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Seanad Éireann debate -
Thursday, 30 Jun 1966

Vol. 61 No. 13

Finance Bill, 1966 (Certified Money Bill): Second Stage (Resumed).

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

Before finishing last night I commented on the negligence of the Government in the bank strike. I should not like my remarks to be in any way distorted or to have given the impression that I was taking sides. I distinctly said last night: "A plague on both your houses" to both the bank officials and to the Banks Standing Committee for holding this country up to ransom for six weeks while they proceed at a leisurely negotiating pace that would suit the 17th century but that has no place in the 20th century. I suggest to the Minister that as part of new industrial relations legislation he should provide for a curbing of this type of disruption to our economy.

Penalties should be brought in to hit both sides in a dispute where the sides do not make a decent effort to wind up their dispute in a minimum time. A dispute going on beyond a minimum period of two or three weeks should incur a penalty of a loss of part of their earned income allowance on the part of the officials engaged in the dispute. This deduction should increase if the strike dragged on for any further periods. At the same time, the management side concerned should be hit severely in their exemptions from corporation profits tax. No modern, progressive country can tolerate having its banking system disrupted for six weeks. In this day and age I cannot understand how this business of consultation between those engaged in the strike can take four or five days. One would think we were back in the Stone Age when couriers had to be sent out from one part of the island to another. Surely, with the telephone service as it is, if we could get the results of the Presidential election by midday the following day, that standard is the minimum we would expect from any organisation engaged in a strike. Every effort should be made to minimise the disruption of the country's economy.

Having made my position quite clear on that point, I wish to turn to the overall assumption on Government planning contained in the report of the NIEC—the assumption that we are to become full members of the EEC in a very short period, by 1970 or thereabouts. This is a very dangerous and, I believe, erroneous assumption. I refer the House to three excellent articles on this topic which appeared in the Irish Press on Monday, Tuesday and Wednesday of this week by Richard Grogan. He is on the spot in Brussels and has made a very detailed analysis of the position. He has spoken to many of those concerned and his conclusions are that our chances of getting into the EEC are becoming more and more remote and are in no way linked with the entry of Britain to the Common Market. The Common Market administrators, or what we call its Secretariat, who make all the decisions want Britain in to give stability to the Common Market as a major power between the two giants of the Community Market—France and Germany. But, having got Britain in, the general feeling is to bolt the door immediately and consolidate what they have then got to build a viable European unit. They are in no way enthusiastic about expanding it from what it would be then—a seven member community—to a ten member community.

I should very much like if we had facilities or procedures such as exist in other Parliaments whereby one can actually read articles into a debate. I should like to read those articles by Mr. Richard Grogan into this debate. But, failing that, I suggest all members should make themselves familiar with them. He has some rather harsh things to say. He says that it is depressing and reflects no credit on our Department of External Affairs that the attitudes to which I have just referred should exist in influential EEC circles without it being realised here.

Does he quote the influential EEC circles? Does he refer to them specifically?

But surely a fully-fledged article in the official newspaper of the Government——

We do not accept that.

I shall leave the Minister to draw his own conclusions but I am quite prepared to maintain the view I have held for quite a long while that our chances are very remote. There is a very tightly-packed Secretariat which is headed by Professor Hallstein and Dr. Mansholt who make the main decisions. As far as I can see the European Parliament has less power in dealing with its Parliament than we have in regard to ours.

Does Professor Hallstein tell us one thing and Dr. Mansholt something else?

I am not quoting Dr. Mansholt——

The Senator has just brought him into the context of Mr. Grogan's articles.

——as the leader of the agricultural policy of the Secretariat, and one of the most influential members in this. What I am pleading for is a re-assessment of our position and not the complacent view that we will automatically get into the Community. There is also a general feeling in the Secretariat that, once the present position has been consolidated, there will emerge a number of forms of associate membership and that some of those associate forms may be much more suited to our needs than the present very onerous form of full membership. In any case, it does seem that the situation is quite fluid and we have got to start thinking and planning on that basis.

We should begin to realise our position here and realise our strength. We may not have tremendous coalmines or other resources like other European countries but we have resources which are much more valuable than that and much more treasured in Western Europe—the opportunities to live a reasonably human and pleasant way of life, with our relatively uncrowded roads, cheap recreation centres and other facilities which are never counted. That is what we have got and I have, on many occasions in the past, stressed that I feared very much, in full association with Europe, that that will not go unnoticed and we will have a tremendous influx of Europeans.

In considering this unit which we are so anxious to join in some capacity and which, when England is admitted, will stand at about 220 million people, why not take cognisance of our geographical position exactly between that unit and another great unit of the same size—the United States of America? Why not, if we are looking for economic association and so on, explore the possibilities of association with the other economic unit? I am not in any way advocating that we should become the 52nd State but to me it appears that we would have as little say in Europe with full membership as we would have as the 52nd State of the US. Therefore, the possibility of economic association in some way with the US should be actively explored.

We ought not shrink from the political implications of association with any great unit. Let us examine a statement in Mr. Grogan's article, which is something we all know for a long time. He is referring to the top administrators of the Common Market: "This enterprise is Europe's only chance of regaining a position of power in the world". The operative word there is "power". Power denotes political implications. Therefore, let us not close our eyes to them. Another extract from that article is: "Some of the officials in their assessment say that Ireland will eventually accept a form of association with the Common Market". In other words, it is something that is far from cut and dried. We should treat it in that way and be much more active in our exploration than we seem to be at the moment.

All resources within the country should be utilised in those explorations. Other countries can fashion teams drawn from all walks of life, from the Civil Service, from business life and from the universities. As far as I can see, the same type of approach does not seem to be adopted here. I am not aware, speaking from the academic side, that any use has been made of academic personnel in the Brussels negotiations or any of the Brussels fact-finding work.

I want to pass from this to the NIEC Report and the position of agriculture as outlined in it. Nobody can contemplate the position of agriculture without looking with dismay and horror at the polemics being hurled by different leaders, particularly the leader of the ICMSA, Mr. Feely, against some of the leaders, particularly Fr. Brady, of the National Farmers Association. This is something which is hurting the nation as a whole. It is hurting the organisations concerned; it is hurting the farming community by preventing them getting together and making their contribution for the good of the nation. It is time that people in all walks of life began to take an interest in getting the farming community together and behaving like adult citizens in our community. I believe the only course open is one of mediation with plenipotentiary groups of both sides.

I would like to suggest that the people whom the farming community look up to more than anyone else are members of the Hierarchy, and I would suggest, in particular, either Most Reverend Dr. Lucey or Most Reverend Dr. Morris. In any case the situation has gone too far and we have enough drivel in the papers without having to read those polemics which do no good to our national image or to the organisation concerned. Away back in 1957, I was chairman of a meeting that fought to bring those two groups together. We left that meeting happy that we had brought the groups together. Toasts were drunk after the meeting. Some four weeks afterwards, on a quibble, one of the organisations came out and unanimously repudiated the terms agreed on at that Tipperary meeting.

Another matter referred to in this Report is the Industrial and Economic Council. I cannot but wonder why the Government are being used to increase still further the priority that industry has over agriculture and over education. It is a sorry commentary on the position in this modern scientific age that it is regarded as promotion for a Minister to go from the Department of Education to the Department of Industry and Commerce.

Dr. Fisher referred to it as going from one ignorance to another.

Certainly not. Any country that takes its place in present-day life should fully recognise that one of the major ministries is the Ministry of Education. I take this opportunity of appealing to the Taoiseach to give full recognition to that and not to shift the present occupant from the Ministry of Education.

We are very happy in the Seanad to welcome some retrospective legislation in the Finance Bill. We spend a good deal of our time fighting against this very bad principle but this is one place where we can all agree that the exception proves the rule in the case of the assessment of widows with regard to their pensions and their general estates. In this case the upper limit has been raised from £15,000 to £25,000 gross estate. As well as that, the reliefs have been increased and provision has been made for marginal relief at the upper limit of £25,000 so as to provide a smooth transition from one stage to another.

That is very welcome, but if we go back to the Seanad Éireann debates of last July, we will find that we spent ourselves arguing for these obvious concessions and arguing against the injustice of the non-provision of marginal reliefs at the transition point. I personally had several amendments, as had other Senators. We argued these for hours and we forced them through the division lobby but to no good result. It is good to find the Minister now acknowledges that our case was just and proper on that occasion and that he has taken the unprecedented step of allowing the reliefs to be retrospective to the previous Finance Bill. I think it would give us much greater heart here for our work, and the feeling that there was really some use in talking in this forum if the Minister last July had come forward and said: "Yes; the case made is an excellent one and I hereby accept it in Seanad Éireann". That would have demonstrated to the members and to the public that we have a function to fulfil. We can claim a great deal of credit for the fight but it would have been much better parliamentary practice and much better democracy if the Government had given in to our very logical and compelling case as presented last July. However, I suppose it is better late than never.

There is one aspect of all this aggregation of income, and aggregation of insurance policies, which is most unjust to widows, that is the method of calculation. Suppose you leave a widow and she has a pension of £500 a year. It is a very small pension. If that widow is 70 years of age, then it is reckoned that according to the life tables, she has perhaps only four or five years left. Therefore, the aggregation of her pension is only five times £500, or £2,500. But if she happens to be a young widow when her husband was cut off at, say 40, then she had a life expectation of at least 30 years so that the then present value of her pension would be at least 15 or 16 times the value of the pension. In other words, it would be up to £10,000. That is an obvious injustice.

The only way this can be got over, I suggest to the Minister, is to depart in the name of a Christian and humanistic approach, from life tables in such a situation and if you must have your pound of flesh in this, at least take it yearly and let the widow pay a certain amount each year as she gets her pension. In other words, I am suggesting that the Minister should introduce a PAYE system, which is a pay-as-you live type of taxation on a widow's pension rather than the present grossing which can be very unfair in its application.

We come to another item which we can welcome; an item which I welcome personally because it is something for which I campaigned for a long time, that is, the ten per cent dancehall tax. Why such a small tax of ten per cent on 7/6d? That is only 9d. I recall that when I was interested in dancing, the tax was at least 1/- on 7/-. So that in place of progressing with taxation on dancehalls, we have regressed from the tax of 15 years ago, a tax which was then remitted completely for seven or eight years.

If a tax is worth putting on at all it is ridiculous to put 9d on a dance ticket. I do not see why it should not be 10/-.

How does the Senator get 9d as ten per cent of 7/6d?

Why not; it was so when I was going to school anyway?

That again makes me doubt the intellectuals.

Those who drink table waters are a section who can well afford to make a contribution. I do not think they make an adequate contribution. By and large, the younger people and the unmarried section of the community are the group who have the most free money and they are not making a proportionate contribution to taxation. If we want money for education, I suggest that is the place where it can best be got and it surely is justice to say that that section as a whole should make a substantial contribution to the education of the whole community.

Now we come to another item that we can welcome again unreservedly. It is the increase in the allowances for children in respect of income tax from £120 to £150 in order to qualify children who are attending school over the age of 14, and so on. This is only a token contribution but still it is a step in the right direction. While we can fault, and fault very rightly, the failure of the Government to increase the basic allowances which have not kept step with the depreciation in money values since the early 1940s, we can welcome this, and I welcome it more from the point of view of the indication it gives of the Government's thinking than the amount involved which, to the average parent, means £7 to £8. I welcome it because it has come at a time when advice is being tendered to the Government from many quarters, and especially in the Report on Investment in Education, which suggests that there was something immoral about giving tax reliefs to parents on behalf of children who are staying on over 14 years for further education.

There seems to be an amazing—I would not quite say "socialist" because that word is not accepted in other circles—suggestion or feeling that parents are perfectly entitled to spend their income any way they wish, provided they do not spend it on the education of their children. Somehow or other, our thinking has become perverted to the stage where it is regarded as being anti-social to spend some of the parent's income on providing education for his child. It is felt that the State should take off everything by way of taxation and educate all absolutely free without any direct contribution by the parents.

I congratulate the Government on saying that they have not accepted that philosophy, and indeed if I may take this example, the provision suggested by the Government here, a taxation relief of £150, would give about £40 to a parent to send his child for higher education after the age of 14. In addition, if the child is at a secondary school, the Government make a direct contribution of about £40 to the school, that is, £80 tax money in all. If you follow through this it probably cost the parent about £250 a year to keep the child at school at the age of sixteen or over. Of that £250 he gets something like £40 remission or reduction in income tax from the Government. He then has to pay a net £210, but there would be no objection had he gone to Biarritz or somewhere else and spent that money there, or had he bought some luxury goods or even bought some articles that have to be largely imported, with a very large import content. There would be no objection to that, but if he spent his £210 that way rather than by investing it in his child for further education, then that £210 would be withdrawn out of circulation in our economy and there would be a consequential reduction in the tax yield from the economy.

The consequential reduction is up to 40 per cent of the primary amount withdrawn. In other words, there would be a reduction of about £84, so that what the State is doing is that it is giving to the parent just the money that is money spent on his child, the taxation it generates. The State loses nothing from it, and if the parent decided in place of spending the money on his child to spend it by taking a holiday abroad or in buying imported goods, be it a fridge or anything else imported for his house, or on a car in which there is a very high import content in any case, the reduction in tax yield would more than counterbalance what the State has given. The State would still pay nothing. That is something we have to keep in mind at all stages, that what are apparent concessions are in reality only doing something that, if the State had not done that, the money would have gone to it in any case.

This is the very same principle which I have many times given here on this question of paying England to eat our butter and the amount in the Finance Bill that the Minister has to put on that account. It can be shown that when we pay at least a subsidy of 25 per cent, that is about 1/2d a pound, on the butter, that if the alternative was, as it is, that we do not export that to the British market, which is the best market now, and pay a subsidy, if we face the alternative which does not involve a subsidy, namely to change over the part of the land that produces these dairy products to the production of beef, the State will not be called upon to pay any subsidy, but the reduction in total output will withdraw money from circulation within the economy, and the drop in taxes due to that withdrawal of money is greater than the amount of subsidy that has to be paid to maintain that area producing dairy produce. That is something that we cannot get too clearly understood, and it is the whole basis for the justification of subsidies when they result in a real positive increase in gross output from any of our working units.

Any other details in the Bill we can meet on the Committee Stage, but I want to stress again the theme on which I opened last night, that is, the need at this juncture for a radical change in our approach and the resurrection of what we might call good old-fashioned patriotism. The gross national product has failed to spark our people, and the appeal to private greed and to just what the individual can get of the cake has failed lamentably. So, too, has too much reliance on economists without tempering it to the non-material values which economists cannot measure. That, too, has failed and so also has failed our reluctance—I do not know what word to use, I would not say shame, but it is almost infra dig in the last two years to stress the advantages we have got here in being able to live a decent full life in what remains as one of the best family atmospheres available in the western world. These are the values and these are what our people have cherished down the years, and these are the values that will cause them to face our present crisis and to respond to the call for work, because it is only through work that we can build up our country. We seem in the past few years to think that provided we had figures and straight lines and plans work did not really matter. Now it has been brought home to us that work alone counts, and in the work I suggested yesterday all sections could give a lead.

I want to touch on one other aspect, and that is the necessity for the Government to give a lead in austerity, because in these difficult times surely it is flying in the face of public opinion to see all the lavish receptions and drink flooding at those receptions. All that is asking for trouble and it is setting a very bad example in every respect. I know that in Cork they are still scandalised by a recent Government reception there at which drink was given out not by glasses but by the bottleful.

That is a shocking misrepresentation.

Coming from an institution where we have not got these lavish expense budgets and where, when you do have to entertain, we can get by very often with just cake and coffee or at the most sherry, I suggest that the time has come to bring the austerity note into these things.

That will make the headlines. Three hours speech and now you have made a headline.

I have been at some functions in UCC and I got something more than cake and coffee.

You got sherry.

And a bit more. They can do what they like in UCC but outside it we must put on the hair shirt.

Our dominant problem remains of providing increased employment for our people. We should take that as our main indicator over the next five years and focus everything on that. I suggest now that the time seems to have come when there is little or no activity on Saturday to set up what I might call a Saturday work bank in which all citizens would be expected to contribute in some way or other to some positive community task for at least half the day on Saturday. It might be a play centre, a recreation centre or some type of factory, but we could thereby succeed in building it at less capital cost than would be required otherwise.

Alternatively, our idle factories could be put to work on Saturday morning by giving inducements to workers to contribute during that period. While I suggested certain tax reliefs, there would still be a tax yield from it and this tax could be earmarked specifically, with the goodwill of everyone, for economic development to provide increased employment for our people at home. One can do a very simple calculation on this. It would be a poor Saturday morning's work by anyone that would not add at least £2 to the national product. Even taking a £1 work contribution, there are 52 Saturdays in the year and the one million people registered as able-bodied, contributing this morning's work, would provide the staggering sum of more than £50 million a year. One can figure out what an additional £50 million would do in the matter of providing more jobs when one reckons that the cost of a worker in industry is between £2,000 and £3,000. The £50 million would provide between 12,000 and 15,000 per annum at the cost of only a small sacrifice to the contributors.

The indicators on page 34 of the NIEC report are that far from realising our targets we are away off course on the number of jobs. We have fewer now than we had three years ago. With all the best will and effort, we are just going downhill on our primary target. It matters not what the GNP is if the indicators show that we are providing fewer jobs for fewer people. That surely is not what we envisaged as proper development for our country unless those of us who remain behind want to act as cuckoos in the nest, pushing others out on the emigrant ship so that we can get a slightly larger slice of the cake at home. We should remember President Kennedy's advice: "Ask not what your country can do for you; ask what you can do for your country".

