Dáil Éireann debate -
Thursday, 17 Jun 1982

Vol. 336 No. 3

Finance Bill, 1982: Second Stage (Resumed).

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

Debate resumed on amendment No. 1:

To delete all words after "That" and substitute the following:—

"Dáil Éireann declines to give the Bill a Second Reading on the grounds of social justice and economic responsibility, and in particular because—

(a) in departing significantly from the terms of the Budget as outlined in the Financial Statement by the Minister for Finance in March, 1982, it confers concessions solely on the relatively well off, while giving no equivalent concessions to the low-paid as was proposed in the Family Income Supplement provisions of the Budget presented to the House in January, 1982,

(b) in granting concessions in regard to PRSI, it does so in such a way as to give maximum benefit to the well-paid, and little or no benefit to the low-paid,

(c) it aggravates national economic difficulties by measures, in regard to payments in advance of Value-Added Tax and Corporation Tax, which will cause losses of jobs in many vulnerable businesses, and will worsen the national budgetary situation for 1983 by using up revenue that would otherwise be available in that year, and

(d) it does not provide for any long-term reform of the PAYE system as was contained in the proposal for the introduction of a system of tax credits in the January Budget, while it fails to seek other sources of revenue by abandoning any proposal to reduce tax avoidance through discretionary trusts."

—(Deputy J. Bruton.)

Mr. S. Brennan

I will summarise the points I made before Question Time. I adverted to the possibility of another general election and pointed out that the situation would be that we would be without a Finance Bill in that event for a considerable period. I suggested that might cost the country in the region of £250 million. I concluded my point by pointing to the responsibility of the House to provide the country with a Finance Bill irrespective of whether Members are totally happy with various sections of it. That is a great responsibility on Members.

I went on from there to point to a few headlines in the financial situation. One is that the servicing of the public debt is now eating up virtually 90 per cent of the total take from the PAYE sector which demonstrates that that is a road that we cannot go down for any period of time. I pointed out that over the years we got ourselves into a situation where virtually 50 per cent of total current expenditure by the State was spent in three Departments, Social Welfare, Education and Health. I seriously question whether we are receiving value for money in those areas. I also pointed out the very narrow tax base which applies to this country. I quoted a figure of 700,000 to 800,000 people who could be regarded as the real tax base because the gap between them and the population of 3.3 million is taken up with dependants and those employed in the public service. That is a statistic which is getting worse and one which I pointed out as a headline for the nation which we ignore at our peril. In the past six years the public service grew by 37,000 people while manufacturing grew by 7,500 people. If the public service is to achieve anything close to 20 per cent this year, the cumulative increase in public service pay between 1981 and 1983 will come to 75 per cent. That is at a time when incomes in industry, industrial services and agriculture will probably fall. I pointed to the tension in society and said the greatest tension seems to be between the public sector and the non-public sector. The figure of 75 per cent illustrates the point I am making. The consequent imbalances in income awards, job opportunity and security in different sectors of the economy are factors which make this country harder and harder to govern.

I went on to talk about the situation in Austria. I pointed to the openness of that economy and how they got their inflation rate down to 7 per cent. Unemployment is down to 3 per cent. They did this by putting aside ideological differences which existed in their parliament and among their people. They embarked on a course of putting the economic difficulties before any other consideration. It seems to be meeting with some success.

Those are the points I made before Question Time and I should like to continue by pointing to the situation in Austria where they have appointed a joint commission for prices and wages which consists of 20 people. Labour has abstained from using its full bargaining power in return for a direct influence on price formation and on economic policy generally. Some prices, notably foodstuffs and energy, are controlled by the Government. The others are subject to voluntary control. The joint committee have taken a grip on the economy in that way. Free wage-bargaining is allowed. They do not interfere except to postpone negotiations from time to time. Success on the prices front has moderated wage claims to competitive levels. Bargains have been made with unions which are linked to tax cuts. They have successfully managed a hard currency policy which is difficult to implement. The unions have accepted the need for international competitiveness to be maintained. This has improved the Austrian economy and there is no reason why it could not be done. It has produced a remarkable degree of self-discipline among workers and wages have tended to move with those in the highly-competitive German economy.

The main reason for consensus on income determination has been that all sides, business, Government and unions, are committed to maintaining employment at a high level. They managed to keep inflation under control and because of this have been able to introduce more expansionary policies. There are many similarities between the Austrian economy and ours. Between us all we seem to have failed dismally for many decades to lessen, let alone eliminate, our problems. Perhaps the Austrian experience is one we should look at.

We have had social partnerships, national wage agreements and various gatherings of the brains of the nation to sort out our problems but in the end we seem to retreat into our sectional groups when the chips are down. The interests of the nation seem to come out last. If we are to have a new social partnership now is the time for it. It must be genuine and unselfish. It is obvious to anyone who looks at our situation that our options are limited. Basically in terms of day-to-day finance we have three options. We can put more tax on the people. We can broaden the tax base and pile on taxation. Quite frankly, that is not an option and there is no point in anyone thinking that that is the answer to all our problems or that we can continue to pay for services.

As I said earlier, the level of services is not maintainable. Not only is it not maintainable but, as the years roll on, it will be even more impossible to maintain the present level of services. Seeking to raise extra taxation is therefore not an option. I agree with those who say taxation has reached saturation point. I was speaking to a constituent the other day and I was told the joint income of himself and his wife is of the order of £16,000. With PAYE, car tax, value-added tax and the various direct and indirect taxes, he calculated that he was returning to the State out of that £16,000 something of the order of £13,000. Admittedly some of the taxation involved would be voluntary indirect taxation but, even so, there are not many options these days in personal expenditure.

Taxation in not the answer. Some effort must be made to introduce a broader spread. The tax basis is something of the order of 24 per cent on the entire working population. That is the fresh money coming in. What we must do is spread that, broaden it out and introduce greater equity. I trust the commission will take a major step in that direction because taxation reaches a stage at which incentive dies. It stifles initiative. What then is the other option? I have already pointed out that virtually all the return from PAYE goes in servicing the national debt. It would be quite unsustainable to increase borrowing, thereby adding to the national debt. One need not dwell on that. It is quite obvious. It is now accepted there is no real option in that regard and we can no longer look to it.

That brings us then to the only remaining sensible option. Whether the ideology is left or right, or whether one wants to deal practically with the matter, one thing is quite clear, namely, that the level of public expenditure has reached an all-time high. Someone will have to shout "Stop". I have dismissed the other two options and I know the public at large have also dismissed them. The difficulty in curtailing public expenditure is that somebody who wants to be clever will immediately start arguing about a reduction in gardaí, a reduction in the schools, a reduction in the number of teachers and so on. Over the years we have tried to achieve a successful embargo on employment in the public service. I quoted the figure of 37,000 new people in the public service in seven years and 7,000 in manufacturing industry. This shows that, however much we may try to control public expenditure in the public service, we have not been successful, mainly because of the enormous increasing demands under the headings of social welfare, health and education and more and more State services generally. We may indeed have reached the point at which the effort must be to ensure that the level of expenditure will not continue to rise. Health expenditure in just one decade has doubled proportionately. I emphasise proportionately. We are spending twice as much proportionately on health as we did ten years ago despite the fact that we have not earned the extra money to pay for the service in that period.

We are now spending 8 per cent of GNP on health. That caters for some 45 per cent of our people. Britain spends 7 or 8 per cent of GNP in catering for 90 per cent of the population. That comparison must lead to very close questioning of the cost-benefit of every £ we spend on these services. Public expenditure is growing at an alarming rate.

To digress for the moment, I had a lady to see me the other day. She lives in a corporation house. She waited an hour to tell me that the taps in her bathroom were dripping and she wanted to know if I could get the corporation to fix them. She was living on a corporation estate and she said the repair was not her responsibility. I had a gentleman from a corporation estate who told me his front window had been broken and he wanted me to get the corporation to fix the window. I told both that the State is not there to act as a continual subsidy machine. It is there to protect the vulnerable and encourage people but certainly not there at one's right hand every time something minor goes wrong.

That mentality seems to be growing. It is increasing the cost of the public service and thereby increasing taxation out of all proportion. I say that quite bluntly. Equally bluntly I say that the only real financial option in the foreseeable future is the control of public expenditure. Much as we may hate to do that, much as we may hate to say to schools, or hospitals and so on that they will have to do with less, nevertheless that is now the only approach. But we must not do that on its own because on its own it would depress the economy. Parallel with that we must try to increase that figure of 24 per cent mainly in the private sector so that a surplus can be produced to enable us to pay for increasing services in other areas.

The country needs a double injection. It needs control of public expenditure and at the same time encouragement to the private sector to improve competitiveness. There must be no disincentives to those who wish to create employment. Most of our employers are very small, five, six or ten man operations. They must be protected. I am supported in this by no less a body than the Central Bank in its report, which says:

The primary and immediate objectives of economic policy at present, therefore, should be to

(i) correct the imbalance in the public sector finances — particularly through introducing policies that will lead to the elimination,......of the current budget deficit......

(ii) improve the competitiveness of Irish industry and services.

Therefore, the Central Bank also have diagnosed the remedy we must adopt. To be fair to it I think this Finance Bill has taken a step in that direction. It has tackled the question of the deficit and has budgeted to reduce it in the 12 months to end-December 1982. I look forward to some results in that regard. The Central Bank have advocated that course of action as being the only one now available to us.

I pointed out earlier tensions between the public and private sectors. I want to suggest a road we might take in that respect. For example, in New Zealand the system of awarding wage rounds is as follows. The private sector enter into negotiations in the first place based on what the economy has actually achieved. When the private sector have finished their rounds of negotiations a norm is taken which is automatically and statutorily applied to the public service. The private industrial sector, therefore, set the norm for increases in the public service and the public service have no option but to follow that norm on the instructions of the national parliament. What happens here? We do it the other way round. First of all we sit down — and have done for many years — with the public service and tend to say, "what is the rate of inflation? What do you need? What can we get away with?"Then we set that figure. Then we tend to throw the private sector off the deep end and say, "Well, you can always plead inability to pay". That is putting the cart before the horse. The New Zealand system at least carries the benefit of pinning wage increases to something tangible which is the performance of the economy.

As I pointed out earlier, and must do so again, between the years 1981 and 1982 the cumulative increase in public service pay came to about 75 per cent while the corresponding figures for industry fell. It is quite clear that that road cannot be taken. Without making it a contentious political issue — there are too many of them, they are too divisive and rend the country assunder — we might examine the possibility of getting our order of priorities correct. We might measure the performance of the economy by initiating our negotiations in the private sector, coming up with some figures based on the performance of the economy — that is what the traffic will bear and the country can afford — because the private sector is well able to decide what the country can afford, the unions on the one side and management on the other. Having done that we might then take a similar figure, or some formula based on that figure, to the public service. If we do not do it in this way we shall be off on the old spiral of the public service using its muscle, getting its increase, leaving it to ordinary firms to plead inability to pay, or go out of business thus increasing the employment queues.

I want to come now to the main point I wanted to make in this debate, which is that I look forward eagerly and with some excitement to the production of a national economic plan. I know the Government have committed themselves to this, as indeed had the previous Government. That plan must be the saviour of our economy because if it is not and if it does not come up with solutions to the difficulties at present confronting the country, then we shall have missed a tremendous opportunity to tackle our problems. That economic plan must, first of all, deal with the financial situation about which I spoke. It must take account of the fact that we are using all of our PAYE revenue to pay the national debt, that £2 out of £3 in this country is spent by the State at present. It must take account of the growth in the public service. It must take account also of the fact that we are spending nearly half our current expenditure on three Government Departments, Social Welfare, Health and Education. It must take account of the fact that the options of borrowing and of increased taxation are not real options. Therefore, it must face squarely and honestly the only remaining option as a means of curtaining the growth of public expenditure and must do so honestly and openly. I am confident it will and I urge the Government to tackle it in that way.

Having done that, this economic plan must also undertake something much more fundamental. It must adopt an economic philosophy which defines the economic direction of the nation in the few years ahead. It must define the role of the State. Are we to continue to have the State act as the main generator of employment, to have the State act as the party that picks up all the tabs, to have it act as the great big brother who breathes down the necks of everybody? Or are we to adopt the philosophy which merely says: "Come here a second, the role of the State in this country is to be this — it should guide the people of enterprise who want to provide employment; it should prevent the worst excesses of the private sector; should there be excesses its role should be to prevent abuses of the private sector, to act as a referee, a hand-holder and a general climate setter of the economy." I fear we cannot have it both ways. I fear we cannot produce an economic plan which says on the one hand that we shall have some involvement by the State whenever it suits us and, on the other, some involvement by the private sector whenever it suits us. This country is too small to have opposing ideological approaches to our economic difficulties of the day. I trust and I am confident that this economic plan will seek to address those issues and come up with solutions to them. I am not privy to the information as to when that plan will be produced but I see from parliamentary questions that it will come up in the near future.

I should say also that in writing that plan I trust and hope the Government of the day will take into account not just their own views but those of every Member of this House, of pressure groups and the public at large. If it does not seek to pull together the various philosophies, the various pressures and realities facing the country, if it does not pull together those strands and define a course of action over the next five years — based on the kind of philosophy about which I have been speaking — I personally fear that the country will sink into an even deeper decline. I trust that is something none of us wants to see.

Having dealt with the economic plan at least to that extent I want to move on but, before doing so, I should like to quote an attitude of mind with which I find it difficult to disagree. Here I am quoting the head of the IDA, Mr. Padraig White, as reported in a recent newspaper article:

What was needed was a fundamental change in attitude, and the attitude to hard work, he said. "The basic problem with Ireland is that the public sector attitude and mentality dominates thinking within the country: that attitude is that you rely on the State, you get a job with the State which doesn't involve you in great risk."

Quite bluntly he said:

"That's going to change over the 1980s. It might be turbulent, but it's going to change because the public sector is not going to be able to employ the people."

I think I have demonstrated here today from my earlier comments on the budgetary figures that the public service indeed are not going to be able to take up that slack. There are some 100,000 youngsters at present coming through the educational system at intermediate and leaving certificate levels and there is no way at all, looking at those figures, that the public service can make any real impact on taking up the employment slack there. Certainly I agree with Mr. White when he says that it will be turbulent. Indeed "turbulent" probably is too mild a word to describe it.

Therefore, the only solution is to address the problems honestly and openly in the manner I have advocated within an economic plan. The end of this century is the year 2000 A. D. That probably seems to be a long time away but in fact it is only 18 years. Children born today will be 18 years of age at the turn of the century. We shall see many changes in those years and we shall face many stresses. But from the point of view of the country's infrastructure, for example, we shall need another city virtually the size of Dublin because the average growth of 1 per cent per annum will result in a population in excess of perhaps 4,000,000 people by the turn of the century and a substantial shift in age structure, with the young, the 15 to 29 age group, greatly exceeding the maturer age group, the 30 to 49 or so, group. We will see a very rapid shift towards urbanisation. Half of the population by the turn of the century will be living within a 50-mile radius of Dublin city. By the end of the century also we will have perhaps three-quarters or 80 per cent of the people living in cities and towns if present trends continue.

Our population growth is now among the highest in the EEC and will exceed a figure of four million by the turn of the century. We have not been able to keep pace with the growth in population and we have not been able to keep pace with these developments. It was estimated recently by An Foras Forbartha that between now and the turn of the century we need to spend £30 billion on putting in the kind of environmental infrastructure, roads, schools, telephones and all the various infrastructures we need in the next 18 years. Where in ainm Dé will we get £30 billion between now and the end of the century?

We certainly cannot do that if we continue to milk the system dry to the extent we have been doing for a long time. The State will not be able to meet that bill. We may need more imaginative forms of raising finance, we may need to talk to the private sector more honestly and openly and we may need to involve the public in helping to fund various projects. I have not got all the answers. I am sure the economic plan will include some imaginative answers to the kind of problem. If we have not found the answers by the end of the century we will be faced with traffic jams which will make the traffic jams in Dublin city at the moment look like a freeway, which will make the pollution and all the various environmental difficulties look like kids stuff.

I do not know where the money will come from. On the figures of the economy for the past decade, that kind of money is not here. I am trying to inject the realism which simply says that we need to invest in our infrastructure, that we need to spent that £30 billion which we have not got, so we must give some imaginative thought to the question of where we will get it. Earlier today at Question Time the Minister of State said time and time again that he would love to do this, that and the other scheme if he had the money. Quite clearly he has not got it and no other Minister ever had it. With an expenditure of up to 50 per cent on only three Departments and the figure growing all the time, there is no way the Minister will ever get that money, because that figure will continue to increase as the years go on.

I want to see imaginative answers in the economic plan to the problems of the day. I do not believe the recession has bottomed out. That is disappointing, considering we have a lot of advantages. We have a sterling advantage, we have an oil advantage because oil prices have come down and we now have a dollar advantage. Despite those advantages we do not seem to be able to get ourselves up on our feet. I look to the economic plan to chart the course for Irish business, public institutions and the semi-State companies, to tell them what is on for the next five years and what is not on and to pinpoint the type of objectives and targets they will have to meet in that time. One would not dream of running a business today without a three-or four-year plan for how one would do it. Neither can one attempt to run a state as complex as ours without a similar type of plan. Under such a scheme Irish business will, hopefully, be able to plan its own development and employment needs, what areas it can get into and the areas it can make money on to provide the taxation which the country needs.

The Government are collecting 3 per cent of the total revenue of the State in corporation tax. My friends in the Workers' Party will probably say that that is because they are all dodging tax. I have another view of it. I believe that the vast majority of Irish companies — I will put the figure at 60 per cent — are losing money and are not paying corporation tax because of that. On the national balance sheet, if we continue to allow expenditure to go up and revenue to drop, as has been happening by firms getting into trouble, we will obviously face national bankruptcy and we will not be able to avoid the kind of measures needed to develop the economy in the years ahead. The young people of today expect us to develop the economy.

I do not believe the old simple answer thrown out from time to time — devaluation — is the solution. It gives an artificial boost in the short term. There is a feeling in the country that all of a sudden everything is a bit lighter and easier. But, unless it is accompanied by very stringent financial economic measures it is worse than useless because it gives a short-term reprieve before we go into the same type of cycle again. I am not happy with devaluation because I believe the public would see it as a solution to the problems and not what in fact it is, the start to a series of very difficult measures.

I want to reiterate what I said earlier, that we have become a subsidy-saturated society. There is nothing we wish to do now for which we cannot look for a subsidy. Much as it pains me to disagree with Members of the Opposition, I must recall something said by Richie Ryan on radio one day during the time of the great snow, which everybody remembers. He said: "Go out and clean the snow from your own front garden". That is the type of philosophy I would like to see incorporated in a new national economic plan. I mentioned earlier the people who came to see me in my clinic and who asked me to get their windows fixed and to get other things done for them.

Mr. Kelly

The Deputy said it pained him to disagree with members of the Opposition. The Deputy has actually agreed with the Opposition. That is what is paining him and that does him credit.

Mr. S. Brennan

The amount of pain the Opposition give me is not measurable. We have all paid lip service to reform of parliamentary procedure. I am only 12 months in the Dáil and this is probably the sixth or seventh time I have mentioned this. We all seem to run away from it when the chips are down. We must do something about the reform of the House and about getting the financial procedures and the debating procedures right. I saw in the Fine Gael manifesto before the 1981 General Election a commitment to tackle that, but after seven months in office it was not tackled. We, on our part, mentioned it from time to time but never actually got around to it. It is something which we must honestly face. I am not convinced that we are dealing efficiently with financial legislation and legislation in general. The Chair may feel that this does not come under the Finance Bill but I raise it in the specific context of the manner in which we analyse financial expenditure.

There is a need for some financial committee of this House to go through the various figures in the public glare, comment on them and bring them to the attention of the public. I would like to see some improvement in that regard in the years ahead, but hopefully in the months ahead.

Another item to be mentioned is our balance of payments. That is a nice, economic cliché for most of us but the harsh reality is otherwise. The balance of payments deficit has reached an unprecedented level of £1,300 million, which is now equivalent to 13 per cent of the national output. We simply must get our exports up and our imports down. Various reports from professional accountancy bodies time and time again have stated that Irish industry is working at something like 50 or 60 per cent of its output. It could take another 40 or 50 per cent, if it could sell it. It could sell it if we could get our marketing and exporting philosophy organised. Córas Tráchtála do a fair job, considering their resources. We reach a very tiny proportion of all the markets of the world. As a trading nation, if we do not export we do not survive. I have said to a number of young people recently "Look at the world markets and see what you can sell to them. Do not fall back on the State. By selling to the world at large, you are seeking to take up the slack in Irish industry". Irish industry, believe me, is now gasping and is slack, indeed.

I said earlier that I regarded the Finance Bill, in its attempt to close the budgetary deficit, as being an honest first step. In that regard, I support the Finance Bill. I summarise by saying — and we must make no mistake about it — that a country will not remain unchanged if tens of thousands of young unemployed march every year on our streets. It will not remain unchanged when we must find this extra £30 billion for infrastructure. It will not remain unchanged if we find that all our PAYE money is going on borrowing and that our public services are costing increasingly more money. It is the duty and role of political parties and Governments to seek to make the changes which will live up to the responsibility placed on their shoulders in the years ahead.

I have put forward what I believe to be the solution, which is twofold. It is to contain public expenditure, to encourage the private sector by a series of initiatives, by seeking more concensus in our economic policies, more agreement. Let us have the battle on the streets, but, having had it, let us get down to running our economy and finding a consensus as to how we are to do that. We should package all this into a national economic plan, which above all has as its core and central root a national economic philosophy which charts the course of the country for the years ahead and which says "The State has a central guiding role. It can do so much, but to look to it to do all that has been asked of it is just not on". We politicians must continue to spell out that message in the years ahead.

In supporting the Finance Bill, I look forward to that economic plan and trust that it will incorporate these issues, get some consensus as to the solutions and chart our way forward, so that we can have a document we can all support whether on the Government, Opposition or minority side or as members of the public generally. We want an economic philosophy in a document which we can support. The public are willing to support such a document. I know that the Government will produce that document.

Mr. Moynihan

No document presented to this House is of as much interest and importance to the community as a whole as the Finance Bill and its budgetary policy. Each year, this legislation is looked forward to with interest and, by some, with apprehension. No segment of our people view the annual budgetary policy with the same interest as do that sector confined within the PAYE system. Over a number of years they have experienced, which is generally admitted, that their contribution to the Exchequer has been far in excess of what is justifiable.

It would take much longer than the time available this afternoon to go into the merits and justifications of their protests, marches, frustrations and discontentment. The frustration and discontentment have reached such proportions as at last to bring a realisation to the Government and all other sectors of our community that the necessary adjustment in that taxation system, to bring about a degree of equality, cannot be much further delayed.

As Deputy Brennan has already said, we all hope that the Commission on Taxation will be both courageous and just in its interpretation of what the total taxation system should be and that, at long last, the PAYE sector will receive justice, so that that element of discontent, so high among that very important sector of our community, is finally removed.

