The most striking feature of this Dáil session has been the conversion of the Fianna Fáil Party in Government to a whole range of policies which they strongly and often bitterly opposed while in Opposition. The breadth and diversity of these conversions is nothing short of spectacular. They apply to all the important themes of economic, budgetary and fiscal policy. The extent of one of them became very clear to me as I sat in this House listening to the Minister for Finance delivering his Financial Statement on 31 March last. I could clearly see the signs of shock spreading across the faces of Government back-benchers who had been gullible enough over the past four years to believe the constant stream of facile propaganda coming from the Fianna Fáil front bench. I saw the same thing in the faces of Ministers in the present Government who had allowed themselves to be mesmerised during the last election campaign into believing that there was a better way. Never have I seen such a rapid or complete transfiguration. There was a conversion also in relation to the SEA. Once the issue had been raised by the Supreme Court decision, last year's evil became this year's good, a good that could be promoted only half heartedly and diffidently and then only after the foot soldiers in cumainn up and down the country had been inoculated against their will with an antidote to poison which they had been fed towards the end of last year. That conversion was almost too late. Had it not been for the energy which Fine Gael put into the referendum there was a clear danger that the people might have made a wrong decision.
We have had a conversion in relation to the Anglo-Irish Agreement. The Taoiseach, then Leader of the Opposition, skirted around the issue with many a nod and a bow in the direction of the Constitution, without ever properly getting to grips with it. Rather than claiming credit for having played a part in initiating the process which led to the agreement as he should have done, and could respectably have done, he chose instead to stand back, lacking the courage to embrace it and lacking the conviction to put his alleged constitutional doubt to the test. All of that changed when he found himself in Government. The Taoiseach made a very brief reference to Northern Ireland in his speech yesterday. I wonder if there is any significance in the fact that the only document to which he referred was the report of the New Ireland Forum.
A picture came into my mind of the Taoiseach, then the Leader of the Opposition, speaking to the news media after the final meeting of the New Ireland Forum and I hope that is not a picture I should have to dwell on now, or that we in this House should have to remember in the months to come. The Taoiseach has been reticent in this House in the past two weeks in dealing with questions raised and issues posed in the context of the Anglo-Irish Agreement. I can understand that in some circumstances there might be reason for the Taoiseach to be reserved and a little circumspect in what he might say in this House. So I will content myself and limit myself to saying just that I hope the Taoiseach will press ahead with full commitment and full energy with the process that has been set up by the Anglo-Irish Agreement. I can assure the Taoiseach that if he does that, if he presses ahead committedly with the process and the procedures set up in the Anglo-Irish Agreement, he will have my complete co-operation and the full support of my party.
I understand that there may be reason why the Taoiseach would be reticent or circumspect in what he says about that. I do not intend to go into the issue in depth but I will make it clear that the Fine Gael Party are and will remain totally committed to the achievement and the objectives of that agreement. We will fully support all action taken to achieve these objectives and we will be extremely worried by any departure from that. It would be comforting to people to know that all of those conversions to which I have referred were brought about by a sudden access of wisdom but there is more than enough room to doubt even that. I supect a major part of the reason lies in the simple fact that after four years of Opposition for the sake of opposition and after a general election campaign in which the Fianna Fáil Party contrived to say little more than the banal, that party found themselves totally unprepared for Government. Without the slightest idea of where they were going they plunged off in a direction which had been carefully and assiduously marked out by the previous Government. They proceeded on their way slashing all about them cutting flowers and weeds alike, and leaving in their wake only an ugly scar rather than a properly cleared path.
To the Fianna Fáil eye observing the scene last February the history of economic, budgetary and fiscal policy of the previous six years seemed to appear as one of unprecedented restrictions. The Fianna Fáil believer last February seemed to think that there was a better way of achieving economic, budgetary and fiscal objectives by means of a very different set of policies — policies which the non-believer could only regard as inconsistent and contradictory. Admittedly during the last general election campaign there was the occasional chink of light with tentative references by the Taoiseach first to relative real expenditure and then to real expenditure at 1986 levels.
