The situation we now face is that the Taoiseach and his Government have lost all power and authority to rule. They have no real legitimacy to continue governing the Irish people. Technically, they may be able to squeeze by, as they did yesterday on a majority of one; technically, on the numbers gained they may cobble together tenuous arrangments with various dissident supporters and seek to win a majority in this House, albeit as slim as possible. That does not mean they have any real legitimacy to govern the country and to carry out the policies and implement the decisions which are necessary at present. We now see a Government who are emasculated and incapable of taking the vital decisions that are needed to restore national morale and confidence.
It is quite clear to any rational independent observer, and there are enough of them who will fully support us in the next general election, that matters will go from bad to worse. Inevitably, as night follows day, matters will deteriorate in the whole area of social, economic and financial development, the state of the public finances and confidence in our political institutions. The independent-minded public see it that way. This is precisely the situation envisaged in our Constitution in which the Taoiseach is empowered to exercise his prerogative to dissolve the Dáil. In every parliamentary democracy in the world, the Prime Minister of the day has the power to dissolve parliament and seek a mandate or a rejection from the people as to who should resume the constructive and responsible Government of the country. It is quite clear that after four years of mismanagement this Government have lost the confidence of the people, of their own supporters within the two parties which comprise the Government and are incapable of taking the sort of decisions that are needed at present.
The major decision now facing the Government is to squeeze support from reluctant Deputies in order to bring in a budget in January, if they last that long, a budget that can cater for the urgent requirements of the nation. This Government are in a state of siege. They are beleaguered on all sides, not by the people who are waiting patiently outside to make their verdict known, but by their own supporters and their own members. This Government are now unworkable and are in a hopeless and untenable position. When a Government become unworkable the Taoiseach or the Prime Minister of the day has a moral obligation and responsibility to dissolve parliament, to seek a mandate from the people and ask them for their view on his Government or on whatever alternative Government they may seek to elect.
This bunker politics which we are witnessing at the moment is reminiscent of — and it is the nearest parallel I can think of— the dying days of Mr. Callaghan's last Labour Government in Britain. That administration had to limp from day to day fumbling away with the extraordinary support of Mr. Fitt and the Ulster unionists. That was the sort of support on which a socialist administration in Britain was ultimately forced to rely in order to carry on for a few more weeks. The result of that sort of adminstration was to bring the whole British economic and financial system crashing about the ears of the Government.
We have plenty of precedent of the honourable decision being made to dissolve the Dáil at the appropriate time. Mr. de Valera dissolved the Dáil in 1948 before his term of office had expired. Mr. Lemass dissolved it in 1965 and Mr. Lynch dissolved it in 1973. They are three honourable occasions on which the Dáil was dissolved before the full term expired, when it became apparent to sensitive and sensible political leaders that the people should be consulted. At present we have a Taoiseach who is totally insensitive and who does not know what politics and public affairs are about. He does not have any sensitivity or feel for public opinion or for what concerns the public. Those three Fianna Fáil leaders decided to dissolve the Dáil when it became quite apparent that there was uncertainty in the air, that there was danger of instability, and that it was important to consult the people. In 1948 when Mr. de Valera dissolved the Dáil Fianna Fáil were rejected. In 1965 Fianna Fáil were re-elected and in 1973 Fianna Fáil were rejected. On each of the three occasions there was no vested interest in going to the people. There was a profound desire to ensure that stability was maintained, that when uncertainty was in the air the Government would do the right thing by consulting the people and getting a democratic mandate.
The purpose of the motion before the House is to seek to establish if we can in the Taoiseach's mindless mind and in the minds of his Government Ministers that they have an overriding duty to the Irish people, to themselves and their own sense of integrity and principle to dissolve the Dáil and to ask the people their view of the four years of Government. The people will be presented with Fianna Fáil as the rational alternative and they will make the appropriate decision. Whatever the decision, it is important that the people be consulted at present in order to remove the uncertainty and instability that is bringing this country down. There is no doubt that this Government do not have the political will or the capacity to make that elementary decision. Apart from that, they had not the political will or the capacity to deal with a whole range of serious financial, economic and social problems that beset our society.
