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Dáil Éireann debate -
Tuesday, 3 Nov 1981

Vol. 330 No. 6

Finance (No. 2) Bill, 1981: Second Stage (resumed).

Question again proposed: "That the Bill be now read a Second Time."

My basic point in introducing my observations on this Bill was that if we adopted the correct economic and social strategy in our budgetary and general economic policy we could ensure our future development. This year and again next year there will be an additional 15,000 people seeking employment. We are a rich country in terms of agricultural land, our seas and our mineral, oil and gas resources and if we exploit these resources properly we should be able to sustain our economic and industrial development. We built up during the sixties a strong industrial sector and a sustained export record. I am convinced that if we extend that industrial sector and improve exports we can provide good jobs at reasonable earning levels for all our people. For that reason I am not pessimistic in my approach to this Bill. In general I am optimistic but if there is one area about which I am pessimistic it is the inability of political parties to get to grips with the need for courageous policies. There is a great deal of progress to be made towards the development of our economy on a rational basis.

I have stated many times in this House and elsewhere that there are no soft options open to us in economic and social development. Anybody who suggests that we can simultaneously increase Government expenditure for job creation, job maintenance and the expansion of social programmes and also reduce direct or indirect taxation is simply codding people. An attempt to do such things would wreck the economy. We need a sustained period of very careful management of the State finances and we also need an economic and social plan which will not be messed about by party political programmes. We need, too, a national planning board to advise politicians on the best strategies to adopt. We need an understanding in regard to income increases and very definite agreement between the social partners and the Government on all these matters. Unless we adopt that approach we will simply go along from budget to budget chopping and changing, making promises, half implementing them and borrowing money for political expediency, funding projects which are half baked and half defined and ending up in the mess we experienced in 1980 and 1981. We are at a watershed in terms of budgetary policy.

I hope that those who have some responsibility for examining the strategy will learn some unpalatable lessons from what happened during the term of the former Taoiseach and the former Minister for Finance. If I have been bitter and scathing in my reaction to the policies they followed it is because, despite the former Taoiseach's indication on assuming office that he would take some hard options, he reversed that course immediately for transient political popularity. Nothing was beyond the greatest toucher of all times in seeking money for any project. The money was made available but there was not a taxation policy to pay for that kind of expenditure. That is not good enough.

We did not pay back £800,000 to a certain section of the community.

The Deputy will have an opportunity to make his point.

It is very hard to sit here and listen to this kind of thing.

You will have to sit there and contain yourself. You will be given an opportunity to make your case.

The Minister of State should speak the truth.

Apart from Deputy McCreevy, it is not unfair to say that not one Deputy from that side, when they were on this side, expressed serious concern about the economic and social strategy of the Fianna Fáil Government. I make these points in a political way because in the next two or three years we will need massive taxation finance, massive financial resources, in order to overcome present difficulties. For instance, next year 15,000 additional persons will come on the labour market seeking jobs and if we are to be able to create jobs for such persons we will need massive national financial resources to undertake the work. We will need money in order to eliminate poverty. These days it is out of fashion, almost totally out of tune, to use the word "poverty," but if we are to make any serious dent in real poverty we will need every shilling we have in the Exchequer and more. The only way to get that money is by way of contributions from those who can afford to contribute.

Having been in the House since 1969 I may be regarded as being very jaundiced. In that time I have not met many politicians who have met many people on social welfare, because there are very few politicians who have been forced to live on social welfare. Perhaps some politicians are from relatively poor families, but most politicians do not have to live on, for instance, non-contributory old age pensions, disability pensions, social welfare benefits, pay-related or otherwise. As we talk now, there are 950,000 people living on social assistance, and of them 275,000 are children, children of people on unemployment benefit or assistance, or those on disability benefits or supplementary benefits or deserted wives' allowances or prisoners' allowances, or the various other allowances such as widows' contributory or non-contributory pensions. I will repeat that out of our total population of about 3.46 million, 950,000 people, of whom 275,000 are children, live on social welfare incomes, and often those incomes are not as much as a politician would spend on a round of drinks in a pub at election time, not that urban politicians are wont to do that kind of thing because the people would not have it.

When we talk about elimination of poverty we must remember that the top 20 per cent of Irish families enjoy 45 per cent of the country's income, and we all know that we are not wealthy as a country by world or EEC standards. Therefore, the income of our society is not distributed or utilised in an egalitarian way. If we take the other end of the scale, the lower 20 per cent of our population have only 4 per cent of the income. I will repeat those figures because they have to be shouted from the rooftops since the vast majority of the people do not believe them. If an opinion poll were taken of the country's poverty, we would find that what I have said is correct. The top one-fifth of the population enjoy 45 per cent of the income and the bottom one-fifth have only 4 per cent of the income.

Recently I attended a Cabinet subcommittee meeting in which we debated among ourselves the matter of home improvements grants. People want back boilers, they want windows glazed, they want these things done by way of improvement grants, and politicians have been going around the country distributing application forms——

The Chair is reluctant to interrupt Deputies——

I am on the Finance Bill.

I have been consistent in my reminders to Deputies that we are dealing with a taxation measure. The Chair accepts that it may be necessary for Deputies to give some background information——

I will get back rapidly to the Bill. I am talking about the purposes for which we tax people. It is true that 25 per cent of our old people living alone do not have even a standard water amenity, a bath or a toilet. That is the reality of Irish life. I will not prolong the point, but one can go to the inner city areas, to the Leas-Cheann Comhairle's constituency, and one will find those severe problems and deprivations. That is why we need taxation, direct and indirect, that is why we need capital taxation, why we need resources to pay for the elimination of poverty. We need money to spend on job creation. I have referred to the 15,000 people coming on the labour market this year. In his excellent report, "Population and Employment Prospects for 1986", Brendan Walsh states that the net increase in non-agricultural employment between 1975 and 1986 in order to provide jobs for the growing labour force and reduce the unemployment rate to 4 per cent lies in the range 23,000 to 28,000 per year. One has a formidable task. There are 15,000 people entering the labour force and the current unemployment figure is well up to 130,000. If that is to be reduced we need massive State resources.

We urgently need to look at the taxation system in order to bring about equality in education. People may ask what education has to do with direct taxation. It has a lot to do with it. There are people who have their children in college and obtain a tax rebate for keeping them there. We perpetuate a system which is totally regressive and class-orientated in terms of educational structures. The evidence is so blatantly obvious that one gets tired of reiterating it. I see my colleague from UCD on my left, appropriately enough, a man for whom I have great admiration.

The McHale Report stated in relation to the social and economic background of students at UCD that 1.5 per cent of students came from semi-skilled and unskilled occupational categories. These categories comprise 14.2 per cent of our population. In the greater Dublin area the population is one million. The fact that only 1.5 per cent from this category attend university is the outcome of the taxation and incomes system we have. It can be traced back to the Finance Acts we have had. Let us take the higher professional category. To what extent do they comprise——

The Chair must advise the Minister that unless he can direct these matters——

I am relating them to taxation. You will see exactly what I am saying.

The patience of the Chair has been worn out waiting for this great revelation.

There is no need for the Chair to wear himself thin.

I ask the Minister to get to the matter of taxation as expeditiously as possible.

I shall correlate it without any great difficulty and the Chair will see when it all unfolds precisely what I mean. In UCD the higher professional category provide 19 per cent of university students and constitutes 2.6 per cent of the population. That is the reality. That is why I believe that the taxation system must be radically overhauled. Semi-skilled and unskilled people should have massive tax incentives to send their children to university just as the higher professional groups have that incentive. Rather than annoy the Leas-Cheann Comhairle further, I shall just say that the ratios have declined over the years.

About 25 per cent of those in Northern Ireland are unemployed. We talk about articles 2 and 3, God help us. If we are to attempt to eliminate poverty, promote employment and job creation and introduce real equality in education and if we urgently need to spend resources on the State sector we need taxation. To what extent are these resources available for the Government and the politicians to do something about the problems I have referred to? What has happened is very simple. The failure has been documented in terms of State finances. There was massive political dishonesty particularly in the period 1977 and 1981. The former Government funded health programmes, education programmes, social welfare programmes and job creation programmes without facing up to the need to raise taxation. In other words there has been an excessive reliance on borrowing. Fianna Fáil borrowed all over the place, for this, that and the other, without any acceptance of the fact that they might have to pay the money back in three or five years time. Some trade union leaders are nearly as bad as the Fianna Fáil Party in this. Fianna Fáil regard our approach, which is essentially one based on the need for taxation and the need to cut down massive foreign borrowing, as totally monetarist. The word "monetarist" flung around by Deputy Fitzgerald and his colleagues is a good jingle. It sounds well but it has nothing to do with the measures taken last July.

I should like to refer to a report which was published last week and urgently recommend all my colleagues in government and in the Opposition to read it. It is the NESC Report on Economic and Social Policy, 1981. That was one of the strongest exposés of the stupidity of over-borrowing, particularly on foreign markets. I am not so sure that Deputy Haughey would regard the membership of the NESC as a gaggle of monetarists. Some of them were appointed by him. I am sure those nominated by the Irish Co-operative Organisation Society or the Irish Creamery Milk Suppliers or the IFA would bitterly resent being called monetarist by Deputies Haughey or Fitzgerald. Every page of the report is riddled with firm advocacy of the need to reduce and eliminate the current budget deficit as one of the most important things to be done in the economy. The report warns us strongly — it is signed by members of that body — that if the present policies advocated by Fianna Fáil are pursued in respect of the current budget deficits, adjustment will be forced upon the community and there will be reaction from our creditors.