This debate gives me an opportunity of telling the House of something that has had a serious effect on our balance of payments. I refer to a scandal that took place during the recent shipping strike. Fortunately, the strike has ended. Otherwise I would not be in a position to make these disclosures. It would undoubtedly have caused a spread of the strike and made a bad situation worse. I refer to a scandalous situation involving Irish cattle exporters and the B & I. Cattle from Northern Ireland were allowed to be exported while cattle from the Republic were left for a week or ten days at the North Wall or in paddocks around Dublin. Cattle from Northern Ireland were shipped in their thousands and Irish cattle were not allowed to be shipped in a State-owned ship.

The Irish Livestock and Export Traders Association last Tuesday discussed this. The Press were present but because the strike had not ended we asked them not to disclose the situation because of the danger of the strike spreading to B & I. I know a man who ships between 400 and 500 cattle a week. In the past two weeks he could export only 38 while hundreds of Northern Ireland cattle were going out. Senators may ask how he knew they were Northern Ireland cattle. A ten-year-old child would know because they are punched in the right ear. Possibly this man had been a customer of British Railways but that should not have stopped him from getting a small quota of cattle shipped.

A situation arose last Saturday at the North Wall in which exporters and agents protested that they could not get their cattle shipped. The Gardaí were brought along and because the exporters did not wish to affect the few legitimate men who were getting cattle shipped, they desisted from their protest. It is a galling situation that Irishmen cannot ship Irish cattle in a State-owned ship while British cattle, diverted from Northern Ireland, get first preference. How does the Minister for Finance view our balance of payments situation in the light of a situation like that—Irish cattle deteriorating for nine or ten days at the North Wall and Northern Ireland cattle getting preference?

Not so long ago the Government bought B and I and cattle traders and others throughout the country applauded this step. Now I can assure the House that the Government's purchase of the shipping line has been of no advantage to the cattle trade. There have been increased freight charges and the shipping capacity has decreased. Last year the line lost £80,000. Nobody knows the profits made by the previous owners but it is common knowledge that they made plenty profit. The cattle trade constitutes 50 per cent of B and I business but when the board were being set up other industrial agencies had representatives appointed by the cattle trade had none. I can assure the Minister that what happened last week would not have happened if the cattle trade had representatives on the board. The responsibility lies with the Minister for Transport and Power. CIE are on the brink of bankruptcy.

The Senator may not proceed on that basis. Departmental matters may be discussed on the Appropriation Bill but are not appropriate on this Bill or on the motions being taken with it.

I believe that a sworn inquiry should be held and the people made conversant with the circumstances in which these Northern Ireland cattle were shipped to the exclusion of ours. If only ten Northern Ireland cattle were shipped at the expense of our cattle it would be serious enough in the circumstances which prevailed for the last two or three weeks. It was an emergency. The whole thing undermined the confidence of the public in the B & I and after an inquiry into the facts as I have said, if they will prove to be correct which I am sure they are, the Minister for Transport and Power should be made to resign and make room for someone capable of doing the job.

That is the prepared statement of the cattle dealers?

It is my own statement.

I do not propose to deal at length with the Bill itself because most of the matters I wish to raise on it can be raised on Committee Stage. There is one matter I want to raise, because it is not in the Bill, but I must first of all make a brief reference to Senator Quinlan's remarks on the subject of education. While there is something to be said for his case with regard to the subsidisation of education, even on economic grounds, I do not understand why these subsidies should be confined to people well enough off to be paying income tax. It seems to me that the whole emphasis of what he said was in this direction.

The point was they are paying it themselves, not the Government.

I appreciate that in this country the pressures towards the continued subsidisation of better off people in education, housing and other areas to a much greater extent than badly-off people are very strong and that voices to the contrary are unpopular. I am speaking at the moment on my own account and not on behalf of any group but it seems to me that suggestions of further subsidies in this area should not go unchallenged. The whole emphasis is all the time on increasing tax allowances in order to transfer purchasing power to people well enough off to be paying taxes. The person who is not well enough off to be paying taxes gets, I think, about £16 per year per child at the most. The person paying tax gets £68 per year per child between his tax allowance and his children's allowance and the whole emphasis in this country is towards increasing these tax allowances. We are, in this respect, very backward in our thinking. The fact that in this country the Labour Party could have recently proposed further increases in tax allowances to increase still further the subsidy to better-off sections of the community indicates the extent to which we are dominated by the middle-class thinking in this respect, to the exclusion of any proper social approach to these matters. I simply want to voice a word of protest against Senator Quinlan's suggestion of continuing educational subsidies to the people who are already benefiting from high subsidies to the exclusion of people who are not well enough off to pay tax and who, therefore, get no assistance from the State.

Shall we fight it out on Committee Stage?

I should like to remind the Minister that last year I raised a question in relation to a type of insurance policy called an income policy where you insure your life so that, in the event of your unexpected demise, your widow will secure an income for a certain number of years, perhaps until you would have been aged 70. The Revenue Commissioners treat these policies as being policies involving payment of a capital sum and they add together all the annual payments one's widow might receive during the period of expectation of her life, as far as I can understand it, and levy estate duty on this huge capital sum which means that where one may have tried to provide £1,000 per year for one's widow, in order to get that £1,000 a year, the widow has to pay a very substantial amount. This seems to be something which is improper and the tax system needs reviewing in this respect. I appreciate that this is all tied up with concessions on the premiums paid on these policies but I think where the policy is to provide an income it would be much preferable that the premium would not be liable for a tax rebate, full tax to be paid on it, and that any pension should be payable free of tax, and certainly free of estate duty. Alternatively, it could be left as it is at the moment that the premiums are not liable to tax but that the income the widow would receive would be liable to tax in the ordinary way but exempt from estate duty. The idea of aggregating those sums for a period of 30 years and seeking estate duty on them, is, I think, absurd.

I pressed the Minister on that point and he said he would look into it. I see there is nothing about is in the Bill and I wonder whether he might like, in replying, to say something as to whether or not he has looked into this and whether it is something which he feels could be reformed by some method.

Before going on to deal with the economic situation generally, there are a couple of other general matters to which I should like to refer. First of all—and this briefly because there is a motion down on it; therefore, I do not wish to detain the House on it, and Senator Quinlan has already mentioned it—there is the question of our failure to take seriously the whole question of EEC membership. The Minister, by his interjections when Senator Quinlan was speaking, showed a disappointing lack of appreciation of the problem here. His interjections suggested that unless a journalist could quote by name the EEC official his reporting of what he has heard is not to be considered and has no standing.

My suggestion was that our sources are more reliable.

If the Minister believes that, he can believe anything because nobody who has visited Brussels in the last year, whether he is an Irish Press journalist, an Irish Times journalist, a neutral observer or a political observer—and there was a political team there last October— has come back with the impression which the Minister seems to have obtained from his so-called reliable contacts, that the door is wide open and we only have to walk in once Britain goes in. He suggests that the difficulties about our entry which have been aired in the Press recently and are shared by anybody who has visited Brussels are unreliable and that, in fact, no difficulties exist.

It was very difficult to explain my position through interjection.

The Minister will, no doubt, reply to this point. It will be coming up, I trust, in the next couple of weeks in a debate in this House when we shall have a chance to consider the Government's failure, and the Department of External Affairs' failure in particular, to handle this matter with any degree of seriousness.

I should like to refer to one matter which the Minister raised in his Budget speech and about which nothing more has been heard publicly. In his Budget speech he said that a review of the existing organisations of the Civil Service at administrative level was to be conducted by a special group combining representatives of the business and professional world and persons no longer serving who have had broad experience in the Civil Service and in State enterprises. It is more than three months since the Minister made that announcement and it is unfortunate that no more has been heard publicly about this proposal. Disturbing rumours have been circulating to the effect that pressure is being put upon the Minister to modify the form of this review so that, in fact, it would be more an internal review rather than one by an external group, including nobody at present in the Civil Service.

May I here and now scotch those rumours? There has been no such pressure put on me.

I am delighted to have the Minister's assurance. Perhaps then an early announcement will be made of the composition of this external review committee. I would hope also that the committee, in their deliberations, may have an opportunity of calling on the advice of expert consultants if they feel that this is desirable in regard to any aspect of the administration of the Civil Service.

The problems of the Civil Service are many. We have a Civil Service which is, in many respects, excellent and beyond rebuke in its incorruptibility and in its ability to carry on the administration of the country on traditional lines with a high degree of efficiency. But there has been criticism made by responsible people, from the Taoiseach downwards, of the Civil Service in its present form. The Taoiseach himself, speaking five years ago, quoted Professor Charles Carter as saying that while we had shown ourselves fairly good in framing national aims and asserting principles, we were not so good at preparing and executing specific plans—and he asked whether any defects in this regard were in the character of the administrative organisation through which the Government functions. Were all Departments of the Government making the best use of the resources of intelligence and organising ability which were available to them? Could the aims of the Government, particularly with respect to economic expansion, be more fully realised by changing the structure of the Civil Service and the established systems of administration, and would such a change ensure that the potentialities of the human resources available would be more fully exploited for national development purposes? Was there a problem of organisation that we had not yet faced or solved?

The Taoiseach went on in this speech to refer to his earlier suggestion of making every Department of the Government into a development corporation, adding that he had had in mind bringing about a change of attitude and outlook among civil servants, a new psychological approach to the Government's development responsibilities. In some Government Departments he said there was still a tendency to wait for new ideas to walk in through the door, to be passive rather than active, to await proposals from outside, to react mainly to criticism or to pressure of public demand and to avoid the risks of experimentation and innovation.

I do not know if there is anyone outside the Civil Service who is satisfied that this matter of turning Departments into development corporations has been fully carried through or fully initiated. It is certainly true that some Departments have greatly modified their attitudes with regard to playing an effective role in the development of the economy. It must be said that the Minister's Department is one of those which have given an important lead in regard to this matter but it has not been followed universally. A review of the Civil Service is very important and should be carried out by people who are orientated towards the needs of Ireland in this part of the twentieth century.

The NIEC have expressed concern about this matter. They have said that there was need for steps to ensure that all Departments play their full part in implementing the programme, which would require a realignment of policies and administrative practices that may not yet be completely realised in some parts of the public service. It went on to point out that in other countries, such as France, the main obstacles to effective planning were in the public sector and not the private sector. That has been the view of the NIEC and it is fairly close to the views expressed by the Taoiseach five years ago.

A Civil Service review should take account, as I have said, of the need for a Civil Service able to deal with the needs of modern Ireland. This may involve substantial changes. The present recruitment to the Civil Service is mainly through the executive officer level, an educational level which is below that of a university graduate. It, therefore, does not normally attract university graduates. Moreover, a study some years ago of this matter of recruitment established that because of the nature of recruitment and because of the examination methods employed 75 per cent of the entrants came from one group of schools which was responsible for one-third of the total output of schoolchildren, and many of our schools which contribute substantially to the other sectors of the economy through the calibre of the people they produce, were totally unrepresented in the recruitment.

This has not, to anybody's knowledge, notably changed since that study was carried out. This form of recruitment does not draw on other sources which could play a very important part in the role of the Civil Service. This shows the unsatisfactory form of recruitment. The form of recruitment with regard to the administrative officer entrants is somewhat different but the number of those entrants is very tiny compared with the total number of entrants. There is, therefore, no adequate effort made to provide the Civil Service with a sufficient number of people of the calibre required for modern conditions. There is a great need of people with a very high standard of qualifications in many fields.

We have not sufficient experience or knowledge of the Civil Service of other countries. I have been informed that in the British Civil Service something like ten per cent of the administrative grade are qualified statisticians. I give this figure with caution as I have not checked the precise figure but I imagine it is generally accurate even if not numerically precise. From what I know of the British Civil Service there is in any event a strong statistical branch in each department capable of handling data coming in and of mobilising it for use by those concerned with making policies. In this country, apart from almost a handful of grossly underpaid statisticians in the Statistics Office, there are no such people.

I can recall being asked some years ago by a very senior civil servant, an Assistant Secretary, whether certain information was available of a particular character in relation to external trade. When I explained that it was available in the external trade statistics he expressed surprise that these statistics were there. On another occasion when talking to a civil servant of senior rank, who was responsible for an important area of public activity, I discovered that the concept of economic growth was something he had never heard of. He expressed pleasurable surprise that the total volume of resources available could increase and that increases in resources for his activity were not necessarily at the expense of others.

I do not consider that this level of economic and statistical expertise is sufficient for the problems we have to cope with in this country. One serious problem in regard to this is that the Civil Service continues to exclude professional people from full participation in advising Ministers in regard to policy decisions they have to take. Professional advisers and professional staff in Departments, with rare exceptions, are not accorded direct access to the Minister to give the advice they should be allowed to give. The advice they give is frequently modified through the administrative arm and the Minister does not hear the full and true picture of the situation upon which he has to make up his mind. This is unfair to the Minister. The Minister should be given the advice direct. There was some assurance in recent years that the professional staff would be accorded a position of authority and that their advice would be taken into account as it should be. Although efforts have been made in this regard there is no sign of any fundamental change in the set-up which has excluded professional staff from playing the full role that they should play. I know that in regard to the Department of Education, you will find it hard to discover any teacher in the country who does not simultaneously respect the wisdom and understanding of educational problems on the part of the professional staff in that Department, and simultaneously abhor the views and the attitudes of the administrators through whom that professional advice has to be filtered to the Minister. I do not think this view which is so widely held among the teaching profession can be without foundation. We have an excellent professional staff there who understand the educational problems, who are well read and up-to-date and who keep in touch with educational developments elsewhere but who are increasingly frustrated because all their efforts to achieve something in the educational spheres are frustrated by administrators who know nothing about these problems, who have not studied them, who have got the experience but who are determined to carry on existing policies regardless of whether these are dangerous or damaging to the country.

This is an extreme case but I think you will find frustration in other departments also. You will find frustrated professional men who know what the problems are, who are anxious to do something about them but who are frustrated because their advice has to be filtered through in this way.

The Chair suggests that these are matters of administration which would more properly arise on the Appropriation Bill.

I accept the Chair's view on the matter all the more willingly because I had virtually finished my remarks on the subject anyway.

I shall, therefore, turn to the question of the national economy, a review of which is certainly proper to this debate. When I spoke here last year we had announced to us that there was an economic difficulty. The word "crisis" was not used, but there was a serious economic difficulty. In our debate we endeavoured to disentangle the causes of this and to establish what the difficulties were.

At the time I made a number of suggestions of what the causes might be. It was difficult at that time because we were very close to events and little information was available about what had happened in the immediately previous months. It was difficult to be dogmatic about it. A number of causes seemed to me to have contributed to this situation—among them temporary worsening of our external payments situation, which I felt was not in itself intrinsically serious but which had been seriously aggravated by all the inflationary pressures. Among the deficiencies of government policy which I referred to then was the lack of a credit policy up to May of that year, failure to control hire purchase and failure to control the development of the building industry, failure to control the Government's own current expenditure, the fact that the capital programme appeared to have got out of hand, and the failure to evolve an incomes policy.

I think that, on the whole, events have shown that this partial and premature diagnosis was reasonably sound. If I had to do it now I would switch the emphasis a bit. I am inclined to the view that I underestimated the direct responsibility of the Government in this matter. Now that we can look back over this period and see the full development of the situation, with accurate statistics for most of the period, it becomes increasingly clear that in 1965 we had an economic situation which was not serious in itself but which was seriously aggravated by the situation which was created by an imbalance within the country between the public and private sectors. To an unusual degree our difficulties have, in fact, been attributed to deficiencies in Government policy. I am not saying that because it is my job to get up and criticise the Government. Direct political responsibility for these matters was limited. I suspect it is true, though it may not be wise to say it, that the Government as such had as little to do with economic difficulties as they had with our economic progress in the previous years.

Nevertheless, the Government have political responsibility. They took the credit for the development of the economy in the previous years and they now have to accept the blame for what has gone wrong in the last two years.

The NIEC was asked to report on this situation. Senator Quinlan has already gone through the report and has emphasised some of the points made. There are, however, a few points I should like to make because I think this report is an important and valuable one and while I would disagree with it in some minor respects and feel that certain things were not stated adequately or could be enlarged on, I think it is a good analysis of the situation and of the problems to be faced.

The first point made by the report is the need for an incomes policy. That is now a platitude because everybody says there is need for an incomes policy, but it is none the less true. Much of our difficulties were started by the excessive ninth round scale in 1964. As I shall suggest later on, I do not think that this one round in itself was fatal. It was the Government's failure to control the situation thereafter and their insistence on inflating still further the dangerous situation, that created our difficulties in 1965. But certainly the ninth round started these difficulties.

This question of an incomes policy is something which has been put forward for some time past. The House will recollect that emphasis was placed on this by the Fine Gael Party during the election of 1965 when it was stated:

In the past the government has, when a crisis has been reached, and only then, attempted to act in the role of mediator. We intend to ensure that the government's role is not merely that of mediation in time of crisis, but that it plays a positive part in helping to bring about an orderly and sustained growth in wages and salaries and in maintaining harmonious industrial relations ...This wages policy must be supplemented by a policy for non. wage incomes...firstly by means of an active price policy and secondly by means of a policy in terms of total incomes.

It went on, having suggested a lead for "guide posts" for price behaviour as against the rigid price control the Government established, to say:

if despite this prices policy profits nevertheless rose faster than wages and salaries, taxation should be employed to ensure that such profits are brought into relationship with the general growth of wages and salaries.

That was the policy adumbrated at the time of the last election. It was perhaps timely and the suggestion of dealing with industrial relations problems before the difficulties arise rather than when the crisis is upon us, was particularly timely in the light of subsequent events.