I will deal now with a number of problems regarding the economy. I start with the tourist industry which is of vital importance to the economy and which is in a state of absolute disarray at the moment. Because of its importance, it merits immediate consideration from the Government, Bord Fáilte and all tourism interests. Let me say at the outset that the principal factors in the decline of this most important industry are inflation and taxation. Our current inflation has raised our prices to such an extent that they are now completely out of line with some of our competitors in the tourist industry. Taxation on petrol, drink and VAT on restaurant and hotel meals has been the last straw which has about broken the camel's back.

Last year, the tourist injection into our economy was £650 million. To date there has been a substantial drop. This decline is caused by our inflation rate, our policy of taxation and, to some extent, the political climate. As we all know, since 1969 the northern troubles have had an effect on tourism. Current British events have also created an unfavourable situation. We have a long-standing relationship with the ordinary British citizen and our brothers in Northern Ireland. At this point of crisis in the industry Bord Fáilte and the Government should intensify their efforts to win back that element of the British and Northern Ireland tourist market that was so welcome here and made such a major contribution to the economy. It is important that immediate steps be taken because there is absolute depression among the major elements of this industry at the moment. Hotels, guesthouses, bars, cafes and so on in tourist areas are suffering a drastic drop in their earnings. Unless the situation improves this will have serious repercussions for the rating authorities because those are among the most highly valued premises and make a very large contribution to the finances of the local authorities. The serious decline in incomes will have a serious effect on their ability to pay the rates which will affect local authority finances by the end of the year.

There are a number of Government Departments involved to some extent in tourism, including the Department of Industry, Commerce and Tourism, who have direct responsibility. The Department of Transport have among their vital concerns air, sea and rail travel and these are concerned with the development and growth of tourism. The Department of Education is involved in training hotel management staffs and all grades of hotel staffs. The Department of the Environment are involved with roads, car parks, monuments and so on. The tourist industry is such that it should have a specific ministry and that ministry should cross into some of the areas in the Departments that I mentioned with a view to getting a completely consolidated structure that would take into account all the aspects that are so important in this vital industry. We are now approaching the peak of the tourist season and because of the prevailing depression positive steps should immediately be taken to initiate a very intensive sales programme in Britain and Northern Ireland as the best basis for a hope of resumption of the normal tourism programme for the remainder of the year. Also the programme for the development of home holidays should be intensified with a view to retaining as much holiday money as possible within the country.

I will now deal briefly with agriculture. This industry has been in deep recession since 1978. There has been a very substantial fall in incomes and milk production. In my own area milk production has dropped very substantially. This year there is some indication of a slight increase. But the drop in milk production for that area represented a loss of about £15 million to members of the co-operative. That is bad. But any drop in milk production and processing means very substantial job losses. Our co-operatives have been operating rationalisation and redundancy policies which are a disaster so far as local employment is concerned. The creamery and co-operative industries were one of the biggest centralised employment agencies in rural Ireland. I asked the Taoiseach last week what tonnage of potatoes was imported in 1981. The astonishing figure of more than 60,000 tons is not only a disaster for our economy but a disgrace to our society. We are one of the principal agricultural communities in Europe and yet in 1981, in addition to the potatoes, we imported about 700 million tons of agricultural goods.

The previous speaker mentioned the serious position in regard to the balance of payments. Here is an area in which both courage and planning are required to ensure that colossal bill is at least reduced if not finally eliminated. I am convinced that the traditional farmers have not lost the technique of producing potatoes and vegetables. What is required is a marketing and processing and presentation system which cannot be developed by the individual farmer but can only be undertaken through a major expansion of the co-operative movement into this field. The Department of Agriculture, the co-operatives and the various farmers' organisations have a major responsibility to ensure that the situation as we now see it, this colossal importation at great cost to our economy of goods which are capable of being produced here and which could create so much employment that is so badly needed, is remedied before things get much worse. With the goodwill that must be there much can be achieved. Then we can look forward to an expansion of employment from the country's natural resources.

In the budget, provision was made for exemption from stamp duty in respect of the transfer of land from father to son. There are specific requirements in order to qualify for the exemption. I accept that today scientific as well as practical training is of the utmost importance. There are a number of people under 35 years of age who would not only have 17 or 18 years' practical experience in agricultural development but in many cases have been managers of their parents' farms. As the regulations stand, such practically qualified farmers would not benefit from the proposed relief. The Minister for Finance should have another look at this regulation which encourages the transfer from older to younger farmers because this could result in the dynamic agricultural development required.

There is a dire need for the development of a realistic land policy. The Land Commission, who do useful work and who have an excellent staff, are starved of the necessary finance to allow them to make any contribution to the realignment of land, particularly in the west, where it is required to enlarge uneconomic holdings. Far too frequently we find that foreigners with adequate bank accounts will outbid a local farmer, thereby denying him and his successors the opportunity to develop his agricultural holding to make it an economic unit. This whole area of land realignment and the number of foreigners allowed to purchase land under EEC regulations should be looked at again.

The Land Commission policy seems to be that after a residency of seven years any EEC citizen is entitled to purchase land here. I know of cases where foreigners bought land but it was not registered in their names until 16 years later. There is a loophole in the law which enables some foreigners to purchase land and these transactions are not made known to the Land Commission until residency has been proved. There are a number of people who are not EEC residents and who have not resided here for the requisite period who are registered land owners. Taking into account the scarcity of land to enable small farmers to have economic holdings and the number of young people who would like to have their own farm but who cannot get land, we should be very concerned that land does not pass out of the ownership of Irish citizens. This is of fundamental importance. The development of a land policy is urgently needed, especially a land policy which will aim at allocating land to the people with small uneconomic holdings rather than allowing people with 300, 400 or 500 acres to buy that land.

A major portion of this Finance Bill is taken up by social welfare. The social welfare recipient has become the hobby horse of many concerns who want to level criticism at the system. It has been said that the level of social welfare benefits is responsible for our unemployment level. Every Deputy knows the problems experienced by those on social welfare. The first thing we must realise is that poverty is confined to those dependent on social welfare. It has been said that people on the higher levels of social welfare will not take employment. If this claim had any substance we would never see protest marches or hear of disputes when a factory is threatened with closure. I can assure Deputies that when announcements of closure are made there is a great deal of concern among workers and their families and the overwhelming majority of these people would rather work than face unemployment.

Some people claim social welfare recipients are a drag on the nation's resources, but I never hear criticism from those boardrooms of the many millions of pounds given to industrialists to create jobs; yet within 12 months those factories, built and equipped at the expense of Irish taxpayers, were closed and the equipment shipped overseas. I have not heard any criticism of the volume of State aid for hotel development which was to benefit our tourist industry. We all know that within a short period of major renovations being carried out with State grants, those hotels were sold and their further use as tourist assets lost. I realise that in any system of grant aid there will be abuse, but what I want to say is that the criticism about the magnitude of social welfare abuse is not justified. There is hardship and poverty experienced by social welfare recipients and they would much prefer if we could offer them employment rather than social welfare.

Many hardships are caused by the delay in social welfare payments — unemployment benefit, unemployment assistance, disability benefits and maternity benefits. This problem is not of recent origin. It has existed over a very protracted period. We were advised that with the introduction of the new system there would be no further delays. Every Deputy knows these delays are still happening and I urge the Minister to leave no stone unturned to ensure that where benefits are due there should be no unreasonable delay in making those payments.

On previous occasions I mentioned the anomalies in the social welfare legislation. Let us take an old age pensioner, living with his wife, who enjoys free electricity, free travel and a free TV licence. When the husband dies the widow has her income reduced by half and her entitlement to free travel, free electricity and a free TV licence withdrawn. Taking all the circumstances into account, the forced reduction of her income and the fact that she will not be capable of earning any sort of income in her remaining years, the Minister for Social Welfare should look benevolently into such cases to try to relieve the new pressures on such widows.

Another important omission from our social welfare services is the introduction of an income-related pension scheme, despite all the work that has been done on its preparation. So far, this has come to nothing and I urge the appropriate Minister to draw up a scheme as soon as possible. At the age of 66 people leave employment in which they earned anything between £100 and £200 a week. At that age their incomes drop to flat amounts, as little as half of what they had been earning.

In the context of the current high unemployment rate, we must all accept the challenge which Deputy Brennan, before me, posed. It is an immense task. The Youth Employment Agency was a step in the right direction because at least it provided a pool of finance to be spread around on various projects. The employment opportunities legislation provided immense scope to local authorities in particular, if only they had the finance. Therefore, there should be the closest possible co-operation between the State agencies—the Youth Employment Agency and the Manpower Service— and the local authorities to ensure that some valuable work will be done to relieve unemployment among our young people. Such co-operation would serve to reduce substantially the drain on the Exchequer of having people on the dole. As well, by way of taxation, it would benefit the Exchequer.

Deputy Brennan dealt with the colossal cost of the health services. On a previous occasion here, and many times in the Seanad, I asked the responsible Minister, having had 12 years experience of the operations of the regional health boards, to try to provide a national health service which would not be so top heavy at the administrative end. We should concentrate on the provision of hospital medical staff, doctors, nurses, ambulance and ancillary staff, and try to cut down on the superabundance of administrative staff.

The 1970 Health Act provided for the establishment of eight regional boards with very expensive administrative centres. I suggest that is over-generous for a nation of our size. We should concentrate more, after 12 years experience, on relating our expenditure directly to the benefit of people who need the health services. Therefore, we should take a hard look at the possibility of restructuring the national health services and the eight regional boards. The hospital service is a vital need and we should concentrate on improving it.

In County Kerry we completed a new hospital complex but we are in the invidious position that we cannot have the hospital opened, because of lack of finance, until 1984, and people who have been waiting so long for it have given up hope. I am asking the Minister for Health to solve any financial problems and have that hospital opened.

We need to give more attention to the mentally handicapped whose problem has been neglected by the State. Apart from the great help of voluntary organisations, we cannot be very proud as a nation in this respect. There should be far more generous Exchequer provision for services for the mentally handicapped. I include our psychiatric services. Until recently we had colossal institutions but they were used for custody rather than treatment. In the past few years excellent improvement work has been done but more needs to be accomplished.

The Department of Health should make every effort to improve treatment for kidney patients by bringing dialysis machines within reasonable distance of sufferers. We have a number of patients in Kerry who have to travel from remote areas over bad roads three times a week to receive treatment in Cork and return home each evening. Therefore, I appeal to the Minister for Health to install one of these dialysis machines in the new central hospital in Tralee. If that is not done kidney patients in Kerry will lose confidence that they can get treatment nearer home within their lifetime.

The innovation in 1979 of issuing medical cards on an annual basis has involved an immense amount of administrative work. I suggest that such cards operate for a period of three years. This would eliminate a tremendous amount of work for the administrative staffs in hospitals and would be more economical.

The Department of the Environment have responsibility for housing, water supplies, sewerage schemes and road works but the local authorities have major problems also in these sectors. When derating was started in 1978 promises were given that there would not be a diminution in the level of services provided by the local authorities but it is now realised that we are coming to a crisis point. There has been a substantial loss of employment in the local authorities and road development work has not been carried out.

With regard to housing, all Ministers do their utmost within the constraints upon them to keep local authority housing schemes up to reasonable level. One of the major problems of a housing authority is the securing of adequate land at a reasonable price so that the impact of the purchase price will not fall too heavily on the tenants. The Minister should recommend to housing authorities that they build up a large bank of land which could be used not only for their own housing needs but also as sites for people who might wish to build their own houses. If people were offered serviced sites many of them would prefer to build their own houses rather than depend on the local authority. The current cost of local authority house is in the region of £17,000.

In addition to the provision of sites the Department should look favourably on the expansion of the subsidy scheme for site development in respect of local housing. At the moment to qualify for that subsidy the density of housing must be not less than ten houses to the acre. In view of the developments in housing since that was originally decided, I suggest that where there are eight or more houses per acre the Department should look favourably on the provision of a subsidy. This would encourage people to take their names off the housing list and the subsidy would be an incentive to them to purchase a site.

The recent schemes for house improvement grants have laid down that approval must be obtained for the grant before the commencement of work. In many instances when people had completed their forms and sent them to the Department they thought they qualified for a grant. I suggest that a proportion of the grant, perhaps 50 per cent, be paid to people who had started work before the inspector visited the site. Many people added an additional bedroom or a bathroom to their premises but unfortunately as they had commenced work before the inspector's visit they did not get a grant. I ask the Minister of State who is present in the House to review the situation with a view to making a contribution to such people.

The Office of Public Works have responsibility for school building and reconstruction work. I accept that there has been a considerable investment in that programme but the number of condemned schools and those in need of major repairs is appalling. In my area one school has been condemned for more than 30 years and only now is work proceeding on the purchase of a site. This is a demoralising situation for teachers and students. It should be a priority to eliminate as soon as possible buildings that have been condemned because of their insanitary condition, overcrowding or because of structural defects. Such buildings are a hazard for students and teachers and they give a very bad image to the public generally.

The Office of Public Works have responsibility also for drainage work. Many rivers throughout the country have been scheduled for such work. Flooding has caused enormous damage to houses and land and it has endangered life. There is no hope that some of the rivers can be dealt with in the next 30 years and people in the areas concerned are becoming restless and are forming action groups in order to deal with the matter. I am suggesting to the Minister responsible that the Government should re-introduce legislation to enable local authorities to undertake interim drainage schemes in order to feed the rivers into the main catchment areas. By doing that they would be making a major contribution to agricultural development and to the safety and security of householders through the elimination of flooding. This is of paramount importance and I hope that in this Dáil session the suggestions I have made will be acted on. There are difficult times ahead and the most useful basis on which we can survive is by the development of our national resources, agriculture, tourism and so on. In regard to agriculture, I hope that the colossal import of goods that could be produced at home will occupy the immediate attention of the responsible bodies with a view to ensuring that not only will our economy develop but that our balance of payments, a vital matter, will benefit accordingly.

Acting Chairman (Mr. Griffin)

I am now calling on Deputy Naughten and I wish him well in his maiden speech.

Mr. Naughten

I am grateful to the Chair for his good wishes and I am privileged to be making my maiden speech on the Finance Bill, a most important piece of legislation. The most important business dealt with in the House is the budget because it seeks to stimulate and consolidate the economy. The Finance Bill gives effect to the provisions of the budget. I am worried about what the Finance Bill holds for my constituency, Roscommon, and the country. It is my belief that the three men closest to the Taoiseach, the Ministers for Finance, Agriculture and Industry and Energy, are being influenced by him. That worries me and many other people who have a stake in our economy.

I should now like to deal with the economic policy being pursued by the Government. We have heard a lot about social policies but if we do not have good economic policies we cannot get the money to finance good social policies. Nobody denies that the Coalition Government while in office for seven months alerted our people about the depth of the recession and the debt we had been plunged into by the previous administration. The Coalition Government presented their case so well that in the general election the people showed that they were willing to accept the reality of the situation as outlined by them. Our people were prepared to accept the tough economic policies of the Coalition but in spite of that, in spite of the general acceptance of those difficulties and the understanding of the financial requirements needed to continue to support overseas investment the Government have failed to take any positive action. They continued to postpone for a considerable time positive action to deal with the economy.

In the 1981 general election we heard many promises and there were more promises before the general election of 1982 from the Taoiseach. He promised many stop-gap patching up operations. Wherever problems were clearly identified by Fianna Fáil the Taoiseach made promises. Deputy Haughey during the campaign promised favours in different areas. For example, in one area the Taoiseach promised a general hospital and in another area an airport but he did not recognise the disastrous financial situation of the country. Fianna Fáil are back in office on the strength of those gimmicks and mortgaging millions for the future. That is being done to obtain a few votes here and there and not least to please an Independent Member from a Dublin constituency. We are all aware of how freely that money was handed out particularly in relation to the Talbot workers and the workers at Clondalkin Mills. I wonder what the final bill will be for that at the end of 1982. I am not prepared to accept the accounts presented because they seem to change daily and depend on the type of case presented by pressure groups. As the pressure groups take to the streets one finds that money is made available for this and that but aspects of important investment are neglected. That was the policy prior to 1981. Irrespective of who cried "wolf" the Government stepped in and paid the bill with borrowed money.

It is pointless to hope that the realities of the situation here will be ignored by foreign banks. They will not be ignored simply because we are Irish or because Fianna Fáil are in office. When it comes to advancing loans the nationality of the borrower does not matter. We must pay the going rate of interest for the money we borrow or if not we will not be given it. I deplore the policy of the Government to borrow money for current expenditure. That was Fianna Fáil policy from 1977-81 and we are all aware of the financial mess they left us in. The Bill proposes to introduce a system of collecting VAT at the source of entry and the Minister for Finance told us he would make provision through the ICC for those who must borrow money to pay this VAT. He did not tell us that that money would cost those firms 22 per cent. That is the harsh reality of borrowing money and that will eventually close many of our major industries. What we are doing is collecting next year's tax this year.

Our ability to service and repay debts depends on our ability to negotiate fresh productive lending for the country. In the course of a speech to an economic club in New York some months ago the Taoiseach suggested that the efforts of the Coalition to bring public finances under control had damaged our image abroad. However, in a recent survey it was found that approximately a quarter of the overseas firms who have invested here would go elsewhere if they were investing today. That disenchantment springs from problems which result from decisions taken since 1977, many internal.

I have the height of praise for the IDA and the county development teams. We all admit that great economic strides have been made here trying to develop industries in our cities and throughout Ireland. The present economic policies being pursued are seriously damaging that success. We talk about attracting new industries but we must create an environment in which those industries can produce and export abroad. We must create the infrastructure. For example, in the west very often an industrialist who moves there finds there is no telephone, very poor roads and, if his gateway to the west is through Athlone he is faced with trying to get through a town which is choking to death.

These are areas in which the Government could usefully spend money on building new roads and opening up depressed parts of the country, in which industrialists find it hard to set up businesses which will give major long-term benefits to the area. We need low interest rates, low inflation rates and good labour relations to stabilise those industries. We must have easy communications and facilitate our industrialists to communicate with the Continent or wherever they are selling their products.

That brings us to the question of competitiveness. At present, many industries are not competitive, even on the home market. It was mentioned during the debate that at the present rates for borrowing it is not practical for industrialists to borrow on a large scale. I am not against borrowing if it is for productive purposes but I regret the trend that has developed here for borrowing for current expenditure. The handouts over the last three years were paid out of borrowed money, taxpayers' money given out for cheap political gain. Every member state of the EEC has its own problems and concessions gained by the Irish Government are very small. That does not affect the other member states and they are satisfied as long as benefits flow in their direction. Our Government should be much tougher in negotiating a fair deal for this country. In the past I do not believe that those negotiations were handled as effectively as they should have been and the unwarranted delay in introducing the increases for agricultural produce which was granted recently cost this country vast sums of money and came at a time when farmers are producing the maximum amount of milk.

The Government should pursue more vigorously the schemes that are at present in operation. The provisions of the present Bill are totally inadequate to stimulate growth in the economy and to encourage foreign or home investment. While we have interest rates of 22 per cent, we cannot expect investments from the home market or from abroad. There has been a great deal of criticism about the budget introduced by the Coalition in January which resulted in a general election. However, the provisions of the budget were necessary and people do not deny it. This was borne out at the Dublin by-election. During that election I had my first chance to meet Dublin people in the doorstep, the very poor, middle class and the very well off. Over those three weeks, I learned just how those people are thinking. If they can see light at the end of the tunnel they are prepared to put up with the harsh measures and to support the Government of the day. Unfortunately, the people are not getting that leadership at present. It has been widely stated that the Government are causing confusion and uncertainty by changing their minds from one week to the next and even, at times from day to day.

There are serious changes in the Bill which were proposed in the budget. Our economy will not improve until the inflation rate is reduced. Let us look at our nearest neighbour, Great Britain, who is one of our partners in the EEC. Her interest rates are about 12 per cent while ours are over 20 per cent. Her inflation rate is substantially lower that ours. How can we compete for new industry? If an industrialist has a choice between establishing an industry in Great Britain or here, he will opt to set up an industry in Great Britain.

I object to the payment of VAT at the point of entry. I accept that there is a great deal of tax evasion and that it is the function of the Department of Finance to tighten up in that area. But to have to pay VAT at the point of entry is damaging industry. It is increasing the price of raw materials, machinery which we need for agricultural production and all the other equipment that is necessary for industry and for agriculture. It puts a major strain on the cash flow of firms importing essential materials. Irrespective of whether the people concerned have to borrow from the ICI they will still have to pay exorbitant interest rates of 22 per cent on this money that they now have to turn over to the Government because of the principle of collecting next year's tax this year. There is no doubt that the cash flow of those industries is going to be severely damaged by this decision. Even in the last few days we have seen industries closing down. We are still not at the end of this slide. The Government have imposed this measure to collect £140 million but I believe that, at the end of the year, they will not have collected this amount because the recession will not allow them to collect this kind of money. We will have more redundancies, and the unemployment figures will rise. I sincerely hope I am wrong but I am afraid that is the reality of the situation.

I feel very strongly about the question of subcontractors' certificates. This first came to my notice two years ago when I made representations to the Minister about the problem. The system of subcontractors' certificates was originally intended to counter tax evaders and to counter fly-by-night boys. However, the regulations and the manner in which they are applied are so severe that they are financially damaging to the economy because, in many cases, contractors who should have certificates are not able to get them. If they cannot get them they must pay 35 per cent of what they earn there and then in tax and may have to wait up to two or three months to get this money back from the Revenue Commissioners. This is grossly unfair. If small contractors, young fellows who set up a small business and are prepared to employ two or three people, are faced with this situation, this barrier against equal opportunity to earn a living, it is very unfair and I respectfully ask the Minister to examine the matter carefully and see what can be done to eliminate the hardship caused to these young people.

At present we have a frightening figure of national debt and repayments. The interest on the national debt in 1976 amounted to £268 million. In 1977 it was £399 million. Capital repayments at that time amounted to £315 million. Interest paid outside the State was £99 million. I understand that the figures expected this year are: interest payable on national debt, £1,300 million; capital repayments of national debt, £1,160 million. The interest paid outside the State is a tremendous burden on the economy. With these vast payments it is little wonder that the economy is not able to generate sufficient wealth to invest in worthwhile employment projects or able to create the employment young people so badly need. Another 100,000 students are coming on the labour market this year and there is no employment for them. It is a frightening situation where we have this escalation of unemployment. Many young people now on the unemployment list will never have the opportunity of working or knowing what it is to do a satisfactory day's work and draw a day's pay. This is morally and legally wrong.

Many at the other end of the scale have become redundant through no fault of their own, men of 45 or 50. I doubt if they will ever have an opportunity of working again simply because far too much money has been spent on the past four or five years on domestic expenditure, on day-to-day expenses and not sufficient has been put into worthwhile job creation programmes. I regret that this has happened. The Government have a moral obligation to provide job opportunities for young people. It is hard to understand why the Government will not invest in projects with major employment potential. I am speaking particularly of projects in which we can utilise our national resources.