I would be very interested in hearing the reaction of Fianna Fáil spokesmen to the NESC report because they see fit to condemn the July budget and to say that it was entirely unnecessary and unduly extreme. The NESC report highlights the abject failure of Fianna Fáil to manage the ordinary budget arithmetic of the economy during 1979 and 1980 and this failure was in the interest of winning the general election, an interest to which everything else had to take second place. I quote from paragraph 1.29 of the NESC report in the context specifically of the current budget deficit:

The failure of tax increases to match the increase in Government current expenditure resulted in an increasing current budget deficit. The current budget deficit increased from 3.8 per cent of GNP in 1977 to 7.3 per cent in 1979, although it fell slightly to 6.6 per cent in 1980. (Table 20) The scale of budget deficits and the expansion of Government capital expenditure have resulted in substantial increases in the borrowing requirement of the Exchequer, which has increased, relative to GNP, each year since 1977. The Exchequer borrowing requirement in 1980 amounted to £1,217 million, 14.6 per cent of GNP, compared with 14.0 per cent of GNP in 1979 and 13.0 per cent in 1978. (Table 25) The more broadly defined public sector borrowing requirement, which comprises the borrowing of the Exchequer, State-sponsored bodies and local authorities has also increased relative to GNP in each of the last three years, and amounted to 18.9 per cent of GNP in 1980.

These, according to Fianna Fáil, are the figures of the monetarists Senator Whitaker who was nominated by the Government, Professor W.J.L. Ryan, who was nominated also by the Government, Mr. Paddy Cardiff of the ICTWU and so on. These are men who are concerned about the Irish economy but who, perhaps, do not meet a Monsignor on the hillside and tell him that he will be given £8 million to build an airport, who do not meet a group of striking workers and tell them not to be concerned because their redundancy payments will be topped up. Neither do these people phone a Department of State and ask if they would like £3.6 million for the purpose of building sports complexes. Neither do they invite someone to accept £1 million for the purpose of building an oyster factory. That was the sort of situation that we inherited but in our anxiety to try to rectify matters we shall probably lose the next election.

It will be good for the Deputy's party.

It will be good for the country.

The Deputy is welcome to that kind of gombeen interpretation of politics.

I object to that.

I would ask Deputy Leyden to desist from interrupting and I would advise the Minister of State that he is taking a considerable time to make his contribution relevant to the debate.

I shall deal now with the question of taxation as it relates to the Finance Bill. At this stage, even allowing for the July budget which we must admit was not very pleasant for anyone, we face an opening budget deficit for next year of £1,100 million. Our balance-of-payments deficit was £700 million in 1979. It remained at that level in 1980 but this year the figure is likely to be of the order of £1,300 million. The foreign debt of the State-sponsored bodies has trebled since 1978 so that it stands at about £900 million. The cause of this was the attitude of the former Taoiseach in telling the chiefs of these bodies that they should build, invent, produce jobs and so on while failing to say that the Irish people would have to pay for all of this. That debt has to be serviced. We all know that if one approaches a bank manager to inquire about the facility of a bridging or any other type of loan, one is asked how one proposes to pay back the money and in what period of time. The same applies to the Department of Finance. I do not walk around to the Bank of Ireland each week and collect about £2 million to pay the public service. We borrow in accordance with strict arrangements at both domestic and international level. In 1981 the cost of servicing our foreign debt plus some repayments is £380 million. Next year with a budget deficit of £1,100 million to start with we will have to find £650 million for this purpose alone. This will leave us with a very difficult budgetary situation, so much so that, as I pointed out in general simple terms on a recent radio programme, we now owe to foreigners, to use the pejorative term for which I apologise since we suffer unduly from that type of phraseology, about £800 for every man, woman and child in the country, and for every industrial worker in the country we owe now £2,500. That kind of servicing must come from taxation if we are to make our way because there is nowhere else to get it.

When I met some of the chief executives of various State-sponsored bodies at the IMI on 8 October last I pointed out that by last July's budget the outlook was that in 1981 almost £2 billion would have to be borrowed. That is equivalent to about 20 per cent of GNP of which about half, or 10 per cent, would have been required to finance the deficit on current account. That is why I sound so harsh today in my disgust and distaste at the behaviour of the former Taoiseach, an accountant, a man who knows what money means, who can read both sides of a balance sheet, but who, for appalling, narrow, short-term political gain — despite the famous television speech of January 1980 when he made it quite clear to the Irish people what the real problems were — did an about-turn in 1980 and 1981 simply to win an election. I reiterate that that kind of opportunistic policy which was followed, that kind of ill-defined borrowing which is wholly corrosive to economic growth, and every piece of stupid expenditure for current needs which was incurred unnecessarily to quite an extent by the previous Administration mean that our children will have to do without jobs in the eighties. That is the legacy to which my reaction here today is revulsion. There is no doubt that prolonged and increased borrowing, particularly for current account purposes, carries with it a legacy of growing debt service and it pre-empts larger and larger shares of ordinary tax revenue. Despite the measures we took last July, increased debt service cost will absorb two-thirds of the increased revenue from existing taxation in 1982. I do not want to sound unduly pessimistic but it is essential that we know the realities of the situation because all politicians have a degree of responsibility on this issue.

As if that is not bad enough, successive party political programmes in this country have also done their utmost to destroy the basis of ordinary taxation. I say that in respect of the previous Coalition and the previous Fianna Fáil administration. Why do I say that? Because the previous Government in the second half of the decade took over responsibility for that part of the health costs of the country which was met previously from local taxation. I sat in government and in opposition. I was in over there from 1969 to 1973 and here from 1973 to 1977. I am sitting here again and the scenario has not changed much. In that period the previous Government, the Fianna Fáil Government, eventually in 1977, took responsibility for that part of the health cost which had been met from local taxation and did away — all parties were in agreement with this — with the remaining aspects of local taxation. We abolished rates. We could not do it fast enough. Even the Conservative Government in England were flabbergasted. My colleagues in the Council of Europe, Social Democrats from Germany, Communists and Socialists from France or any other——

He is talking about taxation.

Would the Minister of State please give way? I suggest that these personal anecdotes, these suppositions, these hypotheses would be acceptable and are relevant in a peripheral manner, but when the Minister presumes to major in them in a speech on the Finance (No. 2) Bill, which is not a budget speech I assume that he will accept after three-quarters of an hour that he is out of order and the Chair cannot stay with him.

The Leas-Cheann Comhairle will appreciate fully the point because I have some very trenchant things to say about taxation. I have to give the background as to why we need radical changes in taxation and I will come to that in two or three minutes.

Is this a re-run of the Minister's Gaiety speech?

I will accept the Minister's assurance that in a matter of two minutes he is now going to become relevant on the measures which should be discussed in this debate.

I dispute strongly with you, a Leas-Cheann Comhairle, that I am being in any way irrelevant and when I am finished you will, I am sure, agree that I have been entirely relevant.

The Minister of State will accept that the Chair cannot accept assurances of that kind. The Chair must be guided by the actual utterance, and I suggest to the Minister of State that it has taken him a considerable time to get to what the Chair would regard as pertinent to the Finance (No. 2) Bill.

I am being entirely pertinent, and I will sum up and finish this aspect of my contribution in two minutes and then I will go on to the real point that I am sure you will regard as being totally relevant.

Previous Governments have abolished local rates taxation on domestic dwellings and simultaneously introduced a whole series of new subsidies without any provision to pay for them. The ultimate recourse was, of course, to fund these expenditures from borrowed money. We have failed to bridge the gap with our own tax resources. That is the nub of the point I am making. I make the point strongly because I want to come to the question of direct and indirect taxation. I regret that some people in the House do not seem to be able to understand that in terms of sources of State revenue you must take into account rates, income tax direct and indirect, local charges and a multitude of resources that go to make up a budget. That is why I refer in this context to the points I have made——

The Chair will not accept that insinuation from a Minister of State. This is not a budget speech. One would imagine that the Minister of State would be so aware. The debate here will deal with the taxation measures proposed in the Finance (No. 2) Bill.

I will deal with them now.

Following that peroration I come to the point I want to make on the question of taxation. The Taoiseach yesterday, 2 November, said in a speech that he made to the Goldsmiths Company: "I would like to take this opportunity of reiterating the Government's commitment to the introduction of greater equality in the taxation system. This we will do not only by intensifying measures to combat tax evasion and reducing opportunities for tax avoidance but by the implementation of all proposals to reform the income tax code, to eliminate income limits for health and PRSI contributions and to introduce a youth employment levy on that part of incomes over £8,500 a year."