The major cause of the present economic stagnation is a very basic one. It is the collapse of investment: foreign investment coming into this country, domestic investment from within the country, private investment from inside and outside the country and public investment by the Government, local authorities and State-sponsored bodies. That decline in investment is reflected in a whole host of economic, social and financial problems which are all related to that central factor of total cessation of investment in our economy at present.
Over the past four years of Coalition Government economic growth has been negative, minus 1 per cent, compared to 23 per cent economic growth in 1977-81. It is futile for the Taoiseach or any Government Minister to talk about achievement in regard to reducing the rate of inflation. That is no achievement whatever when it is related to a fall of that magnitude in investment over the same period, when it is related to 250,000 people unemployed and when practically 100,000 people have emigrated. One puts in the balance the rundown of the economy, the flight of money from the economy, the lack of investment in the economy, the rise in unemployment, the rise in emigration and the shrinking number of working people paying more taxes. When one puts all of that into the scale against a reduction in inflation one can see where should be the national priority. Of course you can reduce inflation. You can reduce it to zero, as zero equals zero equals zero. You can produce a beautiful set of accounts that show there has been no inflation, no growth and no people employed. That is the extreme example of bringing down inflation to the negation of all the other economic, social and financial objectives within our society. That sort of economic growth, where over a four-year period it has actually fallen, lies at the heart of, and is germane to our whole problem. When one compared it with the 23 per cent growth in the previous four years one sees the relevance of what I am saying.
Employment generally has now fallen to its lowest level for ten years. That is an irrefutable fact. Industrial investment alone, on which we depend primarily for jobs, has fallen by half. The public capital programme has been cut by one-third in the employment area, the area of job creation in so far as the public sector can help by way of industrial investment, while day-to-day current expenditure for the Government has gone through the roof.
This decline in investment can be reversed. It is not impossible to do that if there is not a paralysis of political will in regard to decision making. This decline in investment can be reversed by a positive programme of incentives in the private sector in selective areas of growth that are feasible in terms of economic development such as natural resources, tourism, timber, agriculture and the greatest resource of all, our trained and educated people. It can be reversed by a programme of incentives in the electronics and computer fields and in selective areas where we feel we can apply our talents and investment best, where profits are not going to disappear in repatriation through a black hole somewhere abroad or where too high a percentage of imported materials are being used so that the net benefit to the overall national economy is very dubious. A range of incentives to the private sector is needed in selected areas of investment here at home to be administered through the IDA in order to stimulate growth and expansion. There is need for a substantial increase in State investment in the productive sector of the economy and if that means borrowing for productive purposes that is right.
One classical example of a major error by this Government in regard to the whole incentive area, probably the most negative decision made by this Government — we warned them of it at the time — was the introduction of DIRT in the last budget. It was quite evident that the arbitrary 35 per cent imposition in a unilateral manner imposing a tax of that kind on savings would lead to precisely the trouble that occurred. We said so in the course of the budget debates here early last year but no heed was paid to us. Now every economic commentator and observer agrees that it has been the biggest single determinant in the run of money out of the country over the past 12 months. Since the introduction of that tax the flight of capital has been inevitable because it was immediately perceived by large and small investors to be a direct attack on savings, which it was. I do not have to go into the litany of the facts where £1,500 million has departed from this country as a direct result of the negative effect of the imposition of that tax. When the whole emphasis should be on incentives towards saving and investment we bring in a tax that is a direct deterrent to savings and investment. That tax along with the doubling of VAT to 10 per cent in regard to house purchase were the factors in which deliberate Government policy deterred savings and investment.