On the question of an incomes policy, it is worth recalling that the suggestion of a plan to control the growth of non-salaried income is one which has been endorsed by the NIEC in its Report. That is something the Government should consider further. I shall at the end pose a number of questions to the Minister on the action he is taking in regard to the matters in the NIEC report. In fact, out of the report I have extracted 20 questions. The number is just fortuitious. They are all matters relating to recommendations made in the report in respect of which the Government have not yet taken clear action. The Minister will probably be able to tell us what he intends to do.

The report is concerned, in connection with incomes policy, about the evasion of taxes by business and professional earners. That is something we should do more about. It is suggested that where professional people have been suspected of evasion, and many of them are honest in their tax returns, but there is evidence that some others are not, this can be got over by giving to the consumer of the services provided a tax rebate if he submits receipts from the professional man concerned. These receipts could then be analysed by computers or calculating machines to determine the income of individuals providing these services and this might partly solve that part of the problem of evasion.

In this country we also come against the fact that very many people excuse themselves from the payment of taxation and return false incomes on the dubious grounds that the taxation system is ineffective because it permits evasion and because farmers are not subjected to income tax. I do not think either of these things justifies the evasion of taxation. But this opinion is widely held and it is something which forces us to realise that our tax system may not be equitable and very certainly there is a strong case for removing the exemption of certain groups from income taxation. This is something to which all political Parties will have to give their attention. I can quite see that no political Party is going to lightly adopt such a policy, but in my own opinion, and not speaking on behalf of any Party, this system which gives people the excuse that taxation is inequitable is one that we should think twice about.

The report emphasises the need for a consensus on differentials. This is our biggest problem of all. I do not believe that an incomes policy is our major problem in this country or that there is an insoluble problem as regards wage rounds. The trade unions have shown themselves, within the limits imposed on them by reasonable pressure from their members, to be reasonable and responsible people, and when it comes to a wage round, if both sides are prepared to negotiate effectively, out of it will emerge, on the whole, with the increasing realisation of economic realities, increased wages or salaries not impossibly beyond what the country can afford. We are moving towards a reasonable view on these matters, and the responsible action of the Irish Congress of Trade Unions, which I welcomed last year, in introducing the £1 a week limitation, has helped considerably in this direction.

Our real problem now is in the attitude which different groups take in addition to getting their share of the national cake arising from increased productivity and getting their share out of a national wage and salary round they must get something extra because they ought to be paid more than somebody else. In individual cases this view may be justifiable. It would be quite absurd that everybody's remuneration should go up in complete harmony without regard to changing responsibilities or past neglects. Nevertheless the extent to which people can convince themselves of the validity of two mutally conflicting conclusions, and the extent to which two groups of our people can convince themselves that each of them should be paid more than the other by just selecting arguments to suit themselves—the extent to which this happens and the extent to which there is a total lack of consensus on these matters, is dangerous and damaging. We have the mass of clerical workers determined to hang on to old privileges and past differentials and not to permit any catching-up by manual workers. We have the farming community who take the view that whether or not they produce more, they must be paid more, equally with all the other workers who are producing more. And we have the manual workers who are determined, as they are entitled to be, to improve their position from that which has traditionally been theirs, that of the underdogs. As between all these groups, not all of them can be right at any given time. I have my own views as to which is most right, which is of no importance, but unless people are prepared to accept some common view, not necessarily one imposed by compulsory arbitration, but to accept the common view of the community in these matters in some way, and give up their particular grievances and insistence on privileges, we are not going to get any kind of stable society.

There is a real danger that the clash between these three forces in the years ahead could disrupt the country in a way that nothing else could, and that a struggle involving the farmers, the clerical workers and the manual workers in which each section is seeking to improve its own position at the expense of others could lead to a clash of opinions which could undermine our institutions. The Taoiseach has recently, and rightly, warned about this problem, but the question of what concrete action is to be taken is one on which we will not all be in agreement. Certainly it is our major problem. The possibilities of economic growth are there, in the country, though there may be temporary setbacks, and we have the undoubted potential for expansion, but we can destroy these possibilities if we are going to become involved in a civil war about who is going to get new privileges or to hold on to old ones.

The report in dealing with this matter placed great emphasis on the undesirability of making distinctions between different kinds of workers. This is in paragraph 68 which says that some of the dissatisfaction with the present personal distribution of income "may be a symptom of a deeper sense of grievance about unnecessary and undesirable social and economic distinctions or about inequalities in opportunities for advancement. There are, for example, marked differences in the degree of economic security as between wage earners, salaried workers and the self-employed. There are marked differences in the incidence of incremental scales, the arrangements for sick pay, pensions and compensation for loss of employment and in the size and range of fringe benefits generally. Many of these grievances and inequalities in treatment could, with the application of imaginative thought, be removed and their removal would undoubtedly result in a sounder basis for the successful implementation of an incomes policy." That is something that we should turn our minds to. Many of these changes can be effected without any great cost, and the sense of grievance which would be removed would reduce tensions in our community.

There is one other suggestion, however, in this section of the report with which I am not entirely happy. This is the suggestion which relates to the disclosure of incomes in paragraph 61. It says "There is already available detailed information on wage rates and on many salaries, especially those paid in the public service. It may be desirable that this should be supplemented by adequate information about other personal incomes. One step in this direction would be to extend the present practice relative to disclosure of directors' remuneration in public companies to the total remuneration, including fringe benefits, of the top management executives."

The latter suggestion is one which I would be willing to endorse, and I would see no problem about it—that is that there is justification for more information about the aggregate incomes of company executives, but the suggestion that there is need for more disclosure about personal incomes individually is another matter. There is pressure, I know, from trade unions for greater disclosure of individual incomes, and this idea is supported by the argument that people have the right to know these things and that uncertainty about them creates rumours and dissatisfaction. I think that the evidence is all the other way. If you set out to disclose everybody's individual income you will get the kind of situation which was created here recently by the disclosure of the pension of one individual. We are a country whose besetting sin is against the tenth commandment, the sin of envy. That is the commandment which obliges us not to covet our neighbour's goods. This is very deep rooted in this country. We all have a tendency to tear down others and to try to bring people down to our own level, and this pressure to disclose individual incomes is really something designed not to avoid uncertainty but to arouse people's envy and to increase demogogic pressures of that kind. We have had the recent instance of the disclosure of the pension to be paid by the Government to a public servant, and the reaction which that created has confirmed me in my view that there is nothing to be gained by this disclosure of personal incomes. The reaction in that instance has been indefensible. Dr. Andrews has served this country well for a period of 40 years, a man with strong political convictions which I do not share and on which I disagree with him completely, but who has given devoted service to this country, and the pension which he has got is a normal proportion of the salary which he was earning at the time of his retirement. Proportionate to his final salary, the gratuity and pension are in line with those of any individual who serves in one of the State companies or in one of our large private concerns and had worked with them for a period of 40 years. If there is to be any criticism expressed in this case it should not be related to the pension and the gratuity. It should have been levelled long ago against the salary paid for the position and it should have been publicly uttered in Dáil debates. The salary was mentioned in the Dáil on several occasions and nobody queried it, and to complain because he has got the pension appropriate to the salary that he was being paid is something which I think is indefensible. The agitation which has arisen on this matter would suggest to me that this pressure to disclose personal incomes is designed to cause more trouble and not to minimise trouble.

The NIEC report moves on from the question of an incomes policy to a credit policy, and here it must be said that we failed completely in 1964-65. I am still somewhat puzzled as to the reason for the failure.

In 1958 a guideline for the control of bank credit was published by Dr. Whitaker. It was accepted and applied and it was to the effect that there should be a broad ratio of 30 per cent between the net external assets of the commercial banks and their deposits. In retrospect, to fix a definite figure like that seems to have been a mistake but it stood as a guideline for years and the Central Bank and the Government never made a move to change it. By early 1964 it had fallen seriously below the minimum ratio Dr. Whitaker had suggested. The correct thing then to have done was for the Central Bank to have said: "We believe the correct figure for the first half or the second half of 1964 is 25 per cent or 24 per cent." Some figure like that would have been reasonable. Instead, they let the matter go by default.

This is something to which attention has been drawn already. I referred to it in an article in 1963 and there was an OECD recommendation on it in their 1964 report on the Irish economy but no control or guidance was given as regards bank credit throughout 1964 or into 1965. The Central Bank has since issued a series of thoroughly confusing accounts of the action it finally took, each of which seems to disclose a slightly different picture from the previous one. From these it is clear in any event that nothing was done until 11th May, 1965, at which stage the crisis, if one likes to call it that, had reached its peak. This was indefensible. I do not know why the original figure was allowed to be dropped without being replaced by anything else. It has been suggested that the reason was that the Central Bank had no power to control credit and that each commercial bank has its own particular external assets. In order to get them to limit credit, by applying moral suasion, it would have been necessary for the Central Bank to have talked to the individual banks and to have differentiated between them which they would not accept until they were in real difficulties.

I do not think that is the way the Government should operate or the Central Bank should operate on behalf of the Government. To allow a situation to worsen, to refuse to act to control credit until things got so bad that people were asking to be helped out, is indefensible. In this instance, also, the Fine Gael policy put forward at the last general election was soundly based. At the time I had doubts on this point. I was not convinced wholly that the policy was correct in suggesting that the Central Bank should be given power to control credit. I was inclined to think that moral suasion was sufficient. It is now obvious that moral suasion was inadequate.

The Central Bank did not seem capable of exercising moral suasion and the result was that we had an expansion of credit which contributed, as the NIEC pointed out, to our difficulties. Now that the Central Bank have plucked up their courage and the commercial banks have got into such a mess, in future moral suasion might be adequate. But it was not adequate at the time of which I am speaking and the Government, in the circumstances, should have taken the power to control credit or to give the Central Bank power to control it.

The Taoiseach's reaction to the Fine Gael proposal in the general election campaign was to my mind irresponsible. He has not been in the habit of acting in that way or of speaking irresponsibly in recent years but his reply to the Fine Gael policy on this matter—to well thought out proposals for the control of credit—was to say that Fine Gael were threatening the depositors' rights to withdraw their deposits. It was an irrelevant remark which had no foundation at all. That was a lapse from judgment on the part of the Taoiseach of a seriousness that, fortunately, we do not often find him guilty of.

The third area in respect of which the NIEC have a great deal to say is the question of the public capital programme and, indeed, capital investment generally. They speak of the need to prevent an excessive growth of aggregate demand and they stress that this must be the responsibility of the Government. They put particular emphasis on this point. They say we need priorities here because there are no longer the resources available for all the different projects we want to undertake. They say there is need for a system of ranking and priority as between the different types of investment. It is quite clear to all of us now that we have not got the resources necessary to finance all the projects we want. Therefore, priorities are necessary, choice is necessary between alternative economic investments, some of which may be more effective than others in bettering our national output and employment. We have to choose also between social investment and economic investment. Heretofore we have had no system of choice in our capital programme as set out in the Second Programme. The system was a simple method of asking everybody how much money they wanted and then adding it up. The extent to which a control mechanism was operated was minimal.

Under the system operated, anybody looking for money was asked to justify his demand but, having justified it as being a reasonable demand, there was not attempt to establish priorities or to prune the programme. As a result, we got a mosaic of bits and pieces of investment which people in the public sector propose to undertake in the years ahead, without any ranking, any choice, any priority. A great deal of our difficulties have come from this source. The NIEC have said that the Government must establish a system of priorities in public investment and that the Government must publish a system of such priorities and review it from time to time as the need arises.

One of the great weaknesses of the First Programme was that the forecasting of public investment was extraordinarily inaccurate. The margin of error was as high as 500 per cent in the case of transport and I do not think that any of the capital programme forecasts were less than 40 per cent off target. Of course, in addition to trying to control and discipline the Programme, to have a system of priorities and choices, we must ensure that we expand the resources available to the maximum extent. We must apply to investment the proportion of our GNP that is necessary. In 1964 we applied only 19 per cent of our gross national product to national investment. Other countries at a similar stage of economic development, Italy and Austria for instance, applied 21 per cent and 24 per cent respectively, the European average being 25 per cent.

We are not investing anything like what we need to invest and our labour surplus problem is one which can be solved only if we achieve a certain average rate of growth. Some people think the percentage of gross national product invested will have to rise to about 30 per cent. Certainly we should not be satisfied until we have achieved 25 per cent.

We can also learn something from other countries in the distribution of our investment as well as thinking about the ranking of investment in an order of priority. Our distribution of investment is notably different from that of other European countries. In 1964 only 3½ per cent of our gross national product was invested in dwellings as against a European average of 6 per cent. In fact, there is no country in Europe which gave dwellings such a low priority as we did in 1964. I do not think that even with the increase in output which occurred in 1965— and certainly not since the decline in 1966—we have significantly improved on that peculiar position. Moreover, it is worth noting—and I think there is a lesson here—that whereas in Europe as a whole only 31 per cent of total fixed investment is in building other than dwellings, in this country it is 41 per cent, so that not alone are we not investing enough in dwellings but it can be said that we are going overboard on every other kind of building. It is not so much that we are allocating too much of our resources on building as a whole, although it could be argued that a slightly greater emphasis on plant and equipment than on building could be a good thing, but that the money is going on the wrong kind of building. Other countries have a better sense of priorities, putting dwellings higher on their list of priorities. Here, I think, we can learn something from the experience of other countries.

The NIEC Report has a good deal to say about building. It suggests that the growth of building in the last couple of years was one of the factors leading to over-strain in our economy and it suggests the need for some system of notifications of housing starts. One cannot emphasise this too strongly. Our experience in the last year in regard to the building industry and the Government's reaction to it has been a thoroughly disappointing one. The building industry and the Government had a consultation at the turn of the year and the building industry documented its case very well, was able to show what was happening at that time in the building industry and that a situation had arisen in which there was likely to be a downturn in building. There may or may not be money in the country to prevent that happening but the first thing any State should do in running its country properly is to face the facts and I am sorry to say the Government did not face the facts here. They were not prepared to accept the facts put forward, they insisted against the evidence that there would be a levelling-off in building but no worse this year, they refused to accept the view of the building industry and committed themselves firmly to the statement that in fact the level of activity in building would be maintained. That statement is included in the Progress Report on the Second Programme for Economic Expansion published in March last year where it was stated that the level of house-building in particular would be maintained in this country.

In fact, we now know that the building industry was perfectly right; there has been a decline in the number of private houses notified as being completed. There was a decline of 12 per cent over the period from November last to May of this year. In other words the Government's representatives were talking of a levelling off when the decline had already started. Moreover, it must be emphasised that these statistics on completions are subject to a time-lag. The figures for completions for any given month really refer to houses actually completed about three months earlier. As the building industry knew itself, the private housing sector has been declining since the end of last summer and yet in March of this year, so ill-informed were the Government on this, and so determined not to face facts, that they committed themselves to the view that there would be a levelling-off and no worse in the completion of houses.

Moreover, in February and March there was a sharp decline in the completions of local authority houses and although they recovered somewhat in April there was a significant decline over these three months as a whole. The fact is that the building industry is now running well below its rate of activity last year and this is something which the Government should have seen coming and, if they could not see it coming, they should have at least seen it when it had happened and done something about it.

The reason for their failure to do so is, first of all, a reluctance to face facts but also the fact that the statistical material is defective in a number of ways and that nothing has been done about remedying this. But what is particularly disturbing here—because it strikes at the whole root of the whole control mechanism in the public capital programme—what misled the Government was that they are paying out this year slightly more money for building than they paid last year. They were so proud of this achievement that they would not face the facts. Even when it was put to them again and again with concrete evidence, they would not face the fact that a very high proportion of the money for this year would be needed to pay the unpaid debts for last year's building. That statement was put to them by the building industry; it was rejected and yet we know now in the SDA loans that 90 per cent of the amounts allocated this year are in respect of commitments already entered into and in many cases for houses already completed. It may be that that cannot now be avoided but there are a number of things to be said on this.

First of all, the Government ought to know what is the relationship between the money it provides and the investment activity which this money is related to; no Government should be in a position of purporting to believe that because it was providing as much money, that this money was reaping the same benefit this year, nor should they be unaware of the fact that a large part of this money was in respect of building already completed. That local authorities had got deeply into arrears in regard to paying off the bills of the previous year is a serious reflection on the whole control mechanism for the capital programme. The control mechanism is one which is simply an accountancy mechanism, when they agree to spend so much and somebody merely certifies that it has been spent. If any private industry had such an extraordinarily haphazard and incompetent system of controlling its capital investment, it would be subject to Government strictures. But the Government itself in operating this control mechanism has been thoroughly inefficient and this is something which must be remedied. I believe something is now being done, belatedly, about rectifying this situation but it will not be effective until something has been done about improving the building statistics.

Again, the absence of statisticians in the Government Departments has been a serious problem. The fact is that there is ample material available from the building inspectors who go out inspecting foundations being laid, roofs being put on, and so on, but nobody has ever bothered to extract this information from their notebooks so that the so-called starts and completions are not related to the physical activities involved. We are still without any information now because of the serious problem of getting adequate statistical data. The building industry is very important to this country. Instability in the building industry communicates itself to other sectors and the fact that we should not have available to us statistical data and that the Government should make statements about building activities which have been out of date for some time, is a deplorable position to be in. It all goes back to the lack of expert people and people of expert knowledge in Government Departments capable of handling these figures.

It is worth saying something about what, in fact, went wrong with the capital programme this year. I think I heard a speaker earlier on asking the Minister about this but in any event I should be glad to have explained to us why there is not sufficient money available for capital investment. There is an explanation for this and I think it is a great pity that the Government, for their own sakes and for the sake of the country, have not attempted to explain what has been happening to our finances. It would be better that the Government should give a full and frank explanation for it even if it will then be seen that part of the trouble is their own fault.