I welcome the commitment of the present Government and the Taoiseach to introducing an equitable taxation system. Our present system as it is structured is inherently inequitable and provides entirely legitimate grounds for dissatisfaction among those who feel they are being heavily taxed. PAYE taxpayers, notwithstanding the reliefs which are proposed in the Government's programme, claim they are required to carry an undue burden of income tax. We must find means of achieving a contribution from all sections and incomes of the community. Under successive Finance Bills, we must find a way of ensuring that persons make contributions in proportion to their true ability to pay. If we fail to demonstrate in the eighties that our taxation system is scrupulously fair, politicians will deserve the odium in which they are held by many people for failing to reform our income tax system.

The inequalities within the present income taxation system have become a source of friction between different sections of the community and this is a matter which should be of very serious concern. When we talk about national pay settlements, or policies to direct or redirect public expenditure, or controlling Exchequer expenditure, unless all these strategies are accompanied by a socially just system of taxation, they are not worth the paper they are written on. I hold that view strongly. In any examination I have done of tax rates in the Department of Finance and the impact on different families and different tax structures, the key issue is the relative total impact of all taxes. That is why, a Leas-Cheann Comhairle, you may have found it hard to follow my train of argument. One must take into account the total impact of all taxes, direct and indirect, social insurance contributions and PRSI contributions on the family, not just on the individual.

If one examines the relative impact of taxation on different income groups, it is evident that, far from being progressive, in many respects the system of taxation is, in many areas, regressive. It helps those who have money to spend and who have high incomes. I do not believe, from a three or four month examination of any of the data which I have seen in the Department of Finance, that the taxation system transfers resources from the better off sections to those who are less able to look after themselves——

Did it take the Minister longer than the Taoiseach to examine the books? It took the Taoiseach ten minutes to do so.

I will treat the matter more seriously than that. Detailed analysis will show that in some areas, especially education and in tax relief on house mortgages, there is, if anything, a net transfer from lower and middle income groups to the higher income groups. I can give case studies in that regard.

We come to areas of reform which are relevant to the Finance Bill before us and other Bills which will come in the future. Some aspect of the current taxation system can only be described as scandalous. Any Government has a fundamental obligation to ensure that the taxation system is reasonably equitable. Perhaps the absence of effective direct taxation on some incomes gives rise to a very interesting situation where some people in the community who have money can speculate £40 million in one week on oil shares, on what might come up the stem of a pipe from hundreds of miles out in the Atlantic. Apparently there is no great problem facing some members of the community. One might ask where they get this money. In the stock exchange there were gains of £8.6 million in one day's trading in one company alone. That £8.6 million was in respect of the shares of 11 shareholders. Then we are told there is no money here and that we have a fair system of taxation. We had a situation where £130 million of capitalisation of the Irish oil sector was described as the most prominent boom sector in the economy, or at least on the Dublin Stock Exchange. Where did the money come from?

There is a property up the street, Seán Lemass House, where one man made a profit of £2.1 million on the purchase and sale of the dwelling, all on an outlay of 10 per cent deposit. In terms of bank profits, the Bank of Ireland and Allied Irish Banks are in the top eight of the world league. Why? They are enormously profitable and, despite the recession, are making enormous profits which are not subject to much taxation. One has to go to trade union members, shop floor members, industrial workers, public sector workers and tell them there is a recession, the Government have no money and we cannot pay for extra expenditure. You must accept moderation, responsibility and control of your incomes, you will be lucky if you get 8, 9 or 10 per cent. Simultaneously one can pick up the financial pages of Irish newspapers and it is easy to see signs of conspicuous wealth. That is why the question of taxation must be taken on a broad canvas if one is serious about doing something about it and exorcising the scandal which exists in terms of taxation.

ESRI reports have suggested that proposed taxation measures should be phased in and that a more gradual approach be adopted towards the implementation of the direct tax reform, linking it perhaps with overall progress and reducing the deficit, and to growth and revenue which could arise from exploring other possible sources of taxation. It is a matter for the Government to decide and also a matter out of which the Opposition can take pleasurable opportunistic short-term gain, if they so wish. We are all democrats and must all face up to the implications of our actions.

I am convinced that we could substantially change our taxation system on a phased basis. We urgently need basic public expenditure revenue to carry through ordinary social programmes while not, simultaneously, making such rapid changes as would increase the consumer price index. If we are to change value-added tax, this change should be tilted in favour of things bought predominantly by the higher income groups. Admittedly, what we would get in terms of millions of pounds would not be great but it could relate to goods with a very high import content. Perhaps there should be some investigation in that direction.

There may be scope for re-examining the category of goods now included in the different bands of value-added tax to see if some luxury goods and goods with a high import content could possibly be shifted to higher bands. The report of the Committee on Costs and Competitiveness states, on page 25, that increases in indirect taxation implemented in recent years have not been a major contributory factor in relation to the general rate of inflation. I do not know if one could call the so-called three wise men monitors. They make the useful point that the prices of beer, spirits and cigarettes are between 5 and 11 per cent higher than they would have been if the share of the retail price taken in taxes had remained unchanged between June 1975 and September 1981. They also maintain that petrol is actually 4 per cent cheaper than it would have been on a constant percentage tax, which is an interesting point. These figures put the July tax increases into a more sane perspective. The VAT situation needs to be examined in terms of a movement from direct to indirect taxation. I would be very concerned about the effects which a changeover to direct taxation would have on the consumer price index. We must do our utmost to avoid that type of general development.

In so far as the Finance Bill impinges on the current budget deficit, that situation also must be examined. Deputy Haughey believes that academics should stick to their academies. That was his famous retort to Deputy O'Donoghue.

His own party was founded by an academic. If he had another job, I never heard of it.

Deputy Haughey does not believe in economists, or in things called civil servants, or in Departments of Finance. They are awkward people between him and his expenditure plan.

The Deputy is obsessed with that man. He is very much afraid of him.

I am not obsessed, I am just disgusted. I thought he had more in him.

(Wexford): We are glad that the Deputy is disgusted with what came out of the Gaiety.

I am a political realist and I hope that I am honest. There is need to eliminate the current budget deficit. I am, however, not so sure that one should try to eliminate it in one fell swoop over three or four years. It should be slightly longer, certainly not longer than five. One must assess the extent to which the recession is likely to last. It has lasted longer and bitten deeper than many of us anticipated. Unemployment figures are not likely to be reduced dramatically in the months ahead and they are now running at 10 per cent of our labour force. It may be that an alternative strategy of phasing out the current budget deficit over a slightly longer period would not impose further hardship on our people in terms of adopting the correct budget strategy. This is something of which the Opposition will probably want to make hay.

While looking for a fairer system of taxation the political obligation is on us of deciding where the money comes from. Tax reliefs on non-mortgage interest should be examined. Here I am talking on an entirely personal basis and throwing out ideas which might be examined on a general basis because we should be politically honest. Fianna Fáil have great difficulty in understanding the present Government because we talk honestly about issues. I am speaking about one of the issues which we should examine under the Finance Bill.

You speak not with one voice.

We are not afraid of our leader. We do not cow before him.

Your leader should be afraid of you, but who is your leader? Which one is he?

Much of the tax interest reliefs on non-mortgage interest goes into, for example, the purchase of motor cars which here have a massively high import content, affecting considerably our balance of payments. Also, nominal interest rates are below the rate of inflation, which gives a negative real interest return or rate. There is a case for examining in the years ahead whether or not it is wise to continue subsidising a negative rate of interest on an unspecified range of items, with cars as an example.

Have the Deputies read an outstanding article recently in The Irish Times by an outstanding columnist, Paul Tansey? It is a very well written article in terms of the allocation of State resources in the housing sector. At present we give tax relief to mortgage interest for house purchases. If I wanted tomorrow to buy a holiday home, or had enough money to invest in yet another home, bearing in mind that the only house I own is a 1964 house——

The Deputy should buy one in Knock. That would be an appropriate place, by courtesy of Monsignor Horan.

I own a 1964 house with a £3,000 mortgage, which at that time was an expensive mortgage. If I want to buy a holiday home, or to go up market as people do, I get tax relief. Is it socially or morally just that that special favoured tax treatment should be given to those with money while, at the same time, there are 27,000 families on the waiting lists of our local authorities who have no house of their own tonight and are either accommodated by in-laws or in lousy flats for which they pay £25 or £30 a week minimum rent? Last weekend in Dún Laoghaire I met a young married couple who are paying £45 a week out of an income of £85 a week for three rooms plus gas and electricity on top of that. There is no 9 ft. by 10 ft. room available in Dún Laoghaire for a young married couple at less then £25 per week minimum rent. I often wonder if landlords declare such incomes for tax purposes. While that is going on we give tax relief to someone who wants to go away up market and might be in a position to screw a bank, a building society or a commercial finance undertaking for a loan of £25,000 or £45,000 on top of their previous mortgage and get tax relief for it. We have to examine this; I am not making proposals at this stage.

Of course not, the Minister of State is just chatting.

I should like to quote what Paul Tansey said, by way of support. In the course of an article in The Irish Times Paul Tansey pointed out in relation to tax relief on house mortgages.

The average price of new houses on which loans were granted in 1973 was £7,095. A young couple buying their first house that year might have paid about £6,000 for their home. With a deosit of £1,000, they would have required £5,000 in loan finance to purchase their house, representing a mortgage of 83 per cent.

