the introduction of the Finance Bill to drop this crazy charge before he puts another few thousand people on the dole queues.

The criticisms I have made of the existing system do not warrant the complete abandonment of any serious attempt at the formulation of a budgetary policy, either with reference to public finances or to the impact of taxation and expenditure on the economy as a whole. That is precisely what we have seen taking place in 1979 and in 1980 and which I believe will take place in 1981. I will not go back over the ground which I have already covered.

It is clear that the Book of Estimates contains a set of figures designed to add up to a pre-ordained total rather than an honest presentation of the cost of Government. As Deputy O'Leary said, every budget is an election budget. The further we get from the last election date the more hysterical and abandoned the Government become and they throw out the normal disciplines that should apply to a budget. The approach based on a 10 per cent cut in real Government non-pay spending is blatantly justifiable and, indeed, incredible. Why should the taxpaying public be asked to pay more of their hard earned money while civil servants receive salary increases for doing less because of the cuts in those Estimates? The Minister said they will increase by only 3 per cent, which is a cut of 10 per cent in real terms. Consequently, there will be less for public servants to do while the cost of public service pay increases. Clearly these figures the Government are using are unconnected with economic reality.

The Minister for Finance admitted in his speech that he knew well his colleague, the Minister for Posts and Telegraphs, intended raising postal and phone charges during 1981. It is possible, but hardly likely, he had not been informed that the increase would be as much as 20 per cent to 25 per cent. In this book we find that a startling set of figures for Government requirements in postal and phone services run into the first 30 heads of expenditure. The post office service ranges from an increase of 300 per cent for the courts to a reduction of 55 per cent for the Revenue Commissioners. The Gardaí have been allocated a 1.6 per cent increase in postal charges and the Department of the Taoiseach got only 5 per cent. The Office of Public Works got a 39 per cent increase while the Department of Finance are being asked to manage with only an extra 12 per cent increase. It might be argued that the Revenue Commissioners did not know there would be an increase in postal charges but that could hardly be said in respect of the Department of Finance. The Minister for Justice receives 72 per cent and one might wonder why he would make more phone calls than the Minister for Finance since they live approximately the same distance from Dublin. The Stationery Office lose 40 per cent in spite of the fact that telephone charges are going up by over 20 per cent.

There are those of us who might reasonably consider that the use of letters and telephones is an index of activity, if not productivity, in Government Departments and agencies of State. How are we expected to interpret these figures? If we believed them we could hope to see a dramatic improvement in the work of the courts and a fall in the crime rate and, blessed news, less attention from the Revenue Commissioners and the inspector of taxes since their telephone bill is to go down by 55 per cent.

During his budget speech the Minister took time off from an account of the Government's mishandling of the economy to deliver a homily on tax evasion and to draw attention to the increased number of staff in the Revenue Commissioners. I looked in vain for a suggestion that we were to be spared from their attention in 1981 to such a degree that postal and telephone charges would be lower by 55 per cent. The conclusion is that all these figures are hogwash.

Under the vote for Secondary Education there is provision for an increase of £100,000 from £13.6 million to £13.7 million in supplemental grants to secondary schools in lieu of tuition fees. Since school costs would rise parallel with inflation we must come to the conclusion either that school managements will have to dip into their own resources or parents will be required to make "voluntary" contributions. Many people are aware that school managements are strapped for funds already. Under the Vote for the Department of Agriculture there has been a 50 per cent cut in aid to agricultural schools and a 60 per cent cut in scholarships and training. It must be remembered that this is the Department which looks after our principal industry.

The Book of Estimates is riddled with such anomalies and there is not a single major heading under which all the items included would pass a credibility test. If one were credulous enough to accept the Estimates the unavoidable conclusion would be that the taxpayer is to be asked to pay more in order to receive less, while the public service will be doing less, through no fault of their own, because the money will not be provided to continue services at the same level as in 1980. Fortunately we do not live in a world where such a scenario is credible. Consequently I accept the general conclusion offered by all informed and unbiased commentators that the current expenditure figures contained in the budget are deceptive and based on a conscious attempt to mislead this House and the taxpaying public into the belief that the Government have the current budget deficit under control.

Let us start from the premise that the level of public sector output remains constant and that all the alleged economies are enforced. In this situation the non-pay element of public service spending would rise by at least 13 per cent in 1981 and possibly by as much as 15 per cent. Total public expenditure would be higher by between £150 million and £250 million and the current budget deficit in that case would be higher by between £100 million and £180 million, allowing for a tax clawback of about 35 per cent. The figure of £550 million reached by the Minister was based not only on the unreliable expenditure estimates already described but on absurd figures for unemployment costs. Unemployment is already up by 25 per cent on last year and it must be remembered that from the point of view of the Exchequer the most recent entrants to the unemployment ranks are the most expensive because the amount they receive declines the longer they are unemployed, the pre-budget estimate of the cost of unemployment assistance in 1981 was up by only 3 per cent on the 1980 figures, including supplementaries. The Minister for Finance and the Minister for Social Welfare both gave the impression that there were in this budget very substantial benefits to the unemployed. The reality is totally different.

I hear a huge number of complaints that the Government cannot be trusted, that what they say and what it turns out to be is always different. That is certainly true about the social welfare budget and the impression given in the headlines after the budget that there would be a 25 per cent increase in social welfare. The Minister for Finance referred to it in his budget speech and the Minister for Social Welfare in his budget contribution did not explain that this figure was not correct and that it did not apply to all the recipients of social welfare. This only became apparent on the publication of the Social Welfare Bill in the last four or five days. We will have a lot to say about that bill when it comes before the House next week. These are only some of the falsifications on which the budget is based. There can be no doubt that the true figure for the budget deficit in 1981 will not be £515 million but will be in the region of £700 million. That is £185 million over what the Minister is forecasting.

On page 15 of this booklet Budget 1981, the Minister says that, as Minister for Finance, he will have the support of his colleagues in special measures to ensure that the allocation for these services will not be exceeded in 1981. The Minister will have precisely the same support as Deputy O'Kennedy had and as Deputy Colley had — that was none, because they were all too busy plotting in the back benches as to how to get rid of one another. If the Minister gets that support he will be luckier than his two predecessors. Deputy O'Kennedy found out, not to his cost, and Deputy Colley found out, to his cost, that when it came to looking after their own skins some of their colleagues were more concerned with doing that than with keeping the Government's finances in order.

I will refer now to the second area where the Government have attempted to hide behind an inordinate deception in relation to public spending, the Investment Plan, 1981. This is an extraordinary document. It is not a plan in any sense of the word. It introduces a novel although unexplained idea of private sector financing of Government borrowing and it is the first time that any Government have introduced a combination of do-it-your-self and suggestion box without a statement of their economic intentions. A plan is a consistent set of objectives or policy targets together with a feasible set of policy instruments designed to achieve them and a clear and qualified co-ordination of targets and instruments. What the investment plan contains is a set of pious aspirations and a list of pre-publication figures from the capital budget programme, which at that stage had not been published. It is, in other words, a statement of what money the Government proposes to spend and in what areas.

Apart from a vague reference, repeated in the Financial Statement, to the need to concentrate on productive investment, the document contained no analysis worth talking about of the country's economic position. There has been no attempt to tailor means to ends in any consistent fashion. In so far as any target is specifically referred to, it is the vague concept of increased growth and a rise in employment. We look in vain for references to capital output ratios, rates of interest, quantified improvements in labour and total factor productivity. Where employment is concerned we are assured that 10,000 new jobs will materialise. We are not told how they will be financed, when they will come and where they will be. We are not enlightened as to how this increase in Government capital spending in 1981 will reverse the trend in unemployment which a similar increase failed to reverse during 1980.