The lack of confidence in this country at the moment and in the economy is a most disturbing feature of the situation. Some of this is inevitable but not all. If the Government were doing their job for their own sake and for the country's sake they would be maintaining confidence. In fact, our economy is sound. Mistakes have been made and those have involved trouble for a lot of people but, fundamentally, our economy is sound. But nobody listening to Government speakers would realise this.

I shall, if the Minister does not mind, do what he has not done and he can correct me if I am wrong—that is, tell him what has gone wrong with the economy. The whole problem started in 1964 when the public capital programme was increased by a somewhat abnormal amount. It was increased by £18½ million as compared with £14 million in the previous year and £8 million in the year before. The problem was not so much that the increase was very large but that such a high proportion of the increase had to be provided by Exchequer financing. Apart from an increase of £5 million which was for government building and had to be got from Exchequer borrowing, the remaining £13½ million was for local authority and state enterprise investment and a good deal of this should have come from local authorities and State bodies but was not got from them. This meant that in one year the Government had to find £15 million in Exchequer borrowing for increased investment. The previous year the increase in Exchequer borrowing had been only £5 million.

You suddenly had this jump from £5 million to £15 million in the amount of money the Government had to raise. This is an increase of 30 per cent in one year. That is something which should have sounded a warning note. The fact is that such an increase could not have taken place in this country at that stage except through inflation.

The Government got the money in 1964. It is a great pity they did. The fact is that that year, because of an abnormally inflationary situation, for which it should carry some of the blame, the Government were misled into thinking that the country could be carried on in that way. Small savings jumped in that year abnormally from £7 million to nearly £10 million. Departmental funds were able to contribute £4 million extra because in the inflationary conditions of the time they were not needed to support the market value of Government stocks. And because of lack of credit control exercised by the Central Bank the Government were able to raise another £9¼ million in Exchequer bills. In that way it got the amount of money it needed but that kind of abnormal circumstances could not continue.

In the next year, 1965-66, in fact, there was only a small increase in the capital programme. This is what has puzzled people. The crisis came in 1965 but the real trouble went back to 1964 when there was this vast increase. The real problem in 1965-66 was that the capital programme was too high to begin with, having been raised to an impossible level in the previous year and a level which no country in normal circumstances could finance.

On top of this, foolishly, the Government, instead of raising taxation to pay for the £2¼ million Market Development Grants, decided to finance these grants by borrowing. Moreover, in that particular year the current deficit doubled from £4 million to £8 million. As well as that, we had to contribute another £4 million to the International Monetary Fund and similar agencies. The Government also found themselves, because of the credit squeeze in this country, having to repay £3 million which State bodies had raised by borrowing and it also happened that £5½ million was required for repayment of money borrowed from the public by way of Exchequer Bills. They thus found, that because of the credit squeeze, a lot of demands were made on them by people who wanted money back which they had lent to the Government. In that situation when at the same time small savings dropped and the Departmental Funds provided less money because they were now needed to support Government Stocks, the Government found that they needed £22¼ million more but had £12½ million less available. They thus had to find £35 million extra suddenly from other sources.

This situation goes back to the failure to recognise inflation in the first instance in 1964. It goes back also to the size of the capital programme. We have here defects in planning which we can watch in the future. The first economic programme ended in April, 1964, and Part II of the Second Programme which contained the capital programme, was not announced until July, 1964. Therefore, this particular capital budget for 1964-65 fell between the two programmes. I suspect that what may have happened is that whoever was compiling it had no programme guide-line to go on and as a result we fell between two stools. Our capital requirements jumped to such a level that it was beyond the means of any normal year of the mid-1960s. That is what has caused us to be in the difficulties we are in today.

These difficulties arose because the capital programme targets were set too high. This grave situation was caused by our falling between two programmes, and by our failure to recognise inflation when it was on top of us and not doing anything about it. We have a lot to learn from this for the future as regards our planning. We will have to rethink the whole question of capital programmes in our programmes for economic expansion. In the first instance it was not appreciated what money could be raised under normal conditions, because the programme was drawn up in conditions of inflation. This should have been recognised. Secondly, the capital provisions of the Second Programme only provide for capital investment. In fact, what went wrong last year was that so much capital was needed for non-investment purposes. There was no provision in the Second Programme for money for such things as a Budget deficit. No provision was made for subscribing money to the International Monetary Fund when increased subscriptions were due. No provision was made for having to repay debts when people wanted their money back. When we are thinking of a future economic programme we will have to think not only of money needed for investment but for those other matters which I have mentioned. We cannot regard a programme as being pretty well on the target and yet be £23 million out because we did not know of some things we would need money for. We need to think about this in the future.

Our difficulties are not only on the capital side, but the difficulties on the capital side are such that they have forced the Government to extreme measures to avoid a Budget deficit. In other circumstances the Government might have been justified economically in incurring a small deficit that could be financed by borrowing. But the Government simply cannot afford that at present. It cannot borrow enough for the capital programme. It is that stringency which forced the Government at the cost of two Budgets to raise taxation to a disproportionate level in this country. The Government dare not risk the possibility of a budget deficit which it could not finance from borrowing because it would not just be able to get the money as things are.

The current Budget is something which also needs to be looked at. Here the programme has been ignored. On the capital side what went wrong was that the target was too high for the early years of the Programme. On the current side I do not think that targets were inappropriate. They were reasonably well worked out in total, although I would disagree with the allocation under different items. But the total level of money to be raised for current expenditure was quite reasonable. What has gone wrong is that the Government have totally ignored their own programme.

The extent to which it has ignored it is something about which I am very curious. In no Government publication so far has there been any reference to the extent to which taxation or Government current expenditure are in line with the targets of the Second Programme. There are two possible explanations of this. One is that the Government know they have ignored the targets and are trying to hide this fact and the other is that they do not know and have not even looked to see. I have a suspicion, and I am open to correction, that the Minister has not kept in touch with our progress in relation to these targets, that he may not be aware of the extent to which our current expenditure is running far beyond the level it ought to be running at if we were on target according to the Second Programme.

I would ask the Minister by how much we are beyond the target this year on the assumption that our current expenditure and taxation should be running steadily up towards the 1970 targets. Does he know? I suspect he does not even know. I suspect that tables showing the targets each year are not produced and that the current figures are not matched against these targets. If they are not, they ought to be. That is something the Government has not published but which it ought to mention in its Progress Reports.

I can tell the Minister what the answer is, at any rate I can tell the Minister what my calculations are. They are difficult calculations and I may of course have gone wrong. They involve converting current figures into the 1960 money values.

We should be spending this year £210 million on public authorities' current expenditure in 1960 money values but the Government now intends to spend a figure of £230 million including the extra buoyancy of revenue referred to in the Minister's second Budget speech. That is £20 million more. We are ten per cent above target. The burden of taxation should have risen annually by a small amount each year from 24¾ per cent in 1963-64 to 26¼ per cent at the end of the period. The burden of taxation has thus rocketed and in the first three years of the Programme we have seen a greater increase in the burden of taxation than what the Minister had proposed to impose in the whole of the Second Programme period. This is now absorbing over 26¼ per cent of our GNP, and I suspect in 1960 money terms it is nearer to 27 per cent. The burden of taxation has thus risen two and a half times as rapidly as was forecast in the Programme. I am prepared to hear the Minister in defence of this but what is indefensible is that these targets are never looked at and that the Government seem to be unconscious of the fact that targets have been ignored, as indeed they have been ignored by the Government which has never said anything in public or in published progress reports on this subject. The Department of Finance say a lot about the targets of other Departments in the Progress Report but never anything about their own targets for taxation and current expenditure. I hope the Minister in next year's Progress Report will ensure that all the targets will be shown and that the position as it should have been in 1966/67 according to the Programme will be shown and the actual figure beside it and that the Minister will say why the two figures are different.

I am not suggesting that departures from the targets are necessarily wrong. These targets are guidelines and everyone recognises that we will depart from them in some respects. But unless we accept them as guidelines and unless we examine how we depart from them and face up to the facts and to the implications of these facts, and in particular to the fact that each bit of the programme is interdependent with each other bit, then the programme at this stage falls to the ground.

The programme at this stage is something from which we have departed so far in so many directions that it has in fact virtually fallen to the ground. Employment is below the starting point instead of 35,000 above it. National output is also below the point we should be at. Taxation is 10 per cent higher than it should be. The amount of current Government expenditure on borrowing is £20 million above what it should be. All these figures are out of line in some cases by amounts which are not just temporary fluctuations. It is no good saying that the present level of taxation is a temporary fluctuation. We have shot ahead of the 1970 target already in the level of taxation. The Minister cannot insist that this is a temporary fluctuation. The fact is that these deviations have occurred. These deviations are serious. Their implications have not been examined and their effects on other aspects of the economy have not been looked at. It is these failures that have got us into difficulties. If it had been possible to maintain the programme it would have given a pretty steady economic growth over the period. Things went wrong but when things go wrong adjustments can be made. What is wrong is that we have a programme and certain things are being adhered to and certain things are being ignored. The whole thing has got out of gear and out of focus and is inconsistent one part with another and the failure to treat the programme as a framework for planning has given rise to our present difficulties.

I suggested a few moments ago that the Minister was not aware as to why we were £20 million out in the level of current taxation. I would like to help him by telling him. There are three reasons fundamentally. First of all, due to the economic difficulties we are going through our national output is below target level and, of course, where a given level of taxation is imposed on the national output if the national output is below target, taxation revenue will be correspondingly down. The Minister is short £5 million because we have not achieved the target for national output. That is a temporary fluctuation but it means the Minister is £5 million short. In order to spend the same amount the Minister has to tax more heavily. Secondly, he has to face the £10 million extra for the status increase in the public service. The Minister has tried to defend this increase and I am not going to attack it but I shall pose the proposition that either those increases were justified, in which case they should have been provided for, or they were not justified in which event they should not have been paid. What is unjustifiable is to do what the Minister did, to make no provision and then when the civil servants look for an increase to have to give it to them. This is the antithesis of planning. I am prepared to take the Minister's word that this increase was justified. My own feeling is that civil servants had fallen behind other sections of the community and if the proposition is accepted that civil servants must always maintain their lead over others in the community who had been catching up with them, then I suppose on that basis the increase can be justified. I am only saying that if the Minister takes the view that this increase was justified he ought to have provided in the Second Programme the £10 million needed for it. No provision was made and he is now faced with consequent difficulties. He is £5 million down in revenue as compared with the target level and he has £10 million extra expenditure because of the status increases. The other £5 million of the £20 million disparity vis-a-vis the target arises I suspect because he has allowed expenditure on subsidies to run away ahead of targets. Here we look like being in serious difficulties if we continue to expand subsidies at the rate at which we have been doing.

There is one further complication in this, and that is the most undesirable practice of Ministers—I am not particularly blaming the present Minister, it goes back to earlier Governments also—of introducing Budgets in which a large part, and indeed even the majority, of the extra expenditure imposed by the Government has to be found in the following financial year. This system of bringing in social welfare benefits and, in order to give a bigger increase in the year than you can afford, to postpone it to later on in the year and give a larger sum, like, say, 10/- a week in January of the following year, because you can only afford an average of 2/6 over the whole year, has got us into difficulties. We are in the position in which the Minister finds himself in now, that in order to meet commitments entered into under a previous Budget, the money has to be found in the next financial year, and before he can do anything in the new Budget he must increase taxes straight away to meet the previous commitments. That is most undesirable, and though I know that it may have been done by other Governments, and that a Fine Gael Government could no doubt be tempted to do it also under pressure, it is still a bad, undesirable and dangerous practice. It worked in this country for some years because we had a buoyant economy and the Government could rake the money in, but then came the day of reckoning when the economy slowed down and the Minister found himself committed to very substantial sums to be found in the present financial year not because of this year's Budget but because of last year's, and to which he had committed himself in the hope and the belief that the economy would be buoyant this year, but the money was not there and taxation has consequently had to be imposed at a much higher level than it ought to have been. This is a defect in our financial management which has led to a significant aggravation of our difficulties.

Our whole taxation burden in this country is very odd when looked at in an international context. For example, we raise in direct taxation 5½ per cent of our national output while in comparable countries it is 17 or 18 per cent. In indirect taxation there is no country in Europe with as high a level as we have. The figure here is 16½ per cent—it was that in 1964 and I cannot say precisely what the figure is now after the last three Budgets we have had in 15 months but it is certainly much higher, but in any event at that time it was the highest figure in Europe. We must consider this. I know the attraction of indirect taxation, of broadly based taxes like turnover tax and selective wholesale tax, which have advantages where nobody is prepared to impose income tax on the whole community, but the situation in which our tax burden is completely different to anywhere else, with direct taxation less than one-third of what exists in comparable countries, is so peculiar that it seems to be something that we must look at.

Would the Senator tax farmers?

The Senator has his own views on this matter which he does not wish to commit anybody else to, but he believes that income tax should be imposed on those farmers who have large enough incomes to pay it.

Would the Minister tax farmers?

I have given my personal view. Would the Minister care to give his personal view?

I do not like to see prosperous farmers getting away without paying any income tax.

I am glad that we have common ground, and if we can bring others with us all will be well.

The conclusion I come to from all this is what I started with, that the economy is fundamentally sound, that our difficulties have been caused by mismanagement, by misunderstandings of targets, in some cases by failure to maintain targets and in others by failure to appreciate the significance of an inflationary situation. Some of these failures are ones which do not necessarily imply blame on anybody. Another person in the same position might have made the same mistakes, but we must recognise mistakes and failures when they occur whether or not we apportion blame regarding them.

It seems to me that our economy is fundamentally sound. Last year's balance of payments difficulty was, as I was convinced at the time, purely temporary and self-correcting, and it has corrected itself with such speed that with the Government's deflationary tactics it has reduced our deficit to less than £20 million as against the target of £28 million which was envisaged last March, which is some indication of the extent to which this self-correcting mechanism was at work. The Government in its Progress Report suggested a £28 million deficit as the target for the current year, but some recent figures have shown that the deficit has fallen so rapidly because of a combination of the self-correcting mechanism—because last year's deficit was a peculiarity—with the deflationary efforts of the Government, that so far as our external deficit is concerned we have deflated by some £10 million more than the Government wished to do in March. While it is probably desirable to cut the external deficit during the year down to below £28 million, because it will begin to rise in the latter part of the year, we have possibly overdone this. However, I am coming back to that in a moment in concluding.

I want to say now that we have to improve our planning mechanism in a number of ways. Control of the capital programme has to be greatly improved, and there must be a proper correlation between financial control and physical investment. This was the great defect in the building industry, and I hope that the Department of Finance will achieve effective control and an effective information system so that we can know how our physical investment is going on and not only how much money is spent in investment policy.

We need also a monetary programme. One of the defects of the Second Programme for Economic Expansion was that it said virtually nothing about credit, about monetary policy, banking or anything like this. This had been raised by various people over earlier years, and it had been my understanding that the reason that nothing was said about monetary policies was that it was going to be dealt with in the Second Programme. But the Second Programme had nothing about it, and the absence of any credit policy or monetary or banking policy aggravated our difficulties. Here we need a long-term monetary programme in relation to the Second Programme so as to give some idea as to what volume of increased credit will be required during the remaining years of the Second Programme. The absence of information of this kind is a serious deficiency.

We must make progress with an incomes policy. The Government here has the responsibility, but one has the impression that while they are concerned about industrial relations and things like the need for increasing production, an incomes policy is something that they seem to think is somebody else's problem. The very odd remark made by the Taoiseach, referring to an incomes policy, whatever that may mean, does not suggest a Government with definite clearcut ideas and intending to do something about them in the field of Government policy. We must have some leadership from the Government in this field. The principles have been laid down in the NIEC report and they have done their job. It is for the Government now to work with the different sections of the community to implement those ideas and to give the necessary lead.

I said earlier that I hoped to ask the Minister some questions. The NIEC Report contains a series of recommendations, and in putting down the motion we are debating as well as the Finance Bill the idea was to give the Minister an opportunity to say what he is doing about those recommendations. When I ask the Minister to say what he is doing about the recommendations I hope that we are not going to receive the general waffling type of answer that the matter is receiving consideration and the Government are looking into it. I would hope that the Minister would give the House the courtesy of a frank and clear answer to these questions on the action being taken on specific recommendations which the report contains. It is all very well to say that the Government have received a report like this and to issue an anodyne statement that the situation is being studied and that recommendations are being sought from all the Government Departments concerned, but what we want is to be told what action is being taken on the specific points raised.

One of these questions is this. We have been told by the Taoiseach and by other Ministers recently that a review of the targets under the Second Programme is under way. I think that this is necessary. Some of the targets were mistaken, others have not been maintained, and the programme is not now hanging together properly because inconsistencies have grown into it which need to be ironed out, and we must have another look at the targets. I should like to ask the Minister a simple question as to when that review will be ready and published.

Two, could the Minister assure us that in future progress reports issued by his Department, all the quantitative targets contained in the Second Programme will be referred to and that the progress made will be measured against the targets themselves? The progress reports we have had are very useful and very interesting but they are not progress reports on the Programme. We have such things in the agricultural targets, for instance, as specific targets such as wheat, cattle, pigs and so on. These are not mentioned in the progress reports. We have targets for current public expenditure and for taxation, to which no reference is made in these progress reports. The progress reports we have been getting are reports on the economy, not on the Second Programme, which seems to have got lost or not to be remembered by the Government.