At mortgage rates prevailing in 1973, gross monthly repayments before tax relief would have come to £49 a month on a 20-year mortgage. Eight years ago, when the average yearly earnings in industry were less than £1,500, this represented a substantial sum.

However, in 1981 the average annual repayments on a £5,000 mortgage taken out in 1973 would be only £67 a month before tax relief, despite the fact that mortgage rates have risen sharply in the intervening period. With average earnings in industry running at about £6,000 a year at present, it can be seen clearly that the burden of monthly repayments has diminished severely.

He went on in that article to give other interesting examples and he concluded, as we all know, that the best possible investment for anybody here is in buying one's own house or property because of the tax relief available and the extent to which property appreciates.

I should like to give another example. If one were to abolish tax relief for persons who bought houses up to ten years ago I do not believe the hardship would be a major factor. Present repayments on a loan of £7,000 which would have been adequate to buy a house costing £9,000 seven years ago and which would be worth £30,000 today would be £100 per month. This level of repayment on a house is below current rents charged for small flats in many areas and, therefore, the question of hardship would be relative. I have made those points because there are a number of anomalies in the taxation system. I do not believe one should give relief where people want to massively up-trade in the house property market. I do not think it should be permitted. I do not think one should give tax relief to people who want to buy holiday homes or other aspects of property.

I shall conclude my comments on that aspect of my reaction by referring to the very interesting report of An Foras Forbartha. I should state that the reason I have a particular interest in the housing end is that I am a member of Dublin County Council. As chairman of that body last year I signed many contracts for house building.

The Minister of State should not resign his seat on the county council just yet, if he has not resigned already.

I should like to point out that about 80 per cent of new house building in the Dublin area in recent years consisted by and large, of detached houses, four bedroom houses geared quite an extent to the up-market end. We should consider the extent to which that kind of development has absorbed land, skilled labour and mortgage finance in the greater Dublin area. That should be geared—the taxation system can do this—to the 8,000 or 9,000 young families in Dublin who do not have any house at all and cannot afford mortgage repayments of £260 to £350 per month. That would be a crucifiction. If we are to use scarce national resources we must use them in a direction to help those who are least well off. That is what I call social democracy, that is what I call christianity. I know that the political reaction from many people who have loans will be: "You are not going to interfere with my tax relief. What I have I hold because I had to pay through the nose when I became a householder early on in life". The reaction would be: "We do not want to make any great sacrifice". However, if the sacrifice is not made then the country as a whole cannot eliminate the kind of poverty I have spoken of.

There are some other aspects in relation to the Finance Bill deserving of comment. There is a bank levy in the Bill and the banks are being asked to make a contribution to tax revenue through a special levy. It has been suggested that this is only a temporary measure pending the review of the taxation system affecting banks generally. I hope that the Commission on Taxation examines in depth the taxation of financial institutions generally. I look forward to receiving that report. There is a great need to examine the method of taxation of banks in that regard. With regard to housing and the banks, I believe there is a need to examine why certain staffs of financial institutions get house loans at 3 per cent or 4 per cent. I appreciate that mobility is a question. Should it be taxed as a benefit in kind? Why should certain staffs of financial institutions, lending institutions, hire-purchase institutions, perhaps, the staff of the Central Bank, or pension companies get preferential treatment over and above the unfortunate young married couple who have to pay through the nose to building societies? They must pay the full rate. Why should that be done? Is that not a source of concern, of friction between certain sections of the community? Should it be taxed as a benefit in kind or not?

I pose that as a question. It will be argued that these are conditions of employment which staff have managed to accumulate. I have no objection to any bank giving a 3 per cent or 4 per cent house loan to an employee. But I do not see why State money or public money should be used to enable the banks to do so. If the banks want to negotiate the finest conditions of employment with their staff, so be it. That would be the outcome of trade union negotiations. But it should not be done at the expense of my having to pay higher bank charges to enable it to be done. These are fundamental issues that we should consider under a Finance Bill. I know that I will bring the wrath of some staffs down on my head for raising the issue. But it is an issue that has to be faced. I am not suggesting that this Government are necessarily going to face it or that the previous Government faced it. But to get back to the bank levy, I believe that next year we should look for £25 million and make no apology therefor.

I believe that our financial institutions here, which can afford to build massive office blocks and invest in substantial properties, can also afford to fund part of State finances without necessarily increasing their charges. That is my suggestion and I would stress that it is only a personal view.

In terms of capital taxation the yield should be about £100 million next year. I do not think it would be very difficult to get it. For example, the question of tapering relief under the capital gains tax code should be amended. We should amend the roll-over relief provision which was available under capital gains taxation. Where a developer gets a re-zoning of agricultural land worth £3,500 an acre in County Dublin automatically with one stroke of a pen and the value of the land goes up to £35,000 an acre, there should be a penal tax on the profits of that land if it is sold. Overnight that land, without a sod being turned over or a service provided, is worth £35,000 an acre. I would go further and say that where it happens in relation to the Dublin County Development Plan the tax should be made retrospective. I do not believe that we should go around collecting direct and indirect tax, VAT, PAYE, social insurance and income tax and providing roads, sanitary services, water supplies, power connections——

Airports.

The airport is in a class of its own. All these services are provided right up to farmland and then the man who happens to own these farmlands automatically gets the benefit of State expenditure. That should not be permitted. I know of no country in the world, including America, where this is allowed to happen. Even under Ronald Reagan, Americans pay through the nose in tax on their property. On that kind of transaction tax should be paid.

I would impose a tax on derelict building sites in urban areas and in rural areas. It is outrageous that somebody can buy a building, say, a domestic building, pay no rates on it, let it go to rack and ruin, crumble away—the local authority try to get out of an enforcement order to keep it in sanitary condition — it does not cost a shilling and it appreciates at 30 per cent per annum. It is an investment lying there with nobody living in it and no tax being paid on it. Derelict sites and unused buildings should be taxed at a percentage of their market value and that percentage should be such as to discourage leaving premises vacant.

In regard to farm taxation we are again in hot water because every time we increase taxation it involves individual families and so on. If we are going to continue with the current prospective yield from farm taxation, we might as well abolish it, because the yield this year is about £50 million. It probably costs a fortune to collect. There are 159,000 full-time farmers in the country paying £50 million in income tax. If we are going to be serious about farm taxation we have to look at the years ahead, not just the current year which is a year of depression.

The Minister should tell that to the Minister for Agriculture.

I have been consistent in this House on the question of farm taxation from 1969 onwards.

The Minister is in Government now. Does he not realise his responsibilities when he speaks in this House?

I believe, as does the National Economic and Social Council that on any objective analysis of farm taxation farm tax should be introduced on an accounts basis.

If that is the case the Minister will have to pay them all social welfare.

It should be on an accounts basis.

I am glad the Minister admits that.

It should be irrespective of rateable valuation. I have said that for ten years. I have no reason to change that belief now. I also make the point that those farmers whose incomes are depressed at the moment would not be liable to tax. So I do not see why the principle of the matter should be opposed.

Is the Minister speaking as Minister now?

I am giving my personal views.

It is important that we should know for whom the Minister speaks.

The Deputy will have an opportunity to speak.

But the Minister will not have the opportunity to reply.

The Deputy will have ample opportunity to comment when I have finished.

On a point of order, can the Minister give his own personal views to the House when he is speaking on the Finance Bill? I understood that one spoke with regard to the items of taxation as raised in the Bill.

That is not a point of order.

But the Minister is making personal comments.

Every Deputy is entitled to make a contribution. The Minister is making his contribution and he must be allowed to make it without interruption.

If we are to have equity between one section of the community and another — and no doubt farm incomes will improve during the years ahead and the current recession in incomes will pass — it is absolutely essential that all incomes should be taxed on a fair and objective basis. That is why I have always advocated the farm accounts system. I make that point even though I can appreciate that it might get a severe reaction. Indeed I would make the overall point that in 1980 the total State expenditure on agriculture was £227 million and in 1981 it was £310 million. So some of the figures and some of the arguments currently being used have to be relevant. It is arguable that the current agitation in relation to a particular State bank under the auspices of the Department of Finance is counter-productive because the last thing on earth which any farmer here should want to see happen is a drifting away into the hands of the commercial banks if the equity base of, say, the Agricultural Credit Corporation could be disfigured because of such agitation. So I think that agitation is wholly misguided and wholly undesirable. It is counter-productive and it will be seen to be such.

There has been a lot of comment in the House about the £9.60 payment under the Finance Bill. This is payable to the wife who works at home. We have been told that this is an unwarranted intervention in family affairs. It is no more than a small recognition of the reality that many women work at home. Housework by a housewife is work. The State is providing a system whereby couples can arrange if they wish that the partner who works at home will have some money in his or her right. It has nothing to do with the argument of Deputy Haughey that all this will diminish family responsibility. It is an enlightened change. The £9.60 is very modest but on balance it is a step in the right direction.

With regard to VAT why should various services be emempt from this tax? Why should the bloodstock industry be exempt from VAT? Barristers go to court and charge fees for services rendered but this is totally exempt from VAT. Doctors and dentists do not pay VAT. Why not? Is it fair to other people who have to pay VAT?

