I intervene to make a brief contribution on the budget, partly to deal with problems in my constituency and partly to say a few things I have wanted an opportunity to say for some time.
The introduction of a budget to look after the running of a country for 12 months is an enormous task and an enormous responsibility. Over the years we have provided ourselves with services and undertaken liability for expenditure that we, as a nation, really cannot afford. We have been living beyond our means since the sixties. Indeed, that spending spree seemed to take off in the sixties and has not been brought under control since then. It is harder to correct an economy that has gone wrong in a democracy than it is in countries which are governed by other forms of government.
However, there is no doubt in my mind that the democratic system of governing a country is by far the best that has yet been found and before we consider getting rid of it or endangering it we should be sure that we have something better to put in its place. A democratic system of government can be lost by military coups and a left wing administration can take over completely but a country can also endanger its democratic system by losing control of its finances as a result of getting into the hands of international bankers and lending agencies of one sort or another. When we have got to this stage and when our economy needs to be corrected and got on the rails again a stable and strong government is essential. Numerically speaking, we do not have a Government at present. I am not casting any reflections on the individual members of the Government or the Taoiseach because it is not necessary to do so for the purpose of this argument. However, recent events have demonstrated that, numerically speaking, we have no Government.
I do not think we have any immediate way of getting a stable Government. If there was a general election in the morning or in a month's time, 166 Deputies would come back to this House but we still would not have a Government. That does not mean that the people of the country do not know what they want. They certainly do know what they want; they do not want a left wing administration and they have said so in no uncertain terms. As a matter of fact, about 146 of the 166 Deputies in the House broadly agree on how the country should be run. However, when they come back here after an election they split almost down the centre and the balance of power is handed over to the remaining 20 or so Deputies who have no mandate from anybody to run the country. During my time in public life I have never seen more necessity for a stable, strong and fair Government than there is at present. But we do not have one and we are not likely to get one.
I am speaking on my own behalf and not on behalf of my party. On many occasions over the years we have heard calls for a national Government. Some people who do not like national governments say that they are necessary or desirable only in times of war or armed conflict or when there is an emergency. We are not involved in a war in the real sense of the word although we have the affliction of terrorism and armed activities in the northern part of our country.
The people have said clearly that they want a centre or right of centre administration and they have voted accordingly. About 90 per cent of them have voted for parties who represent the right or right of centre. In the interests of the country the three right wing parties should take steps to give this country a stable Government for the next three years. That is the duty of the people who have got a mandate for policies which largely agree with each other. It is their duty to the people and to those who will come after them to provide a stable, firm and fair Government for the next three years, a Government which would not be subject to pressure groups who would be against this policy, that policy or the other policy.
The next point I should like to refer to is the taxation of farmers. I come from a farming background and I take a certain pride in agriculture and in the land of Ireland. I detect that the good relationship there used to be between urban dwellers and rural dwellers no longer exists. A rift is developing between urban dwellers and the agricultural community. Sons and grandsons of the land are attacking farmers and the farming community from which they came and this is due to the fact that farmers are not seen to be making what is regarded as a fair contribution towards taxation. People are jealous of them and this bad blood is developing.
Farming as an occupation is carried out on a very different basis from a strict business activity. For example, a farmer, his wife and children play their part on the farm and work has to be done during the weekends and the summer when other people are on holidays, and it is not possible to tax farmers on a bookkeeping basis as one would tax a manufacturing or distributing business. The result of efforts to impose taxation on farmers on the basis of profit earned and books kept will not work. Farmers are spending substantial sums of money in fees to accountants to show that they are not liable for tax. They are paying the accountants nearly as much money in fees as they would if they were liable for tax.
I do not altogether blame the Government for the bookkeeping system of taxing farmers. A minority of people within the IFA demanded that system and campaigned for it but I believe that a majority within the IFA have found out that they were wrong. Farmers must be taxed on a simple basis. When the late George Colley was Minister for Finance he introduced a system of a 2 per cent tax on all sales from farms. That did not work because it had no regard at all for the element of profit. The man who was making no profit would have to pay the same 2 per cent on his sales as the man who had a good income. Nevertheless, that system had a lot going for it. I think it would have got a better reaction if it had been properly researched. It will get a better reception now than it did when it was first introduced and had to be dropped straightaway.
In later years the last Government introduced the land tax, which was really, and there is no use in trying to pretend otherwise, another name for rates. It was another great valuation system under which the old rating was operated. The land was valued back in 1850 under a man named Griffith and the valuations continued on until 1865. The Coalition system of land tax was based on adjusted acres. For the record 20 adjusted acres means, of course, the equivalent of 20 acres of reasonably good land and of course 20 acres could be 40 or 50 acres. I think that was a good system.