I suspect that when the Government adopted the Second Programme they did not know what was in it. They were presented with the First Programme when they were bankrupt of ideas and they accepted it gladly. It was a simple, straightforward document advising more capital expenditure and certain changes in policy and the Government, by and large, understood what was involved in it. Then the Second Programme came along. It was totally different in character, involving specific quantified targets for the main elements of output and employment. I attended the press conference at which it was introduced and I asked the Taoiseach what he proposed to do about reviewing progress made on the Programme—the whole position of the Programme from year to year. The Taoiseach's reply was very disappointing and I remember that the journalists looked at each other in surprise. He told me it would be a great mistake to look at the Programme regularly. "Most unwise" were the words he used. Of course, the fact is that the Taoiseach did not understand what the Programme was all about. He understood the First Programme but he did not understand the Second Programme, involving quantified targets in each sector. Each Minister still gets up and speaks about his own sector without regard to the targets for this sector. The Minister for Agriculture; for instance, will talk about agriculture until the cows come home without referring to targets in this sector. The Civil Service or the Government did not really understand what the Programme was about. I agree that the Economic Development Division of the Department of Finance were very well versed——

They are civil servants too.

I have already commented on the wide variation in the calibre of different Departments and this is one illustration of that. The Government have not really been orientated to this type of programming. They must realise, however, that they are accountable for the progress made When the Second Programme was introduced with a flourish of trumpets the Government expressed great pride in it. They had good reason for that. They were fortunate that it was presented to them when it was. I smile, however, when I recall the pride they took in it and the credit they took, forgetting at the time that in three or four years the targets might go wrong and they might be asked to explain why they went wrong. The Government thought the Second Programme was another general economic development project like the First Programme and did not examine it in a manner that would have enabled them to understand what it was involving them in.

I am asking the Minister whether he will tell us that the next progress report in the spring of next year will list all the targets, where we have deviated from them and why, and not give us a general essay on how the economy is doing. I am also asking him will he give us an indication of the monetary and financial implications of the Second Programme in view of the difficulties that have arisen through the absence of such a programme and the failure of the Government to appreciate the significance of the financial side—a failure not confined to the Government, and which I personally shared. This failure has been one of the weaknesses of the Programme and we cannot go through the rest of the period covered by the Programme without having such a monetary programme. These are three questions I am asking personally. The remaining questions I shall ask the Minister are based on the NIEC Report. My fourth question is what action the Government will take regarding an incomes policy. Reading the Report of the NIEC, it is quite clear it is a report to the Government telling the Government what needs to be done. I do not want to hear from the Government what they will do about industrial relations or the trade unions. I want information on their intentions with regard to an incomes policy. In the Report, there are specific recommendations with regard to an incomes policy, some of which I shall now advert to.

There is also a recommendation about disclosure of the aggregate profits of industry, not individual firms, and of the aggregate profits of private firms. It is recommended in the Report that the aggregate profits of individual groups and of private firms should be disclosed. Can we expect an early statement on the action being taken on that? My sixth question is what is being done about extending the role of the Fair Trade Commission. My seventh question is what is being done about taxing profits to keep increases in profits in line with wages and salaries. There is a recommendation in the report for a dividend equalisation tax—that profits should be taxed so as to keep the general increase in aggregate profits in line with aggregate increases in wages and salaries. My eighth question is what is being done about disclosure of total executive remuneration. This is recommended in the Report. Ninth, what is being done about the recommendation that there should be in future a statutory obligation on self-employed people to maintain records of their earnings to assist in ensuring against tax evasion? This appears an eminently sound recommendation. I am disappointed that this and so many other recommendations have not been mentioned on this Finance Bill. My tenth question is what is being done about tax benefits in kind. Question No. 11 is on the additional measures which are recommended should be taken about tax evasion.

Then I come to question No. 12. In paragraph 64 of the Report it is stated that where the transfer of purchasing power to the agricultural sector is effected through price increase, it can be achieved only if it is accepted by the non-agricultural sector and not used to support demands for higher incomes. The recommendation is that decisions about the current level of support for agricultural income would require to be taken at the same time as, and be recognised as an integral part of decisions concerning non-agricultural money incomes. What happened in 1964 was that the general wage round was followed by such a sharp increase in farm incomes that a very large part of non-agricultural money incomes was absorbed and this gave rise to intense dissatisfaction among industrial workers. The failure to co-ordinate the two sectors led to such a sudden redistribution that it caused considerable trouble and unrest. Therefore, the NIEC recommended that farm income decisions should be taken as an integral part of incomes generally. This was not done this year. We saw how the Government carefully held up news of the increases to farmers' incomes until just before the Presidential election.

Question No. 13 is what is being done about removing distinctions and inequalities in opportunities for advancement between manual and other workers. Are the Government going to give a lead in this respect? The Government have many manual workers in its own employment. Will the Government give any lead in this respect and remedy some of the inequalities and class distinctions here which, as this Report says, causes such dissatisfaction out of all proportion to the monetary cost involved? What action will the Government take on that?

Point No. 14—what action are the Government taking on the recommendations in paragraphs 71 and 72 of that report that investment projects should be ranked in a proper list of priorities so that the rate of return on them could be calculated and that these returns should be published? When can we expect this publication; is work in progress on it? When will we get it and what has been done about calculating the rate of return? We need full calculations on the return on investment in this country in different sectors and the variable returns secured show how defective our investment planning is. For example, as I pointed out in an article the other day, in the agricultural sector the return being secured in that area on investment is about one-ninth of the return in industry.

Do the Government propose to undertake any review, as recommended by the NIEC, of the return being secured on investment? Will there be any investigation to find out why the return on the Government's investment in agriculture, which accounts for something like 80 per cent of total investment in agriculture, is so low compared with other sectors? What action is the Government taking on that recommendation in paragraph 71 of the Report?

Point No. 15 relates to paragraph 74 of the Report which calls for adequate statistical information on building and for the compulsory notification of building starts. What is happening about that? What action has been taken to improve statistics on building? What consultations have been undertaken with the building industry in this matter? When can we expect results in regard to this recommendation? In paragraph 74 there is a recommendation that limited temporary controls in building should be introduced, if necessary, for certain periods in order to prevent an imbalance in the development of building. This is not an immediate issue; the problem has been to increase the volume of building at the moment but, nevertheless, it is something on which one would like to hear if the Government are prepared to take action.

In paragraph 75 there is a recommendation that we should introduce some kind of regulator in the building industry, similar to that in Sweden, where firms are allowed to set aside certain sums free of tax as long as they lock them up in a particular way so that they can be released only when the Government wish them to be used to keep the building industry going. It has been estimated that of the non-dwellings building investment in Sweden in the last recession, 30 per cent of the total was financed by this regulator fund. In that way, we would be helping the building industry had we built up such a fund. There is the recommendation; what action will the Minister take about that recommendation?

The 18th point is that there should be a comprehensive and continuing study of these problems by the Government in the building industry. What steps have been taken to institute a comprehensive and continuing study, as distinct from the annual reviews in connection with the Second Programme for Economic Expansion.

The 19th item relates to a whole series of recommendations that deficiencies in our statistics should be improved; they are listed in the Report and I shall not detain the House with them now. There are the delays in the publication of figures, and cases where figures of profit should be available and are not; these are specific recommendations. What action have the Government taken or will they take to achieve these improvements in our statistics?

Finally, there is a recommendation in regard to the extension of credit policy. The Government have not got the power to control bank credit but the moral suasion the Central Bank exercises with regard to the commercial banks should be extended from the commercial banks to other institutions. What action will the Government take on the matter of extending these credit restraints to other financial institutions?

Apart from the first three items I have mentioned, the others arise from this NIEC Report. The Report was published last November and I do not think it is unreasonable, seven months afterwards, to ask the Government for specific clear answers as to what action has been taken on those 17 recommendations. If the Minister is not prepared to give those answers, then it is clearly a waste of time on the part of the council making these recommendations. I hope he will answer these fully and not seek to evade with generalities.

In conclusion what are the current economic prospects at the present time? I have the impression that the Government may have over-deflated the economy at this time. There is always a risk of doing this; there is always a tendency to make sure you get things right when they have gone wrong, and to take unduly severe action. In so far as that may have been done, I would not criticise the Government severely for it because it is so difficult to judge these things rightly. If the Government have gone wrong, it is in any event by a pretty narrow margin.

We note that the special import levies are being removed but more important perhaps for the economy would be some easing of the credit restraints imposed by the Central Bank. In the first four or five months of this year personal consumption has been at best no higher than last year. The target was a 2¼ per cent increase in consumption yet for nearly half the year consumption has been at the same level as or perhaps even lower than last year and it is clear that we have depressed consumption below what was necessary.

Imports have been running five per cent below last year. Here again we seem to have gone beyond what was necessary as a five per cent increase in imports during the year was envisaged. The external deficit itself is now running almost £10 million below the target figure, for the end of the year, so rapidly has the situation been remedied. However, by the look of the components of the detailed figures published to date, it would appear that a great deal of this is due to a running down of stocks which can readily be reversed once we move out of our present difficulties.

There is evidence here of a greater degree of deflation of the economy than was thought necessary. The building industry was to be maintained at the same level of activity as last year and it is now running well below that. Again, we seem to have gone further than was intended or needed.

The external assets of the banks had been rising very sharply and this has been due both to the improvement in the balance of payments and also, unexpectedly, because of an increase in the first quarter of the year of the net capital inflow of about £8 million. I wonder why that happened? Is it purely fortuitous, when further restrictions are being imposed on capital exports to this country from Britain? There is clear evidence that we have gone further than was necessary and that some kind of easement of the present situation is now possible. I should like to know if the Government are discussing with the Central Bank the possibility of easing the credit restrictions because, as they stand at the moment, they are keeping this country at a very low ebb indeed. The Government propose to take £18 million of the £23 million increase in credit which is all the Central Bank at present proposes to permit this year. That would leave an increase of only £5 million for credit for the private sector which in the last 12 months has had a credit reduction of £7½ million. Therefore, if the economic situation permits an easing of credit restrictions, it would greatly help the private sector if some relief were given to them when the banks reopen. Some increase in credit availability should definitely be given to the private sector which has been so stringently tied down as a result of credit restrictions during the past year. I should like the Minister to do something in this regard. Ministers tend to deal with generalities and do not deal with plans for the future.

At the moment the Minister does not seem to have confidence in the economy. We have faced serious difficulties in the last year but they have been temporary difficulties. The Government have not succeeded in maintaining the people's confidence in the economy and in their own administration. I would have thought that they would have done their best to get the people to have confidence in them. We are at the worst of the situation at the moment. Our building programme is down, no credit is available and things are at their worst, but there is no reason why the economy should not recover from now on and the Government should say this.

It is the Government's duty to give a lead in this regard. I am sure the Government have confidence in the economy. I know that our position last year has been a shock to the Government. They thought that the position during the years 1958 to 1964 could continue indefinitely and there was a degree of euphoria which the Government encouraged and they are paying the price for that now. But they should not be so depressed by what has happened. They should have confidence in themselves and their administration and they should help the people to have confidence in them. They have failed to get it across to the people that this is a temporary situation and that from now on things should begin to improve.

It is a pity at this stage in our development to encourage this pessimism which has been abroad in recent times. People are probably thinking of the depressing time which we had in the 1950s. I am not at the moment criticising one government of that period more than another. We had successive governments during that depressing time. But despite the fact that things improved after 1958 and that we had five years of economic growth there is still this uncertainty. It is the Government's business to give a lead to the people in that regard but the Government have not got confidence in themselves at the moment.

I listened rather anxiously to Senator FitzGerald in the last part of his speech regarding confidence in the future and the attitude of the Government towards it. I want specifically to say that we have confidence in the Government and in the future of this country. Indeed, Fianna Fáil have had that attitude since their very inception. There was a time, not so very long ago in the history of our country, when this despondency and depression to which Senator G. FitzGerald referred were very common in the minds of many of the people. The reason for that was the handling of our affairs by the Government then in office. The position has changed immensely since then. When the Fianna Fáil Government came into office in 1957, without putting any specific policy in front of the people at that time——

They had not got one.

The previous Government were in office for only 2½ years and they tried every trick in the bag to remain in office. When they had spent everything they could get their hands on, including selling the Constellations, letting the factory in Inchicore go and various other means in an endeavour to salvage the sinking ship they bolted to the country and left the mess behind them, despite the fact they had a majority of 14. That is the sorry history of that time. That was the Fine Gael attitude. It is no wonder that a certain amount of despondency was generated amongst the people. Indeed, it was not to be wondered at that when the people got the opportunity they returned a Fianna Fáil Government to office with 77 Members.

Many of us remember what the situation was then. I have listened to Senator FitzGerald make some reference to housing. We, in this Party, have continually placed housing in the forefront of our programme. It is one of the important things so far as the community is concerned. We have always laid great emphasis on it. We believe that a man's home is his castle and every man in this country is entitled to a home which he would be proud to live in. We inherited a great number of insanitary houses when we took office. As far back as 1932 the Fianna Fáil Government tackled this problem and it is to their credit down through the years that they have worked earnestly and honestly to try to provide homes for our people.

The Fianna Fáil Government introduced housing grants and moreover they saw that money was provided to pay those grants when the houses were built. It is necessary for the Government to increase their housing programme because of the rising standards of our people, a fall in emigration, people getting married earlier and a rise in our population. I can give some figures for the increased number of houses provided in recent years. In 1961-62 this Government built 5,780 houses. In 1962-63 the figure rose to 7,020, in 1963-64 it was 7,580, in 1964-65 it was 9,430 and this year, 1965-66, it will be 11,000.

This is 1966-67.

I am giving the figures we have got so far. This year we are providing £21.5 million as compared with something like £9 million in 1960-61 so an economist like Senator FitzGerald should be able to see that there is a vast increase in the number of houses we are providing and also in the amount of money we are providing to pay the grants to enable those houses to be built. From the point of view of local authority housing, in 1963 there were 3,008 houses in process of erection. In 1964 this figure rose to 4,272 and in 1965 it reached 6,900. Indeed this year it is true to say that we are providing more money and that we will build more houses this year than last year.

Business suspended at 6.5 p.m. and resumed at 7.15 p.m.

Before business was suspended, I was pointing out the stress that Fianna Fáil have laid on the importance of the housing programme and trying to indicate the serious way in which they tackled this problem all down the years. I gave some figures to show that all during the period they were in office, they made an honest effort to try to improve this position immensely and to provide the finances, to pay these grants and to ensure that people who were building the houses, when they had the work completed, would be able to get these grants. That policy still continues, and it is the aim and intention of the Government to pursue it until every family is properly housed, whether it be those deserving of the labourers' houses or those small farmers who are not in a position to build their own houses out of their own resources. We believe that good housing reflects itself in the health of the people, and that many of the ills that beset our population in days gone by stemmed from the fact that the people were poorly housed.

The best indicator so far as private housing is concerned of the progress made is the amount of grants paid. It is an acknowledged fact that the amount of those grants has been steadily on the increase since 1958, and indeed it actually rose steadily in 1965, despite all the talk of standstills et cetera.

I also made some comparisons regarding the number of houses built during the term of office of the last Coalition Government. A very important factor in that is the number of people at work in those years, because if people are at work, it is an indication that houses are being built. In 1956, there were 6,300 people employed in building local authority houses, and by 1957, that figure had fallen to 3,900. All this can show the direction of the graph, and it is a clear indication of the fall in the production of houses in those years.

The situation was much worse in Dublin city. In 1954, under the Fianna Fáil Government, there were 2,638 houses under construction, but by 1957, when the Coalition were leaving office, there were only 963 under construction, and not alone that, but the number at work fell from 2,378 in 1954 to 925 in 1957. That is part of the reason why there were 93,000 unemployed in those days, and part of the reason why there were 1,400 houses vacant in Dublin city in 1957, with the keys hanging in the manager's office because those who would have taken them had to board the emigrant ship and try to get work in England in building there, work in which they had grown up as expert and skilled in this country. We lost their skills, and it is only in recent years that they have been gradually trickling back and we have at last got a housing programme moving ahead, because it takes some time to plan those schemes and put them into operation.

Housing is a fairly reliable yardstick by which to measure the progress of a Government: I mean by that their efforts to house their people. Most county councils have followed the lead and have tried to introduce supplementary grants to help people building private houses to provide homes for themselves with the aid of the various loans which are available. Building societies and insurance companies together in 1964 were able to provide £12½ million for this purpose. So far as the Small Dwellings Act is concerned, there is an extra £1 million this year to be used for those who require loans to build their own houses.

That is a good policy and it is a good thing that the Government have given the extra 50 per cent grant to certain farmers because, as we know, agriculture is a very important sector of our economy. While the farmer may have good outhouses and may have the benefit of various grants and remission of rates, he had to neglect his farmhouse if he had not capital available. This extra grant will be a help to him. A fairly sizeable expansion has taken place in agriculture during the past ten years, since Fianna Fáil came into office. During that period grants and aids have increased by over 300 per cent. The figure for 1956-57 was £17,232,000 and in 1966, that figure has gone up to £52,482,000. These are the grants and aids made available by the Government to try to help those engaged in our main industry, agriculture.

The Government feel it is necessary to do this because of the fact that we are selling on a market that is often saturated with the same type of goods and it is necessary for our farmers to produce more efficiently and economically. The Government know that it is necessary to subsidise the export of many of their products. If these aids were not provided, agriculture would be in a very sorry mess indeed. It is good to see that agriculture is progressing and that those in agriculture are doing reasonably well, but that does not mean that the Government are completely satisfied with the aids provided. At least, they represent a reasonable attempt to come to the aid of this section of our community.