As part of this dubious exercise the idea of private investment in the State's capital programme is introduced. I have no doubt that the application of competitive efficient standards to public sector programmes is highly desirable and I would not object if the idea was well thought out and presented properly. The suggestion that some untapped pool of private funds amounting to £200 million is available for investment is simply a fairy tale. It is another example of the Government scratching around everywhere, taking fictitious figures to present as near as possible a balanced budget. The word "balanced" is hardly the right word in view of the projected £700 million deficit. In the investment plan we are told that discussions have taken place and in the budget statement we were told that preliminary soundings were encouraging.

However, the Government have never outlined the source of these funds. Where will they come from? Will they come from profits from industry and services, insurance companies, private pension funds, the banks, or an increased flow of personal savings? We are not told, but we know — and anyone can check this from the Stock Exchange data — that if the top 50 listed companies here were to suspend for this year the payment of all dividends, were to undertake no investment out of earnings and were to commit no funds to reserves, the total funds available from these firms would be nowhere like the £200 million mentioned in this investment plan. It is only a method of appearing not to be borrowing either at home or abroad and of appearing to attempt to keep down the level of borrowing which will have to be undertaken this year.

We also know that, if pension funds are to re-allocate money of this order to the yet unspecified profitability projects in the public sector, they will be largely at the expense of direct lending to the Government so the Government's sale of gilts would fall by nearly if not as much as the insurance companies took up of the new investment opportunities. If the Government succeeded in raising £200 million in this manner, which is extremely unlikely, they would be obliged to borrow more or less the same amount from other sources at home or abroad to make up for the drop in the sale of gilts. Since the Government are already setting up all the available funds from the non-banking public this leaves only monetary financing by borrowing more from overseas or by increasing the money stock by borrowing from the banking system at home. This implies that the £200 million private investment figure is simply a crude subterfuge to disguise an increase in the Exchequer borrowing requirement. Far from Exchequer borrowing falling from 14½ per cent to 13 per cent of GNP, this year it will rise by at least 15 per cent. Everybody can see through this subterfuge.

The Government will hardly admit to that, although everybody else understands what is happening. The public sector borrowing requirement will be over 19 per cent. If we add the deliberate underestimate in the current deficit, which I referred to, the Exchequer borrowing requirement will be over 16 per cent and the public sector borrowing requirement could well be as high as 21 per cent of GNP. These figures were quite obvious to the Government when they sat down to their private discussions before Christmas. They devised this means of taking £200 million out of the public capital programme and devised the other means of fiddling the Book of Estimates to take £180 million out of the current side of it.

What has the Minister to say about all this? He offered no substantiation for his claim that he can raise £200 million from the private sector, despite statements of outright disbelief in the Dáil and in the financial press. On the level of the expected borrowing requirement, in his budget speech the Minister said:

On the general issue, borrowing may be high but there is no question of Government complacency about it. Exchequer borrowing will, as a result of this budget, be reduced from last year's figure of 14½ per cent of GNP to 13 per cent this year. This represents substantial progress.

The figure of 13 per cent is clearly wrong, but it can be said that the Government are not complacent about the Exchequer borrowing requirement when we see how willing they are to go to unprecedented lengths to disguise the truth from the House and from the public. In this they have failed.

I shall now turn from the internal inadequacies of the budget to look at its implications in terms of its general effect on the economy and what it tells us of the Government's ability to regulate economic affairs in the common interest. The structure of the table of contents of the Minister's speech shows that the Government recognise clearly that budgetary policy is only one part, although an important part, of overall economic policy. The other two major components which are interdependent on the budget are monetary policy and incomes policy. If the contents of the Minister's speech in any way matched up to the headings of the table of contents we could feel confident that we had a Minister for Finance who could command our respect. Unfortunately, when we move from the Minister's attempts to disguise the mess in which Government finances are floundering and consider his views on economic policies, it is impossible to avoid a profound feeling of pessimism concerning the ability of the Government to handle the problem facing them.

The Minister's analysis of the problem starting with a rather bland and rambling discourse on the world economy and Ireland's place in it, coupled with unacceptable and contentious clichés about economic life in general, was pleasantly superficial and the reading matter could certainly be recommended to anyone with difficulty getting to sleep. Apart from such gripping statements as "active support for investment remains the centre of Government strategy" we are not any surer at the end of the day what the Government propose to do.

Then we are treated to the thoughts of the Minister on the economy in which he engages in some highly dangerous speculation about the problems which have befallen himself and the Government. Having made misleading use of statistics on exports and employment, he reassures us by announcing that the Government deplore the growth in unemployment which has been forced on us. I presume this is a reference back to the external factors which have interfered with our balance of payments, increased unemployment, inflation and so on. Naturally these things would not have been forced on us by an irresponsible manifesto, by the gutless government they engaged in over the last three years, by their own internal wrangling or by a complete lack of confidence by every section of the community in their performance. We are led to believe it was visited on them from abroad — and for that we are meant to fill in "the Arabs", who are being blamed for everything.

We are told that the rise in oil prices and imported energy is responsible for all our problems. How responsible are these external factors, which the Minister says were forced on us, for our problems at present? Deputies Bruton and Kelly put down a question last week to the Minister for Energy asking him the percentage of our gross national product which was expended on imported energy in each year since 1973 and the likely percentage for 1981. They got an interesting reply. This is a fairly crude measurement and other people will produce other measurements to know what the effects of the oil crisis were on our economy over the last ten years and how much of the current depression was due to the huge import bill we have to meet. If I read what Ministers had to say about the budget I would be willing to bet that everyone of them referred to the huge increase in the cost of imported oil during the year and the fact that this was one of the things forced on us. Between 1973 and 1974 the cost of imported energy, expressed as a percentage of GNP, rose by 285 per cent. These are the Government's own figures and were given by Deputy Colley. Between 1974 and 1981 the cost of imported energy, expressed as a percentage of GNP, rose by 49 per cent. This is what has the Government reeling in their corner unable to cope with the balance of payments, taxation, unemployment ——

These are other external factors at work.

We had to cope with an increase in our energy bill of 285 per cent in one year whereas the Government since then have only had to cope with an increase in energy prices of 50 per cent. Still they whine and say it is somebody else's fault. It is never their own mismanagement or incompetence. If there is the faintest cause for optimism on the economic front it is held to be due to the wisdom of Fianna Fáil, but when things go wrong they are "forced on us". Having got all this off of his chest, the Minister went on to talk about economic strategy.

"Strategy" is a great word. One can see them all in their Rommel leather overcoats.

Where did the Deputy come from?

Deputy Kelly should keep away from strategy for a few minutes. Deputy Barry is in possession and he should not be interrupted by his right hand man.

The Deputy is being disorderly.

I do not blame Deputy Kelly for being angry when he hears me quoting the Minister for Finance saying that the growth in unemployment was forced on us. Did anyone ever hear such nonsense? The growth in unemployment was brought about by the Government's incompetence and by a chain of events starting with the election manifesto produced in 1977. That is the source of the problems of the Government and the country. Their silence gives consent.

The Deputy has very little to say.

The Minister should not be invited to interrupt.