When we are so short of money for social welfare I am not so sure that in relation to the Finance Bill and indirect taxation we have not reached the stage of diminishing returns in terms of duty on alcohol. We spend about £2,500,000 a day on alcohol but there are limits to the extent it can be taxed. We also spend a lot of money on other things. We spend about £300 million a year on chartered holidays abroad. If we are looking for £15 million and we impose a 5 per cent surcharge on such holidays we will get £15 million from it. I would like to spend £15 million on the elderly and the deprived in any constituency in the country. One assumes that chartered holidays are discretionary and I do not believe that a 5 per cent surcharge will deter a person from going on such a holiday. I am not suggesting that this be formally introduced but it is something that might be considered. We are great at spending money but nobody has any suggestion about measures which might bring in taxation increases for such expenditure.

In relation to sources of State revenue it should be appreciated that future budgets will be enormously constrained because we have virtually dismantled the main sources of central Government tax revenue. We have abolished rates and, for all practical purposes, we have abolished capital taxation. We have abolished wealth tax and we have abolished capital acquisitions tax for all practical purposes. We are now stuck with customs and excise duties, income tax and VAT. We have failed to broaden the base of taxation to pay for essential services. In 1981 32.6 per cent of all Government tax revenue is represented by customs and excise duty. Capital taxation is represented by 0.5 per cent this year. One wonders if we should even bother collecting this tax as it is presently structured. Stamp duty yields 2 per cent and income tax 36 per cent. Corporation tax is very low. The 10 per cent which this collected represents 6.7 per cent of the total State revenue. That is very little. We get approximately 18 per cent from VAT for State revenue. Agricultural levies yield 0.2 per cent and motor vehicle duty yields 1.3 per cent. The country is very dependent on about three sources of revenue to pay for the money we give to old age pensioners and other social welfare benefits as well as payments we give to farmers in the current recession. There is a very urgent need to consider the whole question of resources of taxation.

The only safe person to quote at this stage in relation to the Finance Bill and the general reaction to it is a bishop I particularly admire in relation to his political attitudes, Bishop Cathal Daly. A newspaper report reporting Bishop Cathal Daly's last Lenten address said:

Quoting the words of James Connolly, Dr. Daly said that the man who was bubbling over with love and enthusiasm for Ireland, and yet would pass unmoved through out streets without burning to end all the wrong and suffering, was "a fraud and a liar in his heart". For too long we had encouraged the politics of promise, the Bishop said. We had voted for politicians who promised the most for us or our interest group, he said.

The newspaper report said that Bishop Daly went on to ask how seldom were matters of social justice or a fair deal for the poor made into election issues. He asked how seldom and by how few politicians were elections made an occasion for challenging the social conscience of our people to build a just society. He went on to ask would voters think of asking the candidates in an election where they and their parties stood in respect of Government aid to the Third World. He said what was called a recession in Ireland would be unimaginable prosperity for millions in the Third World.

He asked if voters would ask politicians for a specific commitment regarding old age and windows pensions, increased welfare benefits for deserted wives and single parent families. He asked would we raise with politicians the question of the forgotten men and women who are homeless, who sleep and live rough, and would we ask the politicians where they stand on matters concerning drink legislation and our drinking and driving laws, their impartial application and interference-free enforcement. He concluded with the saying that there are no votes in education. He asked were we prepared to make an issue of adequate budgetary provision for all levels of education and all types of schools and for services to young people. The heading in The Irish Press was, “Bishop attacks the `politics of promise' ”.

It should be, "Bishop attacks the Coalition".

When the Fianna Fáil manifesto was published in 1977, it epitomised all that was worst in our society in terms of the politics of promise. The former Taoiseach, Deputy Haughey, succeeded in running Jack Lynch out of office towards the end of 1979. One of those implementing that policy, my constituency colleague Deputy O'Donoghue, was pilloried by the aspiring leader of the party as the man who was responsible for the manifesto. He ran him out of the Department of Economic Planning and Development and then he abolished that Department, which was an absolute catastrophe from the point of view of social and economic planning. He then came in here and said: "It is all changed. I am not a politician of the politics of promise. They were the academics of 1977 and that was their manifesto." He went on television and spelled that out to the Irish people and, within six months, he epitomised everything that Bishop Cathal Daly attacked. For 12 months nothing was sacred. Political promises were made without any effort to introduce parallel taxation provisions.

Later in the year we will need Supplementary Estimates to cover social welfare payments. I had to bring in a Supplementary Estimate for the State Laboratory today because last January, to get the books right for the budget which was to precede the general election, the general estimates were cut by another 5 per cent. The Stardust disaster intervened and we did not have the general election until later. The figures then began to emerge. This Finance Bill deals only partially with the problem. The budget deficit is now £1,100 million even after all we did. The Irish people did not welcome what we did but, if we are kicked out of office, we may go down in history——

As the shortest Coalition of all time.

We have no intention to leaving for a long time, but at least we have the record of putting it straight to the Irish people that these are the realities of taxation and income. If you want to pay for social welfare, health, job creation and all the other programmes about which all politicians make promises at election time, they have to be paid for out of our own resources. They cannot be paid for out of taxation on booze, or VAT and income tax. The taxation base must be broadened. That is my message today. If we broaden it we will have a fair society, not a society based on sectional greed, sectional increases and a free for all where the wealthy, the strong, whether or not they are in trade unions, and the large farmers dominate the market place. We have to change that kind of society. I am convinced there are some politicians who can do that. Provided we get rid of the kind of nonsense I exposed in relation to Knock, and provided other outrageous projects are stopped and public money is spent with public accountability and sanity in terms of their cost benefit to the nation, we can achieve full employment and build a fair and just society.

I have outlined taxation issues which I believe are important. I want to put on record a word I used last Sunday. I was revolted at the mendacity of the previous regime in the non-provision of money for projects which were gaily trotted out like confetti at a toucher's wedding. After 13 years in this House that disgusted me and I wanted to react against it in the debate on this Finance Bill as strongly as I have reacted against it.

It does not give me any particular pleasure to speak on the Finance (No. 2) Bill, 1981. Unaccustomed as I am to speaking from this side of the House and from this bench, I wish to state that the act of the Minister of State is very hard to follow. Since his involvement in the Gaiety Theatre last June or July, and having regard to the fine performance he gave there, they say in theatrical circles that he is second only to the late Jimmy O'Dea. He gave another performance here today. I wondered what Ministry he was in charge of. It is seldom that I have to bother Deputy Desmond with my representations as a Deputy. He has assured us here today that he reads reports. If that is his sole duty and responsibility he will be doing a good day's work. Unlike other reports sent to the Department of Finance they will not gather very much dust while he is there. He has so little responsibility for the day-to-day running of the Department of Finance that he has plenty of time to browse through the books.

Today he expressed many views which he states are personal views. I find it very hard to differentiate between the personal views of Deputy Desmond and those he expresses as a Minister with responsibility for a Department. To me that is a characteristic of this Government. What they say at party meetings or in the House are personal views which do not reflect the thinking or the philosophy of the party or the Cabinet. It reminds me of a speech that was not delivered but which was circulated by Deputy Kelly to the Claremorris Chamber of Commerce some time ago. The speech was issued to the media — it appears the first requisite of this Government is to get their speeches to the media and then to make the speeches — but the Minister when he went to Claremorris found a very unresponsive gathering. He was advised by senior members of Fine Gael who were members of that Chamber of Commerce that it would be ill-advised to deliver the now infamous "piglets" speech. I understand the Minister was quite annoyed and irked but he could not stop the media publishing the speech. It is now history that the wrath of his leader, of Deputy O'Leary and others fell on the Minister's head. Reports of the speech were received with shock. I remember at the time I had a complete inability to understand the philosophy and the mentality behind the statements in that speech.

It is necessary to go back in time to understand what happened. At one time Deputy Kelly made a speech saying that when Fine Gael got back into office they would bring back car tax but the leader of the party, I think Deputy Dr. FitzGerald, stated it was not Fine Gael policy. I think I am correct in this. What happened when they got into office? We found that the statement of their frontbench member, Deputy Kelly, became Government policy. If the speech he made in Opposition, and which was disowned by his own leader at that time, now becomes Government policy what will happen to the philosophies and the theories expressed in a speech prepared for the Claremorris Chamber of Commerce? I would say that speech was more right-wing than statements of Ronald Reagan, President of the United States and Mrs. Margaret Thatcher, Prime Minister of Great Britain.

Great friends of the Deputy's leader.

It was an extremely right-wing speech and it put fear and trepidation into the hearts of my constituents and all the people. I do not wish to take in isolation sentences or views expressed in that speech but the general philosophy was that we should get rid of social welfare and State housing and that each of us should become more self-dependent. Yet, the Bill before the House indicates clearly where the Government stand and because of the imposition of heavy taxation it will not allow people to help themselves. We had the thoughts of Deputy Kelly, the Rasputin and the guru of the Coalition. His thoughts were set out clearly in that infamous speech at Claremorris.