I want to refer to the building of a briquette factory in the Ballyforan area which the Government now appear to have shelved. It is hard to understand the economics of this decision when we are importing briquettes from abroad. We have the raw material, the manpower and everything necessary to make the same commodity here, but it seems that the Government cannot finance the project. I regret this because the employment potential there directly is 600 jobs. I appeal to the Minister to see that this project is started immediately.

In agriculture the Government have failed miserably to provide money necessary to stimulate output and create jobs in the agri-sector. More than half our total workforce are employed directly or indirectly in agriculture. A thriving agriculture means a thriving economy. If agriculture prospers every other sector of the community shares that prosperity. Progress in agriculture and increased exports mean we can pay for badly-needed imports for industry and thus create jobs and give everybody a chance to earn a living in his own country. In the past four years agricultural production has dropped and farm income has fallen disproportionately. Regretfully, I say that the present Government in the last four years when they were in office took no positive steps to prevent the fall in farmers' income and are not now doing so. Farmers no longer have confidence to invest in the economy, to buy a new machine, to reclaim or drain land. They have neither the confidence nor the money to buy an additional holding becoming vacant near them if it goes up for sale. Young boys and girls who up to three or four years ago were taking a course in agriculture, coming back and settling down to work on the family farm, are now on the labour market seeking industrial jobs. The income from the farm cannot maintain two families. That is the situation that has developed.

The Government should realise that the cost of creating an industrial job is £15,000. It makes good economic sense to try to retain on the land and employed in agriculture as many young people as possible and to try to ensure that the income from agriculture is sufficient to maintain two families. Very often we find on a farm where a father and son are working that when the son marries he must look for an industrial job because the farm income is no longer sufficient for two families.

In regard to the disease eradication programme, I should like the Minister to examine the position fully and to increase substantially compensation paid to farmers with reactor cattle. Many farmers when they sell their cows or yearlings to the factory find tht the price from the factory plus the departmental subsidy is only 50 per cent of the animal's real value. No other section of the community would tolerate this situation. Many farmers in my county face financial ruin because of a major outbreak of disease in the area. The compensation for reactors is ludicrous with no relation to the value of the animals. The hardship fund is totally unrealistic and is not workable. I appeal to the Minister to have that fund restructured so that it will be meaningful and can be operated so as to help the people it was intended to help and I ask him to increase the compensation payable.

I come to a point that costs no money but one about which I feel strongly. In terms of the economy it is very important. Where a farmer is unfortunate enough to have his stock locked up with one beast that reacts — he may have 20, 30 or 40 cattle to sell — these animals are frozen on the farm and he can do nothing with them. They may not be suitable for a factory and the farmer may not be able to afford to take grass or to keep the cattle on his farm. I appeal to the Minister to ensure that the Department of Agriculture would allow these farmers to have those cattle exported, cattle which are disease free but which are from a locked-up herd. I urge that such cattle be exported to Third World countries in which not as much emphasis is placed on disease eradication as is the case here and in the rest of Europe. This would alleviate much of the hardship farmers are experiencing in the context of the disease eradication programme. It was the situation that was in operation up to April 1980, but for some mysterious reason it was discontinued at that time.

I appeal to the Government also to take the necessary steps to stimulate agricultural production and incomes at this time of a crisis situation. Agricultural incomes have fallen from 52 per cent of the industrial wage in 1977 to 22 per cent today. How can we expect farmers to exist on the sort of incomes they are deriving from agriculture? There is an obligation on the Government to ensure that this section of the community are protected just as all other sections are protected and that farmers be given the opportunity of earning decent livelihoods for themselves and their families. This makes good economic sense too because it may prevent members of farming families from seeking industrial employment, from taking up industrial jobs that are needed by others. Production in the dairy and beef industries, too, must be encouraged.

One of the omissions in the budget that astonished me was in the area of the taxation of short-term social welfare benefits. It was a retrograde step on the part of the Government not to include in the budget the proposal in this regard that was contained in the January budget. Such a measure is badly needed in order to deal with abuses of the social welfare system. I refer to situations in which people stay away from work on the pretext of being ill and proceed to draw sick benefit when their aim is to keep down the amounts on their P60's so that they may qualify for other benefits. Short-term social welfare benefits are not included as part of their income for taxation purposes. It is wrong that someone who works for only nine months in the year ends up at the end of the year with the same amount of money as the man who has worked in a similar capacity for 12 months. Morally and legally that must be wrong.

Regarding borrowings in agriculture, I appeal to the Government to do everything possible to alleviate the problem presented to farmers in this regard. In 1977 and 1978 the experts in agriculture — technical economic and financial — advocated increased investment in agriculture. The financial institutions vied with one another in soliciting for the provision of loans to farmers. There was a situation that was tantamount to loans being forced on farmers. Since then rapid inflation, input cost increases and exorbitant interest rates, none of which was envisaged at the time no more than the effects of EMS were envisaged, meant that many of those farmers who borrowed money in 1977 and 1978 found that they were no longer able to meet their repayments and they are now in serious financial difficulty.

When the Coalition were in office they took certain measures to alleviate that problem. These measures were widely welcomed. They should be continued by the Government. The situation should be monitored regularly to ensure that none of those farmers is forced to sell land or even to leave his home as a result of the mishandling of the Irish economy in the past four years. Inflation was one problem that we should have controlled ourselves. Many other factors that have affected farmers' incomes related to domestic problems also and, consequently, could have been dealt with at home.

In the January budget there was a proposal to provide moneys to begin work on a survey of the Rivers Shannon and Suck. The Minister should ensure that this task is commenced in this financial year. More than 500,000 acres of land in the midlands are flooded by the Shannon and the Suck. The Minister should examine the possibility of having local authorities deemed to be drainage authorities within the terms of the EEC western drainage scheme. This would be a major asset in so far as that scheme is concerned. Many local authorities have the machinery but because of lack of sufficient finance for roadworks they are unable to keep that machinery in operation. But if they were recognised by the EEC as drainage authorities for the purpose of carrying out major drainage works there would be a double advantage for the economy, because on the one hand they would be undertaking valuable drainage work while at the same time utilising the machines that are lying idle.

In the years 1970 to 1980, 62,000 farmers left the land and if there is not an improvement in agricultural incomes as many more will leave in the next two to three years. While speaking in the Seanad in January 1 requested that there be provision in the budget for those people who were practically robbed by the Tuohy affair. Some of those people had all of their earnings, the fruits of all their life's work, swept away overnight. Many of them supplied cattle to the firms concerned but found that all they got in return were useless pieces of paper. I would appeal to the Minister to ensure that funds are made available. Interest free loans should be made available until such time as we know what percentage refund they will get. At the moment many farmers are facing financial ruin. They cannot meet interest rates. Many of them have to borrow in order to live. Some have been left without any stock. Some have not been able to replace stock. I appeal to the Minister to examine the possibility of making interest free loans available to these people.

I come now to the plight of our county councils and their inability financially to provide essential infrastructural developments such as roads, water, sewerage and housing. Local authorities play a very important role in our economy. Unfortunately the existing deterioration in their financial situation is having serious repercussions on local communities. The rot set in in 1979 following the Fianna Fáil decision to restrict county councils to a 10 per cent increase in rates at a time when local authorities were faced with increases ranging from 35 to 70 per cent in statutory demands, such as wages, demands from health boards, demands for supplementary welfare, statutory obligations such as those in relation to the Board of Works and so on.

The position now is that the majority of our councils are on the verge of bankrupcy. The number of houses being built has decreased. There is a patent deterioration in our roads and a decline in the installation of water and sewerage schemes. There is no money for county roads. As I said on an earlier occasion, it appears to be the policy of the Government to allow our roads to disintegrate into nature trails. In the long run it will cost the economy far more to repair our roads than it would if money were provided now to maintain them. It is bad economic policy not to provide sufficient money for maintenance. Our county manager recently reported to the council that he would require £1.5 million of an overdraft. Four years ago the council were in a credit situation. The banks will no longer advance money on current account overdraft. It must be a loan with a rate of interest of 20 to 25 per cent. This is an indication of how the change in the rating system in 1977 has affected local authorities. The placing of a ceiling on local authorities in 1979 has had an appalling effect.

With regard to the provision of health services, I would ask the Minister to ensure that money is made available to the Western Health Board to provide for the back-up staff for consultants in Roscommon County Hospital. One will take up duty on 1 July. A second has cancelled the arrangement to come to Roscommon. There was a clear commitment given by the Taoiseach that he would ensure money was made available for the necessary back-up staff. Unfortunately it has not been made available. I would ask the Minister to take this up immediately with his colleague, the Minister for Health, and ensure that the necessary funds are made available for the necessary staff in that hospital.

On returning to office the Government put local authorities generally in further financial difficulty by ensuring that one particular part of the country gets a very large share of the money available to local authorities. I refer to the Gregory deal. I do not object to money being spent in Dublin. We are all proud of our capital city but it is most unfair that a vast amount of money should be chanelled into one particular area to the detriment of other areas. It has resulted in counties like my own not having the finances necessary to build houses for our people. This is a most unsatisfactory situation and will have a detrimental effect in the long-term on our housing programme. Before the House is Deputy Bruton's amendment to the Finance Bill. In that amendment he points out that the better off will get benefits while the less well off will be mulcted. I support Deputy Bruton's amendment. It is our object to persuade the Minister to change his mind on certain provisions in the Finance Bill.

Mr. S. Byrne

The most important section in our community is the farming section. Yet this is the section which has had to accept a 75 per cent drop in income between 1978 and 1981. This is the section which provides genuine long-term employment because it is their products that are processed in the meat factories, in the creameries and so on. Fianna Fáil are about to produce a four-year development plan for aid to agriculture. I am very happy that this plan is on the way but I would appeal to the Minister to make it a ten-year programme. A farmer cannot do very much in four years. It has been Fianna Fáil policy down through the years to expand agriculture. That is their policy today. Because of the magnitude of the problems facing agriculture there is urgent need to restore viability by overcoming the many problems facing the industry. Fianna Fáil believe it is necessary to bring forward a co-ordinated investment plan for the industry as a whole agreed on by the Government and major farming organisations and State agencies. Fianna Fáil have always stood steadfast in support of the farm family and expanding agricultural output in the interest of national economic growth. Fianna Fáil will take positive steps to restore farm incomes, increase output and bring hope to that sector. The main thrust of Fianna Fáil policy will be reducing inflation, the four-year plan which I appeal to the Minister to increase to a ten year plan, pressing for more EEC measures to relieve the problems in farming, and national aid measures.

Not so long ago the farm modernisation grants were 30 per cent and they were reduced last September by the previous Government to 25 per cent. Fianna Fáil have restored them to 30 per cent. The 30 per cent grant is based on the standard of costs drawn up in 1978 and as a result is completely out of date today compared with building costs. The 30 per cent grant today is equivalent to 20 per cent in contractors' costs. It is important that these standard costs be updated in the light of present costs. I appeal to the Minister to do what he can in that area.

Another change that occured last September was that grants for concrete yards were eliminated unless the applicant was putting up a new building. This is unfair to farmers with existing buildings because they will not be entitled to any grants for concrete yards around such buildings. When we are encouraging farmers to increase stock production it is important that the animals be fed quality winter feed. About 45 per cent of our farmers are making 70 per cent of their winter feed in the form of silage and it is important that other farmers be encouraged to make silage to increase their milk yield. Much higher grants should be given to small farmers to enable them to put up a silage base. The £3 per ton silage grant was a good help to small farmers making up to 50 tons of silage but real benefit from this is not obtained unless the proper facilities are there for making the silage.

To sum up, I appeal to the Minister to bring up the standard costs in line with present grants, that grants for concrete yards be restored and to allow a grant for silage bases for small farmers.

Another area of farming which has come into deep trouble in recent years is the agricultural contractor who is part and parcel of the whole scene of progressive farming. Such people have come under real pressure recently. They have provided an excellent service for farmers, but the inflationary trend has affected them seriously in the areas of machinery costs, oil, interest rates etc. One of the biggest problems facing the agricultural contractor is that he has not the security to borrow money at competitive rates and, therefore, is forced to borrow from hire purchase companies at prohibitive rates. A detailed examination of contractors' problems should be undertaken by the Government and the Department of Agriculture to help to identify the problems of these contractors. I appeal to the Minister to do what he can in that regard because many farmers even at this time — I have met some of them — could not cut their silage in time because contractors had gone out of business. In other words, those farmers will have a lower quality feed. Many contractors are forced out of business by cost and this has created a problem because therefore farmers must purchase their own machinery and equipment. This is not a welcome development because farmers are putting their money into machinery when they should be putting it into stock. Farmers should not be compelled to invest in machinery because contractors are forced out of business. Help in this area will be beneficial not only to contractors but also to farmers.

The proposed interest subsidy is to be welcomed, but it is no help towards getting people involved in systems of farming. It is difficult to justify a calf-beef system of cattle production at present high interest rates. At present costs it would cost £400 to bring an animal from birth to two years of age, including the cost of the calf. Interest on this would amount to approximately £80. It is of the utmost importance to have an interest subsidy for stock production in order to get people involved again in systems of cattle production and give confidence to the farmers. The interest subsidy already in operation is based on capital investments such as buildings and machinery. It is important that the interest subsidy be based on livestock production. Many co-operatives have introduced interest subsidies and they subsidise interest down to 10 per cent in order to enable farmers to increase their herd size. This initiative by the co-operatives would be welcomed in the cattle production sector of farming whether it be through a Government agency or the cattle industry itself.

I appeal to the Minister also to do what he can to increase compensation to farmers for brucellosis and TB reactors which is completely out of date and many farmers are experiencing serious hardship in freeing their herds from those diseases.

Farmers are aware of the high cost and the problems of out-wintering without sufficient winter feed. This can be provided only by use of additional fertiliser and if that is not available at a fair and reasonable price to farmers, then all the plans and programmes for the increase of farm output will come to nothing and will be a waste of time and money. The present high cost of fertilisers is a great stumbling-block in that it inhibits greater output from our cattle and dairy herds. This is true particularly in areas of low quality land which by nature demands a high input of fertiliser. In the light of the necessity of a higher through-put of milk for our processing factories and the new beef and cattle deal negotiated by the Minister for Agriculture, Deputy Lenihan, farmers must be given the opportunity to produce these products. I appeal to the Minister that, if at all possible, some scheme be implemented whereby our fertilisers will be subsidised to increase production and thereby create employment not alone in the farming areas but throughout the country.

We have proved that investment in agriculture has been falling for a number of years. Results show that few farmers now earn more than £10,000 a year. This figure does not represent the farmer's income but is the return for all the family working on the farm for long hours under very difficult weather conditions. Were it not for the help of their families many of our farmers would have been bankrupt years ago. They are entitled to a just reward for their hard work. They cannot say at 6 o'clock in the evening that they are finished until 8 o'clock in the morning. They have to work through the night at harvest time, harvesting beet and wheat, and they cannot look at the clock. They should get a just reward. They proved their worth during the war years in saving the people from unemployment and starvation and they are the only section of the community who can pull this country out of the trouble it is in today.

Fianna Fáil were always behind the small farmer, as they have proved down through the years. Every £1 million that our Government will invest will be returned a hundredfold with increased income for the farmers and thousands of new jobs with resulting spin-off employment. Despite their small income, the farmers are supposed to invest for the future, but borrowing at 20 per cent is out of the question. What will it take to convince our people that a healthy, thriving agricultural industry is of benefit not alone to the farmers but to everyone in the country? Prosperous agriculture will provide extra jobs at farm level and many more in processing. People will be kept on the land and in the rural areas. Instead people are moving to towns where employment does not exist. We have many problems in the bigger cities and I hope that planning for the future will provide more industry in small rural towns and avoid the problems of overcrowding and law breaking of every description which occur in the cities. Rural Ireland was allowed to die slowly because too many industries were established in the cities. That trend must be reversed.

I welcome the encouragement given to parents to hand over farm property to members of their family, but I am not happy with the condition regarding university qualifications. Most young people who have stayed at home on the land have not had the opportunity of going to a university and I hope the Minister will be liberal in this respect and that there will not be discrimination against these people. They may spend 20 or 25 of their best years working on a farm and they should not be penalised.

During the past few years many different types of penal taxes have been imposed on people who are the salt of this country, those who work long hours without looking at the clock and who produce genuine exports. They are being penalised by slick taxes devised by the brains in the Revenue Commissioners. The life of the farming industry is being squeezed out. Fifty per cent of the finest land in Europe is being badly managed because of our stupid system of taxing people because they own a bit of property. The land is not transferred and the young people cannot get hold of it and qualify for grants. I know it is the Minister's intention to encourage people to transfer land, but he must spell things out more clearly in order to remove fears. I appeal to the Minister to do as much as possible for the farming community and they will produce the goods. What other section would accept a drop of 75 per cent in their income while continuing to work hard?

I hope that the report of the Commission on Taxation will lead to the introduction of a fairer system of taxation for every section of society. The present system is outdated and unfair and I am confident that the Taoiseach and the Government will take the necessary steps to relieve the hardship which exists under this system.

I appeal to the Minister for the Environment to be as liberal as possible with people who are trying to improve their houses by extending them or adding on a bathroom and toilet. It is a shame that some people have been refused grants because the work was started before their houses were inspected by the Department. People who find themselves in this position should be enabled to receive these grants. The Minister for the Environment should also do something for people living in NBA houses which were built without chimneys. The costs of heating by electricity are extremely heavy. These people are also being asked to pay unfair amounts of money in order to purchase their houses. We have NBA houses in Tipperary town, Cahir and Killenaule. The Minister should provide the local authorities with grants to enable fire places and back boilers to be installed and to reduce the purchase prices of these houses.

We have the youngest population in Europe and they are as fine a generation as this country has ever produced. With goodwill and commonsense we can be as good as Germany or any other EEC country. We must give hope to young people, whether they are in industry or in farming. There has been too much preaching of doom and gloom and we must have faith in ourselves and in our country. People talk about the tough times today but our fathers went through tough times during the war. We must believe in ourselves.

An Leas-Cheann Comhairle

The Chair would like to congratulate Deputy Seán Bryne and Deputy Liam Naughten on two impressive maiden speeches. The Chair must now call on the Member nominated by The Workers' Party. Deputy Gallagher.

Mr. Gallagher

(Waterford): The Workers' Party in Dáil Eireann see as their task the provision of representation for a forgotten sector of Irish society, the working class and the economically weak and giving voice to the battered people, the tenants of our rundown local authority schemes, the young, the unemployed, the insecure, the old. We have three seats and are part of a balance of power situation which has afforded us the opportunity of maximising the interests of the people we seek to represent. We make no apologies for seeking to use this position to try to shift economic strategy towards a restructuring of the economy. We will make no apologies for finding ourselves in a position, thrust between the competing rivalries of the two civil war parties, where we must use this rivalry to obtain benefits in the interests of the vast majority of ordinary working people.

In following this course we see the opportunity that exists to help make an historic break in the mould of Irish politics by restoring sovereignty to the Dáil and by making Parliament more relevant in the formulation of legislation. It is in this spirit that we approach the debate on the Finance Bill. We aim to use this debate, and the Committee Stage which will follow, as a means of trying to amend the 1982 budget. Such parliamentary involvement, let me add, is more the norm than the exception in developed democratic countries. By refusing to rubber stamp the Finance Bill we aim to move Ireland in the direction of this democratic mainstream.

However, we know that this motivation is not shared by other parties in this House — by Fine Gael in particular, who view this debate and the forthcoming Committee Stage quite cynically as an attempt to force another election for their own narrow party interests. We are about to be treated to an intriguing spectacle in which Fine Gael will pursue a strategy of tabling ingeniously worked out amendments, designed specifically to put The Workers' Party and other left wing Deputies on the spot so as to force a general election. We shall shortly be able to gain a further insight into their desperation and indeed into the depth of their cynicism when we see the precise nature of their amendments. Will they go so far as disowning measures which they themselves brought in in the January budget, as they did during the Dublin West by-election campaign?

Fine Gael, to judge by the contribution of Deputy Bruton to this debate last week, are already working themselves up into a new found frenzy of concern for the poor and the lower paid. Deputy Bruton argued last week that the budget needed to be amended in favour of the lower paid because the Fianna Fáil budget had already eliminated some of the equity features in the original Coalition budget. This had been necessitated by the inclusion of some savage anti-working class features in Deputy Bruton's budget, such as the proposal to tax pay-related benefits——

Mr. J. Bruton

On a point of order——

Mr. Gallagher

(Waterford):—— of recently unemployed workers.

An Leas-Cheann Comhairle

Deputy Bruton on a point of order.

Mr. J. Bruton

As the Deputy is reading from a prepared script ——

Mr. Sherlock

Os ard má's é do thoil é.

Mr. J. Bruton

—— which has been circulated to the press, I should be grateful if he would afford other Members of the House an equal courtesy with the members of the press and circulate his remarks to us also.

An Leas-Cheann Comhairle

This is a matter over which the Chair has no control nor is there any precedent for a Deputy being asked for a script.

Mr. J. Bruton

On a point of order, is it not the case that Members are precluded from reading prepared scripts in this House and may only do so with the permission of the Chair if copies are circulated but not otherwise?

An Leas-Cheann Comhairle

That is not in accordance with what has been happening. If the Deputy had been in the House over the last hour-and-a-half even, he would have seen the contradiction of that which he would deem to establish as a precedent. The Chair, as in all cases of contributions made by Deputies, assumes that the Deputy is reading from notes, which is his entitlement.

Mr. J. Bruton

Is the Deputy reading from notes or is he reading every word?

An Leas-Cheann Comhairle

That is not a matter which the Chair would have a facility to interpret from this distance. I assume the Deputy is reading from notes and I ask Deputy Bruton to allow the Deputy to proceed without interruption.

Mr. J. Bruton

Would the Chair not consider it unfair that the press have sight of something before Members of the House have had any sight of it?

An Leas-Cheann Comhairle

That is not a matter on which the Chair should be obliged to adjudicate. Deputy Gallagher to proceed without interruption.

Mr. Gallagher

(Waterford): I was making reference in relation to the frenzied concern by Fine Gael for the poor and lower paid. There were features contained in the Coalition budget, which were necessitated by the inclusion of some savage anti-working class measures in Deputy Bruton's budget, such as the proposal to tax pay-related benefits of recently unemployed workers, to raise the price of milk and butter savagely and to put an 18 per cent tax on clothing and footwear.

This is the falseness of their present stance. What they really are looking for is a general election that will return them to power so as to enable them to bring in immediately a pure and uncontaminated Fine Gael budget in 1982. It is our judgment, supported by our Ard Comhairle, that this is not an attractive prospect for the working class and the economically weak in the country. We have good reason to fear a Fine Gael budget now. Their recent record in this area gives us no grounds for confidence that they would not revert to the tough monetarist policies contained in Deputy Bruton's January budget. Their new found concern for the less well-off can certainly give no grounds for encouragement, especially since they are mesmerised by the hope of a return to Government.