Having got that off his chest, the Minister moved on to consider the medium-term economic strategy. His analysis was so incisive and perceptive and his proposals were so precise that he was able to dispose of the whole matter in half a page. This is another good quotation. He said there is no defensible alternative to a strategy of growth across the entire economy. Bravo.

Another darling phrase.

Those words would not leap lightly to your lips.

He has words at will.

"A strategy of growth across the entire economy". There is a call to arms, a rallying cry for a nation. Alas, that is not a strategy. It is not a goal. We have had nothing from this Government over three-and-a-half years. I should not blame the Minister. He has been in his job for two months only. He was a member of a Government for three-and-a-half years who did not take financial responsibility and who accepted proposals and strategies which have given us the worst rate of inflation——

As bad as in 1975.

Deputy Moore, the Minister of State, made a pathetic pretence that it was not their fault, but they gave us the worst rate of inflation in Europe and the highest level of unemployment. I hope this year the people will vote them into the longest period in Opposition of any political party in Europe.

Listening to the contributions here this afternoon and to many of the earlier ones I felt that, if sitting on that side of the House I were as weak in my criticisms of a budget and if I were as confused about my quotations or misquotations, I would be paying the greatest tribute to the Minister of the day for a budget which obviously even the Opposition found difficult to criticise.

We cannot understand it.

That would be my summing up of the speeches I heard this afternoon. The theme of the Opposition's contribution to this debate was set on the opening day by the leaders of the two Opposition parties. At greater or lesser length it has been continued and repeated. The approach has been the usual divided one. It has not been constructive. I want to make quite a number of points during the course of my reply, but I want to say first that this is the same type of contradictory theme we have heard in the past, claiming that the Government have not provided adequately for certain sections of the community, such as the PAYE taxpayers who were mentioned earlier this afternoon, the farmers and the business community. At the same time, they claim that the level of Government borrowing is too high.

It is time for the Opposition to say clearly and honestly what their intentions are. They are trying to hide behind different arguments and to appear to be all things to all men. If they say our borrowing is too high, do they want it cut to such an extent as will damage our employment massively in the short-term? Are they criticising us for controlling current public expenditure? When the circus hat went on, they began to talk about cuts in postal services here and telephones there.

Deputies will have ample opportunity to discuss the details of all the Estimates. Questions were put down to various Ministers by Deputy Barry, Deputy Bruton and others. Those questions were answered honestly and constructively. In any set of comprehensive and wide-ranging figures you can take one out of context.

On a point of order, the Minister's reference to questions which were put down by Deputies on this side of the House in order to extract supplementary information about his budget statement encourages me to invite him to make sure that, in the course of his reply, he deals with matters which I attempted to raise by the same method and which the Ceann Comhairle ruled out of order on the grounds that they pre-empted the budget debate.

The Deputy is not making a point of order.

In particular I want the Minister to explain what evidence he has for the supposed contribution from the private sector of £200 million.

The Chair has told Deputy Kelly that is not a point of order.

The Chair has made it a point of order.

It is not a point of order and Deputy Kelly cannot make it a point of order.

The Chair has made it a point of order because I must now follow this debate, and every line of it, to see whether it answers the questions which I attempted to raise and which the Ceann Comhairle ruled out of order on the grounds that it would pre-empt this debate.

The Minister is in possession. He has an hour-and-a-half to reply to the debate. Deputy Kelly had his full hour and he should not interrupt the Minister in this fashion. The Minister to continue without interruption.

Ample opportunity will be given to Deputies, as was given last year, to discuss the various Estimates in detail. When those debates take place, my colleagues will be able to explain in detail all the points raised by Deputies. I gave the House that assurance on budget day and I repeat it now. Deputy Kelly's outburst is a further indication of the confusion and the lack of knowledge of the situation which exist across the floor of the House. It is a further indication of a not-wanting-to-know attitude. The first duty of the Opposition in a debate on a budget is to read the budget speech and the background papers to the budget. It became very clear to me this afternoon that that has not been done on this occasion.

Since budget day, six weeks ago, I have been very satisfied with the reaction to the budget and to the general budget strategy, a strategy of balanced planning and sound judgment. Among others, the Construction Industry Federation, for example, welcomed the budget, and have said that the substantially increased capital allocation should give the construction industry a badly needed boost. The federation rightly feel that this will help employment and that the entire community will benefit as a consequence.

There is general recognition that the Government have done an excellent job in balancing a vigorous programme of investment with a reduction in borrowing for current purposes. In the face of a continuing recession and high unemployment it was essential that priority should be given to the generation of employment opportunities. The investment plan will achieve this along with laying the foundations for a more rapid development of the economy when conditions improve. Prudence demanded that borrowing for day-to-day purposes should be reduced. Borrowing of this kind can only be justified as a short-term expedient. If continued indefinitely it becomes a burden and disrupts efforts to get the economy moving rapidly.

I have been very encouraged by the response to the social welfare provisions in the budget. These provisions are generous and provide for a real improvement in living standards for the less well-off at a time when we are facing difficult economic and financial problems.

It is not possible to answer all the points raised in the debate so far, but I would like to comment on the overall economic strategy behind my budget.

A realistic assessment of our present economic position is essential to any effective plan of action, and that is how we have approached the matter in this budget. The Opposition believe that we are in an economic crisis, this at a time when economic growth continues, jobs are being created, new building works are to be seen throughout the country, business in our shopping areas is lively. Talk of an economic crisis is not only unfounded, but harmful for, if taken seriously, it could cause severe economic damage through its adverse impact on the confidence of potential investors.

Our partners in the EEC are also experiencing a period of economic difficulty but the Opposition are not suggesting that there is a crisis in the Community. It should be remembered that in a number of other more developed member states the rise in unemployment has been significantly faster than here. Unemployment here would have reached far greater proportions, in what is acknowledged internationally to be a serious recession, but for the energetic and constructive economic policies of this Government.

This alone shows how weak and without foundation is the Opposition's statement that we have no coherent economic policy. Various Deputies have claimed that the country is without leadership or direction in the economic area. I wonder whether the Deputies studied my budget speech, and the economic documents issued at that time. If they had taken the time to do so, they would have found that our policy approach is set out quite clearly. The Government's approach is to provide a major increase in productive capital expenditure.

Where will the funds come from?

The Minister, without interruption.

We just want an explanation of where the funds will be got.

After he had fumbled through his papers for some time during his disjointed contribution, Deputy Barry asked what the plan is. It is the biggest ever investment by an Irish Government in productive development. First of all, in industrial promotion and industrial job creation areas, a substantial figure of about £334 million, to necessary development of infrastructure. My main criticism of the previous Government is that they did not look at this during the recession to which they have been referring — the development of roads, energy, telecommunications.

To release the resources for this and to bring the public finances more into balance, we have placed a tight limit on current public expenditure. But while respecting that limit, we have also made generous provision for social welfare beneficiaries. If this approach is to have its optimum impact on the economy, and on employment in particular, it must be accompanied by moderation in income developments.

Doubts have been raised by certain Deputies regarding the reference to employment in the Economic Background to the Budget, 1981, referring to forecasts contained in the latest ESRI Quarterly Economic Commentary. Let us, first of all, be clear as to the exact wording of the official document. Paragraph 4 reads:

Despite the deepening of the recession, the 1979 level of employment was maintained during 1980.

Paragraph 19 reads:

It is estimated that on average during 1980 there was little or no change in the 1979 level of employment, an increase in services employment being offset by a decline in agricultural and industrial employment.