Today we heard the views of Deputy Desmond, not as senior a member of the Government as Deputy Kelly. He has expressed many views today that will cause fear and trepidation to many sectors of the community. However, he has said that the views he expressed are personal views. We have two conflicting gurus: the guru of the Labour Party — as our leader said, the once great Labour Party——

That glittering phrase was used by Deputy Fitzgerald, not the leader of Fianna Fáil.

Somebody once referred to the Labour Party Ministers as the "salmon socialists". It was a comment of a famous journalist in The Irish Times.

The phrase used was "smoked salmon socialists".

The Minister accepts that classification?

I am merely correcting the Deputy.

The comment was made by John Healy in The Irish Times— I think I am correct in attributing that comment to him. I have said before and I repeat now, there are more socialists and socialist policies in Fianna Fáil than were ever in the Labour Party. There are more down-to-earth socialist-minded Deputies from working class backgrounds in this party than were ever in the Labour Party. I am proud to be one of those members from a rural constituency.

The many views expressed by the Minister of State today will be analysed in the days and weeks to come. They provide considerable food for thought. There is little point in making comment on what he said because he said they were his personal views. I always thought that personal views of Deputies were reserved for humble backbenchers like myself. We can express our personal views on legislation. When Fianna Fáil were in Government I expressed personal views on many occasions but when a Deputy takes on the responsibility even of a junior Ministry the views he expresses should no longer be personal but should be the philosophy of the Government in which he serves. That was the norm when we were in Government and it will be the practice when we return to office. When Minister speak they do so with responsibility and as Ministers. They do not, or should not, express personal views, which they rush to disown or to pull back from, as was the case of the infamous Claremorris speech which was disowned by the Taoiseach.

When Fianna Fáil were in office their Deputies hopped to the lash.

I do not see any marks on my back from the lash.

I am only looking at the Deputy's face but the marks are there and are also visible on his colleagues. Funnily enough, 78 Fianna Fáil Deputies are unanimous about the death penalty. Of all issues the one that has divided Christendom most severely in this century has been this matter, but 78 Fianna Fáil Deputies are of one mind. There is some lash there.

We believe in democracy. We believe in taking a decision as a party and standing by it.

Fianna Fáil behave like sleeveens. They are trying to pull out the carpet from the people who are trying to do something——

The confusion in the Fine Gael-Labour Coalition on this matter——

We should return to the Bill before the House.

If the Minister wishes to debate that matter, why not bring the Bill before the House?

We will debate it.

Let us see where Deputy Cooney, Deputy White and Deputy Liam Cosgrave stand with regard to it.

There will be no shortage of debate.

Acting Chairman

We are discussing the Finance Bill, not any other matter.

There are 78 Deputies all of one mind on the death penalty.

Certainly the Bill dealing with the death penalty will not create any employment. I do not want to deal with that Bill now because I feel strongly about it——

The Deputy should tell the House what are his feelings on that matter.

Acting Chairman

Not now, please. There will be another time. The House should deal with the Bill before it.

Our party's views will be expressed by our leader.

All Fianna Fáil Deputies are cloned, processed and programmed to express just one view on this matter.

We operate under a proper parliamentary democracy, that is, majority rule. We make decisions as a group.

Even the Andrews brothers lay down under that.

I am asking the Minister to bring that Bill into the House as quickly as possible. Then we will find out how the Minister stands.

We know how 78 Fianna Fáil Deputies feel——

You certainly do.

——They are all of one mind. The statistical odds against that are astronomical.

We are of the same mind on Articles 2 and 3 of the Constitution.

Has the Deputy ever read them?

We are moving very far from the Finance Bill.

If I may, I would like to deal with the "piglet" speech prepared by the Minister, Deputy Kelly? Does his "piglet" speech form part of the Finance (No. 2) Bill, 1981?

I hope it does because for the last 15 minutes the Deputy has been speaking about nothing else, except for the capital punishment issue on which all his party are of one opinion.

The Minister, I presume, wrote his own speech, or had it prepared for him, but he did not make it because he was afraid of the decent honourable people of Mayo. He would have been eaten alive if he had made that speech there. He would have been run out of Claremorris.

I am nearly one of them myself, and if I had more neck I would be touting myself as Mayoman of the Year.

The Minister was advised not to make that speech in Claremorris and he did not have the guts to do it. He would not even make it in his own constituency, although it is more affluent than my constituency or the Mayo constituency.

I do not believe it.

We rely a great deal on State assistance because we have to and because we have been deprived for so long of the cream of the wealth of this nation. When we got an airport, a Connacht airport, the Coalition tried to take it from us. They also tried to take our Tuam factory from us. That is the Coalition's philosophy.

Fianna Fáil ran that factory down and did not say a word to the people who had it in their power to keep it going on an economic basis.

Fianna Fáil never closed a State run factory. Our business was creating jobs.

Fianna Fáil business was creating jobs behind desks. That is why we are where we are today.

This speech which the Minister did not make was very important especially when we see the Coalition housing philosophy. Young people cannot get a county council loan unless they are married.

The "piglet" speech referred to self-help, do your own thing, build your own homes — a fine philosophy — provided you can get assistance from a State agency. Young people do not have large sums they can call on, or wealthy parents or relatives to help them build their houses. To a great extent they rely on the State for financial help. What did the Coalition do in government? After two or three weeks in office they decided to remove the £3,000 subsidy for single people, first-time builders or house buyers. We announced at the 1981 Fianna Fáil Árd Fheis that this scheme would apply to all first time builders or buyers. We did not deny that subsidy to single people. The Coalition are prepared to give the £1,000 grant — very generous of them.

Now the young people apply to the county council for loans and they are asked if they are getting married. If the answer is "no", they cannot get the loan. This would be amusing if it were not so serious. The public found it very hard to believe this and the media, in a sense, are ignoring this injustice. If the applicants are getting married they have to go to the parish priest for a letter saying their intentions are honourable and that they intend to get married within 12 months.

Recently a priest asked a couple if he had to fill in a standard form. Perhaps the Minister would arrange for the Cabinet to provide forms which the clergyman — a Roman Catholic priest, a Protestant gentleman or another person responsible for giving the letter — could fill in. When the couple have the letter they go back to the county council and they are told they will be given the loan provided they both supply a P60. If their joint income is under £7,000 the loan will be approved.

Everybody will appreciate that it is embarrassing to have to ask a boyfriend or girlfiend how much he or she is earning. That question was never asked when I was looking for a wife. To have to ask a boyfriend or girlfriend to provide their P60 is a serious invasion of privacy. I am not making this up. This is a measure the Coalition are implementing. How could relatively sane Ministers like Deputy Kelly stand over this kind of philosophy.

As I said, the couple looking for a county council loan must have a joint income of less than £7,000, although they realise that after they marry they may have only one income — of course, the wife might get her £9.60 some time, which would be a great help in repaying a county council mortgage costing perhaps £30 a week. Before the money can be paid over — and this is the catch — they have to produce their marriage certificate. Then they will get the county council loan. There is no way the house will be available at that stage. What housing agency would build a house for a couple intending to marry, and who would only get their loans after they were married? These conditions will eventually be cited in annulment cases because this is interfering with our marriage system. Couples now have to produce letters, P60s, fill in forms, have the house built in two names and they have to get married. It is a new system of shotgun weddings with the bank manager putting a gun to their heads. If they do not get married they do not get the loan. What kind of pressure are the Coalition putting on people today?

It galled me when I read the advertisements issued by Fine Gael during the election campaign. As classic examples of misleading advertisements one could not get better. Maybe the Minister did not read them, but in the Sunday Independent of 31 May 1981 the headline read “Give us a chance”. The leader of the Coalition Government, Deputy FitzGerald, was surrounded by young people who felt he would do something for them. What has he done? He removed the subsidy which we introduced to help first-time house purchasers and builders to get their houses and to get married. How much responsibility must he accept for a Government which brings in those conditions.

Some days before the general election Fine Gael published an advertisement in the Sunday Independent stating that there would be a £4,000 housing grant for first-time buyers. They also referred to a pay-related home mortgages scheme and apparently there is a proposal to introduce this at some stage. Perhaps Fine Gael had to break their commitment when they joined with Labour in government. There is no doubt that they had given a clear commitment to young people that they would continue to pay the £3,000 subsidy plus the £1,000 grant. They did not state that they would remove the £14,000 loan from young people. At a meeting of Roscommon County Council I said that I would launch my own crusade to rectify the situation and use every opportunity to highlight this abuse of power. The Minister opposite may deny what I am saying because he is dealing with individuals who have not been affected by these decisions. I appeal to him to change back to the rules which applied under the Fianna Fáil Government.

The Deputy probably will not believe me when I say that in all the correspondence I have received there has not been a single complaint about the point he has been sweating over for the past 15 minutes.

The Minister represents an affluent constituency.

The Deputy has never gone to the doors there and knocked on them, as has anyone who works in the constituency.

I come from a rural constituency where people need county council loans and are not in a position to obtain a loan from a bank or a building society.

I know that, but I thought the Deputy was complaining about the restriction of this facility to people who are married or about to get married. On that point I have not had a single complaint from my constituency.

The Minister must be living in an ivory tower. I know he is a professor and would be very hard to approach about such mundane matters.

I have had to slosh around the streets looking for votes in the same way as the Deputy.