Last July Fine Gael, supported by the Labour Party and indeed by ourselves, were given their first chance. The July 1981 budget was an emergency measure to reduce an unsustainable budget deficit. We did not oppose the budgetary measures then implemented, which almost entirely consisted of increases in indirect taxation, a form of tax to which we are opposed in principle, because Deputy Bruton was able to argue that the time was not available to bring in the capital taxation and self-employed profit taxes that we, as a party, favour.

The Coalition had their opportunity in the subsequent six months to get the Department of Finance and the Revenue Commissioners working on proposals which would have ensured that the burden of paying for the economic crisis would be fairly shared and not again by working class shoulders. To help that Government along, we submitted a 27-page document setting out in great detail the realisable taxation changes that could be incorporated in the 1982 budget. They were totally ignored in the January budget. I recall Deputy Bruton's comments last week when he said that he had no patience with Finance Ministers who plead administrative difficulties and that "any difficulties can be overcome if there is a will to do so". Indeed, we can confirm these opinions of the former Minister following our own consultations with the Department of Finance when they costed the alternative taxation measures we proposed in our alternative budget submitted during the February general election.

Thus we conclude that the Coalition's desire to ignore our proposals for capital taxation and for a fairer share to be paid by the self-employed derived not from any administrative inconvenience that arose but from a political will to cushion the wealthy and the gombeen elements from having to suffer unduly as a result of the crisis in the Exchequer finances. Instead, it transpired that in the six months available to them Fine Gael and their Coalition partners had set their energies to formulating a particularly nasty budget which, unbelievably, given their parliamentary weakness, blatantly placed the burden of paying for the economic crisis on the backs of the working class and the less well-off. That budget was run through with the monetarist theories of the economic adviser of the Chilean Junta, Milton Friedman, as instanced by their conscious and declared aim of shifting the tax base away from direct taxation to indirect taxation.

Dr. FitzGerald

A script has been supplied to the stenographer. If this is the case, could we please have a copy now?

An Leas-Cheann Comhairle

If we are to stay within Standing Orders——

Mr. Fitzpatrick

(Cavan-Monaghan): On a point of order ——

An Leas-Cheann Comhairle

Please Deputy, I am replying to Deputy FitzGerald. Strictly speaking, Deputy Gallagher is not supposed to read.

Dr. FitzGerald

What is that?

An Leas-Cheann Comhairle

We can indulge in the niceties of whether he is reading or referring to a script but, strictly, the tradition is that a Deputy is not entitled to read a script.

Dr. FitzGerald

What is that?

An Leas-Cheann Comhairle

If the Deputy will bear with me, I have been supplied in the last few seconds with a copy of a script.

Dr. FitzGerald

Good. Now let us have it.

(Interruptions.)

An Leas-Cheann Comhairle

Deputies, please do not bay at the Chair. It is not necessary. I have been supplied with the script and having been supplied——

Mr. M. O'Leary

On a point of order ——

An Leas-Cheann Comhairle

—— I am now advising Deputy Gallagher that it is not in accordance with Standing Orders that a Deputy should read a script.

Mr. L'Estrange

Is Deputy MacSharry's name on it after the discussions today and yesterday?

(Interruptions.)

An Leas-Cheann Comhairle

Order, please.

Mr. L. Allen

I wish to inform the House——

An Leas-Cheann Comhairle

I take the view ——

Mr. Kelly

A Deputy making his maiden speech is always given way to.

Mr. L. Allen

I wish to inform the House that two previous speakers used scripts and read from them.

Mr. Quinn

They did not circulate it to the press.

Mr. J. Bruton

If I may, on a point of order, I should say that the matter to which we object most strongly is that people who are not Members of this House have a written text of what Deputy Gallagher (Waterford) is going to say in full and therefore have advance information of the contents of that speech that his colleagues here in this House have not been afforded. I believe that is a breach of not only Standing Orders but of common courtesy.

An Leas-Cheann Comhairle

Whatever about the courtesy — and again one would hope that courtesy was not unrelated to Standing Orders — I am advising Deputy Gallagher that, in accordance with Standing Orders, he is not entitled to read in toto a script. He may use the script and refer to it. I leave it to his imagination as to how he will comply with Standing Orders.

Dr. FitzGerald

Might I ask you, Sir, as a matter of courtesy — you having been furnished with a copy of the script — to lend it to me? Thank you very much indeed.

Mr. M. O'Leary

On a point of order, could the Ceann Comhairle use his good offices to inform the godfathers of the Ard Comhairle of the courtesies of this House so that in future such scripts will not be used?

Mr. Sherlock

May I say, a Leas-Cheann Comhairle, that the Members referred to——

An Leas-Cheann Comhairle

Deputy Sherlock, you do not have to reply. In fact I would prefer that you did not.

Mr. Sherlock

I should say, on a point of order, that the point raised is frivolous because others I heard speak in this House had scripts in front of them just as Deputy Gallagher has at present.

(Interruptions.)

Mr. J. Bruton

Some people can invent their own speeches without having other people to write them for them.

Mr. Sherlock

The fact is that what he is saying, from what he has in front of him is making such impact — that is the important thing about it——

Mr. Connolly

They just cannot take it.

(Interruptions.)

Mr. Fitzpatrick

(Cavan-Monaghan): In view of the turn that this has taken I think that the procedure and Standing Orders of the House have been brought to the notice of the Chair and precedents may be established. As you have said, Sir, Standing Orders say that a Deputy other than a Minister may not read a script verbatim. It has now been brought to your notice and to the notice of the House that a script is being used. Indeed, a script has been formaly circulated through the staff of the House to the stenographers and to certain Members of the House. I think you have to decide whether you are going to establish a precedent and whether scripts will be allowed in future. With the greatest respect, Sir, I do not think it is good enough that you draw the attention of the Deputy to the rules and then say to him: I leave it to you to put your interpretation on the rules and to skate around them as you think fit. On your shoulders now, Sir, is the heavy responsibility to decide whether Deputies in this House may read scripts, prepared by themselves or by others, or whether Standing Orders will be enforced. I think it is my duty to say that.

An Leas-Cheann Comhairle

Deputy Gallagher has 25 minutes remaining. I appeal to the House to pay to him the respect which is expected in this House for anybody who has the responsibility of replying for his party. I might add that we have a long road to travel before 10 o'clock this evening. I hope we would not make it an acrimonious one and that we would allow Deputy Gallagher to proceed.

Mr. Kelly

On a point of order — without holding up Deputy Gallagher whom I have no wish to interrupt even though he regards my party and the nearly half million people who voted for them as gombeens — may I say, Sir, I would invite you to set a ruling on this — not so much on the fact that Deputy Gallagher is reading a script but on what he said about us and the Chilean Junta some five minutes ago. He may have forgotten it because he never wrote it.

(Interruptions.)

Mr. Kelly

In spite of the fact that he so regards my party and the half million people who supported us, together with the 600,000 very similar people who support the large party opposite, may I invite you, Sir, to rule on this: whether it is in order for any Deputy in this House, I do not give a damn to what party he belongs — to hand out a script which at this time, 6.35 p.m., for all we know is now being broadcast on the 6.30 p.m. Radio Éireann news before the Members of this House know what is the pay-off in this script.

Mr. Sherlock

That is what The Workers' Party have to say on this issue and, if Deputy Kelly is afraid to hear that, I suggest he is afraid of hearing the truth.

An Leas-Cheann Comhairle

I would ask Deputy Sherlock to resist the temptation to reply. You are not obliged to nor are you permitted to. I am now asking the House to allow Deputy Gallagher to proceed with his contribution. Deputy Gallagher, without interruption.

Mr. Gallagher

(Waterford): As I was saying, a concern for the effects of taxation on the low-paid comes very strangely from Fine Gael when they were some of the most enthusiastic advocates of the shift from direct to indirect taxation. Indirect taxation, as even the dogs in the streets may know, is an inherently regressive form of tax because, by taxing expenditure, the poor pay proportionately more of their income than do the rich. Of course, this is the philosophy of Fine Gael.

Mr. L'Estrange

Theirs and Fianna Fáil.

Mr. Gallagher

(Waterford): The lower a person's income, the more of it they have to spend to live. That is clear. Indeed, in this country the great majority of people find themselves in the position of having to spend all they have to live. Thus, under an expenditure tax régime, they pay tax on all of their income. The capitalist, on the other hand, spends only a portion of what he gets, the rest he saves, invests or speculates. Indeed, as an economist once said; the capitalist gets what he spends while the worker spends what he gets. By trying to shift the tax base towards indirect taxation Fine Gael were trying to bring about a situation in which workers were taxed on all of their income and capitalists were taxed on a portion only of theirs. It was the frills of that budget — designed to offset the central regressive drift that it represented — for which Deputy Bruton is now shedding crocodile tears. It is only when he can convince us that he has given up his former reactionary commitments to basic right wing monetarism that we might begin to accept that there is some sincerity behind those tears.

As if the attempt to shift the tax base towards expenditure taxes was not enough the Coalition Government added insult to injury by such proposals as the measure to repay to farmers interest on bank loans they had raised to speculate — I might add unsuccessfully — in land for no other reason than it was farmers who got their fingers burned. Industrialists, and even oil speculators were not to be accorded this extraordinary privilege. The audacious attempt to remove the resource tax from the Statute Book retrospectively so that the Exchequer could pay back payments of a tax passed by the Dáil was not alone an insult to the longsuffering PAYE taxpayers but to the democratic system itself. Indeed, listening to some of the comments of the Fine Gael Party, so vehemently——

(Interruptions.)

Acting Chairman (Mr. Moynihan)

Would Deputy Gallagher please be allowed to continue without interruption?

Mr. Sherlock

Listen to the voice of the Irish working class for the first time in the history of this House.

(Interruptions.)

Mr. Gallagher

(Waterford):—— the pseudo Liberals within the Fine Gael Party and their commitment to the democratic process. We have seen an example of their commitment to that. They are trying now, as I have said, to add insult to injury by handing back retrospectively taxation which they themselves were going to implement.

With such a record on economic matters there can be few enough grounds for working class representatives and socialists in this House, in effect, to pass a vote of confidence in Fine Gael's alternative budget by bringing down the present Government on the Finance Bill at this stage. And we warn those who might be tempted into this course of action that a return of a Fine Gael Government could well result in a renewed and concentrated onslaught on the living standards of the working class. Fine Gael, to earn our confidence that their alternative approach to the budget will bring significant benefits to the mass of people and to the economically weak will have to do better than they have done in their budgets to date.

Fine Gael were offered a third chance to show an earnest of their good faith after the February election in the discussions we held with the leaders of the Fianna Fáil and Fine Gael Parties to form a new Government. We entered those discussions with an open mind, and indeed if one cares to consult the press cuttings of the time, it was the perception of the media that we would lean towards Deputy FitzGerald in those discussions. However, by the time they were over it was very clear to Deputy Sherlock, Deputy De Rossa and me that Deputy FitzGerald had no policy other than the one which had been rejected by the electorate.

It was made evident to us in our meetings with Deputy FitzGerald that he had no stomach to even consider any of our alternative suggestions. The Fine Gael side were not even willing to pay us the courtesy of even attempting to acquaint themselves with the proposals we were putting forward to shift the burden off working class shoulders and to ensure a fair share throughout society through our proposals for tax equity.

Fine Gael, let me add, seemed to adopt the attitude that they were the rightful majority, even though they did not get a mandate from the people, and in an arrogant way refused any suggestion of engaging in serious discussions with us. They apparently expected from us the meek acquiescence that they had seemingly become used to from their association with the Labour Party.

It was clear to us, too, that in the aftermath of the election it was the right wing of the party that was holding sway, people like Deputies Kelly and Bruton, as was evidenced by the clear message from them of having no truck with serious socialists. This was a signal to us that the more progressive wing of the Fine Gael Party, although having maintained a high profile during the recent general election campaign were decidedly in the minority when it came to the real exercise of power and of showing a willingness to consider the proposals we were putting forward.

We came to this conclusion, despite our reservations about the Fianna Fáil attitude to Northern Ireland, and to the aim of reforming the Constitution and achieving a secular republic. At that time, as a result of the highly-published constitutional crusade of Deputy FitzGerald, the general perception was that Deputy FitzGerald was a true reformer. In the interim Deputy FitzGerald has had the chance to show his commitment in this regard. Yet he has done nothing to date. On the key issue of civil liberties and constitutional reform at present, for example, the proposed pro-life referendum, Deputy FitzGerald has shown himself to be in the same camp as the Taoiseach. Fine Gael's stance on this developing campaign will be a true test of just how deep is their commitment to a constitutional crusade. Thus far, they are in favour of a deeply reactionary amendment to make the Constitution more rather than less sectarian. Thus far, both in the budgetary sphere or in the broader political sphere, Fine Gael have given us no reason to substitute them for Fianna Fáil in Government. Of course, The Workers' Party are under no illusions about Fianna Fáil.

(Interruptions.)

Mr. Gallagher

(Waterford): Just as every circus must have its clown, I suppose every Parliament must have its fools. You can take your choice from the left.

Acting Chairman

I appeal to those Deputies who are interrupting to desist from doing so and to allow Deputy Gallagher to conclude.

Mr. Sherlock

The simple answer is they have no alternative.

Mr. Gallagher

(Waterford): I am now coming to our agreement with Deputy Kelly on one aspect. We are under no illusions about Fianna Fáil, but we accept completely Deputy Kelly's perception of Fianna Fáil and Fine Gael as ideological twins as accurate. Why do they not get together? As we said on many occasions, let the two reactionary conservative parties in this Assembly get together, give the stable Government they are consistently preaching about and let those of us on the left in this Dáil Chamber form a socialist left in the country. We are prepared for that.

We will continue to maintain an open mind on the issue of whether a Fine Gael or Fianna Fáil Government will best serve the country's interests of the working class at any particular point in time. If the time comes when a change of the present Government will best serve the interests of the people and the workers in a clear and demonstrable way, then we will willingly participate in bringing this about. My colleagues in this Chamber are on the same line as this. Let nobody in the conservative parties make any mistake about it. If and when we decide, it will be we who decide, not intimidation or pressure from either Fianna Fáil, Fine Gael or, God help us, the Labour Party.

We thus offer neither of the conservative civil war parties in this House an unconditional mandate to govern. They can of course at their own choosing take up Deputy Kelly's suggestion to coalesce. But as long as they refuse to take up that option we will continue to use their division to fight for the workers and for the country, and in relation to the economy, to try and make sure that they will not be able to make the working class pay for this crisis, a crisis created by the economic policies of successive Fianna Fáil and Coalition Governments.

Our resolve to continue to follow this course has been confirmed by the democratic expression of the electorate in Dublin West. Contrary to what Fine Gael have made of the Dublin West result, the real picture was that Fine Gael suffered a drop in their first preference votes compared with the February election. This is hardly a strong vote of confidence in a working class constituency for a Fine Gael alternative budget.

Indeed, the Fianna Fáil vote fell as well. The 100 per cent increase of The Workers' Party share of the vote, on the other hand, is a message to us to continue to use our resources in the Dáil to press for working-class interests. Rather than being a vote of confidence in Fine Gael we take the view that the doubling of the vote secured by The Workers' Party candidate, and the subsequent transfer of our votes to Fine Gael, was an indication of the electorates desire to ensure that a continuing restraint be placed on the Fianna Fáil minority Government.

The debate on the Finance Bill is overshadowed by the continuing difficulties of the Exchequer, as indicated by the continued high current budget deficit. The Minister for Finance's admission that the deficit will amount to 100 per cent of the full year total by the end of this month is a serious matter and one that we must take cogniscance of.

These budgetary developments have raised once more the possibility that the working class people will be asked to pick up the tab for the capitalist crisis which exists precisely because of the failure of the capitalist policies espoused by the two conservative parties in this Chamber.

To the Minister for Finance we give notice that, in considering corrective measures to deal with the budgetary situation, we will oppose any attempts to do so at the expense of the working class taxpayer, the unemployed, and the economically weak, either in measures this year to recoup lost revenues or in the 1983 budget. We note the Minister's statement that the PRSI £45 million will be met through expenditure reductions. If these reductions are to be found through the elimination of waste, or through the raising of productivity in the civil service through better management, then we will support them.

The Workers' Party accept the need to cut the budget deficit. We reject the attempts by Deputy FitzGerald, which are quite unfair given our clearly enunciated policy regarding the budget deficit, to portray the left in this House as irresponsible, as looking for more spending all the time, with blithe disregard for the national interest.

On the contrary, we are advocating economic policies which are of a far more constructive nature with regard to the horrific unemployment problem in cutting the Government's deficit than those of Fine Gael, which are negative and which cannot see any further than cuts, irrespective of the economic consequences. We believe that the deficit must be reduced through the expansion of profitable — and I emphasise "profitable"—activities of the semi-State bodies as well as through the elimination of waste in our public sector generally.

In this connection I mention one example: the opportunity for the development of mariculture in the 1980s. The massive potentials in commercial fish farming were recently set out in the report on the sector by the National Board for Science and Technology. The recent report that the Electricity Supply Board have got "permission" from the Department of Fisheries for the export of 100 tons of cage-reared salmon is welcomed. We urge that the ESB should be made responsible for expanding their activities in mariculture to the fullest and most profitable extent possible, instead of hiving it off, as is the inclination of the conservative parties, to yet more gombeen interests. Such an industry could be contributing £80 million to the balance of payments by the second half of this decade. Such sums are a positive example of what can be done by our public sector to curb the deficits. However, I suspect that this call will meet with little enthusiasm from the private enterprise fanatics of Fianna Fáil and Fine Gael.

I cite the ESB's potential involvement in mariculture as one example of what can be done. Who can imagine what could happen to our economy if the whole public sector were unshackled from its gombeen capitalist manacles? It is a disgrace that a great, progressive and productive enterprise such as the ESB should have to go cap in hand to the Department of Fisheries for permission to export a paltry 100 tons of fish.

But in the absence of these more attractive, but unfortunately longer-term possibilities for economic development, we must still come to terms with the grim realities of our present economic crisis, brought about by the capitalist policies of the two conservative parties, whose failures now dominate the discussion on the Finance Bill.

Mr. L'Estrange

Brought about by Deputy Haughey in Government and the Deputy knows that.

Mr. Gallagher

(Waterford): Notwithstanding the crisis that exists in the public finances we must continue to push for the reform of the tax system which is still an entirely realistic and realisable objective.

We do not need a Commission on Taxation report to tell us what needs to be done. The PAYE taxpayers have been telling successive Governments since 1979 to widen the tax base, to increase the tax take on Schedule D of the self-employed income, both earned and unearned. Interest payments, rent and dividend income must be brought fully into the tax net, like the wage and salaries of PAYE taxpayers. Rent is a major area where tax evasion exists. This must be properly tapped. Other self-employed income must also be brought in, and the problem of tax evasion by professionals must be tackled. The farmers must pay their fair share, a proposal which clearly does not meet with the support of Fine Gael to judge by their January budget, which unbelievably reduced the liability of farmers to pay for the massive amount of services they get from the State, through the outrageous proposal to cut by half the rates payments of larger farmers.

Mr. Kelly

Absolute rubbish. Our party were the first to impose income tax on farmers.

Mr. Gallagher

(Waterford): These proposals to offer more State handouts to the farmers, along with the bank loans package were, in addition, quite unnecessary. Farm incomes are to rise by 25 per cent this year, far in excess of any other group, and hard-pressed PAYE taxpayers are expected to pay just to add icing to the farmers' cake this year.

Mr. Kelly

The Fine Gael Party does and will tax farmers.

Acting Chairman

Would Deputy Kelly please let Deputy Gallagher continue?

Mr. Gallagher

(Waterford): In addition, the obscene wealth and anti-social activities of the property speculation sector must also be tapped, and we will not be dissuaded by claims that such attempts are economically disruptive. The existence of substantial untapped tax revenues in this economy is evident to all with eyes to see. The wealth of the black economy is clearly in view.

To achieve these ends we assert yet again that sweeping changes must be effected in our tax system — changes of a progressive nature that will widen the tax base through a reliance on direct taxation of the self-employed and the wealthy and the implementation of capital taxation proposals that will see this form of tax rise as much as is possible.

Our amendments to the Finance Bill on Committee Stage are aimed to provide this House with the opportunity of taking the first serious steps towards a balanced tax system, and finally show the PAYE taxpayers that their campaign for tax reform was not in vain. The kid glove approach of Minister for Finance towards the wealthy in the past must now be ended.

While economic issues are central to this debate, given the drastic level of unemployment, high inflation, a critical balance of payments situation, inequitable taxation, gross under-utilisation of our natural resources, particularly in agriculture, mariculture and allied industries. The Workers' Party insist that the crisis in the economy is but an element, though a key element, of a much wider and more deeply rooted malaise within the social system.

As a socialist party, we are not concerned only to win the ultimate total transformation of society, we are equally committed to the present strengthening of the democratic process, the immediate improvement of the quality of our political, economic and social life and the mobilisation of our people's skills, energies and enthusiasm for the creation of a more just and equitable society within the foreseeable future.

Acting Chairman

Deputy Gallagher has five minutes to conclude.

Mr. Gallagher

(Waterford): The Workers' Party also recognise that many of our people within all walks of life and of all ages, men and women, have become disenchanted with the present political system and, in my experience over the last couple of months, I would wish that every working man in the country——

Miss M. Barry

On a point of order——

Deputies

On a point of order——

Acting Chairman

What is the point of order? One minute, Deputy Gallagher, please.

Miss M. Barry

On a point of order, has it been agreed that every Deputy can read from a script?

Acting Chairman

No, Deputy. The ruling of the Leas-Cheann Comhairle is that he cannot read.

(Interruptions.)

Mr. Gallagher

(Waterford): I wish that every working man in the country ——

Acting Chairman

Deputy Gallagher, one moment, please, on a point of order.

A Deputy

I would like a ruling on what is going to happen if Deputy Gallagher does not manage to finish his script?

Mr. Sherlock

On a point of order, will the Chair allow Deputy Gallagher time off for all the interruptions he has had?

Deputies

Hear, hear.

Mr. L'Estrange

Does the Deputy hear all his friends?

Acting Chairman

Can we have order, please?

Mr. L'Estrange

The Deputy is not giving time to his friends in Fianna Fáil.

Acting Chairman

By order of the House, I must conclude this contribution at 7 o'clock. There must be no further interruptions. Let Deputy Gallagher be allowed to continue.

Mr. M. O'Leary

On a point of order, our party are quite willing to give further time to the Deputy to finish his script.

Mr. B. Desmond

He deserves it.

Acting Chairman

In keeping with the courtesy of the Labour Party, we will allow the Deputy an extra five minutes.

Mr. Gallagher

(Waterford): I spoke about the disenchantment of the ordinary working people which arises——

Dr. FitzGerald

On a point of order, there have been interruptions and in fairness to the Deputy he should be given sufficient time to allow him to conclude and we are conceding time to him.

Mr. Bellew

That is a change.