I reject any suggestion that these statements are incorrect. The latest official estimates for total employment published by the Central Statistics Office show that in the year to April 1980 total non-agricultural employment increased by 21,000, of which 14,000 was accounted for by the rise in services employment. It is completely at variance with the trend of the last three years to suggest, as some Deputies did, that services employment actually declined during 1980. Services employment increased by 52,000 in the three-year period to April 1980. It is reasonable to assume that it continued to increase during 1980.

It is now clear that the labour force in 1980 increased at a rate significantly higher than the estimated range of 5,000 to 10,000 as contained in the second national understanding. Subsequent to ratification of the understanding, the CSO issued revised estimates of the labour force which showed that in the year to April 1980 it increased at a rate of 18,000 and at an average annual rate of 23,000 for the two previous years. The Central Statistics Office are not yet in a position to provide an estimate of the labour force increase for end year 1980 but again there is no reason to suggest that any sharp change in the trend of increase took place over the months from April to December. I am, therefore, confident that when the Central Statistics Office produce labour force figures for later periods they will support my statement regarding the employment performance during 1980. The 1981 census of population will give us a comprehensive assessment of the trend in unemployment. This will be the first time in ten years that such a comprehensive census will have been carried out. I do not have to spell out to the House the importance of a census from the point of view of planning. If the Coalition Government during their term of office committed any sin against the community, one of their greatest sins was the fact that in 1976 they postponed the census just to save a very small sum of money.

The Government are concerned with the job loss situation which is counteracting our excellent job creation record to date. For example, the average monthly rate of increase in the adjusted live register between April and October of about 4,000 decreased to a monthly average of 2,000 for November and December and to 300 for January. This encouraging trend since November suggests that the level of job losses is decreasing. The fall in notified redundancies in the final quarter of the year supports that conclusion.

References to the increase in the external reserves last year, suggesting that we are forced to borrow abroad in order to maintain our external reserves, are totally incorrect. I would point out that the increase in our external reserves in 1980 resulted from significant inflows of private capital as well as from public sector borrowing. I would also draw attention to the fact that over £200 million of the Government's external borrowing in 1980 was by way of borrowing from the European Investment Bank and the European Communities. The borrowing was essential to ensure the full take-up of the capitalised interest subsidies negotiated in the context of our membership. The policies outlined in the budget are designed to improve our external balance of payments over a period of years. I referred to that earlier.

With regard to a country's external reserve cover, it should be noted that there are no generally accepted conventions for deciding on what the minimum external reserves cover for a country should be. Conditions will vary from one country to another depending on the nature and composition of external trade. Our official external reserves fell during the course of 1979, as the effects of oil price increases were felt in a widening balance of payments deficit, from 4.1 months cover at the beginning to about 2.4 months at the end of the year. However, this reduced later level was still broadly similar to that of many other countries. By the end of 1980 the reserves showed an increase to three months cover, which is quite favourable compared with the normal international practice.

In the course of the debate, Deputy O'Toole made the remark that a Government spokesman's statement in relation to the December trade figures was a blatant cover up. How untrue, how incorrect and how consistent with the type of comment from the benches of Fine Gael, led by their leader. That statement had referred to the fact that a significant part of the increase in the December import figure reflected substantial increases of investment goods and materials for further processing which were encouraging signs of an improvement in current and future economic activity.

The Deputy, in support of his argument, suggested that certain imports be excluded from the investment goods category, although these items clearly belong to that category. For example, items such as office equipment which includes computers, data processing equipment and so on, which the Deputy suggested should be excluded, are investment goods which support economic activity. The Deputy did not have regard to the fact that a large part of the increase in oil imports was destined for use in industry. He also omitted some £80 million increase in imports of materials for further processing, excluding oil. These imports clearly relate to production and should not be excluded. In short, out of the increase of £209 million in imports in December, compared with December 1979, about £147 million or approximately 70 per cent is attributable to investment goods or materials for further production. Therefore, I completely reject the Deputy's allegations that the statement made by the Government spokesman was in any sense a cover up.

Likewise, let me refute the point made by Deputy Harte which was to the effect that there is no evidence to suggest that the change in our currency vis-à-vis sterling has helped us to win a larger share in the British or Northern Ireland markets. It is difficult to quantify the extent to which the appreciation of sterling has helped to improve our export performance in the UK market, especially as the depressed state of the UK market itself would have had a significant offsetting effect.

Despite the depressed state of the UK market, Irish manufactured exports to the UK increased by 13 per cent in value in 1980 compared with an increase of approximately 8 per cent in the value of total UK manufactured imports. This must surely lend support to the argument that the appreciation of sterling did have a positive effect on Irish export performance in the UK.

After an inflation rate of 18 per cent?

I wish to deal now with the EMS because some of the Opposition are misrepresenting the position. Some of them referred in a critical way to the position of the IR£ in the European Monetary System. Their comments demonstrate a signal misunderstanding of the true position of the IR£ in the EMS, just as many of their comments indicate a lack of knowledge of the budget and its associated documents. It is true that sterling, which is not a participant in the EMS exchange rate mechanism, has appreciated very considerably against the IR£ during this period. However, what the Deputies do not wish to acknowledge is that sterling has appreciated to the same extent against the currencies of our EMS partner countries.

Deputy Harte believes that the EMS has gone wrong and lauds "Britain's successful policy of keeping sterling high". I wonder does the Deputy really believe that Irish industry or Irish agriculture would somehow be better off if the IR£ were linked to sterling and standing at an appreciation of almost 30 per cent against the German mark and other EMS currencies? The effective depreciation of our pound has in fact benefited our exporters, at a time when their profit margins have been hit by recession, and should also give a boost to tourism. Sterling's appreciation has, of course, contributed to inflationary pressures in this country and this is certainly a cause of concern to the Government. However, this in no way makes the argument, that Deputy Harte seemed to be making, that the IR£ should be linked to sterling, to a highly-valued currency. I believe, far from having gone wrong, as Deputy Harte suggested, the EMS has made a major contribution to the exchange rates stability of the participating currencies and has shielded them from the great fluctuations which have affected other currencies. I believe we can be proud of the way that our currency has maintained its position within that EMS band.

A number of Deputies put forward the argument that the level of Government borrowing is not being reduced this year. Deputy Kelly, the strategist of a few moments ago, who has now disappeared from the Chamber having caused his usual disturbance, suggested that the 13 per cent borrowing projected for 1981 should be compared with the 1980 budget estimate rather than with the outturn for that year. I do not see any sense in this. Borrowing 13 per cent of GNP in 1981 is a reduction from 14½ per cent in 1980 no matter what way you look at it.

Deputy Keating accused the Government of hoodwinking the public by implying that the current deficit is being reduced. Along with his leader, he based this accusation on partial calculations, again a misrepresentation of figures, of the full year effects of the 1981 budget. But the 1981 budget figures deal only with the present calendar year, as is the case with all budgets. The current budget deficit is projected to fall from 6½ per cent of GNP in 1980 to 5¼ per cent this year, again a clear reduction and in no way designed to hoodwink the public.

When preparing the 1982 budget, this Government will take all factors into account and will prepare the budget in such a way as to continue the policy of reducing the current deficit, a policy to which, I might point out to Deputy Boland, the Government are firmly committed.

Deputy FitzGerald referred to the Taoiseach's speech in Ennis in August last regarding the 1980 budget targets. He said the Taoiseach's statement was that those targets were being adhered to which was generally correct at that time. The Government subsequently decided to allow additional expenditure in order to support economic activity, a large part of the additional expenditure being directed to the Public Capital Programme.