He says he does not use the car and saves a few shillings of the taxpayers' money. That is only newspaper propaganda which is not realistic. He lives in an ivory tower but I live among the people in my constituency. I do not know whether the Minister lives in his constituency.

The Deputy introduced the question of my constituency. I wanted only to say that on the point he raised I have not received any complaints.

Has the Minister been back to his constituency since the election? I live in my constituency.

I, too, live in my constituency.

I know people who started building their homes on the basis that there would not be a change in the position, and they are now being deprived of these payments.

The Deputy is miles out of line. I have told him the facts about my constituency and he will not swallow them.

We are digressing. Please return to the Finance Bill.

There is a reference to housing in the Bill. I know a very decent individual who voted for me at the general election. He has an aspiration to get married, like any Irishman, but he is nearing 50 years of age and his chances are running out. He is in a desperate position because he has commenced his house and has been refused a loan. What will he do? Where is he to go for help? He could get a letter from the parish priest but he cannot get a girlfriend and thus cannot qualify for a loan. I wish the Minister would come to Roscommon and meet the ordinary people who have been so severely affected by the policies expressed by him in his Claremorris speech.

The Deputy should continue about the man he was describing because he was richly comic on that subject.

Acting Chairman

We will not go matchmaking at this stage. Please refer only to the Bill.

All I can do for this man is tell him to hold on because we will soon be back in power. Perhaps the Government will fall tonight. This man gets down on his knees every night and prays for the fall of this Government.

Is he going to forswear matrimony altogether unless the Government fall? Are we to take it that he has been living in this country for 50 years and his only hope of matrimony depends on seeing Fianna Fáil back in office?

His only hope of getting a loan is by Fianna Fáil's return to power. He is not concerned about getting married. He wants to get a loan, not a wife.

I thought the Deputy said he wanted to get married.

He has to get a wife in order to get a loan to build a house. The Minister is becoming agitated because he is hearing the hard facts. Like many other people, this man in Roscommon is praying that the Coalition Government will quickly fall.

I thought this man's chances of matrimony were running out at the age of 50, which I could well believe. Is the Deputy whingeing that it is his chances of getting £3,000 which are running out?

He cannot get the £3,000 or the loan without getting a wife.

I am not sure what is the burden of the Deputy's complaint about this constituent who is pining for either a wife or £3,000.

Acting Chairman

We must return to the Bill and this problem can be referred to Deputy White who looks after matchmaking.

The Minister has no sympathy for anyone in this plight, as is evident from his infamous "piglets" speech. That is his philosophy and he is welcome to it, but it is not the philosophy of Fianna Fáil.

Has the Deputy ever sat down with this man and said "Listen, Pat, what exactly is it that you are looking for?" He should talk to him and find out what he really wants.

There are some other Members on this side who wish to speak.

I love the Deputy's affectation of concern.

Hopefully our return to office will not be long delayed.

I hope the Deputy's constituent will hold out that long without blowing his brains out in despair.

When that time comes I will make every effort to ensure that these restrictions are lifted. I am publicly committed to this and when our spokesman on the environment returns as Minister we will be back to a situation of helping people.

I have no apologies to make for detailing cases in my constituency because I have been elected to express the views and fears of people in an effort to change the policies of this Government. As a rural Deputy, my views may differ from those of the Minister opposite and I make no apology for raising these sensitive issues.

I advise the Minister to take a strong dose of realism and then come down to a constituency in Roscommon to make a speech. Naturally he will not be invited to a Fianna Fáil dinner.

The policies announced by Fine Gael during the election compaign have not been realised, and throughout the country there is a strong feeling of disgust and despair because of those broken promises. I deliberately do not refer to Labour because Fine Gael were stronger on the ground in my constituency and they are the bigger party in the Coalition. I have not referred to Labour's policies because they did not put up a candidate in my constituency. I have been highlighting the misleading advertisements of Fine Gael. Their housing policy will cause serious unemployment in the building industry in the next 12 months and I suggest that between 1,200 and 1,400 jobs will be lost straight away. This is a sad comment on Fine Gael's advertisement in the Sunday Independent of 31 May: “Let us stop the rot now: Fine Gael will create new jobs.”

They have not done so since they came into office. On the contrary, in his budget speech and in the Finance Bill Deputy Bruton has restricted recruitment to the public service, thereby cutting off job opportunities for young people in that area. So where are the new jobs Fine Gael were to create? The evidence can be seen in Tuam where Fine Gael policy means that there will be 280 more people on the dole in 12 months. That is some job creation, some record. The people of Tuam last summer were misled into voting for them and now they see the result. Unemployment in the west is soaring and will continue to soar because Fine Gael are convinced that the monetarist policies of Prime Minister Thatcher in England will succeed here, that the more unemployment that is created the greater the recovery will be in the economy.

I am not surprised at the philosophy of the Minister now in the House but I suggest to him that if he does not do something quickly unemployment will be in the region of 150,000 by early next year. Is that not the unacceptable face of Fine Gael policy and Coalition mismanagement? As I have said, the budget and the Finance Bill debar recruitment in the public service and in semi-State agencies, evidence of which can be seen in the operations of the Irish Sugar Company in the west. All we can do is hope that the Government will change course. They must be concerned at the soaring level of unemployment. I suppose the Minister is well able to justify rising prices, but surely the people in his constituency——

The Deputy came a cropper the last time he referred to my constituency. He would be well advised not to get back on it.

The Minister has no people unemployed in his constituency.

Certainly we do, by the thousands.

Why then did the Minister put a ban on recruitment to the public service? It was a serious decision for the Government to take because of its serious effect on employment. We are facing a winter when more young people will be on the dole queues. Unemployment assistance is totally inadequate, and another undesirable aspect is the requirement that young men and women looking for jobs have to go to Garda stations to sign on. Does Deputy Flaherty, described as the Minister for Poverty, agree with that requirement? Hers was an appropriate Ministry to appoint in these days of widespread poverty. Young single women deserve better than to have to go along to Garda stations to sign on the employment register. It is not a criminal thing to be unemployed and the Garda have a lot to do already detecting crime and apprehending criminals. Will the Minister in charge of poverty at least give some consideration to this? It is bad enough to be unemployed but it is completely undesirable that young men and women should have to go to Garda stations to sign on.

More people will find themselves in this situation in the next 12 months, particularly young people who if they have not obtained jobs may be on the dole queue for a long time. We must be concerned about this position. The Government would be unfeeling if they were not concerned at the plight of such people. The should do something about this. They should try to create jobs and have a youth employment scheme. In our first months in office in 1977 we were faced with a serious situation and set about bringing forward policies which helped to alleviate the situation. In 1981 we lost office but since the Government have taken over they have not taken any steps to create jobs. I have already highlighted that.

Going away from the major social problem, unemployment, to discuss a Constitution which is quite adequate is the wrong thing to do and the Government should come back on the right track as soon as possible and concentrate the combined wisdom of the Cabinet and their adviser, Mr. Alexis FitzGerald, to consider ways and means of creating jobs. The situation is serious and people have very little confidence in them. During our tenure in office we were prepared to borrow money to invest in job creation. It is honourable and justifiable to borrow money to create jobs and wealth. It is a good investment. The policy of the Government, where they feel they are not in a position to borrow and do not wish to do so, should be reconsidered. When we were in Government if I went to different Departments for grant assistance for building advance factories and so on in any part of my constituency the Minister did not say: "Deputy, the money for that has to be borrowed". We knew it had to be borrowed but we borrowed it for constructive purposes. We built schools and factories and provided sewerage and water schemes. They were good investments and will repay in time. That policy was right and justified. It was a policy of progress. The present policy of cut back in public expenditure is a negative approach to planning and to the creation of jobs.

In rural areas the effects of the present inflationary policy of the Government are more evident than in the eastern part of the country. Unless there is a sharp change in direction the emigrant ship will start off again. Where will people go? There is unemployment in Britain, America and other countries. We stopped that ship and will not allow it to start again. I hope the Government will see that their policies will lead to massive unemployment and that our young people will have no opportunities to develop their full potential.

The Government's policy, which will be discussed at Private Members' Time this evening, will create a situation where there will be a serious job loss in the teaching profession. That is a serious situation. It will put young teachers on the dole queue which has been swelling over the last few months. I appeal to the Minister for Education to change his philosophy in relation to this. Not only will it cause job loss in the teaching profession but it will close many two and three teacher schools in rural areas. If enrolment at four years of age is done away with, many of these schools will not have sufficient numbers to justify having two or three teachers. I do not know how much consideration was given to this by the Cabinet but in discussing it they must have realised the implications for young children and the teaching profession.

As regards poverty I should like to congratulate the junior Minister, Deputy Flaherty, an able Deputy who was elevated on her first day in the Dáil. She has an onerous task. She was provided with £100,000, a sum of money which would not eliminate hardship or poverty in one county let alone 26. How can anyone proudly boast that this Government are concerned about poverty when all they have done is appointed a junior Minister, given her a Department, a State car, staff and £100,000 to spend? She could spend that by giving an increase of 50p to long stay patients in welfare homes.

Including 30 or 40 of the 50 year old bachelors the Deputy was speaking about earlier.