Mr. Connolly

A reversal ——

Mr. Gallagher

(Waterford): Before the constant interruptions, I spoke about the disenchantment of the ordinary working people which arises not simply from the gross inefficiency of these Governments but is related to the actual style of politics which has become the keynote of political life under both Fianna Fáil and the Coalition.

Is it small wonder that there is little trust in the programme and promises of Fianna Fáil and the Coalition, that there is widespread cynicism as to the nature of politics, personalities and parties? Broken promises, inner-party strife, and the blatant pursuit of personal power are not the basis upon which the trust and credibility which certain Deputies are so fond of preaching about in a political institution can be built.

Mr. L'Estrange

Will the Deputy find it over there, too?

Mr. Gallagher

(Waterford): In the course of the recent general election, we set out alternative budget proposals which are simply a short-term response to the present crisis in Ireland. Admittedly, they involve no more than a tinkering with the superficial details of the present capatalist economy. But, as I have already indicated, taxation cannot solve the problem. The problems of 20 per cent inflation and over 148,000 unemployed — and the figure is still growing — and the acute balance of payments problem are just the surface manifestations of the extent to which the private enterprise economy is in trouble. They cannot be solved without a radical change in attitudes and an overhaul of the economic system. The Workers' Party maintain that two basic changes are required for a solution to the long-term economic crisis that faces this country in the eighties.

(1) There must be a renewed commitment among the work force to the task of economic development, and

(2) There must be a planned approach to development so that the resources of the economy are harnessed fully and efficiently to achieve the increase in national output necessary to cut inflation, reduce the taxation burden, raise real wages and provide the material basis for social progress.

Neither of these two changes can be brought about in a private enterprise dominated economy. Why should the work force contribute the increased productivity and efficiency required for such a plan to a system in which it has no stake? The working class in this country know intuitively that if they respond to the endless calls for wage moderation from conservative politicians and industrialists, or indeed to the demands for an acceptance of an unbalanced tax system, that they will get nothing in return. The very fact that capitalism offers no guarantee of economic justice is proof that belt tightening among the workers will only lead to fatter dividends for employers.

It is thus understandable that workers must resist attempts to raise efficiency or productivity at their expense, not just in the public sector, but in the private sector. For the same reasons, the endless calls for wage moderation repeatedly fall on deaf ears even though economic circumstances dictate the need for such austerity.

For this country's long-term economic problems to be solved it is essential that the working class co-operate fully to improve efficiency, increase competitiveness, raise exports and cut imports — the measures necessary to solve the balance of payments crisis. Without the consent of the working class it is inevitable that this country will lurch from balance of payments crisis to deflation for years to come.

Thus the key principle of any long-term economic development plan is a guarantee to workers that the profits to be reaped from belt tightening, from efficiency and from the raising of productivity will accrue to the ordinary people in a just way.

By ensuring, through legislation, democracy in the workplace so that each and every worker will fully participate in the running of his or her enterprise, and by ensuring a key role for socially owned State enterprises such as CIE, the ESB and Bord na Móna, the creative energies of the working class can ultimately solve all economic problems.

The second essential feature of the long-term development plan we propose is planning. Our economy under private enterprise domination is chaotic at present. For example, there can be no effective national drive to solve the major problem of massive energy imports because there is no co-ordination between ESB, CIE and our transport planning authorities, all of which would have to be the pillars of a national plan to reduce the deficit arising from energy imports. By introducing planning on a national scale, the decisions of productive units in the private and socialised sectors of the economy can be meshed together in the national drive for development that is needed. The state sector must be at the centre of any planned expansion. The Workers' Party has consistently backed the expansion of the role of State enterprise in the economy. Because the State enterprises are the most amenable to a planned drive for economic development their expansion goes hand in hand with the introduction of planning.

The long term efficiency and development plan that we propose would concentrate on the raising of exports and the cutting of imports in the following key sectors, in agriculture by the expansion and involvement of State enterprise in large scale farming, and food processing, as outlined in our recently published policy document, "Land for the People", in energy through a plan to raise the production of cheap energy, and by a planned conservation plan, organised and executed by the ESB; in manufacturing by the involvement of the State in manufacturing initiatives to replace the failed small industries programme of the IDA, and through renewed and sustained efforts to obtain foreign industries which are of real benefit to the economy.

The response of the conservative parties to the economic crisis is predictable. The Coalition showed clearly who they wanted to pay the cost. It was to be placed yet again on those who could least afford to pay, the working class. Fianna Fáil in Government have done little different. Deputies Haughey and FitzGerald represent the same interest — they both have shown consistently over time that they will refuse to tax both wealth and capital. The Labour Party by their support for Fine Gael policies have shown that they have lost the will to defend the interests of the workers. But the voting record of my colleague, Deputy Sherlock, Workers' Party TD, made sure that the voice of 900,000 marching PAYE taxpayers had to be listened to at last. That voice was heard on 27 January, budget day.

In voting against the Coalition budget, we did not deny that there is an economic crisis. What we disagreed with fundamentally was how the Government proposed to pay for it.

Mr. Quinn

On a point of order, as I am the concluding speaker for the Labour Party, I would like to ask how long more Deputy Gallagher will be.

Acting Chairman

Deputy Gallagher has five minutes to conclude.

Mr. Gallagher

(Waterford): The Workers' Party fully accept that there is an acute economic crisis. As an economy we are spending more than we are earning abroad and the difference has been made up by Government borrowing. Over the past few years successive Governments have attempted to maintain the illusion of prosperity under capitalism by more and more borrowing to pay for day to day spending. Both Fianna Fáil and the Coalition refuse to follow the policies necessary to lay the foundations for real prosperity through a significant restructuring of the economy to raise production to the levels necessary to maintain our standard of living, and to create sufficient employment for the growing labour force. The unshakeable faith of these conservative parties in private enterprise as the engine of growth is misplaced. Despite an investment rate the same as that of Japan, the inefficient ramshackle private enterprise economy has proved that it cannot meet the challenge. The engine has seized. By 1982 all we are left with is an unemployment level of 148,000 an inflation rate of over 20 per cent, economic stagnation and of course, a huge foreign debt.

With the economy now on its knees, and little prospect of ever being able to pay the interest on that debt through self-sustained growth, the economy by international definition, is on its knees. Like any company in trouble which first turns to its workforce to cut wages, the Fine Gael and labour Party Coalition Government in their 1982 budget tried to do exactly this: they tried to take money out of the pockets of workers by huge increases in direct and indirect taxation. In the past the conservative parties, Fianna Fáil and Fine Gael, with the collusion of the Labour Party were able to get away with this approach. There is now a workers' voice in Dáil Éireann prepared to call a halt.

Mr. M. O'Leary

On a point of order, has there been any change in the nature of the business of the House arising from any agreement between The Workers' Party and the Taoiseach?

Mr. MacSharry

There has been no such change.

Mr. L'Estrange

Has there been no bargaining yesterday or today?

(Interruptions.)

Dr. FitzGerald

The Finance Bill was introduced yesterday week and it has been suggested that the Government have agreed to amendments to the Finance Bill. These suggestions may be quite untrue but it is important that we should know what we are talking about. If there has been no agreement and the Government do not propose to introduce any amendments other than those that we have discussed already, then the House will be glad to know that. If, on the other hand, there have been agreements behind the backs of the Members of this House to modify this Bill in some significant way, then before we proceed further we are entitled to know and we ask the Minister for Finance to give a clear statement on it.

Mr. M. O'Leary

Do I understand the Minister to say there has been no change?

Mr. MacSharry

There has been no change. Nor have I seen any amendments from any source.

Mr. L'Estrange

Deputy De Rossa said that the Taoiseach met him yesterday and was to meet him again today.

(Interruptions.)

Mr. Quinn

I would just draw the attention of the House to some of the courtesies. We have extended the courtesy to The Workers' Party, to conclude their speech. We should look at some of the old style traditions. If the Deputy feels a prepared speech is preferable, I do not think it is wise for us to get hung up on it. By all means let us change tradition. We are all aware that many people read speeches, therefore why do we tie ourselves up in such traditions of our own making? I would prefer to see The Workers' Party, formerly the Official Sinn Féin, represented in this House rather than outside and I would prefer to see the Provisional Sinn Féin represented inside rather than outside this House. If certain traditions are broken, they were made by Irish people and we should not get too hung up on them.

I want to address my remarks to the comments made by The Workers' Party and then deal with the economics of the Finance Bill. I want to address my remarks in a manner in which I hope all my comments have been to date, and that is as constructive criticism and not in a personal way. The Workers' Party's attitude to parliamentary democracy is consistent and comes from a long political parliamentary tradition, which does not necessarily exist in this country but which has existed in every European country where there has been a Euro-Communist or Communist Party. The opportunistic behaviour of The Workers' Party in this House since last June is exactly the same as that of the French Communist Party, the Italian Communist Party, the Portugese Communist Party and the Spanish Party.

Mr. Sherlock

That is an outrageous implication. The only reason the Deputy is making it is because The Workers' Party are effectively the representative voice of the working class people which he and his Labour Party have forgotten.

Acting Chairman (Mr. Moynihan)

Would Deputy Sherlock allow Deputy Quinn to speak without interruption please?

Mr. Sherlock

If any Member walked in with his little land Bill under his arm and his——

Acting Chairman

Will Deputy Sherlock allow Deputy Quinn to continue?

Mr. Sherlock

——party purports to represent the working class people ——

(Interruptions.)

Mr. Dukes

They all say one thing and vote the other way.

Mr. Quinn

As I was saying, the opportunistic voting pattern of that party is something our sister parties in the Socialist International forum have experienced. I was not surprised by any of the criticisms made by The Workers' Party nor was I surprised at their decision to vote against an amendment calling for the establishment of a rents tribunal, against which all three Deputies voted in return for some kind of vague changes. They had 27 amendments accepted in that legislation, all of which purported to change the word "shall" to "will" or "may", or some such substantial radical Marxist tranformation of the housing market.

Since The Workers' Party representative in his concluding speech saw fit to attack the Labour Party I feel I should reply in the context of a left wing analysis of what their proposed policies are. There are inconsistencies in, on the one hand, voting in this House for the PRSI increases, which they did, and then going out on the streets to march in opposition to them, which is also what they did. That is something which is not necessarily correctly paraded on the front page of The Irish People, but journalists not representing party newspapers have an obligation and an opportunity to record accurately.

They have also tried to misrepresent some of the progressive measures a small party like the Labour Party are trying to have implemented. Tragically, they cannot recognise the kind of changes that have been made and, because of the economic framework within which their own policy makers conceive politics, they cannot understand the reasons why the belt-tightening exercises have to be undergone in the first place.

When The Workers' Party was originally known as Sinn Féil they were committed to economic independence for the Republic of Ireland. It is my understanding that they are still committed to that policy. So are the Labour Party. The restrictions imposed by the International Monetary Fund on the working class, for whom The Workers' Party are so concerned, would be savage beyond belief when compared with any kind of constraints which any combination of domestic political parties would impose. It is precisely the kind of reckless spending by the Fianna Fáil Party to buy votes which would bring this country and its economic dependence to a stage of disintegration where the IMF would be obliged to come in, as they did in Britain when the Labour Party were in office and as they did in Italy. That is exactly what the Labour Party were seeking to avoid and will continue to do, and we make no apology for that. If that was not understood by the people, then that is a criticism of our ability to communicate our policies, but it is not necessarily a criticism of the policies themselves.

I can understand The Workers' Party's lack of understanding of the role played by the IMF, because the IMF do not operate in the eastern European socialist economies and therefore does not necessarily come into the economic frame of thinking of people who have a certain support. There is nothing wrong about that support. I want everyone to be quite clear about what I am saying, because that is a perfectly valid point of view to have. All I am saying is that every Deputy or party who puts forward a view should try to argue it honestly, rationally, reasonably and recognise all the facts. That is the basis on which scientific Marxism and scientific socialism is constructed.

In the Irish economy and in the western world in which we operate, the IMF are a very strong force, particularly for leftwing governments, or left of centre governments, who want to protect workers from the revages of the collapse of the international system by borrowing and maintaining levels of income at a time when economic growth is declining. I draw the attention of the international affairs committee of The Workers' Party to the fate that befell the Manley Government in Jamaica which attempted to ride out the strictures of the International Monetary Fund by implementing a socialist programme in an extraordinarily difficult economic system.

If we are to have left wing criticism of the role of the minority party in this House, let it be consistent with the facts and take cognisance of all the facts, not the selective facts which are made for opportunistic debate. The tone, text and colour of The Workers' Party speech were extraordinary. I had to pinch myself most of the time because I felt it had been written for the previous budget, not this budget. It seemed to suggest that Fine Gael were in government. The only motivation there can be for that is — and it is quite clear to me, to the House and from the relieved smiles of the Fianna Fáil Deputies — that The Workers' Party again decided to go into coalition with Fianna Fáil to abstain or to vote for the Finance Bill tonight. A journalist recently described an objective assessment of the role of The Workers' Party in this House as "benevolent neutrality".

Mr. Fitzsimons

They voted with the Opposition last night.

Mr. P. Barry

It was a token vote.

Mr. C. Murphy

When is a vote a token vote and when is it the other kind?

(Interruptions.)

Mr. Quinn

I welcome the support of every Deputy, but I was surprised and disappointed Deputy Fitzsimons did not vote with us on that issue.

The point at issue is that we are debating the Finance Bill. The impression has been created that there was an underhand deal, a secret arrangement, under which, in return for The Workers' Party's abstention on the Second Stage, concessions would be made by the Minister for Finance on Committee Stage. We must wait and see what the outcome will be. The Labour Party will be pressing their amendment to relieve the kind of distortion that was in the budget, which this Finance Bill compounds and which The Workers' Party appear to wish to support, either by benevolent neutrality or by positive support in tonight's vote. We will do that because the bias in favour of the people who own wealth goes right through the section. That provision has not been modified relative to the needs of the people. It has not been modified one iota by any of the representations made by The Workers' Party in private or in public.

Any progressive provisions in the Bill, and there are some—I welcome their survival and I thank the Minister for retaining them despite lobbying from some sections of the Fianna Fáil supporting groups —in fact are legacies from the Coalition Government. However, the more progressive elements in that budget, which was an extremely difficult budget, have been removed. It was rather sad to hear somebody as sincere as Deputy Gallagher——

Mr. Gallagher

(Waterford): I am sincere.

Mr. Quinn

I say that sincerely. On the one hand he was able to argue passionately against what he called the "obscene accumulation of wealth" but tonight he will vote, or not vote, in favour of legislation which is the legal vehicle to enable people to hide wealth, which, in the phraseology of The Workers' Party was robbed from the working classes by the capitalists. I understand Deputy Gallagher's dilemma, and Deputy De Rossa's, and Deputy Sherlock's: it is the dilemma of being elected to a parliament that has two large centre parties, populist parties, who have to be pushed and shoved to make any kind of progressive concessions. It is a dilemma that will continue until we get some kind of radical re-alignment.

I suggest respectfully to The Workers' Party that that kind of sloganeering and the sort of insulting analysis they presented here tonight do not fit in with their party's policies. We are in a real economic crisis. On the one hand we are playing in the popular scrum of more money for everybody in demonstrations throughout the country, and at the same time we are saying that jobs can be produced overnight in a whole range of industries. It is simply against economic reality. If we were to apply the model of economic development that has been applied in Eastern Europe, and which is inherent in the industrial revolution proposals of The Workers' Party, we would be forced to have wage constraints on a planned basis and an incomes policy without any of the increases being talked about for a long period. The very first people to baulk at that would be the trade union movement. Indeed, I gathered from what Deputy Gallagher said that all of the benefits of increased productivity should go to the workers, the people who produce the wealth.

If that is to be the case, there would not be any benefit in increasing productivity, whose purpose is to find capital for re-investment. It is clear that our capacity to borrow more money abroad for productive investment is extremely limited because of the declining value of the Irish punt and the parlous position of the Irish economy vis-á-vis the other European economies, particularly the British and the pound sterling. Therefore, we are in a very vulnerable position.

I make these comments on The Workers' Party contribution because we must try to strike a balance. My socialist colleagues in all the other European parliaments have had to respond to the same narrow pre-1973 Marxist analysis of economic realities in the world today. That party's analysis extends to the North-South dialogue on the Brandt Report in regard to Third World development: it is a rigid, hard, narrow interpretation of world economics, conceived in a framework that does not any longer fit the economic realities of the world since the oil crisis of 1973. It certainly does not fit into a programme to try to establish an economy within the EEC. I understand that The Workers' Party now support the EEC, though they did not support it during the 1971 referendum.

It is only through a mixture of socialist planning with co-operation from the private sector in a mixed economy that we can attain any measure of fixed security and stability in Ireland. Unfortunately, the ability to get the kind of consensus that helped to achieve the industrialisation of Ireland from the early sixties to 1972-1973, when there was consensus, when we had wage agreement after wage agreement, when real productivity was gained in nearly all sectors, was shattered by the refusal of certain sections in the economy to recognise the need for change, for people to participate in the spoils, the benefits, of redevelopment.

The most culpable section are undoubtedly the farming community. If any section created a sense of total alienation among workers and brought into the streets hundreds of thousands of PAYE people — they were right to go into the streets, and I joined them there — it was the farming community who, having campaigned vigorously to get us into the EEC in 1971-72 and who then benefited from the undoubted short-term bonanza in terms of farm prices, categorically refused to share their new-found wealth with the urban workforce, many of whom were finding that the old tariff protected industrial jobs with which they had grown up were disappearing.

I remind The Workers' Party that it was not the so-called radical republicanism of Fianna Fáil that took on the farming community: it was on Labour Party insistence, with Fine Gael support, that for the first time those who were making real money, the farming community, were taxed. That was in 1974-75. The effect was that many of them transferred their support to Fianna Fáil. Any analysis made in the House should be based on what happened in history rather than what one would like to have happened in history. The history of that time is that the farmers refused to pay the money: they refused adamantly to pay their taxes and they are still refusing to do so. I suggest they are still being treated too lightly. All the professional lobbyists for farmers, mainly for the large farmers, are conceding that there is growth in the incomes of the farming community. Therefore, it is only right and proper that they should be paying their full and fair share of the taxes required.

This Bill does not ask them to do it. It will not get at the ranchers, will not oblige them to make a contribution. I will be looking for support from The Workers Party and other socialist Deputies for amendments to try to redress that situation. I will give one example. The last Coalition Government implemented the Labour Party proposal for the establishment of the Youth Employment Agency, which is financed by those who are at work, but not by farmers or some of the self-employed. That is unacceptable. Why should one section of the workforce, mainly the PAYE people, be obliged exclusively to carry responsibility for the financing of the Youth Employment Agency when the farmers or the self-employed do not contribute? We have calculated that a Youth Employment Agency levy on farmers and the self-employed would yield £20 million. We draw that to the notice of the Minister for Finance and we will be moving an amendment on those lines on Committee Stage. It is now likely the Committee Stage will be passed because of the "benevolent neutrality" of The Workers' Party.

The budget attempted to provide a cosmetic exercise on the continuing inequality in our country. This inequality has been severely aggravated by the response of the country to the crisis of 1973 and has caused divisions not just between town and country, between farmer and worker, but within the work force itself. On the one hand there is the problem of young people trying to get a job for the first time and, on the other hand, of workers seeking redundancy payments rather than attempting to keep a factory in operation in order to maintain employment. They are real problems that demand real solutions but the solutions are not contained in the provisions of this Finance Bill.

This Government, like the previous Fianna Fáil Government when stability was not a problem, have failed to deal with the central issue of the utilisation of the public finances they control. The convention of the theological dogma of so-called left wing parties is that one should nationalise financial institutions and take them into public ownership. For example, when the Labour Party in Britain were in office the British Government nationalised their loss-marking steel industry, to the great delight and joy of every capitalist shareholder in the industry because they got a bonanza they would not have got otherwise.

This country already owns the largest life assurance company in the nation. It is in public ownership. The Minister for Finance owns 97 per cent of the shares.

Mr. MacSharry

There is still an overdraft.

Mr. Quinn

Yet, with that kind of leverage the Government have not used their power in a planned way. The Minister could exercise enormous fiscal power through the organ of the Central Bank, which is publicly owned, and control the direction of State finances, the investment policy and the way in which it would develop exactly on the lines mentioned by Deputy Gallagher in relation to the long-term development of sectors of our industry. However, there is an extraordinary reluctance on the part of Fianna Fail to do that, and there has always been that reluctance. It was not there in the forties and fifties when the private enterprise sector simply could not aspire to that kind of thing. I challenge the Minister to refute the claim that Fianna Fáil now are strongly in the hands of a small clique of wealthy people who control their economic policy. The refusal of Fianna Fail when they had a 20-seat majority in this House to take effective action in directing the policy of companies such as Irish Life and the Central Bank into responsible economic planning and development was because it was more profitable for private enterprise to do the job.

When I spoke on the Bill dealing with urban development I pointed out that it was another cosmetic exercise by Fianna Fail that would do nothing to regenerate the north side of Dublin city because it was not making financial resources available for the job. As Deputy Sherlock correctly pointed out, if anything it was attacking still further local government autonomy in the name of the revitalisation of the inner city.

Now the Government have the power, the instruments and the levers to effect major economic policy changes if they have the political will to do so. During the four years when we were in socialist opposition on this side of the House and when the Government had a 20-seat majority there was no point in arguing or even talking to Fianna Fáil. Now that they are a minority Government I appeal to the left wing Deputies and parties to exercise their influence in a constructive manner to get some of the changes and reforms implemented by a minority Government, changes on which all of us are agreed. I can assure the members of The Workers' Party in this House that it Fianna Fail return to a majority situation the courtesies and the secret meetings and all the rest will be something of the past.

Mr. MacSharry

Never. Doors will always be open.

Mr. Quinn

I remember all too clearly the deafness and the blindness from 1977 to 1981.

Mr. MacSharry

Never from me.

Mr. Quinn

The Labour Party are disappointed that the Government, with all their experience, did not see fit to respond to changing the overall composition of the taxation package in order to introduce a greater degree of equity in a manner acceptable to a wider range of people. I am talking in particular of working people who represent 80 or 90 per cent of the population, people who earn their living by head or by hand and who are PAYE workers. For some reason, perhaps related to the enormous cost of Fianna Fáil's election programmes and their election campaigning, as the magazine Aspect indicates in this month's issue, there is an extraordinary reluctance on the part of Fianna Fail to tax wealth. We are suggesting that a comprehensive capital taxation series of measures could be introduced to produce the following: a tax on wealth to produce £25 million; a capital gains and acquisitions tax to produce £25 million; a land zoning development levy to produce £15 million and an income-related selective property tax to produce £20 million. This gives a total of £85 million. I will refer in detail to two of those measures for the purpose of clarification.