I heard a Deputy in the House this evening talk about economists, their comments and their criticism of the budget and he said he would leave it to those independent people and allow their points of view to be accepted. Let me put the other points to him. On a certain television programme I heard an economic reporter say very significantly that the budget was a continuation of the policy being carried on by the Government, particularly in the latter half of last year, recognising that there was a need to generate economic activity. This budget continues to do that.

Can I have the reference of who said that?

It was on the budget night on a television programme, I will give the Deputy the name privately if he wishes it. Deputy FitzGerald also claimed that the 1980 budget left taxpayers with incomes of less than £10,000 worse off. This claim is wrong. That man seems to bat out any figure that comes to mind and comment on it. This is not correct at all because it is based on incorrect measures of the cost of living effect of the budget and on the impact of the indirect tax changes on lower income households. In fact, the 1980 budget gave substantial income tax gains of greater or lesser magnitude to virtually all groups.

The Opposition also complain that the claims of the PAYE sector to greater equity have been swept aside with contempt. I would like to make a few points on this. I am sure in no area is the dishonesty — one could almost call it deceit — of the Opposition so evident. I know the PAYE sector are well aware of how badly they were treated under the Coalition Government and the significant improvements which have been made since this Government came into office. In fact the cost of income tax reliefs provided in the years 1978 to 1981 inclusive amounted to about £500 million. As I said in my budget speech, I would have liked to do more this year but there were limits to which one could go.

It is accepted that inflation must be an important factor in determining taxation policy. This has been acknowledged in recent budgets and in taxation legislation. However it is not widely recognised that the income tax improvements made in the past years have provided greater relief than indexation in the corresponding period would have achieved. Indexation would have cost in that period in the region of £325 million, compared with the £500 million of reliefs actually given.

This is a significant gain in real terms to the general body of taxpayers. The point can also be illustrated by a comparison of the basic personal allowances available to PAYE taxpayers in 1977-78 and 1981-82. The allowances for a single person increased from £665 in 1977-78 to £1,715 in 1981-82, an increase of almost 158 per cent. For married couples the allowances are £1,100 and £2,830 respectively, representing an increase of over 157 per cent. In contrast the increase in the consumer price index in the four years to mid-November 1980 amounted to 64 per cent. That speaks of a Government commitment.

The leader of Fine Gael again attempted to pair off the indirect tax increases in the budget with the income tax concessions which I announced. It is a further example of the pitfalls of partial assessment of a budget which has to be seen in terms of its overall balance. The Deputy's comparison has no room for the very generous social welfare increases which I announced nor for the thrust towards restoring balance to the current finances in order to allow for a major programme of investment which will make available 10,000 extra jobs. That does not take account of the industrial promotion and creation I referred to earlier when we were talking about several times the number of jobs.

I am satisfied that the overall balance of the budget was correct and that the indirect tax and other revenue changes I announced will not have the harmful effects on industrial peace which some Deputies suggested.

Much attention has focused on the possible effects of indirect tax increases on the national understanding. The agreement on pay policy provides for a meeting of the Employer-Labour Conference to discuss the position if the consumer price index rises by more than 10 per cent in the period from mid-May last to mid-February 1981. These discussions would consider an adjustment to the amount of the second phase, having regard to economic circumstances but without imposing an obligation on employers to negotiate a particular level of increase. I would reiterate what I said in my budget speech that the terms of the agreement are both generous and high by international standards. Consequently, I would hope that in any discussions the social partners would bear this in mind and also recognise the self-defeating nature of even higher pay increases.

The claim has again been made that the price of drink has passed the point of diminishing returns and that the projected revenue will not materialise. The reality is of course that this year's increases on drink did little more than maintain the real level of the duties concerned and that present duties are not exceptional by reference to previous levels. That being the case, I have no reason to be apprehensive about my projections of revenue in this connection.

A number of Deputies raised the issue of our decision to bring forward by three months the date of payment of the second instalment of corporation tax. This was raised again this evening by the Deputies opposite. As I indicated in my budget speech, the background to this decision was the exceptionally generous payment arrangements for companies compared to those applying to individual taxpayers. Does the Deputy not appreciate that the PAYE taxpayer pays tax before the wages reach his or her hand? There was a long recognised case on grounds of equity for bringing the treatment of companies more into line with that of individuals, particularly those carrying on a trade or a business of the same kind as companies, the small concerns, but with simply a different legal form.

I should emphasise that, as with the acceleration of payment dates for individuals in recent years, the change in companies' payment dates does not alter either the amount of tax payable or the rate of tax. What is involved is merely the bringing forward, to a modest extent I might add, of the date for payment of half the tax due. Those companies which by reason of export sales relief or other allowances and reliefs have a nil or very small tax bill will not be affected at all or only to a minimal extent. Many companies in the manufacturing sector, particularly those established in more recent years, are likely to be in this position.

Other companies will require to make some changes in planning their liquidity, cash-flow and borrowings. The effect for most companies however will be a bringing-forward of the payment date from early 1982 to late 1981. I am confident that this proposal will not impose any undue strain on company liquidity in 1981 and is fully justified in terms of achieving greater equity in the tax system.

I am glad to see that Deputy FitzGerald, the leader of Fine Gael, agrees in principle with the proposal to provide an incentive for the construction of moderate-cost rented accommodation of which there is a serious shortage particularly in our major towns and cities. While there was criticism of the extent of the incentive proposed a substantial allowance was called for in order to provide the necessary boost to meet this pressing need. That is why we propose a rate of allowance of 100 per cent which can be offset against rental income generally rather than rental income from qualifying properties alone. At the same time the fact that the allowance will be offset against rental income only will ensure that it directly benefits expenditure on construction activity and the legislative provisions for the allowance will of course be drafted in such a way as to minimise the scope for exploitation of the allowance for avoidance or evasion purposes. I feel, therefore, that the new allowance represents a balanced incentive providing an inducement to greater private sector investment at reasonable cost to the State and fulfilling a two-fold need.

Opposition Deputies suggested that the extention of the 50 per cent initial allowance to lessors leasing industrial buildings to State-sponsored industrial promotion agencies for sub-leasing to industrialists goes beyond what is necessary. I should like to explain to the House why a party such as ours, perhaps with a greater national interest or a wider interest where the nation is concerned than any of the parties opposite, did this.

That is the kind of arrogance we could do without.

This proposal places lessors of industrial buildings to the IDA on a par from a tax point of view with lessors who lease direct to the industrialist. Experience has indicated, however, that such direct leasing is inhibited from taking place outside of Dublin and Cork because, due to the absence of an active market in industrial property, such investment tends to be unattractive to the private investor. This proposal is therefore necessary in order to facilitate private sector investment in factory provision in these areas of the country.

I am fully aware of the concern felt regarding the taxation contribution of the major financial institutions, particularly as to whether their contribution can be regarded as fair and equitable compared to that made by individuals under income tax. The matter is however a complex one involving the question of industrial financing and the attraction of international investment to this country. These circumstances require that a detailed and objective examination be given to the matter by the Commission on Taxation before any changes can be proposed. It is for this reason that, as I indicated in my budget speech, I do not propose any changes this year.