What a transformation we have had since then. The history of the past six years has, of course, been one of consistent and determined attempts to reduce the current budget deficit and the Exchequer borrowing requirement by restricting both current and capital expenditure, a process interrupted for only a brief spell by a period of alleged boom and bloom which turned to ashes. It is a history also of measures which were opposed vigorously all the way by the Fianna Fáil Party even though they paid lip service to the objectives. It was clear throughout that period that the fallacious doctrine that the solution to every problem lies in throwing money at it and expecting such remedies to stimulate economic growth thereby financing the cost was still deeply rooted and virulent. Its very virulence is testified to by the fact that it has survived so long — long after it had become abundantly clear that that doctrine impedes the proper consideration of the underlying realities and serves to increase the problems rather than to resolve them.
Let us take the Fianna Fáil view back in February this year. That party looking back over the previous six years saw a picture of high taxation and restrictive expenditure policies and both, of course, were ritually deplored by Fianna Fáil. What was the real picture? Between 1981 and 1986 tax revenue increased from just over 30 per cent of GNP to 37 per cent. The Fianna Fáil Party of course saw that clearly and deplored it. What they simply ingnored was had the Fianna Fáil expenditure policies up to the middle of 1981 been continued taxation would have had to increase much more rapidly and to a much higher level.
On the expenditure side Fianna Fáil noted the continuing increase in current expenditure as a proportion of GNP over that period. Leaving aside interest payments, there was a marked deceleration in the rate of increase of the proportion of GNP from 1983 onward. This trend and its various effects and manifestations on the economy were also deplored by Fianna Fáil.
On the capital side expenditure on the public capital programme fell by almost 25 per cent in real terms during that period. Exchequer borrowing for capital purposes fell from 8½ per cent of GNP in 1981 to 4½ per cent of GNP in 1986. The Fianna Fáil Party were not content simply to deplore those trends. They denounced them in the strongest possible terms and those who were responsible for them were pilloried and described in every possible term of abuse allowed in this House and a few which are not.
The same Fianna Fáil Party who deplored the growth in the level of taxation, who bemoaned the fact that expenditure had not increased more rapidly in current terms and who became irate when talking about the real reductions in expenditure on the public capital programme, deplored also that the current budget deficit had not been further reduced and that the Exchequer borrowing requirement was still too high.
What is the rest of the picture over that period? During that time the national debt grew from £9 billion to £21 billion and interest payments grew from £800 million to £1.8 billion. There is an even more interesting feature behind all of this. When interest payments are excluded, the current budget deficit was less than a ½ per cent of GNP in 1981 and in 1986 there was a surplus of over 2½ per cent of GNP on that current account. These figures very dramatically underline the effect of increasing debt on our resources and the problem of pre-emption of resources which we face and will face on an increasing scale unless and until we all take to heart very seriously the lessons which have become obvious in relation to our financial situation since 1977.
Much of the mythology about economic policy during the past ten years has had the effect of obscuring the reality of that from the view of the electorate. For all of that period until March this year that mythology was all that was seen by the Fianna Fáil Party. It now appears the veil has been taken away. I sincerely hope that that veil stays drawn aside so far as that party are concerned because the matter is one of urgent, immediate and fundamental concern to all the people of this country. Fine Gael have always taken that lesson very seriously. Unfortunately, the same cannot be said for all other parties. I sincerely hope that the Government will take the problem seriously and I urge them to do so.
Even that will not be enough. It is essential that the other parties and groups in the House take that message to heart also and that those who understand it — and it is not at all difficult to understand — will drop the pretence that there is a softer, more palatable option either for all of us or for some restricted groups among our people. Without that acceptance we are heading for deception, division and disaster and it must surely be the duty of this House to avoid that.
It must just as surely be the duty of this House to first of all understand and then to make plain to the electorate the scope of the task that lies before us. There is in existence a clear and comprehensive statement on the major elements of an integrated strategy and on the general policy for the major sectors of the economy, a statement which has the agreement of all the interests represented on the National Economic and Social Council. In their report, A Strategy for Development 1986-1990, Report No. 83 of November 1986, the NESC set out at Chapter 7 a strategy for economic and social development. That report makes very sobering reading indeed. The strategy set out in Chapter 7 and developed in other chapters shows very clearly the qualities that are needed if those of us who are charged with the process of government, and in that I include every Member of this House, are properly to fulfil our responsibilities. These are, first, a willingness to confront the reality of our problems without retreating behind ideological binoculars that distort our vision of the world; secondly, the commitment and the will to identify the policy priorities for our people without retreating behind the pretence that everything can be done at the one time and, finally, the courage and the tenacity to act in accordance with the realities which face us, in line with the priorities we set, and to maintain a perspective on the totality of our action which rises above short term discomfort or short term gain.