I know that the country has plenty of problems the Government can do nothing about. We are all in a difficulty of having exchange control in a small trading country like Ireland and the volatile nature of worldwide interest rates, but here are two decisions taken by a Government who obviously have given no thought or study to the implications of what they were doing. Those two decisions alone are sufficient to indict this Government of total carelessness and lack of heed, concern and thought for the real needs of the economy. Disincentive measures were brought in in regard to savings and investment where the need was really for positive incentives to stimulate the economy, for investment and for savings as the basis for investment. This run of money out of the country since the introduction of DIRT is a serious blow to any lingering prospects of creating more jobs and curtailing unemployment and emigration. This reduction in jobs has meant that a shrinking number of people at work are paying more taxes. The result is that the public finances are in complete disorder because if fewer people are forced to pay more taxes then obviously there is a ceiling in regard to revenue.
Of course, there has been a revenue shortfall this year, along with an irresponsible overrun by the Government in regard to current Government expenditure, yet they went off on an optimistic hobby horse, telling each other earlier this year after the budget that there would be a mini boom, a consumer boom which would yield more revenue before the end of the year. There is no consumer boom and there is less revenue. On the basis of that crazy prediction Government Departments proceeded to spend more money. At any rate the effect of the disorder in taxes, revenue and public finances is that £1,500 million will have to be borrowed this year on top of taxes to finance the Government's day to day expenditure, and that is running at £180 million on the latest Government admission, coming up to £200 million over target.
As a result of all of that we are in the appalling position of the Government being in grave difficulty in regard to raising money for current expenditure. Anybody involved with the stock market or with the financial institutions can bear me out on that. This money will have to be raised before the end of the year to pay off the deficit. Because of the difficulty in raising funds the Government are forced to pay high interest rates resulting in increased rates for borrowers and mortgage holders. In addition to the world situation with regard to interest rates, the Irish Government are putting themselves into a position where money is being forced reluctantly out of the system with the result that there is less for private enterprise. This is all because the Government are paying over the odds in interest rates to get the money to finance their spendthrift administration.
At this point there is no future in engaging in the sort of arid academic debate to which we were subjected by the Taoiseach in his Ard Fheis speech over the weekend, in which he concentrated on who was right or who was wrong in the past. There was an extraordinary return by him to 1922 to in some way justify the progress made by this Government in the past four years compared with the period 1922-23-24. That was 64 years ago; two generations have passed away since then. I was talking to people in my constituency the day after the Taoiseach made that speech and they were amazed at this academic treatise, relating the success of this Government in 1986 to the sort of society that was taken over by Cumann na nGael in 1922. That is arid academic nonsense. It was all very well as a treatise to a lot of undergraduates on the history of the State, but it has no relevance whatever to the real problems facing people in 1986. The people I met thought the Taoiseach had just gone bonkers relating back to the dim and distant past of 60 years ago to draw comparisons with the beleagured people of the present whose families are unemployed, who are paying heavy mortgage rates, who are training and educating young people for emigration to Britain, the United States or Australia.
What are required now are a Government who will grasp the problems of 1986. That is what we are talking about. We must have a Government who will initiate a programme of expansion from now into the nineties. We must get away from the flawed personality bias that has been introduced into political debate in the past few years by the Taoiseach. We need to get down to comprehensive, economic and social planning for expansion, jobs and investment. We need a Government elected by the people as a single party secure in its majority, concentrating on getting that job of expansion under way through the stimulation of investment, through consciously striving to achieve economic goals and, on that basis, all other progress can fit into place. The desirable, social, political and other objectives, for example, tax equity and fairness, can only take place on the solid base of economic progress and expansion. We need a new Government who will plan comprehensively for that purpose and, with the 53 per cent support of the people, Fianna Fáil represent the only single party who can credibly obtain a clear majority in the coming general election and govern the country decisively for the next five years. That is a fact of political life. It is also a fact that Coalitions do not work and ringing the changes on various combinations of Coalitions will not work. Investment confidence will disappear for years if there is a weak Dáil after the next election. There is no way in which this beleagured Government, seeking to squeeze support from reluctant Deputies, can bring in a budget in January that caters for the urgent requirements that face the nation. The whole purpose of this motion is to indicate loud and clear that this Government must hand over to a party backed by the people to reinvigorate the economy and recreate the confidence which made this country great until recent years and can do so again.