Earlier I referred briefly to the allegations made by several Opposition Deputies and the leader of Fine Gael. I drew attention to the fact that Deputies this afternoon followed that line by wearing a circus hat for a while. The leader of Fine Gael spoke about the absurdities of the Book of Estimates, such as Departments stopping posting letters or making phone calls. Some of those allegations have been dealt with in detail by Deputy Seán Calleary, Minister of State at the Department of the Public Service. Deputies will also have an opportunity of referring to these matters in the course of the debate on the various Estimates.

By way of general comment on the level of expenditure projected for 1981, I should like to say that — I made it clear in my budget speech — in line with the Government's determination to curtail the level of the current budget deficit, the strong upward trend in current spending, which has been evident for more than a decade, must be halted. This necessitated a very severe pruning of the departmental Estimates. Given the committed nature of the pay and pension elements of these Estimates, the non-pay services had to bear the brunt of this pruning. Nonetheless, I was able to provide in the budget for an increase of almost 14 per cent on these non-pay services. With careful management——

It will have to be careful after the recklessness of the last three years.

——I am satisfied that this level of increase will be adequate to meet the cost of these services in 1981 without any serious disruptions.

The claim was made that the financial arrangements inherent in the Government's privatisation programme will be more costly than conventional sources of Exchequer borrowing. I want to assure the Deputies who made that suggestion that a prime consideration to be applied to any privatisation proposal is value for money. We will negotiate the best possible terms appropriate to the asset for which finance is arranged. We are aiming at an outcome that will benefit the taxpayer and, at the same time, will be a worthwhile investment opportunity.

The allegation has been made that the investment plan provides funding for capital projects for one year only, to quote one Deputy: as though all of us were going to fall off the end of the world at the end of 1981. Major infrastructural projects cannot be carried through in a given 12 month period. This is recognised quite clearly in the investment plan. Paragraph 2.27 states that many of the projects are part of longer-term development programmes, that a great part of their cost will be incurred in 1981, but financial provision for completing them will also have to be made in subsequent years. Similarly, only part of their effects will be felt this year and their full benefits will accrue in 1982 and beyond later in the decade.

Much attention has been given to the agricultural sector during the course of this debate. Opposition speakers sought to contend that little attention has been paid by the Government to the plight of the farmers. Again, homework has not been done. It is hard to see how such statements can be justified in the light of the extra measures for agriculture included in the budget which follow an earlier series of measures introduced since last June. Including the ewe subsidy announced recently extra aid to agriculture since last June amounts to £74.5 million, a considerable sum by any standard.

Perhaps I should list the measures involved as Deputies do not seem to be fully aware of them or deliberately want to ignore them. The 1980 additional measures, which amounted to £39 million, comprised an additional £23 million for the farm modernisation scheme, £8.4 million for increased grants under the disadvantaged areas scheme, £6 million on agricultural rates reliefs, almost £500,000 on warble fly eradication, £320,000 on sheep grants and £75,000 on aid to the agricultural exports co-ordinating group. In addition to this £39 million, the understanding attitude of local authorities on rates collection meant that £4.25 million of 1980 rates was carried over to 1981. In addition there were budgetary measures totalling £35 million comprised £19.6 million extra for relief of agricultural rates, £9.65 million resulting from the suspension of the disease eradication levies, £5 million from the maintenance of two dates for farm income tax payments, £0.5 million from the abolition of the 10 per cent threshold for stock relief and £250,000 for the seed potato industry. In addition, a special extra subsidy of £0.7 million has been provided for the pigmeat industry. It is clear from these statistics that the Government have been doing everything possible, even in difficult times for State finances, to help Irish agriculture recover from its present difficulties. I also expressed our concern in a Government statement. I think what I have given is some indication of a caring Government concerned with that problem.

Apart from the national measures to which I have been referring the Government have also launched a major campaign in the European Community seeking the kinds of aids our farmers require involving not only the Minister for Agriculture — who, of course, is spearheading the drive — but the Minister for Foreign Affairs on his visits and indeed I used my visits to the ECOFIN Council as well to support their problems and emphasise to the people there how important it is that our agriculture initiative be supported.

That is another bit of fantasy — spearheading the drive, my eye, when all it takes is a few words——

Please, Deputy, The Minister without interruption.

The strategist has returned. It has been suggested in this House and elsewhere that we should just go ahead and introduce further domestic aids regardless of whether or not they are contrary to the EEC Treaty. In my view that suggestion does not constitute a sensible approach. The Government have introduced a wide-ranging series of measures carefully tailored to meet the most pressing needs of the farming community while remaining consistent with Government monetary and budgetary policy. Indeed I heard a figure thrown out on a television programme, not by the Deputy opposite but by his successor, their spokesman on Finance, who talked about £400 million and, when I asked where that money might be raised there was the usual silence. It is typical of what that party are saying at present. One point I might make is that I have not heard or read of any Member of any of the parties over there, at any stage of the budget debate, suggesting where any further income could be raised. Do they want us to borrow more? Do they want us to increase personal taxation? Do they want more severe cuts, because nobody suggested where the additional finance might be found.

The Government's concern for social welfare recipients, for the vulnerable section of our society, has been demonstrated in a very positive way by the substantial improvements effected in welfare payments in recent years. The generous increases in welfare payments announced in this budget have been welcomed by the community at large, by most Deputies in the House and indeed are deserved by their recipients. I am proud that the increases announced in this budget appear to be the highest in real terms in any budget in the past ten years.

The leader of the Labour Party accused the Government of neglecting the whole area of social welfare over the last three years. Surely any objective examination of this Government's record since taking office would demonstrate the absurdity of that statement. At times one would think that it is just whatever a particular spokesman pulls from his own head, of what be thinks the position might be, rather than what it actually is, that appears to be put across the House.

The increases in welfare payments granted by the Government have afforded significant real increases in the levels of benefits. For example, as regards pensions, the real increases granted are more than three times those given by the last Coalition Government during their entire period in office. On top of these increases there have been many other improvements effected, one of the most important being the introduction of the national fuel voucher scheme under which payments of £3 per week are paid now, over the heating season, to over 100,000 persons. This Government have been getting on with the job of alleviating poverty, doing it in a much more efficient and effective way than our predecessors, by putting effective purchasing power into the pockets of those who need it.

I was pleased to note that the leader of the main Opposition party shared my concern with regard to the cost of public service pay. His concern echoed many of the sentiments expressed in my budget statement on the subject. I must however draw the Deputy's attention to the pitfalls of crude comparisons of incomes in the public and private sectors. Closer analysis, as indicated by me in reply to parliamentary questions, shows that of the 35 per cent increase which occurred last year, over 6 per cent is accounted for by very special factors such as non-recurring savings in 1979, and a further 10 per cent arose from special increases in the health area which were backdated to January 1979 and that involved a considerable amount of restrospection. If those two elements were eliminated the increase for the rest of the public service more or less matches that in the private sector.

What about public service reform and rationalisation?

The Minister, without interruptions.

There are 1,000 extra in the civil service since the Minister came into office, 8,000 since this Government took office.

(Interruptions.)

When these two elements are eliminated the increased pay bill for the rest of the public service more or less matches that for the private sector. There are of course further complications in such comparisons. I mention these as just two examples to illustrate the danger of making crude comparisons between average private and public sector incomes without full investigation of the reasons for the increases themselves and study of the conditions of the evolution of the increases.

What about the increase in numbers? How does the Minister justify that?

Would the Deputy mind permitting the Minister to proceed without interruptions, please?

He has not changed over the years, has he?

(Interruptions.)

Would the Deputy please resume his seat?

Look at all the silent Deputies who are never heard in the ordinary way.