It has been a feature of this Government at all times, while they may not be too happy about imposing extra taxation, they have been honest enough to admit to the people that in order to provide these services, it is necessary to have taxation. There are those in Opposition and others who would like to make the people believe that they can have these services and nobody will ever have to pay for them. It is a fundamental principle that you pay as best you can for the services as you go and it is important to let the people realise that. That is a very important principle in Government planning and fairly sound economics. It is the type of economics that a man would try to use in his own life and within his family in an effort to live within his means. The same thing should apply to a Government. It is all very well for people to say that we should have extra grants or various services made available, yet these same people when the Government introduce legislation for the purpose of providing these things, march into the Lobby and vote against it.

The Government have never shied away from their responsibilities. Some people have blamed them because they went abroad looking for money. That is not something that has not happened on previous occasions. It is no shame for a Government to go outside the country and look for a loan. As a matter of fact to my mind, it is an indication that that Government are fairly creditworthy.

Anybody who has had the nerve-wracking experience of trying to negotiate an overdraft with even the smallest or simplest bank manager knows that if he is not in a fairly sound financial position, he will not have much hope of getting it. The bank manager, secretly or otherwise, will minutely examine his credentials before he will permit him to have an overdraft. The test has been so rigidly applied that it is only with the greatest reluctance that sensible people will attempt to negotiate a loan even in a town in which they are fairly well known because they know the difficulties associated with passing the test in the sweat chambers on the bank premises. Now, if a country goes outside its own shores to look for a loan, and is successful in getting that loan, that is an indication that outsiders have confidence in the ability of the country to meet its commitments. I am happy to say our Government succeeded in getting such a loan.

Not in New York.

The point is we got the loan and that shows the confidence outsiders have in this Government. I would remind those who interrupt that, while they were in office, they tried to get a loan much nearer home: they were looking for £20 million and it is ancient history now how miserably they failed. The ordinary people, including the commercial banks, had no confidence in them and they were unable to get a loan which was issued at the highest rate of interest ever offered up to that time.

So far as money from abroad is concerned, the Coalition Government in their first effort at mismanaging the affairs of the country from 1948 to 1951, secured from the United States Marshall Aid. Their Leader at the time boasted that he was able to spend £5 million in one night. Mark you, that £5 million was spent on something that would eventually inure to the betterment of the economy; it was spent on buying foreign wheat to give the impression that the Fianna Fáil policy of growing wheat was, as they said, all cod. They were very careful not to tell the people at the time that Marshall Aid was not a free grant but a loan and that each year the Minister for Finance would have to budget for the interest charges and repayment. The figure is a sizeable one. Some of the gentlemen on the other benches who are so well up in figures might take a little healthy exercise and figure out the annual interest and capital repayment on that loan. It is one of the reasons why we have such very high taxation at present. So much for loans.

There has been a good deal of talk in relation to the state of the economy. We have the usual Fine Gael gloom and doom and the prophecies of woe. It is the banshee wail that they have been using since 1932. That is one of the reasons, I think, why the people will not again trust them in government. It does not do anybody any good to go around whinging. It took this Government quite a while to coax the people back again into having confidence in the ability of Irishmen to push the country forward and bring us out of the morass and mess in which the Coalition Government had left the country in 1956-57.

None of us denies that there is a scarcity of money. However, I should like to emphasise that the difference between this Government and the outfit in 1956-57 is that we have stood our ground. We have not hidden from the people the real situation. We have faced the people on the issues and let them know what the circumstances are. We have not run away from office and left someone else to try to straighten out the financial affairs of the nation.

What about the local elections?

We shall meet the Senator in them next year.

Why not this year?

I think it is a Labour Senator who is interrupting. I should like to remind him that he, too, is coupled in this "Coalition". He, too, was a party to this programme which knocked 2,000 to 3,000 people out of work during the Coalition period. He, too, was a party to Marshall Aid.

Perhaps we could come now to the current problems.

Some of these people have rather short memories and it is no harm, I think, to remind them. They may think the people have forgotten. There is an old proverb "Once bitten twice shy". I think the people are pretty wise now.

They are twice bitten now.

I do not think there is any danger that a Coalition Government will again be foisted on the people.

It would be hard to foist any Government on them.

There is one thing: we have never been ashamed or afraid to face the judgment of the people. There are few countries in Western Europe which have given the people more opportunities of returning the Government of their choice and only twice since 1932 did that Fine Gael-dominated Coalition get a chance of taking the reins, again, let me repeat, with disastrous consequences and at great cost.

Let us come to the current problems now.

I should like to say a word about tourism. It is a very important factor in our economy. In 1965, it brought in no less than £77 million, an increase of 75 per cent over 1960. I do not know how some people can stand up here and criticise in the way they do, remembering the scorn that was poured on the efforts of the Fianna Fáil Government when they introduced An Tóstal in an effort to make people conscious of the value of tourism in our economy. Down in Shannon, Bord Fáilte in conjunction with our very able Minister for Transport and Power have provided various attractions in an effort to get people to visit our lovely country and sample our hospitality.

While the reference to tourism is quite in order, details of the kind into which the Senator is entering are not in order.

I shall do my best to keep within the rules of order. I mentioned Shannon because that was the place which the prophets of doom foretold would be left to the rabbits in the end. Some of those people subsequently went down there on a tour and they were, I think, surprised. I do not know how they had the cheek to set foot in the place, remembering all they said about it. Had we been guided by these prophets of doom, we would have no industries in Shannon today. Neither would we have the transatlantic airline and the other developments fostered there in an effort to boost our economy. It is a matter of great pride to the majority of Irishmen that we have an airline connecting us with so many other countries; and Irish people coming and going are glad to use their own airline. It is something the country appreciates. Certainly, Shannon Airport is a very good tourist window as well as being a showplace for Irish-made goods.

One could go into many other matters on this Bill, but I do not intend to delay the House much longer. I would advise those opposite to be more honest in their criticism in future. We are not too worried about criticism so long as it is helpful or even half honest. I would like to remind them that the people have fairly good memories. The majority of them like to see the country progress. They do not like these sorry tales that make people shy away from visiting the country or prevent people from investing their money here in factories which provide employment for our people. In its early history, Fianna Fáil realised that the production of Irish-manufactured goods was very important.

I would ask the Senator to come to the Finance Bill and the two Reports under discussion.

Tá go maith. I was about to conclude with a little bit of advice to the Opposition.

We are all ears.

The majority of the people have the utmost confidence in the Government and in what the Minister for Finance is trying to do. While all of us dislike taxation, the majority realise it is necessary. When business is finished at the end of the year and the Government have not any money left in the kitty, it is only a matter of taking it from those who can afford it and trying to parcel it out to those who cannot fend for themselves—the sick, the hungry, the lame, retarded children and various other members of our community who are unable to provide for themselves. When we seek large sums for health, education, water, housing and such things, we are merely trying to help the majority. I am quite pleased with what the Minister is doing.

Chun críoch a chur leis an scéal, ba mhaith liom rath Dé a ghuí ar an obair atá idir lámhaibh ag an Aire agus a rá le fírinne go bhfuil súil agam go bhfanfaidh sé ina Aire le blianta fada amach agus go gcuirfidh an Rialtas i gcrích an obair atá idir lámhaibh aca. Tá dóchas agam go mbeidh rath ar iarrachtaí an Rialtais chun scoileanna, tithe agus oispidéil níos fearr a sholáthair. Táim cinnte go bhfuil mórán dul chun chinn déanta go dtí seo.

I was glad of the intervention of the last speaker in the debate because I thought there was a conspiracy of silence on the opposite side.

There certainly was from Labour.

Now that we have had the spokesman for finance from the Fianna Fáil benches, I suppose it would be appropriate for Labour to put in a word. I was reminded over the tea break that we were dealing with the Budget in this debate as well as Report No. 11 of the NIEC. We have reminded one another often enough that the Budget is one of the economic instruments of the Government. It can be used not just to collect the nation's revenue but to advance our economic development. There is no evidence, however, in these financial measures that anything contained in them will cure the economic ills of the country. There is no indication that any more employment will be created, certainly no message of hope to the community and no glimmer whatever of leadership.

I am inclined to agree with Senator FitzGerald that this Government and the Fianna Fáil Party are too depressed altogether. It is bad for themselves and bad for the country. Even though we are in a bit of a mess, it is not insuperable and the economy is going to recover. We had better face up to it and see to it that it recovers as quickly as possible and not be depressed, going around with long faces talking about what the inter-Party Government did with the rabbits and the Constellations in 1956.

What we have here in this Budget is an unimaginative, tax collector's measure, primarily and almost exclusively designed to extract the maximum money from all, without regard to justice or fair play. I suspect—I have been more convinced by this, particular Budget—that the annual Budget is largely an ad hoc measure. The Minister knows the money he must collect and he looks around and tries to put his hand into the most convenient pocket to get the money as easily as he can. He seldom has the opportunity of looking at our taxation problem as a whole and adapting it to the principles of equity and indeed efficiency in collection.

He may well say his principal concern is the collection of sufficient money to balance the books—a hard task which is enough for one man—and that he should not be bothered with principles of equity. I want to suggest we should all, including the Minister, be concerned with the overall incidence of taxation. We are often told that taxation is too high, that it is weighing too heavily on the people. That is not the point I am making at all in this connection. It is the incidence of taxation to which I wish to draw attention. Not alone is there the Budget every year, and in this year two Budgets, and maybe a third, but there is also imposed on the community local taxation, and on the workers social insurance taxation, which can weigh very heavily upon them.

Under the central Government's financial arrangements, taxation is collected by way of direct taxation, income tax, a measure of capital tax on death duties, and an increasing measure of indirect taxation by way of turnover tax, this new sales tax and the taxes on tobacco, drink, etc. The indirect taxation is increasing, and— let us be fair—I admit this Government make no secret that it is their policy to try to collect as much taxation as possible by indirect methods rather than direct. We do not agree that is the right or proper thing to do, but I am acknowledging that they have come out openly and said that is their policy. They believe more in indirect than direct taxation.

I referred to local government taxation. This does not come within the measure we are debating but I hope you, Sir, will permit me to mention it in connection with the point about the general incidence of taxation. I am not going further into it except to say that this year local government taxation by way of rates will amount to £32,500,000. The social insurance contributions from employees will amount to about £7 million this year, and this at the ordinary rate of 7/4 for a man and 6/3 for a woman represents quite a heavy burden on lower income groups.

We have never had, as far as I know, an examination of the total burden of taxation in relation to income groups, in relation to householders, in relation to urban and rural dwellers, etc. We have gone on building up taxation. The rates are ever increasing. In every Budget we have to get more money. We have introduced the turnover tax, and we are now introducing a sales tax. We have gone on, and on and on, and nobody has ever been able to tell us how this total burden of taxation, how all these factors, weigh on the different sectors of the community.

We cannot show, for example, that the system is progressive; in other words, that the rich pay proportionately more than the poor. I have often asserted that it is not a progressive taxation system, but that is just an assertion of mine; we have not the overall picture which would enable us to judge what exactly is the position. Because of the implementation of this Government's policy of indirect taxation, we now have a regressive taxation system: the poor, the less well off, are paving proportionately more than the wealthy. I feel very strongly indeed that the lower and middle income groups in the cities and towns are paying far more than their share of the overall tax burden of the nation.

Some Senators may feel that this is as it should be. I do not think it should be, but I am not entering into an argument about that at the moment. The point I am trying to make is that we have never had, as far as I am aware, an objective examination of the problem to see how the tax burden which we go on imposing year after year is affecting the various sectors of our community and the economy. Whatever may be our different feelings on this, I suggest it would be more practicable and sensible if we were to argue the matter from the basis of objective information. Taxation, central, local and social welfare, is a serious matter, and that may be regarded as an understatement.

In proceeding to collect revenue, the Minister should have regard to the principle of equity, and the Oireachtas, in considering taxation measures, should have background information as to the relative burdens of taxation on the main social and economic groups making up our nation. In making this plea and advancing this argument, I would hope to get support from other Senators. I am not advancing it in any Party political way. I have my own views about indirect as opposed to direct taxation, and I have my own views about the weight of taxation on certain people. All I am saying is: let somebody—and of course it can only be the Minister and his Department—try to get at the facts in this regard and then we can argue about their respective merits.

I am sorry the Minister is not here. I hope the Parliamentary Secretary will convey this plea to him and that in replying to the debate tomorrow, the Minister might acknowledge that this suggestion is worthy of examination and arrange to have these facts ascertained, published and made available to us. In this debate we are also talking about the NIEC Report No. 11. This Report made an analysis of the economic situation, and went on to deal with the desirability of agreeing and adopting an incomes policy. At the present time a debate on an incomes policy tends to be clouded by the current industrial relations difficulties, but I cannot pass from that particular immediate problem without advancing the trade union point of view on present industrial relations.

Senator FitzGerald referred to this today as a civil war. I admit that there is industrial war, unfortunately, but this war was not declared by the trade unions. It was declared very consciously and deliberately by the employers. Last year in this debate I dealt with the efforts being made by the trade unions to face up to the problems affecting the trade unions and workers in that the benefits of the ninth round wage increase had largely been eroded by increases in the cost of living.

The trade unions made painstaking and long-drawn out efforts to reach agreement with the employers on some formula, to provide for the tenth round, which would avoid industrial unrest. This finally terminated in efforts under the chairmanship of Professor Chubb to reach an agreement. I acknowledge the patience we got from Professor Chubb and his impartiality. He was in simply to hold the ring, to act as referee, to see if it was possible to get agreement between the two sides, but since then I have sometimes felt that it was a pity that he could not let us have his comments on his experience in those negotiations, not in any critical fashion but more by way of helping both sides for the future. That was not his task, however, but before I pass from it, I want publicly to acknowledge the great work he put in and, I am sure, his disappointment that in fact it was not possible to reach agreement.

Why was it not possible to reach agreement? Remember, at that time the trade unions had already put their hand to the plough. They had already decided and advised their affiliated unions that claims of £1 should be lodged and pursued and the employers knew that, in fact, settlements would have to be made on the basis of the £1. Some of them, who were reasonably intelligent, knew they would have to face up to a situation off paying increases of £1 to their workers, once the unions proceeded with the claim.

Because the trade unions said so?

No, because the trade unions had a very good case for the £1.

Surely that is a matter of opinion?

I am glad the Senator reminded me about that because it is worth stressing that, in fact, the trade unions' approach to this matter was very responsible. The £1 did not come any way near compensating for the increase in the cost of living since the ninth round settlement, had no regard to the increase in the GNP, but it was a realisation of and a facing up to the situation by the trade unions that on one side they had the problem of trying to do something for their membership who were suffering hardship by way of the increased prices and, on the other side, they had to try to get a settlement and get a round which would not be harmful to the economy. Events will prove that not alone were the trade unions responsible in their approach but that, in fact, what they did and what they are doing will help the recovery of the economy.

I was making the point that the employers at that time knew that the £1 claim was going to be proceeded with and that it would be granted, and since then, of course, it has been negotiated and settled in many employments. I have not with me at the moment the number of workers where the settlement has taken place but I should imagine that the proportion is relatively high. In fact, the tenth round has been disposed of for quite big groups of workers.

I am convinced, and I am not pretending to be impartial in this, that the employers had decided that they were going to make the trade unions pay for any increase that would be secured, that they would as far as possible fight each issue and force the workers out on strike and I was horrified to find that the leadership of the FUE seems to have gone to backwoodsmen with a 1913 mentality and largely stupid men in many cases.

We had the situation, as I said, that the £ had already been declared as Congress policy. They knew it would work its way through the economy, as it has, and still they were determined that they were going to have a period of industrial unrest. It was they declared war. If there is industrial war at the present time, it is by reason of the decision of the employers.

Personal abuse does not help matters.

I relate this to this debate because I want to bring in the Government's responsibility in this matter. Taking part in these negotiations were the semi-State undertakings who are relatively large employers of labour in this country. I would expect, and I hope Senators opposite me would expect, that in semi-State undertakings, we would have an enlightened approach to industrial relations, that we would have a growth in the concept of joint determination rather than this old 1913 attitude of the master and the worker, and I am satisfied that, instead of getting this lead and this improvement from the semi-State undertakings, we have gone a big step backward in the past year or so, and I blame particularly the Minister for Transport and Power.

Let us be fair about this. I am not making a personal attack on that Minister because he has made it clear, and I accept, that what he has been doing has been on the full authority of the Government, so, I am attacking the Government for the deterioration in industrial relations. These semi-State undertakings have been involved with the other employers who deliberately decided that they were going to have industrial warfare, make the unions fight for everything, have strikes in order to weaken the unions and make the workers suffer. I am not saying to you that each strike is fully justified: I am not saying that at all. I am not saying that the unions are perfect. We freely acknowledge that we are not perfect. We are very fallible and we are dealing with human beings. The point I want to make is that if there is this industrial warfare, it is because of the decision of the employers to have that industrial warfare. The unions would much prefer to be able to negotiate the tenth round, as decided, in a peaceful way without any disturbance or any stoppage of work, without any hardship on their people by having to go out on strike and, incidently, of course, to preserve their funds.

They want to see a situation where there will be an improvement in industrial relations, where workers will improve their standard of living and where employment will expand. All that is damaged when there is a period of industrial war but war was declared by the other side and, do not be mealymouthed about it and say that the unions are in rebellion, that they are looking for this increase and that increase. Agreement could have been reached at national level which would have avoided many—I am not saying all—of these strikes. We would have had a period of relative tranquillity if the employers were prepared to face up to their responsibilities in this matter, and I include in that the Government.

I have mentioned the semi-State undertakings and I have intimate experience of one of them, namely, CIE, and I have seen in CIE in the last year or so a definite worsening of the position.