Dublin County Council have witnessed the spectacle during the past year of acres of land being rezoned by a combination of Fianna Fáil and Fine Gael councillors. In the opinion of the technical advisers this land was incapable of being developed or serviced for the foreseeable future; yet, in relation to such a parcel of land on the north side of Dublin city, in the vicinity of Swords, it was estimated that its agricultural pre zoning value was in the region of a maximum £3,000 to £4,000 per acre. Even with the restriction that there would be no services available in the foreseeable future and, therefore, no planning permission its value had increased to at least £25,000 per acre. There has been an extraordinary queue of landowners, farmers and land assemblers knocking on the door of the houses of councillors and local authorities and Dublin County Council in particular will testify to the continuous representations made in relation to getting land rezoned. Apparently the market is extraordinarily buoyant and, I suggest, extraordinarily flush and generous with its money.

We propose that the land zoning development levy would be made at the point of the decision to zone. If a person petitions to have his land zoned and if the value is increased — the problem now in local authorities is that far too much land is zoned — the decision at the time of zoning would be the point when the value changes from agricultural use to development use. This would have the advantage of raising capital legitimately in those areas where there was to be redevelopment in a constructive manner and the additional benefit of discouraging in a very effective way speculative rezoning that has effectively destroyed the planning of Dublin county and, as a consequence, made nonsense of any attempt to plan the city of Dublin and for its growing population with any sense of coherence. Members who campaigned in the Dublin West by-election will recognise the type of nightmare legacy we have constructed and will bequeath to our children.

The Minister could adopt that suggestion which would produce £15 million approximately. It would hurt a lot of Fianna Fáil supporters but it would bring in money that could be taken off the load the PAYE sector have to bear. It would be hard for Fianna Fáil to accept another tax which we are proposing since they abolished rates on all dwellings, narrowed the property tax base and total tax base in such a way that it was the workers who carried the tax burden because nobody else was carrying it by the time the extraordinary O'Donoghue — Colley package was introduced. Deputy Colley is the man who discovered honesty in the back benches of Fianna Fáil. We are proposing that the income-related selective property tax apply to the second home and some family homes. It is an extraordinary testament to the division of wealth here that one can propose such a tax in these days when there are approximately 30,000 homeless on local authority housing lists. On the basis of our estimate an income-related selective property tax would produce a yield of up to £20 million.

We will be looking for support from all sides of the House for that change. I presume that the overall budget and deficit strategy is being maintained. We are talking about a package of approximately £85 million and that could be transferred from the PAYE sector to this section. If a Fianna Fáil Deputy wishes to say why he does not want a land zoning tax or why he does not want holiday homes taxed he should say so; that is what democracy is all about. That Deputy should then try to explain at a clinic why it is that housing lists are so long on one side of the fence and why some people can have two houses. He should explain at those clinics why Fianna Fáil are not prepared to tax those people. I am not talking about taking the second house from such people, I am not totally naive, but I am asking Fianna Fáil to be a little just. I challenge Fianna Fáil Deputies, since honesty is something that has now been discovered in the back benches where the Colley faction sit, and since Deputy McCreevy outside the House can make such points like Deputy Colley, to tell us why they are not prepared to support the measure I have suggested.

If democracy is on the wane and if people are becoming cynical about the machinations of politics — it is my view that that is happening — this is the place where we should be discussing this openly and honestly. Indeed, this is the place where not just the press should be but where the TV cameras and the radio should be so that ordinary people can hear what is being said, or more to the point, what is not said. That is one area where the shift in the taxation burden should be. The Bill is designed to give effect to the budget which was designed to give an indication of the Government's response to the economic problems that confront us. Regrettably for all of us that is not the case. It is regrettable for our working people, and the number of people who do not work in some shape or form is small. It is my understanding that at least 80 per cent of the population depend on their economic activity on a daily basis in order to survive. If we do not do something the situation will get worse.

I am saddened, though not surprised, that the Bill does not contain anything that could be presented as going down the road of introducing equity and justice in the system in a substantial manner. I am referring to anything Fianna Fáil put into the Bill because the progressive parts are the legacy of the last administration, an administration that some Members saw fit to attack and vote against. Tonight we will have an interesting transformation by people who voted against progressive legislation now voting for it. That is the democratic choice of The Workers' Party but it should be seen by the public that that is what they have decided to do.

The decision to abandon totally the idea of discretionary trust is undoubtedly in deference to the growing wealthy section. The proposal to introduce the legislation was brought in by a majority Fine Gael-Labour Coalition. If The Workers Party want to be honest about their criticism they should tell the public how they can make a criticism against that Coalition which intended dispelling and removing that capacity for people to retain wealth and evade any type of taxation measure and how its abolition or removal by Fianna Fáil will get their support. In my view that is opportunistic voting and it is right to describe it as such. There may be a reason for it and it is up to The Workers Party Members to respond and tell the House and the country what the reason is. Certainly, the speech by Deputy Gallagher did not attempt to give that reason because it was not referred to.

The country's difficulties can only be resolved by a system of economic planning supported by the majority of our people. With our type of democracy, our type of constituencies where the constituency work of a local Member is as much a contributory factor in their election success as are the policies of political parties at head office, any type of economic policy presented for the support of the people must have a significant degree of consensus. Ideologies in all parties — we all have them, people who always know best but never have to be elected, the theorists, the think-tank boys, the specialists who know precisely what should be done and then have the honour and privilege of being able to tell somebody else go out and do it — must realise that there has to be public support on a broad basis for economic policies.

The divisions that the Fianna Fáil Government introduced into the economy in 1977 between the farmer and the worker on the one hand and the self-employed and the PAYE worker on the other and between different kinds of industries have broken down and damaged that potential consensus in such a way that the trade union movement have found it increasingly difficult to get support among their workers for national wage agreements. The Labour Party have always supported the concept of national wage agreements, as has the official leadership of the trade union movement. It is an essential and integral part of economic planning to have some form of understanding of what wage costs are likely to be in any industry over a period of time so that the law of the jungle between weak and strong sectors does not prevail. If you do not have national wage agreements it would be impossible to undertake long-term planning projects. It is only through long-term projects that we will get the kind of increase in productive wealth that is essential for the provision of jobs. Every budget and every Finance Bill have a direct relation to the ability of the trade union movement to obtain a national wage agreement; that is the workers' most constructive contribution to economic growth, in addition to their own productivity.

The workforce over the last five to six years, led by the trade union movement, have made an extraordinary contribution in terms of productivity and ceding a substiantial portion of the wealth that they create to the Government and to employers. That is done in the form of deferred payments and reduced increases relative to the rate of inflation or, in some cases, relative to the profits of the firm. Yet, Fianna Fáil in particular have consistently refused to radically change or transform the legislation relating to companies or provisions in financial legislation that will enable the workforce to have access to the accounts of companies so that the workforce can participate positively and constructively in the long-term future of the firm. It has been compounded in a whole range of ways by creating divisions so that the co-operation of the workforce is now far less available than it was two, three or four years ago. Anyone involved in the trade union movement knows that there is growing resentment to the concept of national wage agreements. The trade unions believe — and I support the view — that if we break down that consensus, not only will the working people in general be damaged because the economy will be further undermined, but, within the workforce, the most vulnerable sections will suffer most.

I am concerned that this Bill does not provide for making available the information that workers will need in order to assess the financial position of their company. Perhaps we will discuss it in greater detail on Committee Stage but I am concerned that the options for profit sharing and for taking up shares as part of the financial take that a workforce would have in lieu of cash, in order to facilitate the cash flow and the general economic performance or survival of the company, in contrast to the impression in the budget speech, will only be confined to those companies that are publicly quoted on the Irish stock exchange or companies that are owned in whole or in part by publicly quoted stock exchange companies. I think the House will realise that the list of companies in the Irish stock exchange is not exhaustive and would only cover a tiny part of the workforce. Therefore, this Bill fails in what should be the task of every financial resolution and Bill introduced in the House, the objective of introducing equity and fairness into our taxation system and also creating a climate within which the workforce can willingly operate and see that their future is being secured in a reasonable way. There is no evidence, regrettably, to the satisfaction of the Labour Party that this legislation is moving in that direction.

There is continued opposition among many employers to the EEC Fourth Division which would establish the rights of workers to have access to the financial information of their companies albeit in a very mild form because, like many EEC measures, it is the product of compromise and consensus and does not go far enough. Significantly, however, it goes further than any of the legislation on our Statute Books. That will not produce the kind of support which the trade union movement needs within its own ranks to get co-operation among its own workers to give the kind of productivity that is needed in the large public sector. If we confine ourselves to the public sector, where there has been much industrial trouble on the question of wages because of the impostion of PAYE, it is essential that this or any Government can clearly be seen by that sector to be introducing equity and balance in their financial measures generally and particularly in the financial Bills introduced in this House.

Because that is not there, the capability of using the public sector as the engine for economic growth — which in the official view of the Labour Party and of The Workers' Party, is the only substantial productive element in the economy under Irish control with the capital reserves capable of that development, with the full co-operation of the workforce — is being damaged because of the refusal by the Government to introduce the kind of balance and equity that is needed in the financial provisions. I made that point at some length because I want to give notice to the Minister that it is our intention to introduce amendments to try to make changes in that area. I hope the Minister will be open to reason on this because, without it, we are not going to get the kind of economic response in the short term that we desperately need.

The Labour Party opposed the auctioneering politics that emerged in 1976-77. Immediately after the 1977 election, the then Minister for Finance, Deputy Colley came into the House and said that the economic policies of that time, of the bonanza days of throwing money around, would not work and that at the end of the day we would, in real terms, be worse off than when we started. I used the analogy that it was like borrowing money to bet on a horse in the belief that you had a sure winner but that at the end of the day not only did the horse lose but you were left with having to pay back the money you had borrowed in the first place. The only problem was that it was not Fianna Fáil money which was on the horse, it was money that the Irish people were legally responsible for. It is because of that extraordinary taxation debt that now hangs around the neck of the country in the form of foreign borrowing and debts that we are in our present situation. Therefore, the realistic room for manoeuvre that Fianna Fáil have in this present economic climate is very constrained and tight.

We are learning all the time, as we did in yesterday's Adjournment Debate, of secret deals and arrangements which make that situation worse. Therefore, on behalf of the Labour Party, I call on the Minister to do a serious rethink on Committee Stage — it is quite obvious that some rethinking will have to be done — and to increase in a general way the level of capital taxation so as to be able to reduce the burden on the PAYE taxpayers; to look seriously at the question of bringing farmers more into the taxation net than they are at present. It is really scandalous to see the low level of money the farmers continue to refuse to pay. Finally, I want him to amend the legislation in relation to access to companies so that workers and their trade unions can clearly see the financial situation of the place in which they work and in which they have a stake so that they can take responsible decisions as the vast majority of them wish to do in order to secure their jobs, expand their plants and create new jobs for their sons and daughters and indeed for their grandchildren.

Mr. P. Barry

We are now debating the final stages of the Finance Bill to give effect to the budget introduced by the present Minister for Finance on 27 March. This is the third economic debate on the budget this year. What this country needs now is not another economic debate but a general election. This House and the public have completely lost faith in the present Government who will turn, twist, bend and go back on their word; they will give way to any pressure group. This was quite clearly demonstrated for the past month when they did anything to avoid walking through the lobbies of the House. They are completely in the hands of Sinn Féin the Workers' Party.

Mr. Sherlock

There is no such organisation.

Mr. P. Barry

I am sorry; I forgot that they changed the name. They may change the name but I do not think the leopard changes his spots. "A rose by any other name..." For the past 24 hours we have had speculation in the House, rumours and counter rumours, and a report in The Irish Times this morning headed, “Minister Talks To T.D. 's On Demands”— not requests or representations but “demands”. I understand that on the news bulletin tonight it was stated that The Workers' Party said they had met Deputy MacSharry again today and issued some kind of a statement whether they were satisfied with his point of view or not — I did not hear it myself so that I cannot quote accurately. If a deal had been hammered out I was sure it would be announced before the conclusion of this debate today. Deputy FitzGerald——

Mr. De Rossa

I should like to point out that The Workers' Party Deputies are not responsible for speculation in the media.

Mr. L'Estrange

It was on the radio this morning that The Workers' Party said——

Mr. Sherlock

I categorically deny that any agreement of any kind has been made between Fianna Fáil and The Workers' Party. That is to put the record straight.

Mr. P. Barry

That is fine. I am satisfied with what Deputy De Rossa has said. I was about to say that when Deputy FitzGerald questioned the Minister about it tonight the Minister denied that any deal had been hammered out. If that is so I think the Minister is quite right. It would be wasting his time and further diminishing the credibility of his Government if he came to a deal or accepted amendments from The Workers' Party next week because the Government are in no danger from them. They will trot into the lobby with the Government any time they are wanted because they are as much afraid of the voice of the people as the Fianna Fáil Party. I think the Minister should not further dismantle the budget and the Finance Bill by giving away or accepting amendments that may come from that source in the next fortnight because they are no threat. If the Government want them to vote with them or to abstain, they will do so. We shall have an example of that later tonight. This group of people who profess themselves to be so concerned for the working class will vote tonight for a Finance Bill that dismantles many of the good points alluded to by the Minister in his budget speech because this Finance Bill is certainly a dilution of the budget as delivered by the Minister on 27 March. I think it is true that probably never anywhere in the world has there been such a change between the budget as introduced and the Bill as presented to the House.

We cannot continue under this Government unless they get a bit of backbone. It is for that reason I said at the outset that we should have a general election now to clear the air. Unfortunately, I think there is no danger of that happening because the Government will not be defeated on anything that would warrant a general election because my friends on my right who profess to be on the left will not vote against them.

Mr. Sherlock

I tried to emphasise it but perhaps Deputy Barry did not hear me say it: there is clearly no alternative. Deputy Barry and Fine Gael are not going to offer one.

An Ceann Comhairle

Deputy Barry without interruption.

Mr. P. Barry

I think the voters in Dublin West were clearly demonstrating ——

Mr. L'Estrange

If the Taoiseach had won Dublin West he would not be talking to The Workers' Party at all; he would not want to see them.

Mr. P. Barry

I am a bit surprised, I must admit, that The Workers' Party will not have the courage to vote against the Government. I should have thought that if they were so confident in their policies and the support they were getting — we had the boasting by Deputy Gallagher tonight about a 100 per cent increase in their vote in Dublin West — they would be anxious to gather a similar increase in their vote in all other parts of the country. They should be the ones bursting for a general election after Dublin West if they were so confident that they would have this large measure of support from the people. But, as I say, there is no danger. I do not think we should be surprised that the Government, lacking the political courage to face the people——

Mr. Sherlock

I am anxiously waiting to hear the Deputy's alternative budget proposals. They do not seem to be coming.

Mr. P. Barry

Our alternative budget proposals were put to this House and the people in the last general election, and our vote increased. We have more of a mandate from the people for our budget proposals than the kind of waffle and airy fairy ideological nonsense being spouted here. Deputy Gallagher when speaking — I cannot find it in his script; perhaps because I did not study it carefully enough — referred to the fact that the Ard Comhairle of his party were deciding what to do. That is very interesting.

Mr. De Rossa

That is democracy.

Mr. P. Barry

No, it is not democracy, Deputy. If the Ard Comhairle of your party were not ——

An Ceann Comhairle

Would Deputy Barry please address the Chair?

Mr. P. Barry

We should not be surprised at the reluctance of Fianna Fáil to face the electorate because I think the leader of that party has demonstrated in his period of leadership that he is far stronger with words than with deeds. Here it is necessary to go back because we are talking about the same time bracket, from the time Deputy Haughey assumed office until today because it has all had an effect. We all remember and I think many of us breathed a sigh of relief secretly when we heard the then Taoiseach and the present Taoiseach on television in February 1980 listing out coherently and authoritatively what was wrong with the economy, and telling us what it was necessary to do to put it right. That was the promise of February 1980, and that withered away into the reality of the disgraceful Talbot deal in May 1981, prior to the general election. Anybody with that sort of record was rightly thrown out of office despite the fact of having a 20-seat majority at the time. The Taoiseach had clearly and correctly listed the faults in the economy but had taken no action to rectify them. He had let the situation drift, having brought in a disgraceful budget and Finance Bill in 1981. If Fianna Fáil did not have the courage to tackle the problems at a time when they had a 20-seat majority, how can we expect them to tackle them now when they are in a minority position? These problems have been compounded since the recent change of Government. This Finance Bill is simply the last chapter of what has been going on since the 1981 General Election. It was obvious to us on our election last year that problems had to be tackled urgently and courageously. Within three weeks of being returned to office we produced a budget which, as Deputy Gallagher admitted this evening, was justified having regard to the extent to which Fianna Fáil in office had damaged the economy. In our seven or eight months in office we attempted to set about righting that damage by cutting public expenditure in every Department. Our budget of January last was the result of eight months of exhaustive and heartbreaking tackling of the Estimates for every Department. We are told that that budget was too harsh. It was certainly too harsh for Deputies Kemmy, Loftus and Sherlock, who voted against it. In the event we lost the vote and went to the country on the basis of that budget. We used the slogan "Garret is Right".

Mr. Sherlock

That was after having modified the budget two days before the election.

Mr. P. Barry

We did not modify the budget. We said that we would not impose the tax on children's shoes and clothes but we pointed to where we would raise the alternative revenue. This was spelled out clearly, unlike the situation in respect of the £45 million concession in respect of PRSI. Our budget was put intact to the people. We increased our vote but we had even a more significant impact on that election campaign. We forced Fianna Fáil — against, I suspect, the wishes of their leader — to admit that our approach was correct and that they would abide by the thrust of our proposals in relation to borrowing deficit and so on. I suspect that that line was forced on the Taoiseach by the Minister for Education and the Minister for Trade, Commerce and Tourism. At various press conferences held prior to the election it was obvious that a prominent part was being played by the Minister for Education.

Mr. L'Estrange

Hear, hear.

Mr. P. Barry

A deal, which according to Deputy Colley was not discussed by the Fianna Fáil Front Bench, was drawn up between the Taoiseach and Deputy Gregory on the basis of Deputy Gregory voting for Deputy Haughey on his nomination as Taoiseach. My friends of The Workers' Party then got themselves into a lather of sweat when they found they had been outmanouevred, despite all their backroom boys, their Ard Comhairle and their 200 per cent increase in membership, by an Independent. They had to join the happy throng through the lobby in the hope that they might pick some of the crumbs from the rich man's table.

Mr. Sherlock

Deputy FitzGerald invited us, too.

Mr. P. Barry

I appreciate that all this is very hurtful to Deputy Sherlock but he should remain quiet. He has had his opportunity to speak.

Mr. Sherlock

Deputy Barry was not there to advise Deputy FitzGerald when he needed advice.

Mr. P. Barry

The leader of this party does not need any advice from me in dealing with The Workers' Party. He knew exactly what they were at.

Mr. Sherlock

What surprised me was how little knowledge Deputy Barry had of the Department for which he was responsible.

Mr. P. Barry

The Workers' Party trotted in like tame dogs hoping for a few crumbs from the rich man's table and so Deputy Haughey became Taoiseach. We come now to the intriguing part in all this, to the man who had played such a prominent part in Fianna Fáil's economic strategy for the previous six to eight months and who had taken such a prominent part in drawing that party's economic programme for the election. I refer to one who appeared so often in front of the television cameras as the financial guru of the party and who, having been restored to the Front Bench is now Minister for Education. Apparently the Taoiseach considered that there had been enough of that kind of nonsense.

Mr. Fitzpatrick

(Cavan-Monaghan): Deputy Colley would not take the job.

Mr. P. Barry

He was made not the Minister for Finance but Minister for Education and so we are back once more at the old unhappy phrase of "spend all" and it does not matter where the money comes from. The tragedy about this is that both Ministers, Deputy O'Malley and Deputy O'Donoghue, were correct when they saw that the public did appreciate what we have been trying to do. More importantly they saw that unless the strategy we had evolved was followed through, the result for the country would be larger deficits, more borrowing, increased inflation, fewer jobs with the inevitable consequence of having to finance that policy not just this year or next year but for decades to come.

The present Government then introduced a budget and, reasonably enough, the Minister for Finance, Deputy MacSharry, said he had to introduce that budget in a hurry. That budget was introduced on 25 March. Now the civil servants in the Department of Finance naturally thought that the Minister, Deputy O'Donoghue, and the Taoiseach actually meant what they said during the election and they could go ahead on the basis of what was said and prepare a budget on that basis. Of course, once the pressure mounted on the Cabinet from their own back benches, from Deputy Gregory, from Sinn Féin The Workers Party, and God knows who else outside this House, they bent once more and brought in this Finance Bill which bears very little relation to the budget they introduced in March. The variation is something which has never been experienced so far in this country and I would think it is something which has never obtained in any other country either.

The Second Stage of this Finance Bill will be passed tonight. Deputy Gallagher has said they have a long list of amendments drafted and I think it is reasonable to assume that these amendments probably formed the basis of whatever discussions took place yesterday and today. I want the Minister to say tonight when he rises to reply to this debate precisely what amendments he proposes to introduce on Committee Stage and precisely what further changes he envisages on Committee Stage. What sections does he intend to change? What amendments does he intend making? I also want to know whether he proposes to accept any of those amendments which The Workers' Party showed him yesterday and today. Such an important measure as this should be debated and agreed on in this House and not elsewhere. I shall leave it at that. The Minister has assured me he has not dealt with The Workers' Party and, as I said earlier on, if he has not made a deal he is wise because they will vote for him anyway. They are afraid of the people and they will trot dutifully into the division lobby to make sure they do not have to face the public again.

Mr. MacSharry

That is what the Deputy is hoping.

Mr. P. Barry

This scenario I have been painting has been quite clearly interpreted by the former Tánaiste and Minister for Finance, Deputy Colley. He gave an interview to a newspaper and to Radio Éireann the Sunday after the by-election. He did not want to rock the Fianna Fáil boat and so he kept his mouth shut until after the by-election.

Mr. L'Estrange

Low standards in high places.

Mr. P. Barry

Indeed that was the content of his interview with both the newspaper and on radio. Now Deputy Colley cannot have it both ways. He and whatever friends he has in the Fianna Fáil Party should make up their minds. Either they show that they do not approve of low standards in high places or they shut up. They should not curry favour with sections of the Fianna Fáil Party who disapprove of their present leader or seek publicity for themselves and, at the same time, continue to support that of which they disapprove. The only result of this is to give a hollow ring to their protestations.

Furthermore, if the Ministers, Deputy O'Donoghue and Deputy O'Malley had any courage, if they believed what they were saying during the general election, then they should now resign from the Government. That would be the correct position for them to adopt. Deputy Colley has portrayed himself vehemently and articulately on two occasions recently and on one occasion earlier on as the defender of purity in Irish public life. He should now put his feet where his mouth is but I have no faith in that happening at all. If he is as pure as he likes to portray himself he has an obligation to those friends of his on the backbenches of Fianna Fáil and to those many supporters in the party outside this House — it is a dwindling body of supporters, very obviously dwindling because the more changes that are made and the more variations that occur demonstrate clearly how the Government are being pushed around by every small group, every faction, every Independent, and by The Workers' Party — to demonstrate clearly his purity. The patently dwindling support to which I have referred will be clearly shown in any general election this Government care to call.