It is only if all of us in this House show those qualities that we will succeed in bringing about the cohesion that is required among the people we represent and that will make it possible to achieve our objectives. If we fail to do this we will have failed the people we represent. I should like with your permission, a Leas-Cheann Comhairle, to indicate just a few of the thoughts put before us as policy makers in this House by the NESC in that report. On page 145 it is stated:
The postponement of corrective measures is not a viable option. The question arises as to whether there is an inescapable trade-off between employment and fiscal policy objectives, that is, whether progress towards one must inevitably retard progress towards the other.
In the short-term this might be true. Cutbacks in government expenditure in themselves imply a reduction in domestic demand and, if unaccompanied by other measures, could be expected to reduce employment in the short-term. However considerations about the medium-term must be set against this, namely the stimulus which would be imparted to output and employment in the internationally trading sectors of the economy because of the impact on interest rates of reduced Government borrowing.
That, Sir, is in my view something that should be required reading. Certainly the thought is something we all should bear in mind in economic debates in this House. There is a further piece of what I would call very valuable wisdom on page 146 where the report states:
It is the level of national output which determines the level of sustainable employment. It is also the level of national output which determines the level of public expenditure which can be sustained by acceptable levels of taxation and prudent levels of borrowing. In large measure, therefore, the existing problems of high unemployment and chronic fiscal imbalance derive from the same source.
There is a great deal more about the influence of domestic demand, management and so on but I think those two brief passages will show that in that report there is, if not all the solutions we need, certainly a line of thinking which brings out clearly the factors to which we must give attention and indeed the basic realities from which any debate on economic issues in this House must start.
Power is vested in this House by the people through the Constitution. With that power goes responsibility and the duties that are imposed by responsibility. It is up to each one of us, both in our manner of seeking election to this House and in the discharge of our functions in this House, to keep that essential link between power and responsibility. Those who seek to ignore that link do a serious wrong to our community as we have seen from events in recent years. A very brief history will show that clearly.
In the summer of 1981 a Fine Gael and Labour Coalition Government came into office. We immediately brought in corrective measures to prevent the economy running out of control. These were vigorously opposed by the then Opposition as they were in the subsequent election of 1982. By that time there was a growing public awareness that something had gone seriously wrong with the way this country is run, but those of us who put this case squarely before the people were derided by the Opposition at the time. The new Fianna Fáil Government elected in February 1982 then began a period of so called boom and bloom but then as now cold reality found its way through the rhetoric. The then Government found themselves unable, because of their lack of preparation, to bring in a planned approach to expenditure. They were trying to lead the people having deliberately misled them in an election. The people of Ireland felt then, as many of them do now, that they had a Government who had attained office under false pretences.
When we came back into Government at the end of 1982 we headed straight into the wind. We spent over four years rooting out waste, rationalising and controlling public expenditure with the kinds of policies that are required in those circumstances. It is difficult to bring the people with you. It is well nigh impossible if almost half of the members of this House argue that the problem is different and that the difficult action is unnecessary. Despite this we persevered. Last January we fought an election putting all our cards on the table. We said then, and we still believe, that a Government could bring the people with them in this crucial endeavour of correcting our finances only if they had a specific mandate to do so. That is why we went before the electorate with all our policies, difficult as they were, clearly specified.
In the days following the general election it became clear that no single party in this House could form a majority Government. So on 6 March the Fine Gael Party decided to set out explicitly the guidelines along which the economy should be run and we chose to use our parliamentary strength, representing the votes of almost 500,000 people to bring some order into the public finances. I repeat our statement at that time:
It is Fine Gael's objective to use its parliamentary strength in the national interest to achieve a position in the public finances which will create conditions for increased employment and for a lasting cut in the tax burden without adding to debt service costs in future years.
In so far as the incoming Government introduces a Budget which corresponds with the above objective, Fine Gael will not oppose it or legislative measures required to implement it.