The Senator should not go into these questions of detail. The position of CIE is a matter for the Appropriation Bill and not a matter for discussion on this Bill.

I do not want to go into details, Sir. I want to make my point. I am trying to make the point that the Government have a responsibility in this matter, that the Government through the semi-State undertakings, are a large employer of labour and prominent in the employers' organisation. I am trying to illustrate the attitude of the Government, quoting as an example what has happened in CIE. I suppose I could quote other examples such as the ESB but I do not want to enter into details of the administration of CIE but to deal with the overall problem of industrial relations. I submit it has been traditional in this debate to deal with the economy generally and reference has generally been made——

Taxation and general financial policy are the matters that would be appropriate in this discussion.

With due respect, if I am to confine my remarks to taxation——

And general financial policy. What we can deal with is the contents of the Bill and whatever is within the limits of the two motions that are agreed as appropriate to this debate.

With respect, it has been traditional in this debate not to confine the debate to what is in the Bill but to have a general review of the economy. I accept the ruling of the Chair but I submit that if my remarks do not come within the terms of the Bill, they come within the ambit of the NIEC Report which deals with our industrial situation, the economy and industrial relations——

That is in order. The overall, general position is quite in order. Matters of detail which are appropriate to a discussion of Departmental administration are not appropriate on this occasion and must wait for the Appropriation Bill.

I have been trying to make the point that the Government have a responsibility in this matter and to express the hope that all Senators would join with me in desiring the best of industrial relations in semi-State undertakings for which the Government are responsible. One factor I suggest is respect for the machinery of negotiation where union and employers enter into an agreement on how difficulties, claims procedures and so on should be dealt with. Long before the Labour Court was thought of, we had this machinery in part of the economy, a way of dealing with disputes between employer and unions. It worked reasonably well and, since 1924, I can remember only one strike in that particular part of the economy which was covered by the agreed machinery of negotiation between employer and unions. I would hope that we would try to build up respect for machinery of negotiation. If we agree on ways of settling our differences, that machinery will work effectively. It was inherited by one of the semi-State undertakings when we nationalised the railways and created CIE. We now have the situation where the employer decides to throw out the window that agreed method of dealing with our difficulties and the mundane matter of dealing with the grading of people which was previously decided around the table, the management always having the final decision, also goes out the window and the management say they will decide themselves as to how they will deal with it, not by agreement.

Dr. Andrews was mentioned by another Senator today and may I say that I have the highest respect for Dr. Andrews and I do not link him with this criticism at all. I am sure he is in disgust at what is happening at the direction of the Government through the Minister for Transport and Power and that that is why he is very glad to get his heels out of CIE.

Not at all.

(Longford): I think that is an unfair statement. The Senator is putting words into Dr. Andrews' mouth and since he is not here, he cannot speak for himself. I think that is quite wrong.

I have not said anything critical of him.

(Longford): The Senator implied that he was giving Dr. Andrews' views by putting words into his mouth as if they represented his viewpoint, as if he had it privately from Dr. Andrews.

Am I entitled to say that I suspect Dr. Andrews is in disgust of the policy of the Government as exemplified by the Minister for Transport and Power and because of that, is glad to be out of CIE?

The Chair is becoming more convinced that these are not matters appropriate to this Bill.

I suspect that, in fact, the Government do not know what is going on in many of those spheres.

The Government know very well what is going on.

I know the Minister for Industry and Commerce has overall responsibility in respect of industrial relations, but again I suspect—if Senator O'Reilly would permit me—that the Minister for Industry and Commerce does not know what is going on between the Minister for Transport and Power and CIE. The same happened in regard to the ESB on which we had a long debate recently.

I was talking about the general attitude of employers. The people opposite do not agree with me; they have their own point of view about employers. I do not pretend to be impartial about them. I am a trade union representative and my job is to advance the interests of my members and to support other workers in their efforts to improve their standard of living.

The job of the people opposite is to advance the interests of all.

I feel that employers have been encouraged in the difficulties they have made for the economy by what they interpret as Government policy. Various speeches by a particular Minister at various dinners in the autumn of last year gave the impression that it was Government policy that the employers should stiffen up and show fight to the unions. We got the impression that employers considered they were behaving patriotically in provoking strikes. I shall move from that subject and come to the NIEC Report.

Which was recommended by trade unions.

I am glad the Senator reminded me as I want to make some little comment on it. This Report was accepted by three trade union representatives. Now, the part which deals with incomes policy and which has become of great interest to us all, places a definite obligation on the Government to accept responsibility for the taking of all the steps necessary to ensure that incomes other than wages and salaries are brought within the ambit of an incomes policy. It is fair criticism to say that the only evidence of activity on the part of the Government in relation to an incomes policy was an attempt, fortunately defeated, to dictate and limit wage and salary increases to three per cent, of which Senator Yeats kindly reminded me. We do not seem to know what, if anything, the Government are doing about an incomes policy except for this effort to dictate and limit the income for one segment of the economy. Might I, without boring the House, quote from Paragraph 50 of Report No. 11 by the NIEC on the Economic Situation, 1965, as it is very important? It reads as follows:

By an incomes policy we mean a policy which is concerned with the behaviour of all money incomes. i.e. wages and salaries, incomes of farmers and self-employed persons, professional earnings, rents, profits and realised capital gains—

there is a capital tax for example

—rather than a policy which focuses attention on particular components of the total such as wages or profits. Too often an incomes policy tends to be regarded as a wages policy. We repudiate, as inadequate and inequitable, any incomes policy which does not embrace all categories of money income.

Now, that is the statement of the NIEC which is composed of representatives of the Government, of the trade unions, of the employers, of the State bodies and of the Federation of Irish Industries. This is what they agreed to. This is not simply a trade union statement but it is a statement with which the trade unions agree and accept— in other words, an incomes policy, if it is an incomes policy and not simply a wages policy.

The Government had better start to wake up on this. They are certainly leaving the impression that what they understand as an incomes policy is a wages policy. If that suspicion is allowed to grow then out the window goes any hope of an incomes policy in the next decade. If anybody saw this five years ago or a year ago— that all these people could agree on the principle of an incomes policy— it would have been considered Utopian. It would have been considered impossible to get the employers' and the unions' representatives and the Government and State bodies to agree on this. They did agree. The Government had better wake up and do something about it. They had better give some evidence that they are acting on the report and that they understand and accept that an incomes policy is as it is defined here and is not simply a wages policy. The sooner they do that, the better.

"Whatever that may be".

That is the Taoiseach's understanding of it.

That is an alarming statement from the head of the Government. I want to say, and I am not being partisan in this remark——

That is a sure sign that the Senator is.

——that we, as a nation, have an opportunity here and that if we allow the opportunity to slip it will be to the detriment of us all. In this report, one glance through paragraphs and, in the framing of the paragraphs, one sees the word "Government" many times, as Senator Garret FitzGerald reminded us this afternoon. The NIEC state that the Government must take action about this, that and the other and we are still awaiting evidence of good faith and activity on the part of the Government. The ordinary individual is inclined to be suspicious. The ordinary trade unionist is, I think, possibly doubly suspicious. If he sees a situation in which we are talking on an incomes policy—and that Congress subscribes to it—that all it seems to mean is an effort to limit his income, without anything being done about other incomes, naturally he will not wait. The opportunity is there but it is fast slipping away.

I want to remind the House of the statement made by Congress on this NIEC Report. They are making the point, naturally, that it is acceptable and that it would be wise that it should get full public consideration and discussion. I do not think it has and I am reminded by Senator O'Quigley of the remark the Taoiseach passed about an incomes policy "or whatever that means". Now, with regard to that part of the report which deals with an incomes policy, there is a definite obligation on the Government to accept responsibility to take all steps necessary to ensure that incomes, other than wages, are brought within the ambit of an incomes policy. What are the Government doing in this matter? If they come along and say: "Look, we certainly are dealing with it" or "We intend to deal with it", that is all right but time is slipping by. The comments continue to the effect that all the parties concerned must accept and co-operate in securing that the objectives of an incomes policy are realised — all the parties concerned: nobody can opt out.

I have seen comments by at least one director of a company making a very strong plea that an incomes policy was right for everybody else but not in relation to profits. I do not know whether that is typical of that part of our economy. I noted it at the time and thought it was very rich and very good. I think we might all agree that everybody else's income would be controlled except our own, but that does not make sense. We would want to know whether it is generally acceptable by all parties.

It goes on to make a comment about the economic analysis contained in the Report and says it forms a useful basis for further consideration and that discussion on it would serve a most useful purpose. Again I quote:

We should like to see, for example, a further examination of the causes of the reduction in the real incomes of workers subsequent to the 1964 round, and consideration should be given to the extent to which increased demand in money terms was a consequence rather than a cause of increased prices.

In the debate last year on the Finance Bill and the Appropriation Bill, and certainly the Prices Bill, there was criticism of the Government who had opposed the concept of price control, who had ignored the pleas and representations of trade unions to do something about prices following the National Wage Agreement of January, 1964. Instead, that Government said they did not believe in price control. Finally, in the summer of 1965, they decided it was a good thing after all and they brought in price control legislation. They had waited. They bolted the stable door after the horse had gone. We cannot get that horse back in again but we are entitled to ask the Government properly to operate the price control legislation they have.

I have been told, for what it is worth, by a man in control of one of these supermarkets that hardly a day passes that they are not advised of upward price adjustments. He made the comment that the worker's £1 would in many cases be gone before the worker got it—that in spite of price control, hardly a day passes that they are not advised of price increases. It is a complaint of my wife and I suppose of all Senators' wives. I wonder are Fianna Fáil Senators listening to their wives. Despite price control, prices are creeping up.

The Government have a responsibility. They have the legislation. Let them show they are tough and in earnest about it. Otherwise, the benefit of one round of wage increases will have gone by reason of price increases and of the effects of this Budget, and we must start another round of wage increases to recover somewhat the workers' standard of living. Trade unions are not anxious continuously to be fighting. They want to better the standard of living of their members instead of continuously trying to recover price increases which have taken place.

Here, again, is the comment of Congress on the NIEC recommendation:

We consider it is particularly important that measures should now be carried into effect to insure that price increases do not negative the real benefit of wage increases in future. We have noted that the Report points out that increased demand in 1964 and 1965 did not result in increased production or increased employment. This leaves a question which must be of great concern.

We note with regret, in spite of Senator Dolan's contribution this afternoon, that in fact there are fewer in employment. There are now 2,500 fewer in employment than in 1961. I have said, and I repeat, that I am sorry to have to make this point.

The Taoiseach, when in Opposition, said that the best way of judging a Government was the number in employment, or words to that effect. That is a fair translation of what he said, though I am sure he said it much better. I hope I can come back next year and say: "Congratulations; you have now reversed the trend: now there are more in employment" and I shall be very glad if Senator Yeats can remind me to do so. Now we have a situation that after a year of price control there are fewer in employment.

Again I quote from the statement of Congress:

It is our view that it is essential, if planning is to be placed on a practical basis, that new measures should be undertaken to secure the necessary expansion in production and employment, including such measures as the re-orientation of the future programme towards direct investment in industrial expansion.

These are dangerous words. We have been saying for a long time that it is not sufficient for the Government to say: "We shall give all these inducements to private employers, be they Irish or foreign. We shall encourage employers to come in". It was only after labouring what has been done in Northern Ireland that we finally got to the point where the Government agreed it was a good thing to build factories, a good thing to encourage private enterprise to do it.

In the trade union movement we have been emphasising that we are not opposed to private enterprise, that there is no battle between private enterprise and public undertaking. The only people who make the distinction, who draw that battleline, are the people who are afraid the State will go into private enterprise and interfere with their profits. They are welcome to their profits, but we as a nation have a responsibility to our citizens. It is not sufficient to say we shall give inducements to people to come along and set up factories. We say it is essential we should continue to do that. In a situation where we have that inducement and that encouragement, we still cannot absorb all the people who are flying from the land, who must necessarily emigrate. Even the Papal Encyclicals acknowledge that is so.

We shall get it eventually from the Government. They will eventually accept the pleas of the trade union and the labour movement. They will come out and say it is a good idea. In some instances they have done it already but always a bit slowly and with a "Forgive me" attitude—"We do not like doing it". For years in the trade union movement we have been asking about a nitrogen factory, pointing out there was a need for it—it is not being taken up by private enterprise. Let the State go ahead and do it. Eventually the Government will come to accept that it is not sufficient to say they will give all these inducements to private enterprise and they are welcome to solve the problem. You, the Government, and we, the Opposition, have a responsibility in this matter. We want to continue to press this claim; it is not good enough to simply sit back. Do not come along and ask me: "Well, now, what factory do you want set up?" I do not know. I am not an expert on this; you have experts. But apparently this principle, which is clogging your minds up to the present time, is that you will not do something because it might interfere with private enterprise. You should get rid of that, because there is no necessary conflict between private and public enterprise but you must accept that where private enterprise fails to provide employment, you and we have a responsibility to do it ourselves. We cannot sit back.

(Longford): There is a much larger State investment in undertakings in this country than in many other countries in Europe. It is practically as high as some countries in Western Europe and in Eastern Europe, too.

And there is a much higher rate of emigration from this country than any other country in Europe. That is why it is necessary to have more State investment.

I am glad Senator O'Reilly has reminded me of that point.

In relation to our economy, a higher proportion of workers is employed by semi-State undertakings—in what we might call the nationalised public sector—than, say, in Britain but always in a sense: "Look, we will do it but we will wait as long as we can to see if private enterprise will do it." That is what we did with Nitrigin Éireann and Bord na Móna, because private enterprise was not interested; it could not do the job.

(Longford): Against terrible criticism and terrible loss.

Now we come back to the white elephants and the fairytales of Ireland! But it should make it easier for you people to swallow this eventually, that, in fact, we have a very good record in regard to public enterprise. We have many successful semi-State undertakings which provide a lot of employment and, generally speaking, in spite of the efforts of a particular Minister in recent times, the employment is good. Therefore, we have a situation that in fact public enterprise has provided employment. What I am saying is: "Look, you still have unemployment; you have a decreasing number in employment; you cannot sit back and simply say you will offer inducements to private enterprise to do the job".

I am not against that—I am trying to make that plain—I am saying that that is not sufficient. We must actively go out and set up enterprises ourselves, if private enterprise does not do so, set up factories and various concerns which will produce useful products and provide employment for our people. That is the only point I am making, that we should get away from this fear that there is some conflict between public and private enterprise and somebody is going to jump down our throats if we set up a factory for, say, turbines. I do not know whether that is feasible; I am just giving that as an example. But we should not be content simply to let things take over and let our people leave the land, without actively planning to set up factories ourselves and provide employment at home, where private enterprise has failed to do so.

That may be Labour policy; it is not Fianna Fáil policy.

That is a very interesting conclusion.

I was saying earlier on I have no doubt that eventually you people will come round to that point of view.

We got there a long time before you.

How then can you say it is not Fianna Fáil policy?

You people will have to make up your minds.

(Longford): It is not Fianna Fáil policy to set up State grocery shops in competition with family shopkeepers.

Nobody advocated that.

I am delighted that I have wakened up the people opposite. There is none asleep at the moment and, apparently, many are bursting to give tongue when I have finished. I was going to deal with death duties but, in view of the anxiety of so many people opposite to get the floor, I will reserve what I have to say on death duties for Committee Stage when we can have a chat about them.

To get back on the track of discussion which is relevant to this Bill after some of the latter comments in Senator Murphy's speech and some of the cross-remarks, is a somewhat difficult task. As many of the speakers have said at an earlier stage, there have been problems in this country in recent times and these problems, though minimised, still exist. I might say that we, in this House have seen, in this last term, a very definite effort on the part of the Government to cope with what I regard —and I think probably most Members on all sides would regard—as our most pressing problems. They are those which relate to social welfare, housing and health. We have had a Bill here which will extend the benefits in the social welfare field to workmen who suffer from occupational injury. It is a very broad Bill, has a very broad scope, and one which I hope will be of benefit throughout the whole community. We have had a Housing Bill, which has given increased grants and incentives towards the housing programme. We have had a debate on the White Paper on Health and the Minister, I think, announced yesterday that he proposed to introduce this legislation towards the end of the year.

These are all major problems and it cannot be said that the Government are in any way either unmindful of them or are not taking steps to deal with them. But it is important that we realise in this House and admit that these problems—in so far as they are problems—are created by the very success which we are achieving, that the housing problem which we heard so much about and which has been broadcast so often, is in fact, the creature of success. The housing problem arises—and most local authority executives will agree on this—because of the very advanced housing programme which we have implemented over the past few years and because we have now an awareness of housing needs and rights.

That awareness did not exist when there were more depressed housing programmes in our local authorities. It is only when they go on to implement the schemes that they become fully aware of all the further needs in that area. People are not fully aware of the readiness to satisfy the housing needs until they see the programme under way. Senator Dolan pointed out that this work can be tackled. Housing programmes have received more and more money each year.

Fewer houses have been built.

The housing programmes have called for more and more investment, and as the investment increases, so also does the demand increase. I say honestly that this represents the problem, if problem it can be called, we have to face in this country at the present time. Housing problems are problems which are born of success, born of programmes which make people aware of their social needs, their housing needs and their economic needs. The awareness which has been created in the past year has culminated in the present situation.

This can be illustrated in every field of the Irish situation. The Government can take great pride in that so far as their own programme had to expand, it had to expand because there was an increased demand for housing. This increasing awareness means that certain restrictions may be necessary. Those became necessary and our Government have taken the necessary steps. A very short time after the taking of those steps, we find the first fruits.