Protestations of virtue from Deputy Colley ring a little hollow. Deputy Colley was the Tánaiste and Minister for Finance who oversaw the implementation of the famous 1977 manifesto from which many of our present problems flow. More significantly, he was Tánaiste of a Government who in November 1980 fought a by-election in Donegal where more strokes were pulled and more promises made than even in Dublin West last month. To pretend that he was not party to them or did not approve of them or has a post-disapproval now is less than honest.

Mr. L'Estrange

The one in Donegal was knocked.

Mr. P. Barry

If there are people in Fianna Fáil who believe, as Deputy Colley does, that strokes and promised and low standards in high places should not be part of public life now is the time to walk or else shut up. They can walk through those lobbies and vote down this Bill on Second Stage, and the amendment in Deputy Bruton's name quite clearly points out the reason why they should do it.

Mr. Bellew

Deputy Burke——

Mr. P. Barry

Did I hear somebody mention Deputy Burke?

Mr. Bellew

Deputy Cosgrave and Deputy Burke were the only ——

Mr. P. Barry

That is one of the strokes that Deputy Colley disapproved of.

Mr. L'Estrange

It boomeranged.

Mr. P. Barry

It boomeranged, as Deputy L'Estrange says. After doubling with The Workers' Party — I cannot get the name Sinn Féin out of my mind — of course it is a fact that Deputy Liam Skelly is in this House and you can double your votes as often as you like as long as we win the seats. That is the reality of politics. As I say, Deputy Colley is equally responsible with all those members of Fianna Fáil who were members of Fianna Fáil Governments from 1977 until last June and again for the last three months but he is more responsible than some of the others because he was a member of the Government whose leader sorted out what was wrong with the economy and then refused to do anything about it between January 1980 and the 1981 General Election. The result of their doing nothing about it was the losing of a 20-seat majority in this House, unheard of in politics in this country. That shows what the people thought about what they were doing and I know the people are thinking precisely the same at this moment. Deputy Colley did not open his mouth either about Knock Airport — and he was a Minister of the Government — nor about the famous Talbot deal about which we heard this morning nor about the Gregory deal — at least he did but after the by-election when he was out of office — nor about the Clondalkin Paper Mills or all the other strokes which took place when he was a member of the Government. Deputy George Colley is a nice man. In many of the portfolios he occupied he was a good Minister. There is no questioning his patriotism, but he cannot, nor should he attempt to, criticise others for what he was part of himself.

This Finance Bill continues on the same spendthrift, low standards that Deputy Colley was objecting to. They were giving in to any pressures, and the changes that were made between the budget and the Finance Bill are obviously a result of pressures by those various groups. The Minister denies, and I repeat his denial to put it on the record of the House again, that there is any deal between The Workers' Party and the Government about amendments that may be accepted in the next fortnight on this Finance Bill.

Mr. MacSharry

Whatever else I am not a parrot.

Mr. P. Barry

I want to repeat the denial that any deal was done because we want that in the next fortnight and we want to see the Minister's attitude to that too. The reality will then be proved that Fianna Fáil are not the Government. For the first month Deputy Gregory was the Government and from now on until the by-election no doubt we will have The Workers' Party in government. They will tell the Government what to do, they will call the shots. The extraordinary thing about this Bill — again I cannot understand the attitude of The Workers' Party to it — is that any changes that have been made in it since the budget have been to help the well off——

Mr. Quinn

That is right.

Mr. P. Barry

——and not the less well off about whom The Workers Party are weeping tears here tonight. Regarding the changes in company cars, that perhaps was too severe and I think they were right, but the less well off do not have company cars. I do not know if The Workers' Party provide them but most people on the dole do not have company cars. The change in capital gains tax I will be interested to hear when we come to that in the Bill. Deputy Gallagher was eloquent about that change as he was in defending the rights of the workers here tonight and the restoration of the tax relief on money borrowed. I cannot see how that would help those who are less well off. They do not normally have overdrafts and perhaps they do not have mortgages either and are in rented accommodation. Deputy Gallagher says that the changes in the Finance Bill are to their benefit. Even the changes since the budget in the PRSI hardly help the lower level of taxpayers because it is given as an allowance. That means it is worth 60p to anybody in the 60 per cent bracket and only 25p to anyone in the 25 per cent bracket. Yet The Workers' Party these defenders of the underprivileged, will troop into the Fianna Fáil lobbies and vote for this.

Leaving aside the absolutely inadequate explanation of the Minister as to where he is to get the money for the £45 million — forget about it, we will get it from savings or from increased taxation — they will vote for the concession that helps the better off PAYE payers against the worse off PAYE payers and they will come along in a month's time and vote for the taxation necessary to pay for it. If that is consistency and what their Ard Comhairle are telling them, they should seek other advice. I do not think that is very consistent policy. The Minister says that he will get this £45 million that he referred to either by cuts, public expenditure or increased taxation. I must express grave doubts about the willingness of any Fianna Fáil Minister for Finance to cut public expenditure because during their four years in office from 1977 to 1981 their policy was the absolute reverse and they increased public expenditure. I do not think that leopard will change his spots now. They boasted about the policy of Deputy Martin O'Donoghue to increase the numbers employed in the public sector and to increase the level of public sector spending, now at 60 per cent, one of the highest in the world. I do not have any faith in the nerve of Fianna Fáil to cut that.

I should like to say something about public sector pay. We have all had a go in recent years at the increase in public sector pay but it is only fair to say that individual civil servants have not received pay increases which are out of line with what has been paid in the private sector. What has happened is that the number of people employed in the public sector has grown because of Fianna Fáil policies to an extent which is absolutely unwarranted for a country of this size. Every person employed in the public sector must to a large extent be carried by taxation gathered from those outside the public sector.

If policies are adopted which interfere with industry, the creation of jobs and the willingness of people to invest and if at the same time the public sector is expanded, then the country is on the road to disaster. I do not see any change in Fianna Fáil policy in this regard or any willingness on their part to cut back on the cost of running the country. Neither do I see any willingness on their part to do anything to help the creation or the preservation of the jobs which are so necessary outside the public sector. The reverse is the case. The policies in this Finance Bill, enunciated by the Minister in his budget speech and originally part of the Fianna Fáil programme in the general election, will discourage investment and close businesses.

It is unreal in a time of recession to expect firms not only to pay this year whatever corporation profits tax they will owe for next year but also to impose VAT on imports at the point of entry. This will have the effect of putting into the hands of the liquidator many firms who are at present finding trading extremely difficult. The Minister's solution for this bite into their cash flow is to tell them to borrow, saying that he will arrange for the ICC, through the European Investment Bank, to assist them to raise the money. What help is that to a firm who are breaking even or making losses? What encouragement is to to them to stay in business when all the Minister is doing is increasing their losses by asking them to pay interest on the money they borrow or wiping out their profits? What person in the private sector, to which we continually pay lip service, will invest in those circumstances? The cash needed to run businesses is being drained away.

Money is to be borrowed from banks who are at the same time facing an increased levy, thus diminishing the pool of resources they have to lend to anybody considering investing. Perhaps it is too strong to say that this is a receipe for disaster but it is certainly not the action of a Government or a Minister genuinely concerned with creating jobs and encouraging investment. This is the action of somebody who wants to blunder through as best he can for this year only and let tomorrow look after itself. As a result of the attitude of this Government and this Minister, we are building up problems for 1983 and 1984 which would test even the loyalty of The Workers' Party to vote for Fianna Fáil. They want Fianna Fáil to stay in office for another five years so that they can keep twisting their tails and making them jump through their hoops. They certainly do not want us returned to office.

Mr. Power

Why did they want Deputy Skelly?

Mr. J. Bruton

That was the people of Dublin West.

Mr. P. Barry

The state of the economy was best summed up by the Minister when he said that 58 per cent of the projected budget for 1982 has been used up in the first quarter and 100 per cent of it will be used up by June. He said it would be substantially exceeded in the third quarter but he went on to say that of course the final quarter would take care of everything because the receipts would flow into the Exchequer.

Mr. J. Bruton

Where will they come from?

Mr. P. Barry

I do not know if the Minister believes that. I am certain that those who are advising him do not believe it and I presume some of the amounts he has included in his calculations are to accrue from the down payments of VAT at the point of entry and the bringing forward of corporation profits tax from next year. The Minister should have a chat with the Revenue Commissioners and they will tell him from how many firms it will be possible to obtain this year corporation profits tax due in 1983. They will tell him how much his cash flow will be improved for the last quarter of this year from that source. Does the Minister not listen? Does he not talk to industrialists? Does he not hear the views of the Confederation of Irish Industry or the Federated Union of Employers? Does he not understand that practically every employer in the private sector is short of funds at present, is overdrawn to the hilt, is terrified of the inflationary effects of what is happening and, more than that is terrified of this Government staying in office? Nobody whether an employee, a public sector worker or employer has any faith in this Government as presently constituted to take hard decisions and tackle the problems of the economy so that we can all have a share of the cake which the Workers' Party dish out without any thought as to how it should be made.

If the Government continue on the road they are going, they will damage their own party and that does not worry me. What worries me is that they will damage people's faith in democratic Government and that they will damage the economy to such an extent that their children may be unemployed. The majority of us in the House went to secondary school and left knowing we would get a job. The way the Government are managing our affairs, our children have no such guarantee. They are wrecking the economy and the future for young people. For God's sake let them get out and go to the country before they do any more damage.

Minister for Finance (Mr. MacSharry)

I should like to thank all Deputies who contributed to the debate. As I said at the outset of the debate, the measures continued in the Bill were complex and incorporated a number of changes in the taxation code. The comments made by Members were wide and varied and I cannot hope in the time available to me to answer all of them. I have taken careful note of all that has been said during the course of the debate and shall reply to the major issues raised.

I should like to deal with a few points made by Deputies Quinn and Barry. One of the points made by Deputy Barry was that he wanted me to say now what amendments I will be introducing to the Bill. The simple answer to that at this stage, as anyone involved or closely associated with finance will know, is that it is not possible to say what amendments will be made. Deputy Bruton knows that well. I have been consulted by officials in the Department to the effect that there are various recommendations they will be making to me regarding possible amendments, mainly for technical reasons. That is normal in any Finance Bill. It was referred to on a few ocassions and Deputy De Rossa has already replied to it. I confirm that. The only real contact that one has had in relation to possible amendment on this Bill has been by Deputy Bruton who has been in correspondence with me and has had some contact with officials in the Department. I want to make that position quite clear.

Mr. Fitzpatrick

(Cavan-Monaghan): The Minister must be going to introduce an early suplementary budget.

Mr. MacSharry

That is the position. If the Deputy does not like the facts I am sorry. I should like to refer to a point made by Deputy Quinn which was the extension of the youth employment levy to farmers and the self-employed. Farmers and the self-employed are already provided for under existing legislation in regard to the collection of the levy which was passed by this House under the Coalition Government last December. Farmers pay their contribution through the health contribution scheme and the self-employed through the income tax system.

At the beginning of the debate, Deputy Bruton put forward a motion opposing the Second Stage on a number of grounds. These were, first, that the Bill departs significantly from the terms of the budget; secondly, PRSI concessions were unfairly distributed; thirdly, some tax measures will add to our economic difficulties and, fourthly, no provision is made for long-term reform of the income tax system. During the course of the discussion, I intend to refute, point by point, the arguments put forward by him.

The Finance Bill does not depart significantly from the terms of the budget. The only major difference relates to the special PRSI allowance which has already been approved by Dáil Éireann and is simply confirmed in the Bill. The other changes vis-á-vis the budget have a total cost of only £2½ million.

Mr. Bruton

That is this year.

Mr. MacSharry

It is out of an approximate expenditure of £6,000 million.

Mr. Bruton

What about next year?

Mr. MacSharry

This small cost underlines that they are relatively insignificant in the overall context.

Mr. Bruton

That is a misleading statistic.

Mr. MacSharry

If the Deputy is so concerned about additional costs, it is hardly logical that he should seek a higher exemption from development land tax than the £15,000 which is proposed.

It is nonsense for Deputy Bruton and others to talk about changes in budgets. We know that the budget introduced on 27 January was significantly changed as we went into the general election. Following the election, it was again changed substantially in discussions with various groups in the House. The extent of those changes was much more significant than what is suggested in these measures which amount to £2½ million. The Deputy demanded that I should let the House know, when replying to the debate, what the net cost for 1983 would be of the changes now being made vis-á-vis the budget proposals. The full year cost will probably be in the region of £10 million to £15 million. I cannot be more precise than that. I must make it clear that the bulk of this cost arises in relation to two major changes and these are the benefit in kind provisions relating to the private use of company cars and the proposals for mortgage interest relief. Even with the changes I have made, the revised provision for the benefit in kind will still give a higher yield than the scheme put forward by the previous Government.

Changes in the mortgage interest relief provisions have been necessary, as I pointed out, for technical administrative reasons. The Revenue Commissioners advised me that they were not in a position to implement the proposals as originally announced. These proposals would have involved three separate and unrelated restrictions. There would have been a limit of £4,800 on the old interest qualifying for relief, a limit of £35,000 on the capital sum in respect of which new interest was to be relieved and a maximum rate of 35 per cent on which relief was to be given on the new interest.

It was not found possible to devise a satisfactory method of incorporating these unrelated restrictions in certificates of tax-free allowances for PAYE purposes. The only alternative would have been to apply the restrictions by way of review at the end of the year. Apart from the huge increases in staff required to review up to 230,000 PAYE cases where interest relief is claimed, this would have caused inconvenience and, in some instances, hardship to the taxpayers concerned in collecting under-deductions of income-tax. However, I shall be looking further at this relief at a later stage.

Deputies Desmond and Taylor suggested that the relief might be phased out over a period of years. I believe this suggestion has some merit. I was accused by Deputy Bruton of showing a lamentable lack of imagination because I did not exempt low-paid workers entirely from the PRSI increases. These increases were proposed originally by the previous Government; that should not be forgotten by Deputies opposite. They include a 1 per cent levy on income to promote youth employment. When this concept was originally floated there was mention of an exemption for those on low incomes — I may say "mention" at that time — but no such exemption was incorporated in the legislation brought forward last December by the Coalition Government for the implementation of this levy. I wonder where was Deputy Bruton's imagination then? While it is quite true that those with higher incomes will generally receive higher benefit from the PRSI tax allowances it must be borne in mind that these people are making a higher PRSI contribution and are paying more taxes. I should say that the entire PRSI changes were introduced exactly as proposed by the Coalition Government. Now, when a major concession is given by our Government to ease the burden, I suggest the last people to complain are those in the Fine Gael Party.

Mr. J. Bruton

We did not produce a phantom £45 million out of nowhere, unexplained, to give concessions. If they are going to give concessions they should give them in a fair way, not the way they are doing it.

Mr. MacSharry

Well, there is a lot more being done than what the Deputy proposed doing, which is the nub of the question; that is the point.

Mr. J. Bruton

We shall see that when they tell us where the £45 million will come from.

Mr. MacSharry

The motion opposing the Second Reading rejects the Finance Bill because it does not provide for the reform of the income tax system. The income tax changes which were announced in the budget, and were incorporated in this Bill, are carefully designed to achieve virtually the same effects for individual taxpayers generally as the tax credit proposals of January. This can be clearly illustrated if we take a range of individual taxpayers. In the time available to me my ambition was to give the individual taxpayer the same treatment as was proposed by the Fine Gael and Labour budget. This I have done. It is wrong to suggest that the tax arrangements in the Bill offend against social justice while, at the same time, pressing the case for the tax credit proposals of 27 January last. There is one difference and this relates to the family income supplement. This supplement was seen as a support to families where the breadwinner was in low income employment. It was estimated to cost £4 million this year. It must be remembered that although this scheme was advertised widely, the response was very poor; approximately one-eighth only of those eligible applied for the £9.60 payment. It created serious anomalies. Because of the minimum income eligibility limit of £2,000, it would have led to a situation where a family with taxable earnings of £2,000 would have qualified for a subsidy of £500 but a family with taxable earnings of £1,900 would have been entitled to nothing. Also large sections of the community would have been ineligible for benefit — single persons, widows and widowers, one-parent families, the elderly, social welfare recipients, farmers under £40 valuation and all those whose taxable income for one reason or another fell below £2,000. Furthermore, the £500 would have been available to a very wealthy taxpayer who, because of accelerated capital allowances and other business reliefs was able to show a taxable income of £2,000 only for a particular year. In the event, the £4 million was set aside in the March budget for the child dependants of social welfare recipients so that the money is finding its way to the low income families.

There will be no anomalies and I must suggest that this is a more equitable and effective way of distributing income than was the proposed family income supplement.

Mr. J. Bruton

No, sir.

Mr. MacSharry

The impression is now developing that the tax credits are good per se and that the tax allowance system is totally inadequate. Tax credits are equated with tax reform. This is a dangerous assumption. I must advise caution when discussing the merits of one system vis-à-vis the other. There is no reason that tax credits should be inherently better than allowances. There is one criterion only that really matters when measuring the effects of different systems, that is the impact on the individual taxpayer. The particular structure of the tax system is secondary to the overriding consideration that all taxpayers must be treated in an equitable fashion. Equity means that those who have more should pay more. Superficially the tax credit emerges as a more equitable system because it shows an equal distribution of reliefs irrespective of an individual's marginal rate of tax but its weakness is that it makes no adjustment for the fact that the taxpayer on a higher rate is paying more tax in the first instance and, consequently, has a claim to relatively high reliefs in certain circumstances. This is a reality we cannot set aside in measuring the impact of tax changes. If we ignore it we shall create new anomalies which will further annoy taxpayers.

There is no evidence to suggest, as implied in the amending motion, that the new arrangements for value-added tax on imports and for the earlier payments of corporation profits tax will aggravate national economic difficulties. The liquidity cost of these changes on business will not be severe. The overall annual cost to business, in terms of liquidity cost, is not expected to exceed £10 million to £15 million, so that the adverse effects of the new system are being grossly exaggerated.

Mr. J. Bruton

Where is the money coming from then?

Mr. MacSharry

If it transpires that difficulties are experienced in individual cases as regards value-added tax then, as I said in my budget statement, I will examine the possibility of Industrial Credit Company assistance. It should be remembered also that value-added tax on imports will have a strong, positive effect and will give Irish products a boost vis-à-vis imports by removing the advantage which imports are seen to have over home-produced goods under the present system. It will also eliminate considerable tax evasion.

Surely these effects will do much good for the national economy? The new arrangements for value-added-tax on imports and the bringing forward of the payments date of corporation profits tax will not worsen the budget situation in 1983 by using up revenue that otherwise would be available in that year, as alleged by Deputy J. Bruton. This is a misconception, as any revenue brought forward from 1983 to 1982 will be matched by a similar advancement of revenue from 1984 to 1983. This leads me to the assertion by Deputy J. Bruton, that, because of these two measures, we are facing an opening deficit for 1983 somewhere in the region of £1,100 million rather than the £800 million which would have resulted from their January budget proposals. This projected £300 million increase in the deficit is based on the Deputy's misconception of the effect in 1983 of value-added-tax on imports and the corporation profit tax measures and, is, therefore, incorrect. Apart from this, as a former Minister for Finance, the Deputy is aware that any projections made at this time of the year for 1983 inevitably must be based on a wide range of assumptions which can very considerably. I might point out also that the March budget proposals will have a less severe effect on the economy than those of the January budget, so that the underlying state of the economy and, therefore, of the public finances will be better going into 1983.

Deputy Dukes also referred to the collection of VAT at the point of import and, particularly, the cost which he alleges this will involve for exporters. The Deputy is apparently unaware of the special arrangements which are available under the VAT system for traders who are in a permanent net repayment position, that is traders who are continuously claiming back more VAT on their inputs from the Revenue Commissioners than they are due to pay to revenue on their output.

Companies exporting a large proportion of their output would generally be in this position. They are allowed to account for VAT on a monthly rather than a two monthly basis and this facility will continue. Since provision is being made in the VAT on imports scheme for deferment of the payment of VAT to the fifteenth day of the month following the import these companies will effectively be able to repay the VAT around the same time as they are paying it so any liquidity cost involved for them will be minimised.

I am sure it is clear from what I have said that the amendment in the name of Deputy John Bruton is totally negative. I would have expected a more realistic approach, especially from a former Minister for Finance.

Deputy Barry Desmond underlined, with some vivid examples, the problems of cutting public expenditure. He instanced the abolition of food subsidies, reductions in CIE services, the imposition of fees for education and cuts in overtime in the public sector as the kind of actions that would be required to achieve effective results. He is quite right in emphasising that the cutting of expenditure, no matter on how marginal a scale, is a painful exercise. It inevitably requires the curtailment or the ending of services which we take for granted, as our entitlement. If we are not prepared to accept more taxation then reductions in services and much higher fees for services in the only alternative. I agree with the Deputy that our dilemma is that, while people genuinely want reductions in income tax and PRSI, they will not accept the logical consequences of such reductions.

The Deputy suggested alternative taxes which he estimated would yield £200 million or more. I agree with him that we must widen the tax base and find new sources of taxation. I must at the same time dispute his estimate of £200 million from the sources which he has listed. Quite frankly, this is a highly inflated figure. We are only misleading ourselves in assuming that there are large untapped sources of revenue which can allow us to reduce income tax and sustain the high level of public expenditure to which we have become accustomed.

Deputy Dukes took up reference, as well as other speakers tonight, in my opening statement to the quarterly pattern of the current budget deficit this year and implied that I was preparing the ground for revealing significant excesses on the targets set in the budget. This is not so. The purpose of my reference was simply to point out that the quarterly pattern this year will be rather different from previous years because of the high concentration of new revenues in the later months. This pattern would be obvious to anybody who took the time to analyse the budget proposals in detail.

The Deputy also asserted that the March budget targets were never attainable and that they will not be met in view of subsequent decisions on expenditure and revenue. I reject this totally. The targets set in the March budget are realistic and the Government are firmly committed to achieving them. As I have already emphasised, the only significant change which has been made since then is the £45 million income tax concession for PRSI contributions. The cost of this concession will be recouped by expenditure cuts and, if necessary, additional tax measures.

Mr. J. Bruton

When?

Mr. MacSharry

The other changes in the budget provisions are relatively minor in terms of their impact on the current budget deficit. Deputy G. Mitchell this morning castigated the Government because no specific deadline was being set for the elimination of the current budget deficit. He also, by some feat of mathematical juggling, arrived at the fanciful conclusion that we might have been heading for a deficit of £2,000 million this year but for the intervention of the Coalition Government. The Government's commitment to the gradual reduction and elimination of the deficit has been clearly and unequivocally emphasised on a number of occasions. The action taken in the budget is totally consistent with this commitment. We are bringing the deficit down from £802 million in 1981 to a target of £679 million this year. In terms of GNP the deficit is being reduced from 7.9 per cent to 5.6 per cent.

Deputy Mitchell and his colleagues, who are anxious to bring down the budget deficit, should follow through the logic of their conviction and propose specific measures which will achieve this result. While, on the one hand, they are advocating financial prudence they see no inconsistency, apparently, in proposing at the same time specific increases in expenditure and reductions in taxation. We cannot have it both ways.