I wonder what is driving the Deputy this evening. Maybe he is not happy. Maybe he is unable to accept it when the truth is being told across the House, because he tries to convince himself of a gloom and doom situation that does not exist.

All the independent commentators agree with me.

As indicated in my budget statement, the level of general and special pay increases in the public service is a cause of deep concern to the Government, particularly in present circumstances. They must give rise to the serious question of any review of the arrangements. Having said that. I also want to say that the Government are committed to observing the rules and procedures of the agreement on pay policy in the second national understanding. These procedures permit negotiations of claims for special increases and I make no apology therefore for making a prudent provision in the budget of £80 million to meet the cost of any further awards this year. There was reference by some of the Deputies opposite to the public sector pay. Again, because they speak in a contrary way, one is never sure what they are trying to say. We had it here this afternoon. They went on in a most vague and rambling way when earlier on in the debate it was suggested that they, if here, would impose limits on salaries and wages in the public sector. That is the way it came across to me.

Is the Minister simply hoping that by just talking he will induce a change of heart?

(Interruptions.)

No interruptions from either side of the House, please.

Does the Minister imagine that he is going to get a change of heart just by making these tired remarks? He is making the same speech as Deputy O'Kennedy made last year and the year before.

I am sure Deputy Kelly's interruptions were no different because he is known in the House for interruptions.

Would Deputy Kelly please obey the Chair?

A bit of give and take is the life of the place here. We would have no one at all here only for that. Even those gentlemen up there would be gone. There has to be a bit of cut and thrust.

(Interruptions.)

We do not want cut and thrust when the Minister is replying.

(Interruptions.)

The question of aid for vulnerable industries was raised and in fact suggestions were made by some Deputies that little effort was being made to avert closures. I can assure that Deputy, and I can assure the other Deputies on the opposite side, that the Minister for Industry, Commerce and Tourism is extremely concerned about any threat to industry and his Department are closely involved with the IDA and Fóir Teóranta to ensure that as many jobs as possible are saved. I believe that a lot of progress has been made despite the concern I expressed earlier about job losses. But much has been done by the State agencies with the co-operation of both sides, and quite a measure of success has been achieved there too. It should be recalled that the employment maintenance scheme and its successor, the temporary subvention scheme, made a major contribution towards securing employment in the textile, clothing and footwear sectors. However, that had to be terminated following objections from Brussels, where it was suggested that there was a distortion of competition. In view of these objections it must be recognised that the difficulties involved are very great. However, the Government are continuing to examine the problem to see that firms with a prospect of long-term viability are helped through temporary difficulty. Fóir Teóranta, which is under the aegis of my Department, are acutely aware of the problems of industry and are always prepared to consider approaches from firms in temporary or cyclical difficulties but which are potentially viable in the long run. As I said in the budget, Fóir Teóranta have adequate funds to enable them to ensure that any industrial undertaking with reasonable prospects of profitability will not go under for want of financial assistance to see it through a difficult period.

There was an allegation this morning by the new spokesman on Finance on the other side that the Government had no plan for the economy. Not only is this allegation incorrect but it is dangerous and harmful to the whole economy. What that Deputy is doing basically is peddling discontent and preaching gloom and doom.

(Interruptions.)

The investment plan which the Government published in January provides for an unprecedented level of industrial, infrastructural and social investment. I have gone into that in some detail and I do not want to repeat it. But the Government are determined that the benefits to the economy offered by the plan in fact do accrue. Meetings were held with both sides of industry in recent days to discuss in detail how the benefit of that plan can be maximised for the benefit of the Irish worker, for the benefit of Irish industry. This Government have been committed and will be committed to continuing to work in co-operation with, and having the co-operation of, both sides of industry. Attention will be directed to ensuring that progress of the individual projects is in accordance with the plan and that the opportunities provided by the plan for increasing employment and expanding the demand for domestic goods are fully exploited.

Recently a committee was established under the chairmanship of one of the Ministers of State to specifically monitor the employment situation. The increase in the number of economically self-sustaining jobs, which of course is the central object of the Government's planning, is clearly seen here in the contents of this investment plan. Deputy O'Leary from the other side supported this approach and I agree with his comments. Expansion and development is the only sure means available for securing this object. It entails a further development of each of the economic sectors — industry, agriculture and services. This development would be the primary source of the Government's investment and planning strategy. At the same time the scale of investment planned for social infrastructure, such as hospitals and education, is substantial and is consistent with the obligations of a caring and equitable Government and society. A strategy of economic growth has also to take account of the need to restore external balance and to stabilise the public finances. As I said earlier, the need in 1981 is recognised in the budget and in the plan. An important aspect here is that other planning work at present under way in my Department includes preparation of the statement on full employment as envisaged in paragraph 5 of the second national understanding.

What was the word the Minister used? What sort of work?

I beg the Deputy's pardon?

What sort of work did the Minister say was in progress?

He said something was going on in his Department.

The Deputy is not listening. That means two of them are not listening.

What was the word the Minister used?

I used a number of words. Which one?

The Minister, without interruption.

Over-planning.

The Minister is entitled to make his speech without interruption.

Did I hear the word "over-planning"?

Would the Minister continue?

I thought we were acting as midwives to another over-trendy word from Merrion Street.

Other planning.

However, "over-planning" was not a bad suggestion. Perhaps some of the Minister's advisers will find use for it.

If the Deputy stays with me he will hear it all.

A Deputy

The Deputy is overreacting.

Other planning work at present under way in my Department includes preparation of the statement on full employment as envisaged in paragraph 5 of the second national understanding. This paper sets out the measures and the necessary requirements for achieving full employment and will be discussed with the social partners. Work is already under way on a planning document dealing with economic development over the medium term. This will focus on the growth potential of the economy and on identifying realisable increases in output and employment which are possible, provided that there is a positive response from the community in creating the conditions necessary for seeking this potential and to the initiatives being taken by the Government.

In this connection I must stress how vital it is for the future progress of the economy that the competitiveness of Irish production be increased. While external circumstances largely determine the underlying rate of Irish inflation, the aim must be to influence domestic costs so as to promote this competitiveness and to minimise the adverse social consequences of rapidly rising prices. Securing the required control of domestic costs will also contribute to increasing productive capacity and securing a better external balance and an improved balance in the public finances. Progress towards better balance in the public finances begun in the 1981 budget must also be continued simultaneously with reducing the current budget deficit. The Government will continue to support and encourage the expansion of productive infrastructural facilities. Resources released by restraining current public expenditures will be used to finance viable projects that will yield a better return to the community.

I think I should reply to one point raised by Deputy Barry. He used the material of a reply to a parliamentary question about increases in the percentage of energy to GNP. He used a series of percentages in relation to the years 1973-74 and the current ones. Of course, one can use and compare percentages in a very unequal way because the starting base is so important. To put the record straight, let me put the actual figures of the cost of oil imports on the record of the House.

Will the Minister also put them on the record of the House expressed as a proportion of total imports? He will find that they are exactly the same this year as they were last year.

Oh, Deputy Kelly does not like that.

The Minister, without interruption, please.

Sauce for the goose is sauce for the gander.

The Minister is trying to pretend that his dose of flu is worse than anybody else's. When he gets 'flu he has to stay in bed and the rest of us have to soldier on.