The present Government in response to a campaign against that land tax and in favour of the bookkeeping system, yielded to the bookkeeping system. Now nobody is happy. The farmers — I would say 75 per cent of them at least — are crying out now for the land tax which they opposed and which the present Government, because it was popular to do so unfortunately, and very foolishly I think, gave in to them. I say therefore that the land tax should be reintroduced. The present Government went to absurd lengths: the staff were taken off the Land Commission and I understand the present Government are going to leave them off it because although they denounced the proposals to wind up the Land Commission when it was introduced by Mark Clinton I think they have now come around to it and they themselves are going to abolish the Land Commission.
They took approximately 100 people or thereabouts from the Land Commission and put them on land tax work, adjusting acres. As I have said, after the last Government these people were sacked, or relieved of their jobs anyway. I understand that something like 90 of these inspectors have not even to report to their offices, but receive their salary cheque through the post. That is not good economics according to any standards. It was done for political purposes, and things that are done solely for political purposes in order to attract votes in the run-up to an election are very often not sound. I think the present Government should have another think about this. Anybody can make a mistake and the Government should get back to the system of land tax. It is simple and will bring in a reasonable amount of money. The farmers will be seen to be paying some reasonable amount of tax and the argument against them by their city and town cousins will be taken away.
I now want to deal with the Border counties. It is an understatement to say that business is at a very low level all along the Border areas. The towns are like ghost towns. The sheriff visiting the many shops along the Border is going away as he came because there is very little that can be seized. Do not all rush — there are not many present — to tell me that a 48-hour rule was introduced to prevent smuggling across the Border. It was a good thing it was introduced and I said that immediately it was introduced, but it has done no good for the Border towns. It has done no good for the chain of shops right along from Dowra, Swanlinbar, Ballyconnell, Clones, Emyvale or Scotstown, Monaghan and on up into Louth, Cavan and Belturbet. It has done not one bit of good because it only prevents people coming from Deputy O'Donoghue's county and neighbouring counties in busloads up for the day's crack and to see what is going on in Northern Ireland and to make some purchases and bring them home. They are not coming back. There is no money being spent in the Border towns, which are as badly off as ever they were.
Professional smuggling is going on. I am told there are travellers going around and offering electrical goods, television sets, radios, etc. right along the Border. It is no wonder that this is going on.
A business man in Clones, Belturbet or Cootehill can in no way compete in the electrical field — which is one trade that I have picked out — with his neighbours across the Border. I am going to quote authentic figures. In Northern Ireland, a 14 inch standard colour television set costs £175 and included in that amount is £26 in respect of VAT. The same set in the very same currency costs £299 in Cootehill, Clones and Belturbet and that amount includes £114 tax. That is a difference in taxation between £26 and £114. In Northern Ireland, a 20 inch standard colour television set costs £275, of which £41 is tax. In this part of the island the cost is £450, of which £161.50 is tax. How can the unfortunate business people here trade successfully against those conditions?
I am told that it is not now a case of one going North and smuggling a set into this country but of a professional traveller calling to the door. He would be called a rep, but call him what you will, he undercuts the recognised trader here by a very large amount, by £160 in the case of the larger set. Something will have to be done about that. I know that it may be said that the last Government, with which I was associated, did not do much in this regard. However, as my friend, Deputy McGahon, said this morning, those parties at least did not promise that they would rectify the situation, but the present Government did, in the run-up to the last General Election. They promised that all this would be rectified.
These people of whom I speak are in a very bad way. One cannot mention names here and one should not. I know a large television business which has operated successfully for the last 25 years. It is well run and the proprietor is a sensible man, not extravagant in his ways. He told me, virtually in tears, before the Budget that there was nothing he could do about it, his business would disappear. I communicated with the Minister for Finance about this. He did not give me the figures that I have quoted. I got these from another concern in Monaghan town. I am appealing to the Minister to do something about this situation.
It is simply not possible to detect smuggling along the long land frontier from Dundalk right across into Leitrim and Sligo. One would literally want an army to do so. The only way in which smuggling can be stopped is by trying to make the cost competitive here as against Northern Ireland. Compensation could be paid also. If you start reducing VAT for ten miles across the Border then there would be a creeping paralysis in the business for ten miles further along. However, it would be possible to deal with business premises in these terms. They cannot be changed about; they are static and remain where they are. These could be treated the same as the severely handicapped areas and people living or farming in these areas get special treatment. That could be done along the Border. This is something which will have to be treated seriously.