Mr. G. Mitchell

On a point of order, I did not quite catch the Minister. Did I understand him to say that the current budget deficit would be eliminated over a set period? Did he say that?

Mr. MacSharry

I said that the gradual reduction and elimination of the budget deficit has been clearly and unequivocally emphasised on a number of occasions by myself and other members of the Government. Deputy Bruton raised some questions in relation to tax reliefs for approved profit sharing schemes. He was concerned that the relief might be used as a vehicle for tax avoidance by limiting a particular scheme to directors and higher paid executives. There is always the risk that reliefs of this type will be used in schemes of tax avoidance. I have tried to guard against the more obvious abuses. Indeed, this is one of the reasons why the provisions are so long and complex. A balance has to be struck between attempting to eliminate all possibility of abuse and not restricting the relief in such a manner that would be of no benefit at all. I shall be monitoring the relief very closely and, if there is any avoidance with evidence of abuse, I will act quickly to defeat it.

With regard to the specific points raised by Deputy Bruton, the Third Schedule provides that one of the conditions for approval of the scheme is that it must be open to every full-time employee who has completed the qualifying period of service and that all directors and employees must be eligible to participate on similar terms. Another requirement is that shares may not be allowed to any individual who has an interest of more than 15 per cent in the company, where it is a close company. The relief is not confined to companies whose shares are quoted on a recognised stock exchange, which is a point made by Deputy Quinn tonight and others. It is also available in respect of companies whose shares are not quoted, providing certain conditions are filled.

Mr. J. Bruton

Is that in the Schedule?

Mr. MacSharry

Deputy Bruton has also referred to the income tax relief for the elderly in respect of private tenancy rents. He was concerned that some persons might be denied relief because they would not be able to furnish receipts for rent paid in the first half of this year. On 27 January, the Deputy himself drew attention to this proposal and specifically advised those concerned to retain receipts for rent paid from that date. The Revenue Commissioners will also be taking steps to ensure that those eligible are made aware of this relief and of the conditions attaching to it. In administering the relief, full account will be taken of the possibility that, in some instances, a claimant may not be able to furnish receipts for all rent paid in the early months of 1982. The rules for proving the payment of the rent by the production of receipts or otherwise will be set out in the regulations to be made under the section. These regulations will give the inspector of taxes sufficient discretion in the matter to enable him to take a flexible view, especially in the first year of the scheme, in cases where receipts are not forthcoming for all rent that was paid.

Deputy Dukes alleged that the provision of £1.5 million in the budget would not be sufficient to meet the cost of the rescue package for farmers in severe financial difficulties, which will arise for payment this year. The budget proposals of 27 January contained the provision of £4 million to meet the direct costs of the scheme which, at that time, were estimated would arise this year. It was necessary to revise this figure by the time I came to present my budget proposals on 25 March, in the light of such matters as a later operative date of 1 April rather than 1 January.

Mr. D'Arcy

1 March, not 1 April. There is one month in the difference.

Mr. MacSharry

This had a significant effect on the 1982 cost in the case of the ACC, because it was then necessary to provide for one rather than two gale days. In addition, the mechanics for payment of the direct grants had not been worked out at the time of the January budget and consequently the provisions made then were somewhat tentative. In fact, it was some time after the March budget before the mechanics for payment were finally settled.

Deputies will be aware, from press reports, that the response to the scheme has so far been slow and that, as a result, applications will be accepted, exceptionally, up to the end of June. Only when all applications have been received and examined will a clear and reliable estimate of costs emerge. I should emphasise that the revision of the 1982 cost estimate which took place between the January and March budgets has in no way affected the basic conditions of the scheme or lessened its atractiveness for farmers. The later starting date of 1 April will still leave farmers with a full three year benefit period under the scheme.

Deputy Cooney stated that hardship is being created for farmers by the refusal of roll-over relief for sales of development land and he claimed that it was not the intention to treat farmers in this way. If he reads the January budget speech he will, in fact, see that this exact proposal was contained in the Coalition budget. The reason for the provision is that if roll-over relief were allowed to continue for sales of development land, it would undermine the new tax arrangements which are designed to ensure that large windfall gains on the sale of development lands are properly taxed. In no way will hardship arise because if a farmer disposes of development land, the availability of indexation relief for the agricultural value of the land will, of itself, be sufficient to enable him to purchase a farm of equal agricultural value in the vast majority of cases. In addition, where the farm sold has been held for more than one year, he will still retain, after tax, at least 50 per cent of the gain on the development land property. I should like to mention that if a farmer sells sites for development purposes for a total price not exceeding £15,000 in any one tax year, roll-over relief will be available to him.

Deputy Bruton suggested that the size of the tax deduction to be given in respect of increases in employment be increased from £10 to £20 per week. I might remind the Deputy that in the scheme as originally proposed by himself the deduction was to have been £500 a year. For ease of administration, this has been converted to a weekly deduction of £10 so that the maximum annual deduction available per job will be £520. The Deputy will appreciate, therefore, that the provisions are in line with the scheme as originally outlined by him as Minister.

The Deputy also expressed the view that provisions for eligibility under the scheme might be regarded as restrictive. I can assure him that the provisions are designed as simply as possible so as to benefit the generality of companies which provide increased employment. I would like to clarify, in particular, the position of firms which do not have profits. The situation is that a deduction will be treated, for the purposes of corporation tax, as a trading expense and so will be available not only as a deduction against profits, but will create or augment losses. This treatment ensures that it will be of maximum benefit to firms and that if the particular operation is not immediately profitable but is creating employment, then the deduction will be available and will, in effect, be carried forward and set off against future taxable profits. In addition, it will be available for purposes of group relief.

Deputy Bruton asked that VAT on lampshades be reduced from 30 per cent to 18 per cent as part of the reduction for furniture and furnishings. The dilemma facing any Minister for Finance, as Deputy Bruton knows well, in making changes of this kind is where to draw the line between the items to be reduced and those to be left unchanged. No matter where the line is drawn, there will inevitably be some items on the wrong side of the line which are in many ways comparable with those which have been reduced. The definition of furniture and furnishings which has been made for the purpose of this reduction has been quite generous, but it was never the intention to reduce the rate of VAT on all items used in the home. While I sympathise with the case made by Deputy Bruton, I am not prepared to widen the scope of the concession further.

The opinion has been expressed by Deputy Cooney that the 20 per cent excise duty on bets placed off course is too high and that a reduction would, in fact, increase revenue from this tax. While I agree that a 20 per cent tax on bets is quite high, I would not accept that a reduction would lead to an overall increase in revenue. Since the duty was set at this rate in 1975, there has been a constant increase in the yield and the revenue is still buoyant from this source. A reduction in the tax would reduce the incentive to evade, but it would certainly not eliminate evasion. In this regard, I would say that the Revenue Commissioners are active in tackling evasion. This is a difficult area to control. I have made provision in this Bill for an increased level of penalties, along with a reduction in the power of the courts to mitigate the penalty. These changes will be of considerable assistance in discouraging evasion. I should also say that combating evasion in this area, as in other areas, is made easier by co-operation from the public.

Deputy Barry Desmond suggested that higher rates of VAT should be applied to luxury goods bought dominantly by the higher income groups and to goods with a high import content. While I would agree with the objectives of this proposal, we must remember that VAT is a general sales tax on a wide range of goods and services. If it is to be administered successfully by the thousands of traders throughout the country it must be kept as simple as possible. The present system is already difficult enough to implement and it would not be desirable to add to the number of rates of VAT or to charge different rates of VAT on goods in the same general category. However, I will certainly keep the Deputy's suggestion in mind in future review of the VAT system.

Tax evasion was mentioned by Deputy Mitchell this morning and the need to take more effective counter measures. I totally agree with him that we must do more. But having said this I want to point out that in the Bill now before the House we are making some significant steps forward. Penalties are being increased and more exacting requirements in relation to back duty settlements are being imposed. Also I want to give due recognition to the Revenue Commissioners who have made a big breakthrough in the past few years in countering evasion. They would be the first to admit that much more needs to be done. The Commission on Taxation will be giving special consideration to the issue of tax evasion and tax avoidance and I will look forward to their recommendations. The imposition of VAT on imports would certainly help to curtail VAT evasion. Apart from the loss of revenue to the Exchequer, both evasion and avoidance do harm in that they increase the burden of tax for other taxpayers. In this context I treat evasion and avoidance as one problem. While tax avoidance is within the law it is far too often a cynical manipulation of the law and some practices which are patently artificial involve a huge cost to the Exchequer in terms of tax foregone. These practices are designed by experts who deliberately set out to break the spirit while observing the letter of the law.

A number of Deputies referred to the Commission on Taxation and have expressed the hope that the Government will implement their recommendations. I am looking forward to receiving the first report of the commission in the immediate future and I expect that it will be published without delay. In advance of seeing and considering the recommendations I cannot give a commitment that these recommendations will be implemented and I know that Deputies would not look for such a commitment. I can assure the House that the report will be carefully studied and I expect that it will have a major influence on future taxation policy. The report is, I understand, a very detailed and complex document and it would be unwise to give an overnight verdict on its recommendations. It will require very careful examination. Incidentally, I understand that the first report will be concerned with direct taxation. The commission are continuing their work and they will be reporting in due course on other aspects of taxation including indirect taxation. I would like to take this opportunity to thank the members of the commission for the effort they have made and the time they have devoted to this very important task.

Deputy Cooney alleges that the Finance Bill does not provide or even start to provide for any reform of the taxation system. I categorically reject this. In the field of capital taxation, for example, the Bill contains provision for taxing short-term gains at a much higher rate than gains which accrue over a longer period, and thereby focuses the impact of the tax directly on speculative transactions. There is a totally new package of arrangements imposing a special capital gains tax on disposals of development land while the new aggregation basis for capital acquisitions tax both limits tax avoidance and contributes significantly towards tax equity. There are various income tax changes such as the benefits in kind in respect of cars which also are obvious reforms and have been generally seen as such. In fact for the most part the Finance Bill contains changes which were proposed last January by a Government of which Deputy Cooney was a member. These changes were at that time heralded as major reforms of the tax system. I wonder what has happened them since?

I would now like to return again to the amendment tabled in the name of Deputy Bruton. If this amendment, which incidentally is a most unusual procedure, were carried it is well that Deputies should be fully aware of the consequences. It would mean that the Finance Bill would lapse. The various proposals in the budget would cease to have effect, some immediately and some at an early date and there would be a consequent loss of tax this year of more than £300 million.

Mr. J. Bruton

The Government would then resign which is what the people want.

Mr. MacSharry

It is extraordinary that an amendment involving a tax loss of more than £300 million should receive any support from any side of the House at this time. There has been sustained advice from all sides of the House in recent months about the necessity to keep the budget deficit within acceptable limits. Yet this amendment goes against all such advice and it attempts to open the way for a huge addition to the deficit.

Mr. J. Bruton

For a new Government.

Mr. MacSharry

It runs directly contrary to the philosophy which Opposition Deputies have been preaching constantly for the past 12 months. I want Deputies to be in no doubt at all about the consequences if the Finance Bill were rejected.

Mr. G. Mitchell

The Minister would be out of a job.

Mr. MacSharry

Our problems would not be confined solely to a massive increase in the deficit which in turn would lead to a totally unacceptable increase in borrowing. There would be chaotic administrative problems for the Revenue Commissioners. They would be required to revert to the income tax allowances and bands that applied for the tax year 1981-82 and Deputies well realise what impossible problems this would generate. The special PRSI tax allowance would lapse after a period of four months. No doubt the Opposition will assert that all this confusion is avoidable and that we can easily change course by taking on board the proposals which were put forward by them last January. Apart from the fact that the mathematics of such a change would not work out in our favour there would simply be no sense now in trying to substitute VAT on clothing and footwear and reducing the subsidies on basic foods to compensate for VAT on imports. These alternatives have already been rejected and the community at large would react against any attempts to reinstate them and we would find that out quickly if the people had such an opportunity.

Mr. D'Arcy

Try it.

(Interruptions.)

Mr. MacSharry

We are embarking on our course as agreed by the people at the last election. When we came into office on 9 March we proceeded on that course; we are still on that course and will stay on that course.

Mr. J. Bruton

Somewhat zig-zag.

Mr. MacSharry

The reality is that if the House were to defeat now the budget proposals incorporated in this Bill there would be an irreplaceable loss of revenue and a huge increase in the budget deficit this year. Confidence in the economy both at home and abroad would be gravely weakened, and half way through 1982 we would be left with no budget policy and no clear indication as to what we propose to do in future. This surely is a recipe for chaos.

Mr. L'Estrange

We have that.

Mr. MacSharry

It would multiply all economic and financial problems.

Mr. J. Bruton

We have institutionalised chaos at the moment.

Mr. MacSharry

It would destroy our plans for creating much-needed employment. This amendment is not a rational alternative to the policy being implemented in the Finance Bill. It is only a negative statement which has nothing to do with the promotion of social justice and economic responsibility. If it were adopted it is an understatement to say that it would aggravate national economic difficulties.

I have no doubt the House will reject this amendment. Again I want to emphasise the positive programme which is legislated for in this Bill. Of its very nature a Finance Bill has some unwelcome provisions because it is concerned with changes in taxation and it is inevitable, especially in the present economic and financial climate, that it must impose new taxes. The changes in the present Bill pave the way for a fair distribution of taxation and it is the Government's stated intention to build on this and to achieve a much more equitable system of taxation than we have at present.

Traditionally several amendments to the Finance Bill are put down and I will consider each amendment on its merits. If I see any proposed amendment as an improvement on the Bill ——

Mr. G. Mitchell

Is that the deal?

Mr. MacSharry

——as drafted, then I will recommend its acceptance to the House. Might I remind all Deputies, particularly the Members of Fine Gael and Labour, of the major changes in this Bill and in our budget as against the budget defeated by the Dáil on 27 January and by the people in the general election. In our budget, they are VAT at the point of entry and bringing forward payments of corporation tax. Surely they will have an impact and will cause some problems? But all those matters can be resolved. The alternative as proposed on 27 January was that we would have VAT on footwear and clothing, a reduction in food subsidies, and tax on social welfare benefits.

Mr. L'Estrange

Fianna Fáil were the first to tax clothes in the sixties.

(Interruptions.)

Mr. MacSharry

To sum it up, they are the alternatives. The Dáil and the people have decided on the Opposition's alternative and the people have decided on our alternative. I have no doubt that the Dáil, in giving a Second Reading, and subsequently the Committee Stage of this Bill, will confirm our budget proposals.

Mr. J. Bruton

As is customary on these occasions I should like to ask the Minister a short and simple question. When will he make the announcement of his decision in regard to raising the £45 million necessary to pay for the concessions on PRSI and still keep to the budget deficit as set out for this year, bearing in mind that this money must be raised before the end of the year if the targets he set are to be adhered to?

Mr. MacSharry

I have already referred to that in my concluding remarks and I will repeat what I said on a number of occasions. The Government made it quite clear that the £45 million PRSI concessions to the PAYE sector would be made good either by expenditure savings or additional taxation. I said at that time that the Government had undertaken, in addition to what was in operation by our predecessors, a complete expenditure review in every Department and to report to Finance and the Government by the end of May. Those reports are due about now, and most of them are in. When the Government have an opportunity to examine them it will be clear what expenditure savings can be made and then the situation regarding the additional taxation required will be known. Then the Deputy and the House will be made aware of the situation.

Mr. J. Bruton

Does the Minister intend to make these decisions and announcements before the Dáil goes into recess?

Mr. MacSharry

I do not have a time scale.

Mr. J. Bruton

Is the Minister aware that it is very unusual for a fiscal policy change of such magnitude to take place in a given year to be known at least in the first six months of the year? Will he indicate if he can confidently predict that he will be announcing these decisions within a month?

Mr. MacSharry

As soon as the Government have decided.

Mr. J. Bruton

Does the Minister expect to put proposals to the Government within the next three weeks?

Mr. MacSharry

Definitely.

Mr. J. Bruton

Does he expect them to be decided upon within a week or so of being put to the Government?

Mr. MacSharry

The Government usually do their business very quickly.

Mr. J. Bruton

Then we can expect an announcement in a month?

Mr. Kelly

In what respect does the Minister's proposal to save £45 million differ in kind from the proposal of his predecessor but two, Deputy Gene Fitzgerald, in the 1980 budget, to save £25 million on rationalisation? Will the House be given an opportunity to examine it and will it be presented with the material in transparent gold fish bowl form so that it can decide for itself how genuine are the techniques and methods by which this saving is going to be achieved? We are still waiting to hear about the rationalisation which enabled Deputy Gene Fitzgerald to ——

An Ceann Comhairle

The Deputy may not make a statement. He had an opportunity to speak on the Bill. He may ask a question.

Mr. Kelly

Will the Minister tell the House how and when it will be able to decide for itself, because the Dáil is being brushed very much to one side these days, whether £45 million or 45 million halfpennys have been saved by dint of the operations of the interdepartmental committee which even now is wasting money away from its ordinary tasks pursuing the hare the Minister raised? How will that be visible to the members of this Party, the Labour Party and the gentlemen over there who think everybody else in the House is a gombeen?

An Ceann Comhairle

Deputy Kelly——

(Interruptions.)

Mr. Kelly

How will it be visible to the gombeens and the non-gombeens and to the sea-green incorruptibles?

An Ceann Comhairle

I am putting the question.

Mr. Kelly

The poor old gombeens who carried them — the sea-green incorruptibles ——

An Ceann Comhairle

Deputy Kelly, at this crucial moment I am sure you do not want to be put out of the House. I am putting the question.

(Interruptions.)

Mr. G. Birmingham

I want to ask one question. The Minister said he will be looking at each and every amendment tabled. Can he assure the House that at this stage he has not agreed with any Deputy or group of Deputies that the substance of their amendments will be found acceptable?

Mr. MacSharry

I have answered that question three times already.

Mr. Kelly

I have not had an answer to my question yet.

Question put: "That the words proposed to be deleted stand."

The Dáil divided: Tá, 80; Níl, 78.

Tá

• Ahern, Bertie.
• Ahern, Michael.
• Allen, Lorcan.
• Andrews, David.
• Andrews, Niall.
• Aylward, Liam.
• Barrett, Michael.
• Barrett, Sylvester.
• Bellew, Tom.
• Blaney, N. T.
• Brady, Gerald. (Dublin South-East).
• Brady, Gerry. (Kildare).
• Brady, Vincent.
• Brennan, Matty.
• Brennan, Ned.
• Brennan, Seamus.
• Briscoe, Ben.
• Browne, Sean.
• Burke, Raphael P.
• Byrne, Hugh.
• Byrne, Seán.
• Calleary, Seán.
• Colley, George.
• Collins, Gerard.
• Conaghan, Hugh.
• Connolly, Ger.
• Coughlan, Clement.
• Cowen, Bernard.
• Daly, Brendan.
• Doherty Seán.
• Ellis, John.
• Fahey, Francis.
• Fahey, Jackie.
• Faulkner, Pádraig.
• O'Donoghue, Martin.
• O'Hanlon, Rory.
• O'Kennedy, Michael.
• O'Leary, John.
• O'Malley, Desmond.
• Power, Paddy.
• Filgate, Eddie.
• Fitzgerald, Gene.
• Fitzpatrick, Tom. (Dublin South-Central).
• Fitzsimons, Jim.
• Flynn, Pádraig.
• Foley, Denis.
• French, Seán.
• Gallagher, Denis.
• Gallagher, Pat Cope.
• Geoghegan-Quinn, Máire.
• Gibbons, Jim.
• Harney, Mary.
• Haughey, Charles J.
• Hilliard, Colm.
• Hyland, Liam.
• Keegan, Seán.
• Kitt, Michael P.
• Lawlor, Liam.
• Lenihan, Brian.
• Leonard, Jimmy.
• Leyden, Terry.
• Loughnane, Bill.
• Lynch, Michael.
• Lyons, Denis.
• McCarthy, Seán.
• McCreevy, Charlie.
• McEllistrim, Tom.
• MacSharry, Ray.
• Meaney, Tom.
• Molloy, Robert.
• Morley, P.J.
• Murphy, Ciarán P.
• Noonan, Michael J. (Limerick West).
• O'Dea, William G.
• Tunney, Jim.
• Walsh, Joe.
• Walsh, Seán.
• Wilson, John P.
• Woods, Michael.
• Wyse, Pearse.

Níl

• Allen, Bernard.
• Barrett, Seán.
• Barry, Myra.
• Barry, Peter.
• Begley, Michael.
• Bermingham, Joe.
• Birmingham, George.
• Boland, John.
• Bruton, John.
• Burke, Liam.
• Carey, Donal.
• Cluskey, Frank.
• Collins, Edward.
• Conlon, John F.
• Connaughton, Paul.
• Cooney, Patrick M.
• Corr, James.
• Cosgrave, Liam T.
• Cosgrave, Michael J.
• Creed, Donal.
• Crotty, Kieran.
• Crowley, Frank.
• D'Arcy, Michael.
• Deasy, Martin A.
• Desmond, Barry.
• Desmond, Eileen.
• Donnellan, John.
• Dukes, Alan.
• Enright, Thomas W.
• Farrelly, John V.
• Fennell, Nuala.
• FitzGerald, Alexis.
• FitzGerald, Garret.
• Fitzpatrick, Tom. (Cavan-Monaghan).
• Flaherty, Mary.
• Flanagan, Oliver J.
• Fleming, Brian.
• Governey, Des.
• Griffin, Brendan.
• Harte, Patrick D.
• Hegarty, Paddy.
• Higgins, Michael D.
• Hussey, Gemma.
• Kavanagh, Liam.
• Keating, Michael.
• Kelly, John.
• Kemmy, Jim.
• Kenny, Enda.
• L'Estrange, Gerry.
• McGinley, Denis.
• McMahon, Larry.
• Manning, Maurice.
• Markey, Bernard.
• Mitchell, Gay.
• Mitchell, Jim.
• Molony, David.
• Moynihan, Michael.
• Naughton, Liam.
• Nealon, Ted.
• Noonan, Michael. (Limerick East).
• O'Brien, William.
• O'Donnell, Tom.
• O'Keeffe, Jim.
• O'Leary, Michael.
• O'Sullivan, Toddy.
• O'Toole, Paddy.
• Owen, Nora.
• Pattison, Séamus.
• Quinn, Ruairí.
• Ryan, John J.
• Shatter, Alan.
• Sheehan, Patrick J.
• Skelly, Liam.
• Spring, Dick.
• Taylor, Mervyn.
• Timmins, Godfrey.
• Treacy, Seán.
• Yates, Ivan.

Tellers: Tá, Deputies B. Ahern and Fitzsimons; Níl, Deputies S. Barrett and Taylor.

Question declared carried.

Amendment declared lost.

Question: "That the Bill be now read a Second Time"—put and agreed to.

Committee Stage ordered for Thursday, 24 June 1981.