The general in the House, the man who is taking up the soldiering all afternoon, does not like to hear the true and factual figures that I am giving now. I want to put it on the record of the House because Deputy Barry used percentages and, as I said, it depends on the base you are working from or moving from as to what percentages may or may not mean. I will quote the actual figures of the cost of oil imports for this country of ours. In 1973 oil imports cost £67 million; in 1974, £208 million; in 1975, £225 million; in 1976, £291 million; in 1977, £352 million; in 1978, £338 million; in 1979, £521 million, and in 1980, £725 million. That is the true picture.

Would the Minister yield for a moment?

(Interruptions.)

Obviously the Deputy does not like that, but those are the true figures not the distorted figures that the Deputy opposite me tried to portray in the House.

Would the Minister yield for a second?

The Deputy cannot interrupt the Minister. The Minister cannot be interrupted.

(Interruptions.)

On a point of order, the Minister should withdraw the word "distorted" because they are the figures of the Minister for Energy.

That is not a point of order.

He gave those figures. I know that they have not much use for Deputy Colley over there nowadays, but they are his figures.

The Deputy wants to be careful. I am not sure that his leader is all that safe from what I hear.

What about Garret? He is not that safe now.

I hear there are a few mongrel foxes floating about and poor Garret may be in trouble.

If we want a lesson on how to dispose of a leader we will go to the party opposite.

(Interruptions.)

Would the Minister continue his reply to the budget, please?

(Interruptions.)

The Minister is an expert. He is entitled to have his opinion.

Would the Minister express those oil figures as a proportion of total imports?

Deputy Kelly, please allow the Minister to proceed without interruption. I might add that I do not want any interruptions from the other side of the House either.

We do not interrupt.

The Minister was the worst when he was on this side.

I was never in that class.

We learned our bad manners from him. I never knew what bad manners in the House were until I saw Deputy Fitzgerald in action.

It is a pity the Deputy did not learn my good points.

The Minister has not displayed them yet.

The Deputy has a lot to learn.

Would the Minister please continue with his speech?

I want to emphasise again that those are the actual costs of oil imports. I will conclude by saying that I believe that the budget produced to the House was prepared by a Government who were concerned and caring——

With a general election.

——about the people of Ireland. We now have a further interruption here. Deputy L'Estrange has come into the House. Deputy L'Estrange went back to his constituency and was amazed at the reception the budget had had there. He went back to his constituency and was amazed and surprised at the good reception given to the budget. I believe it is a good budget——

What about the £200 million?

The vast majority of the people see it as a good budget. The weakness of the two concluding Opposition speeches this afternoon is the greatest compliment any Minister could get. The final tribute to the budget was that they could find so little fault with it.

I want to thank those who contributed to the debate and who had constructive or helpful remarks to make. Political life being what it is, constructive criticism is welcome. Destructive criticism can only be harmful.

May I ask the Minister a couple of simple questions?

A brief question.

The Minister's budget speech contained a reference, which was repeatedly taken up in speeches from this side of the House, to a saving which he was making on his expenditure side of £200 million, being a sum which he expected the private sector to contribute to the Public Capital Programme. The Minister, in his reply, has totally failed to explain how he reached the figure of £200 million which every single, independent, outside commentator regards as unrealistic——

This is a speech, Deputy.

Would the Minister explain how he reaches the figure of £200 million which saves him the trouble of accounting for it in the budget?

If I have to answer I am quite prepared to do so.

The Deputy is entitled to ask a brief question.

It is not a question of a saving, it was a very positive and constructive approach by the Government towards funding for capital development. It forms part of the financing and funding of the investment plan.

Where is it coming from?

This is an argument.

The Deputies should realise their responsibilities to the country. Obviously it would be unwise at this stage——

(Interruptions.)

The Deputies will have ample opportunity to get all the information they require, but I will not divulge anything while delicate negotiations are taking place.

Question put.
The Dáil divided: Tá, 68; Níl, 43.

  • Ahern, Bertie.
  • Ahern, Kit.
  • Allen, Lorcan.
  • Andrews, David.
  • Andrews, Niall.
  • Barrett, Sylvester.
  • Brady, Gerard.
  • Brady, Vincent.
  • Briscoe, Ben.
  • Browne, Seán.
  • Crinion, Brendan.
  • Daly, Brendan.
  • de Valera, Vivion.
  • Doherty, Seán.
  • Fahey, Jackie.
  • Farrell, Joe.
  • Filgate, Eddie.
  • Fitzgerald, Gene.
  • Fitzpatrick, Tom. (Dublin South-Central).
  • Fitzsimons, James N.
  • Flynn, Pádraig.
  • Fox, Christopher J.
  • French, Seán.
  • Geoghegan-Quinn, Máire.
  • Haughey, Charles J.
  • Herbert, Michael.
  • Keegan, Seán.
  • Kenneally, William.
  • Killeen, Tim.
  • Killilea, Mark.
  • Lawlor, Liam.
  • Lemass, Eileen.
  • Lenihan, Brian.
  • Leonard, Jimmy.
  • Burke, Raphael P.
  • Callanan, John.
  • Calleary, Seán.
  • Cogan, Barry.
  • Colley, George.
  • Collins, Gerard.
  • Conaghan, Hugh.
  • Connolly, Gerard.
  • Coughlan, Clement.
  • Cowen, Bernard.
  • Leonard, Tom.
  • Leyden, Terry.
  • Lynch, Jack.
  • McEllistrim, Thomas.
  • MacSharry, Ray.
  • Molloy, Robert.
  • Moore, Seán.
  • Morley, P. J.
  • Murphy, Ciarán P.
  • Nolan, Tom.
  • Noonan, Michael.
  • O'Connor, Timothy C.
  • O'Donoghue, Martin.
  • O'Hanlon, Rory.
  • O'Leary, John.
  • O'Malley, Desmond.
  • Reynolds, Albert.
  • Smith, Michael.
  • Tunney, Jim.
  • Walsh, Joe.
  • Walsh, Seán.
  • Wilson, John P.
  • Woods, Michael J.
  • Wyse, Pearse.

Níl

  • Barry, Myra.
  • Barry, Peter.
  • Barry, Richard.
  • Begley, Michael.
  • Belton, Luke.
  • Bermingham, Joseph.
  • Boland, John.
  • Burke, Liam.
  • Byrne, Hugh.
  • Cluskey, Frank.
  • Collins, Edward.
  • Conlan, John F.
  • Cosgrave, Michael J.
  • Creed, Donal.
  • Crotty, Kieran.
  • Deasy, Martin A.
  • Desmond, Barry.
  • Enright, Thomas W.
  • Fitzpatrick, Tom. (Cavan-Monaghan).
  • Flanagan, Oliver J.
  • Gilhawley, Eugene.
  • Griffin, Brendan.
  • Harte, Patrick D.
  • Hegarty, Paddy.
  • Horgan, John.
  • Kavanagh, Liam.
  • Keating, Michael.
  • Kelly, John.
  • Kenny, Enda.
  • L'Estrange, Gerry.
  • McMahon, Larry.
  • O'Brien, William.
  • O'Keeffe, Jim.
  • O'Toole, Paddy.
  • Pattison, Séamus.
  • Quinn, Ruairí.
  • Ryan, John J.
  • Ryan, Richie.
  • Spring, Dan.
  • Taylor, Frank.
  • Timmins, Godfrey.
  • Tully, James.
  • White, James.
Tellers: Tá, Deputies Moore and Briscoe; Níl, Deputies L'Estrange and B. Desmond.
Question declared carried.
Sitting suspended at 6.50 p.m. and resumed at 7 p.m.
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