They will come into that category at some stage. Long term patients receive £5 a week pocket money. For them the day of having a bottle of stout or a glass of whiskey has gone. The Minister for rising prices made sure of that. A packet of cigarettes costs 94p. The Minister would probably say they should not smoke because it affects their health. These people are 80 years of age and upwards. They have less than 80p a day to spend. What can one buy for that today? The Irish Times costs 30p and other morning papers around 22p. Those are the types of costs that are involved. They might want to buy a pound of sugar or a loaf of bread or indulge in a luxury such as backing a horse but the Government are making sure such people will not have an opportunity of enjoying their last days. I ask the Government and the Minister to consider an immediate increase of this allowance to at least £10 a week, which would be modest. The £100,000 the Minister got this year would merely give an increase of less than 50p to long stay patients. What would that £100,000 do? Would it alleviate a poverty which we accept exists, whether this be in the nature of psychological deprivation or whatever? Would it compensate for the increases which are leaving so many people impoverished or would the Minister for rising prices be satisfied that the increases in the budget are adequate to counteract the increases in prices that he has sanctioned since June 1981?

In accordance with precedent any Minister must be referred to by his correct title.

I do not mind what he calls me.

It is a question of what the Chair wishes should take place.

The Chair may be interested in the fact that the Deputy has not referred once so far to any provision of the Finance Bill.

Unfortunately, in that regard he is following a tradition that has been established much to the annoyance of the Chair.

I trust that the same indulgence will apply to me during my contribution.

I am speaking about the £100,000 which the Government have included in the anti-poverty plan. We were criticised for abolishing our combat poverty programme but we had other plans for that whole sphere which we would have implemented had we been returned to office. This £100,000 will not do much to combat poverty and there is poverty now on a scale that has never been known before as a result of the increases sanctioned by the Minister in respect of a large range of commodities. These increases in prices impose a serious burden on the less well off in particular. What effect can an increase of 5p per week have in the face of such increases in prices? I used to hear at election rallies in the past about the shilling that Fine Gael took off the pensioners but now they are the people who are granting an increase of 5p per week to some social welfare recipients. Is it any wonder that the Minister should qualify for the title of Minister for rising prices?

The Chair has asked the Deputy already to refer to Ministers by their proper titles.

The Chair need not protect me. I do not mind how the Deputy addresses me.

The Chair is concerned only with what is proper. He is not protecting anybody but the Chair.

Almost every item that one can think of has been the subject of an increase in price since June last, yet the Government were not embarrassed to give such paltry increases to social welfare recipients. Perhaps the Minister is not aware of the plight of these people since there are not likely to be many of them in his constituency.

There are plenty of social welfare recipients in my constituency and if they have problems they are real problems not like the problem of the person the Deputy was talking about a short while ago, the one who did not know whether he wanted to marry or to get the £3,000.

Social welfare recipients were shocked, as were many others, on receiving the current ESB bills because included in those bills is a 25 per cent surcharge increase. It is difficult to understand the philosophy of an administration who would allow such an increase to a semi-State body who showed a profit of £6 million this year. We refused to grant that increase to the ESB when we were in office. Apart from those depending on social welfare payments there are many others who live in modest homes but who will find it very difficult to pay this extra charge.

It is appropriate that this Government should have a Minister who is responsible for the area of poverty. We did not need any such Minister when we were in Government. We tried to help the people as much as possible and to alleviate their problems. We gave social welfare recipients a 25 per cent increase early this year. That was a realistic increase. Such people as widows, deserted wives and others are being granted a mere 80p per week increase by this Government. I look forward to hearing the Minister defend such paltry increases and at the same time to defend the increases in the prices of food, fuel and almost every other commodity.

Something must be done immediately to counteract those prices so far as the less well off are concerned, even if this means introducing a further supplementary budget this year to increase social welfare payments by between 18 and 20 per cent at least. The Minister looks as if he is not interested. He does not think very much about these things. He wants to debate the Constitution, hanging and such academic things. Back-bench TDs from rural constituencies are concerned about bread and butter issues, the young children who cannot go to school staying at home to be looked after and their parents having to stay at home to look after them. They are not the things that concern Deputy Kelly, Minister for Labour.

Deputy Kelly is Minister for Trade, Commerce and Tourism.

They get more interest from the trade unions than from the Minister, although he has been very courteous in his replies.

I could see the Deputy making a few checks in case he would need to write to me on anything. If he does he will get the very same treatment as Deputies on my side of the House.

Will Deputy Leyden accept that this is not a matter of a duologue between himself and the Minister?

It happened by accident. He had made a few notes before I came into the House and he happened to be here. He is one of the Ministers in the Cabinet who must be reminded of the realities of life today. He is living in an ivory tower. If I was in his Cabinet now I would be advocating an increase across the board for all social welfare recipients of at least 20 per cent to allow for the increases which were contained in the budget and which have been granted since in the mini-budgets which have occurred. Since this Finance Bill was introduced and announced on 21 July 1981 the situation has changed dramatically. We are concerned about this as working full-time rural Deputies because we are meeting the deprived, the poor, the people who find it very hard to live. I appeal to the Minister for Poverty, Minister of State Deputy Mary Flaherty, that she concern herself with trying to solve the problems in that area by coming out publicly and informing this country where she stands on the relief of poverty in the State. The one way we will do that very quickly is at least to give social welfare recipients a decent income at this stage. People who are unemployed, sick, widows and disabled have not a very strong lobby. They have no trade union, unfortunately, to act for them. They have no advocates except us in this House, concerned Deputies who would make their case before this Parliament. I, for one, am very dissatisfied with the approaches being adopted by this present administration in the alleviation of poverty.

We go on to what is not contained in this Finance Bill but which was referred to by Minister of State, Deputy B. Desmond, in relation to the infamous £9.60 per week for the stay-at-home wives of PAYE workers. This is the greatest "con Job" of the general election of 1981. The young married women whose husbands are working and pay PAYE expected this money to come winging its way through the letterboxes, the week after the Government was formed, or at least by the end of July. They would allow that. They are still waiting. They are being told now that they will get it in 1982 in the next Finance Act. At that stage what will £9.60 be worth in real terms compared with today's values? Possibly £8 or £7.50 or less. It must be pointed out also that this £9.60 per week tax credit will not apply to the wife of somebody on unemployment assistance or unemployment benefit or to the wife of a small farmer in the west of Ireland or anywhere else. When you read the infamous advertisements of the general election campaign in the Irish Independent of Tuesday, 2 June 1981 you find: “Women deserve better”. I agree with that; women do deserve better. It goes on: “On June 11 you can do something about getting a fair deal by voting Fine Gael. Here is what the Fine Gael tax proposals will give you. Wife working at home £9.60 per week tax credit payable direct plus new child benefits”. It goes on to outline what they will get from one child to five children. “Wife on social welfare: full payments for wife and children paid direct”. Nobody has explained that yet. “The Fine Gael programme includes many other benefits to help women in practical ways in Irish society. Vote Fine Gael, and put them in and put those policies into action”. We are still waiting for those policies to be put into action. This has been the greatest “con job” exercised in this country in any general election campaign. We expected promises, but promises at least should be honoured as quickly as possible. The wives of many farmers in my constituency and throughout this country were under the impression that they were working at home. If you ask the wife of a farmer she will tell you what work at home is all about. This advertisement said, “Wife working at home £9.60 per week tax credit payable direct”. The Government are saying that the £9.60 will not be paid to the wife of a farmer because seemingly they do not regard her as working at home. She sits around the house watching “Peyton Place” or some other programme on television, or listens to the radio. She does not work. It applies only to the wives of PAYE workers.

Is the Minister, Deputy Kelly, in charge of that Department which deals with unfair descriptions in advertising? Some woman should take the Government to court on that misleading advertisement which was placed before the electorate before the 1981 election. The urban voters particularly voted in great numbers, feeling that they would get this assistance. As our leader said, it is an insult to the couple and to married life that the State would interfere between husband and wife. If the Government propose now to implement this scheme then they must bring it across the board. If it applies to the wife of somebody on PAYE, then it should apply to every wife in this country. Then you would have fairness and across-the-board payment.

Regarding misleading advertisements I have just one other point. I feel it is right to highlight the many cases in which the electorate were misled in 1981. The classic example of misleading advertisements was published during the election campaign on Friday, 29 May, only eleven days before election time. It said, "can we afford more of the same? Fine Gael will bring prices under control". That is the laugh of the century. That should be published in every music hall in this country including the Gaiety Theatre. It would be a characteristic joke in Maureen Potter's "Gaels of Laughter" if she caricatured the present administration and said, "Fine Gael will bring prices under control". The advertisement went on to say: "The Fine Gael anti-inflation plan will subsidise basic food prices". There has been no subsidy. "It will hold ESB, postal and telephone charges down". Postal and ESB charges have soared since they got in. "We will increase child benefit to £3 per week per child". This has not been done. That is the type of misleading advertisement presented to the Irish electorate before the election of 1981. It is inconceivable how responsible Ministers and a responsible Government could stand over that type of misleading approach to the electorate. It has been the greatest "con job" and the most cynical exercise ever perpetrated in this State.

Debate adjourned.
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