We did this because we believe that it is not just the Government who have a responsibility. Each of the 166 Members of this House has that responsibility and we have consistently stuck to that line.
During the course of his speech in this House yesterday the Taoiseach reminded us of the fact that he had criticised in Opposition the economic policies of the last Government. I found that a very modest reference, even for a man who is, like the Taoiseach, sometimes given to understatement. He said:
We also criticised the one-sided emphasis on the public finances which was not accompanied by any serious effort to promote economic development.
That I believe is a very facile point and a very dangerous one. The emphasis on public finance targets is central to the whole economic process. I must warn the Taoiseach and the Government against the gross error involved in thinking that in some way the promotion of economic development can proceed separately or apart from the proper management of the public finances. If the Taoiseach wants any other authority for that warning I suggest that he reread the NESC Report to which I have referred, or, if he is very short of time, that he re-read page 146, chapter 7, which I have quoted from.
There is an absolutely indissoluble link, and we know that the Taoiseach is a man who believes in indissoluble links, between the public finance function particularly in our circumstances and the promotion of economic growth. I set out my view in relation to overall economic management. That will be the basis of everything we say and do in this House on economic and public finance matters. Wherever that view is shared in this House, those who hold it will have the agreement and support of my party. Where it is not shared, on whatever side of the House, we will oppose what we believe to be wrong.
Speaking yesterday on the social services, the Taoiseach said:
We must also ensure that the access and opportunity these services provide must have full regard to the needs of those served. In particular, the needs and requirements of the disadvantaged economically and socially must have priority... It is clear that there are inequities in the application of and access to these services... By remedying these deficiencies we can contribute to the general acceptance of the adjustments that may be necessary in these and other areas of public expenditure.
I am sure we can all agree to that. But I am equally sure that the Taoiseach and the Government will fail to achieve those laudable objectives if they take the line recently taken by the Minister for Health who, because he had stated in reply to a parliamentary question that he had nothing more to say on a particular issue, refused to answer a whole series of legitimate questions about the operation of the services under his care. Equally, they will fail to achieve that objective if they continue with the nonsense of refusing to deal with detailed questions on the operation of our educational system on the grounds that the matter can be dealt with in the context of the budget debate.
Yesterday the Taoiseach defined the Government's first policy objective as being:
To restore the public finances by reducing overall Government expenditure.
He went on to say:
With regard to the first objective, the Government in formulating and implementing this year's budget had by force of circumstances to resort to the process of reducing Government expenditure right across the board, coming down more heavily on those areas which accounted for greatest level of expenditure. There was no alternative to that approach.
I wonder if in the Taoiseach's mind there is the same connotation to the phrase "there is no alternative" as the one that is in my mind. That statement by the Taoiseach yesterday sounds very much like a plea for understanding from somebody who knows that he has been undiscriminating in his approach. It is not a plea that I would be prepared to grant. The Taoiseach must know perfectly well that the information required to take a more discriminating and selective approach is available. It is available after any period of budgetary preparation, and it is most certainly available after all of the budgetary analysis of the past four years.
At the very least, the Government should have given clear guidelines and policy directions to the health agencies and to agencies in the field of education. To plead, as the Taoiseach seems to have done, that the Government did not have enough time for this kind of analysis is to ignore the constant process of analysis that goes on in Departments, and especially in the Department of Finance. To make this plea is to admit what we all know to be true: that the Fianna Fáil Party in Opposition failed to prepare themselves for Government.
During the course of his speech yesterday, the Taoiseach mentioned a number of Bills which he proposes to initiate in the Seanad during the summer, so that they will be ready for debate in the Dáil in the autumn session. One of them, the Adoption Bill, could now be law if the Government had taken the sensible course of taking up the Fine Gael Private Members' Bill, and amending it on Committee Stage.
From statements made yesterday, apparently by the Minister for Industry and Commerce, it now appears that one of the Bills the Taoiseach mentioned yesterday will not be ready before Christmas. But I welcome the Government's intention to bring forward that Bill and other Bills mentioned by the Taoiseach, and I am quite sure they will get fair consideration in this House.