The increase in this Budget of 8 pence on the price of a gallon of petrol was a nasty surprise to these people. Right along the Border there are huge petrol filling stations; between Cavan and Clones there are probably six to eight of these, with one built quite recently. Such matters must be attended to if these business people are to survive.
The budget is said to have introduced equity into taxation, but I do not think that it did. I would say that introducing equity would mean bringing more people into the net so that the man at or near the bottom would get some ease, but that is not so. I came in at short notice — nobody asked me to come in — and I have tried to get exact figures. I think I am right in saying that a man on a salary of £25,000 or £30,000 per annum on PAYE gets relief in this budget to the extent of £596. A man earning from £8,000 to £14,000 gets relief to the extent of £70. That is not equity. That happens because the relief is operated on a percentage basis, just like increases in salary.
When salaries used to be increased by the year, there was a flat percentage rate applied right across the board which led, in certain times of recession and when the economy needed to be straightened out, to all sorts of injustices. The man who is already on a very good salary gets quite a big increase but the man who can hardly live gets practically nothing. A few years ago I suggested, when pay had got a little out of control, that the man at the bottom who finds it very hard to live should get a comparatively decent increase and the increase in respect of the man at the top should be scaled down. I was told that the trade unions would not tolerate that under any circumstances. I think it would be equitable that in a difficult time for the country and the people, those at the top could afford to do with less and the people at the bottom should get more but I was told that the trade unions would not entertain that for a minute.
The Taoiseach and some of the Ministers said something about the extension of the severely handicapped areas. This is of particular interest in Monaghan and Cavan because the two counties are scheduled for complete inclusion in the severely handicapped areas scheme. It is true that the previous Government lodged an application to include several counties, including Monaghan and Cavan, shortly before they went out of office but at least the application was made. When the new Government came in, the Minister for Agriculture and Food made a speech very early on from which it was clear that he was anything but enthusiastic about pressing forward with the application for an extension of the area classified as severely handicapped. First, he said there was no money. Then he found out that the application was wrong and needed to be revised. His Minister of State, Deputy Joe Walsh, is reported to have said later on that they were not pressing ahead with the application because there was no money. That was again corrected. At any rate the application was made by the previous Government.
The extra headage payment that would be brought in is badly wanted by the counties concerned. I put down a question asking the up-to-date position. I think perhaps recent negotiations in Brussels will result in some money being made available. I trust that whatever the difficulty it will be surmounted and that the areas will be reclassified. I speak particularly on behalf of Monaghan and Cavan and what applies to them will apply to several other counties as well.
I was not present for the contribution of the Minister of State, Deputy Michael Smith. He devoted much of it to forestry. At the foundation of the State in 1922 there was practically no forestry here and whatever land was under forestry then was in the possession of the big land-owners. The State had done nothing about encouraging forestry. The Government of the infant State set about encouraging State forestries. By 1948 the forestry drive had taken off in a big way and a lot of land was planted, around one million acres. There is a lot more land available and suitable for afforestation all over the country. There are some millions of acres available. If only a fraction of what is available were planted it would mean that by the end of this century we would be self-sufficient and would have timber to export. That would be very important because in or about that time Europe will not have sufficient timber to meet its own needs. Indeed, there will be a world shortage of timber.
We are well suited here to afforestation. There is a very big area of land available for planting. The climate suits tree growing. There is one thing that I am convinced of and that is that the only way to get trees growing quickly is for the State to do it. If it is left to private enterprise it will take a very long time to get anything worthwhile done. That is because one must have a big block of land to encourage afforestation successfully. Only a State agency could get that together over a long period of time. Furthermore, it is not an attractive proposition for a man to plant trees in the knowledge that it will be at least 35 years before he gets any return.
I do not know if the Minister referred to it, but what I am going to complain about now is that the State planting programme has dried up. No land has been acquired by the State in recent times. While it used to be the invariable practice to have two, three or four year's supply of land for planting, there is not even one year's supply now. The whole thing has dried up and grants are being given to private enterprise to encourage farmers to plant trees. That will not work in the short or medium term. It will take a very long time to do that.
New Zealand resembles our country in many ways. It goes in for agriculture, cattle production, milk production. They have bigger farms admittedly, but there they engage in cattle and milk production and timber on the same farm. One brother takes charge of the livestock and another the forestry. The fields are much bigger than here but the trees are planted around the fields. They act as a shelter belt and, at the same time, produce a lot of timber. That is a valuable national resource. It is a long-term operation but people who run countries should be thinking of the long term. I hear people talking about getting the economy right through afforestation. That is not being realistic. It simply cannot be done in the short term. It is a very long term operation. That is all I want to say so I will give Deputy O'Donoghue the opportunity to say something.