The Taoiseach made no reference to another wide area of family law. I refer to the establishment of family courts, legal provisions enabling family courts to make various financial orders in the case of judicial separation, legal provisions for family courts to make orders in relation to the family home in the event of judicial separation and changes in the law in relation to matrimonial property. I know, and I am sure the Taoiseach knows, that a great deal of preparatory work has already been done in all of those areas and that in relation to matrimonial property in particular it would be a matter of very little extra work to have a Bill prepared, published and debated in the Houses of the Oireachtas.
Those are all areas where the debate on the divorce referendum showed there is a very wide consensus in favour of change and, indeed, a wide consensus as to the nature of the changes required. I call on the Fianna Fáil Party now in Government to live up to the commitments they made during the course of that debate. As far as the main question was concerned Fianna Fáil claimed they sat on the fence but in relation to these other areas they gave very clear and specific commitments. I know the Minister for Social Welfare, now sitting here, will remember those commitments he gave both inside and outside this House.
The announcement last Wednesday by the Minister for Justice that he is having a certain number of these areas examined is, to say the least, unsatisfactory. I urge on him the view that it is time he put a little more energy into the examination. The Minister for Justice also announced that he would bring forward proposals to amend the law concerning the grounds for judicial separation. I welcome that intention and await the proposals with interest, but I hope we do not have to wait very much longer.
In the course of his speech yesterday the Taoiseach announced the abolition of the Irish Film Board. In my view that is a blow to the steady progress being made in recent years towards the establishment of an indigenous Irish film industry. Since the establishment of the Irish Film Board in 1981, with a very limited budget, eight feature length Irish films have been made and two more are currently in production. That marks a very stark contrast with the previous situation, where only one Irish feature film was made from the foundation of the State up to the establishment of the board — and that film was made in 1936.
The most important role of the board was to provide the development money for research and scripting. Without this development money the very welcome incentives to corporate investors in the business provided for in the recent Finance Bill are likely to be stillborn. The reality of film production in Ireland is that these kinds of incentives are, to a large extent, useless without development money. Over the past six years investment by the board has attracted other funding on a four to one basis from the private sector, from broadcasting organisations here and in other countries and, more recently, from a United States cinema company which is now in the seventh week of film production in Connemara. It is a retrograde step to interrupt that process in the way which has been done by the Taoiseach just when we are beginning to make our mark internationally. Of course, we must all accept that there is a difficulty in the Exchequer and I am quite sure that, were the positions reversed, the Taoiseach would be making the same points. Perhaps he would be invoking even more names on this side, but I do not believe in that kind of rhetoric. At least I can say now, following the foresight of the last Government, that the activities of the Irish Film Board would have been very proper for funding by moneys for the arts from the national lottery. I do not see that there was any need to take the step that the Taoiseach has taken. It is a matter of considerable disappointment to me, to my colleagues in this party and to a great many people in the arts to find that the Government are now rowing back on the provision envisaged for the arts from the proceeds of the national lottery right from the beginning. We regarded that as a major new source not of huge amounts of money but of useful amounts of funding for projects that will continue the kind of development, the rebirth of life that we have seen in so many areas of the arts in recent years. I urge the Government to reconsider the steps they have taken in relation to the distribution of funds from the national lottery.
There has been a good deal of discussion recently, even this morning, about the length of the summer recess of this House. A number of Deputies in the House are anxious to see it reconvened very early in September. To me it seems disingenuous and highly misleading on the part of such Deputies to suggest that the recess is all holiday. The summer recess has always been a time when certainly the major parties take stock of their situation and have an opportunity to work on policy development. For individual Deputies it is also a time when they can prepare their own plans in relation to projects or topics in which they have an interest and it is a time for contact and discussions with groups which could not be fitted in during the business of a Dáil session. It is a time when certain kinds of constituency work can be carried out with the attention that they deserve.
I know that there are different views about constituency work even among Members of this House. I remember one Deputy in the PD Party who, being interviewed by a very skilled gentleman on RTE just after the election, almost went as far as to say that he would do no work at all in his constituency, but stopped short at the last moment before he tripped over the obstacle. He seemed to have had a change of heart since because I am reliably informed by my colleagues in that constituency that he does a fairly respectable business at constituency work. I wonder if he had much of an input into the statements that were made up to and including this morning.