If we take the field of agriculture, which is one aspect of this matter, we have implemented very costly schemes which made the farming community very much aware of what they could do towards increasing their production, whether by way of the calved heifer scheme, the bovine tuberculosis eradication scheme or various grants available through the Agricultural Credit Corporation. The farming community were thus made aware of investment and of productivity which they had never been aware of before. In so far as that happened, it brought its own problems in its trail. The result was that there was an ever-increasing demand from the farming community on central funds. It would have been all the greater crime if that demand had never arisen. The demand has arisen and the problem is a very minor one, that is, how in some ways to meet the demand at any particular time. It can become a very pressing demand. It is for that reason that we had money advanced by the Agricultural Credit Corporation to farmers who were obviously well equipped to farm further lands.

This is a very good thing. Land which hitherto was not farmed was now made available to creditworthy farmers but because of the increased capital which farmers were able to obtain, land prices became rather inflated. Again, the Government had to step in and say that henceforth for such period as they considered necessary, they would have to restrict loans for land purchase schemes. In many ways it was regrettable that that step had to be taken but it was certainly very necessary. Nobody would say that the Government should never have made available a scheme whereby farmers could increase their productivity and increase their holdings.

The Government have also taken steps to impose restrictions regarding hire-purchase. This has also been mentioned. It has been said that the Government have taken those drastic steps because they were bankrupt. It has been proved that they were right to take such steps. People were inclined, because of the expanding availability of money, to ask, without having the necessary basic funds to back up that will to ask. Many of them were finding themselves with commitments which they were certainly unable to meet. The Government took the necessary steps in this regard in the interests of the community at large. They had the authority to restrict that development and they took the necessary steps, despite severe criticism.

I cannot hope to cover every aspect of the steps which the Government have taken but matters such as those I have mentioned are examples of the type of things which happen when you have a Government who are aware of the various needs and set out to solve them and when people become aware of their rights in those various fields. Much has been said with regard to pessimism, if it can be called such, on the part of the Government shown in relation to modern conditions. There is no pessimism on the part of the Government or on the part of people at large when they see the Government are fit and capable to take the steps which have to be taken to solve our problems.

I have a certain sympathy—I think this may be said in relation to the NIEC Report—with what Senator Murphy said in relation to the tax burden on the community. I have a certain amount of sympathy with the wage and salary earners who are immediately liable to direct taxation. I would certainly urge on the Government that a review of the taxation code to deal with that problem is highly desirable. I can speak myself of a grudge which I feel many people must hold. At a time when I was a student, and undertook a course in higher education, I was told that any earnings which I might have from part-time work as a teacher were fully taxable and I was not allowed any allowance in respect of the fees I had to pay towards higher education.

This is a regrettable matter. It discourages young people and also older people, who are interested in furthering their own position, if this incentive is not given to them to equip themselves to become better in the various specialised fields in which they are interested. This is a particular hobbyhorse of mine but I feel that such people should be granted exemption in respect of income tax.

I will also say in relation to the NIEC forecast reports that as a professional person who has lately been a wage earner, I must agree that the time has come for a full disclosure by professional people of their professional earnings. I am not saying that many of them are as well off as people think, but, in so far as they are not subject to the minimum deduction of income tax from a fixed salary, I think some means could be devised which would oblige them and put the onus on them in a professional way to present their annual records.

Which, unfortunately, I am afraid we do.

We all know in all honesty that we are not subject to the same regulations, without referring to my own problem, because it hardly exists. Certainly we are not subject to the same regulations and restrictions as those who are wage and salary earners. I am applying this to all professional men. In so far as this was a recommendation in the NIEC Report, I think it reasonable. The wage and salary earners feel that they are the only ones who are bearing the burden of taxation, particularly if they have the impression, justifiably or otherwise, that people with more means in the professions or in self-employment are not bearing their due burden. Here I must agree with what the Minister said today. I can see no reason why well-off farmers should be exempted from taxation either. I am taking the opportunity to say, like Senator Murphy, that I am not an expert in these things and I do not know how these things should be implemented. It is a matter that should exercise the minds of the Government and their advisers.

It has been said that we in many ways are not taking proper steps to solve present problems, that we should look at them and see what we can do about them. Not only have we done that, but we have looked further to see whether we can go towards drawing increased benefits into the economy of this nation.

I heard Senator FitzGerald refer to our free trade with Britain as tying ourselves to the sick man of Europe. I think that in a short time he will have to swallow these words and admit that if we have tied ourselves to a sick man, which I think is an unhappy expression in this House, we indeed will not be the persons who will suffer from that tie. From tomorrow I think we will see the increased benefits in a very real way, particularly in agriculture.

Senator FitzGerald suggested that as an alternative we should go around Europe, looking, in his own words, ipsissima verba, for some form of association with the EEC, any form of association as long as we can say we have some connection with Europe. Anyone—and Senator FitzGerald had the same opportunity as I had during a short visit to Brussels—who is in any way aware of the thinking of the European Community knows that the last thing they want is any form of association. Anything short of full membership in the EEC is absolutely unacceptable to the present members of the Community. Our Government did not fully exploit the position of a form of association such as Austria or Greece has. It is completely unrealistic and ill-advised because the two most embarrassing associations the EEC have are those in relation to Austria and Greece.

This is what was being offered to us as a real alternative to our free trade with Britain. I think that in turning out ideas and suggestions, we should only turn out ideas and suggestions that are realistic and practical in the context of the EEC and this was a complete fly in the wind from a source one would have expected to be at least more balanced. Whether we get into the EEC or not, we are convinced that we should not look for a loose form of association. We now have a real form of association with Britain and anyone who thinks that is a bar to our entering into the EEC is thinking completely against the reality of the situation. If it is thought that we should apply for full membership and entry and that the Europeans would be prepared to adjust their tariff and their levies to suit an Irish entry and then later on, on Britain's application, they would go through a second readjustment to deal with the British entry, that certainly does not represent the thinking of the European Economic Community at present.

I feel we will never be acceptable either without Britain, if they do not intend to go in in any event, or else with them when the European Economic Community will have to reassess their tariffs on one occasion only. To that extent our Trade Agreement with Britain, far from being a step backwards, is a major step forward in that context.

I now come to a matter and I am sorry I did not reserve the last part of my delivery for a more appropriate occasion. In any event at this stage——

The Senator could have enjoyed being offensive to Senator FitzGerald's face.

I hope it cannot be called offence. I am now at the same disadvantage in that Senator Murphy has now left the House.

The Senator is very lucky.

I refer to his pet subject, industrial relations. Everyone who looks at the field of industrial relations here in the context of its development up to the present will see that there has been a natural and proper development from the past when there was almost a criminal repression of trade unions and their activities. The unions and their members, and rightly so, have now got to the stage that all of those repressions and restrictions have been lifted but possibly in many ways, having been lifted, particularly in this country, they may be thinking they have to go one step further on every occasion.

One that particularly occurs to me, which I feel is rather unrealistic in Ireland, is the recent demand and the campaign we have had for a 40 hour, five-day week. I shall say at the outset that whatever demands our unions make they should be just and relevant in the context of this country. I think the employers should also look to the needs of the workers in the context of the Irish situation. Let us look at the 40 hour, five-day week briefly. It is a notion that has crept into this country from our great industrial neighbour, England, and our greater industrial neighbour, America. No one has considered that what may be a reasonable claim in England or America could be a totally unreasonable claim in Ireland. A very real factor is that the vast majority of workers in America spend much more time in getting to and from their place of work. In fact, I would hazard a reasonable estimate that most workers in England and America probably spend five hours longer in the week getting to and from work than workers in Ireland.

In that connection, it could be reasonable for an American worker, and it might be economically wise for all the American parties involved, to say that a half day's work on Saturday is not economically feasible. Too much time is spent coming to work and too much time spent going from work for that to be economic. That is quite valid but I think our trade unions, without having regard to other more pressing needs, suddenly thought that this was a great new world—the 40 hour, five-day week.

Again, and in this I may be sticking my neck out a little, I would like to know how this notion happened to be accepted as an essential here. It is a notion that has been in many ways at the root of many of our recent problems because the circumstances in its birthplace were totally different from the circumstances we have in this country. I think that the worker will agree—or the employer, incidentally, for this applies to employers too, because if the workers are not in their employment, the employer will stay at home on Saturday in the same way —that they do not spend as much time getting to and from their work as their counterparts in England and America. I would like to see someone undertake a study of the comparative position and to see how valid it is for us to make the demands that have been recently made in either of those countries. I remember seeing what I thought was a very sober warning of what we might be facing when the last great transport strike in New York appeared to be on the basis of a 32-hour week demand. However about the situation in the United States, certainly if that principle ever comes here, we will be faced with a major problem.

To that extent I think we should concentrate more on our own conditions in making whatever claims are made. In case it might be thought that my sympathies are against the worker in this matter. I hope it is obvious from what I have already said that this is not all related to wage and salary earners. Many of our employers could well become more enlightened as to what the major commitments are for their workers and for their families. One is always conscious of how remote some employers are from modern thinking and how up-to-date others are, in such things as scholarship schemes for their various employees, training schemes of one sort or another. We know many fields of employment where these are being provided, but I know, unfortunately and unhappily, many others where it would be regarded as a completely unreasonable suggestion and one that could not in any way be faced.

This is a matter to which almost all engaged in industrial activity should start giving thought at this stage, that if they are to increase their productivity and efficiency, they should do it through and by means of the very workers engaged in their industry and through giving them incentives to equip themselves for this increased efficiency and productivity. I hope, of course, that the tax man will also allow the incentive I have already referred to in this matter.

I have great sympathy with the suggestion made in the NIEC Report as to disclosure of profits. I do not know what kind of technical difficulties an industry could involve itself in in this matter, and I could imagine that there could be many problems to be faced in it, but one very real result would be the increased confidence and feeling of fellowship that would be generated between employer and employee, a feeling that at least the employee would know—and this happens in many cases at present—that he has got his fair share of the activity of the industry in which he happens to be engaged. In so far as the NIEC Report recommends such disclosure, I can only add my own view that I think this was indeed a very enlightened and worthwhile recommendation. As I say, I think it would at least have that immediate result.

Having said that, I think that in many ways this evening we have witnessed a rather unfortunate outburst against the employers' organisation. One is entitled to expect from a member of Congress that he would not refer to the men with whom he is directly negotiating as "stupid men" and as men—I quote his words—"determined to start a warfare which was going to make the workers go on strike". That is a very unfortunate outburst from a man who may in the very near future have to face these or some other employers or, indeed, his colleagues at the opposite ends of the table and may suddenly have to say that that was said in the heat of the moment or something of that sort. We all have our feelings, and they may be strong ones at times, on these matters, but this irresponsible and harsh criticism—and "criticism" is a rather kind word in the circumstances—cannot lead to better relations in industry.

How can you possibly expect men branded as "stupid" and "intent on warfare"—again a rather unhappy expression—to think, when they sit at the opposite end of the table with a man who uses these terms, that he is trying to contribute towards a resolution of our common problems? That would be asking a lot from any man, particularly from employers, because they also sometimes will have in some cases a similar opinion, that they have trade union executives coming armed into the battle. This is why I feel about the speech we had from Senator Murphy that we on this side of the House, and I hope all Parties and all sides of the House, represent not just the workers but all the community, because the principle of profits apparently has become a very dirty word in this country, though I cannot imagine a situation where you will have workers unless you can have profits. I cannot imagine how any man could enter into any kind of industry or undertaking unless he thought that he was going to get profits from it. Senator Murphy has the ideal answer: "Let the State take it all over", but he has not got quite that far. He expects that in cases where profits are not forthcoming and places are not being efficiently run, the State will rush in and look after that problem.

I would like to think that the workers' interests will be forwarded at the same time and step to step with the employers' interests and those of— another dirty word—the shareholders. For that matter many workers have become shareholders. I am not here making the case for increased share or dividends, but I say that we should not be waving our hands in condemnation of all the present aspects of investment and industrial activity. One needs the other; one can only succeed with the other. To that extent I think that all Parties, and particularly Senator Murphy's Party, should start thinking and honestly admitting that their obligations are to all the people of this nation. As long as they think they have an obigation to one group only, the workers, about whom I am, too, very naturally deeply concerned, and speak in terms of all others outside that group as being intent on warfare, or blind, or selfish, so long will we be far removed from solving whatever other problems will remain to be solved.

We have, one would imagine, an ideal situation here. We are a small nation constantly in touch with one another's needs and for all that we have apparently succeeded in involving ourselves in industrial problems that many other nations, who might not profess the same Christian principles as we do, have not witnessed. I hope that that day is fast passing. It will pass much more quickly when all sides, particularly those in industrial activity, forget the personal abuse and blind criticism which has been levelled all too often.

We have in this debate a rather unique position and I doubt if it arose before. We have two Budgets and two Finance Bills coming to be discussed together. One wonders how this happens. When one asks oneself could the Government not have achieved a better forecast of their requirements for 90 days ahead, one has, of course, to answer that they could have. There is no doubt about that. They have ample expertise and experience in that regard and certainly they have sufficient skilled advisers available to them. There is no doubt that the Government could have accurately forecast their requirements for 12 months ahead this year as they have had to do in other years. One then has to ask himself, and perhaps paraphrase the Minister in this: "What happened to this year's Budget" rather than "What happened to last year's Budget"? The answer, of course, was the overriding necessity to win an election. That is the reason we have two Budgets and two Finance Bills.

There is no doubt that the Government and the Minister knew that the farmers' demands would have to be met within the year; yet they made no provision in the Budget for these demands. Yet within a few days of polling day they could settle those demands—I will not say in full but certainly as far as the taxpayer is concerned, in large measure. They must also have known that the Garda pay award would have to be paid this year. The fact must have been known to them when they were preparing their original Budget that it would cost £500,000. Again, they made no provision for that award in their Budget. One wonders why, and the only answer which a normal, intelligent person can give is that it was necessary to win the election and therefore these moneys could not be provided for and the taxpayer could not be levied before the election. It strikes me as an extraordinary coincidence that on the very morning on which postal ballot papers were delivered to the Gardaí, the officers were notified that they would be awarded a six per cent pay increase which would not be announced until the NCOs' pay claim had been settled. To my own knowledge, some of the officers received this information on the morning they received the postal ballot papers. It seems to me to be an extraordinary coincidence that this could happen. It is hardly a coincidence that a £1 increase per week would also be awarded to workers in the election week.

We never think of those things.

I am quite sure you are not consulted. It was also an extraordinary coincidence that 20,000 CIE workers learned from their General Manager, whose name is not unknown to the Seanad, just before the election, out of the blue, that they were going to be awarded the £1 per week increase. It was also an extraordinary coincidence that it took another week, after polling day, to announce that this increase would be offset by an increase in fares. All these things may have been coincidence—I do not know—but to me it looks more like policy, a deliberate decision. It is hardly coincidence that these things happened prior to an important election. We have always been led to believe by some of the political philosophers on the Government side that their purpose was to distribute the nation's wealth and to tax the wealthy people who can afford it, the professional people and the well-to-do farmers and those people who allegedly should be compelled to disclose their incomes. Fianna Fáil have always stated that their political purpose in Budgets was to tax those people so that they can benefit the people who deserve——

(Longford): That was what O'Hanlon, the rapparee, did.

Possibly O'Hanlon, the rapparee, was more successful than Fianna Fáil appear to be. At least his reputation for doing it will last longer than Fianna Fáil's. Whether or not that is the policy of Fianna Fáil, at least they always attempt to create that impression but in the Budget this year, so far as I can recollect, they are giving 5/- a week from 1st November to certain selected social welfare recipients.

To those with no means.

To people who have no means and had to be helped in any case. This, of course, was announced before the election but it was not to take effect until November. It was a case of "Live horse and you will get grass" but, in the meantime, you will have to travel a bit for the grass. They did not tell the recipients what they would do to that 5/- after the election. I do not know how many of these people paid up or what they were expected to pay; certainly they did not pay in Dublin. When these people discovered after the election that they would have to pay 3d per lb more for butter and extra on bus fares to enable CIE workers to get another £1 per week—I do not begrudge these workers their increase—and when they discovered that, if they smoked, they would have to pay more for their tobacco and cigarettes and, if they took a drink, more for their beer, and, if they bought a television set, five per cent more on the price, I wonder did they feel as happy about the increase as the Minister seemed to think they should?

This type of budgeting—one Budget before an election and another Budget after it—is patently dishonest. These tactics would, of course, only be used by a Government afraid to face the people honestly, telling the people what their policy will cost and what the people will have to pay to meet that cost. An honest Government would tell the people that they believe a certain policy is the right policy. I trust this twice-yearly Budget will not become, as it were, a recurring decimal with one Budget before an election and another Budget immediately after it. That will make the conduct of elections rather difficult for all of us.

Particularly in Clare.

It is Clare I am thinking of. This general inability to face the people honestly and openly is highlighted by the Government's decision to postpone the local elections again until next June. I see no reason why the local elections could not be held between now and October.

Fianna Fáil would be beaten.

He meant no good reason.

The fact that Fianna Fáil might be beaten may be the reason. From the point of view of Fianna Fáil, it is, I suppose, a sound reason, but it does highlight the fact that they are afraid to face the people and more afraid now since the last election. It shows that the Minister was quite right in his political assessment at the time of his first Budget. If he had budgeted honestly then and asked the people for the taxation he obviously knew was necessary, I am quite certain the result of the recent political contest would have been very different. Not alone would the Fine Gael Party have got the laurels but they would also have got the spoils. The position now is, as a result of Government policy, that taxation is running eight per cent higher than planned in the Second Programme for Economic Expansion, if they insist on calling it economic expansion. Output is running two per cent lower. If that continues into next year, we shall have another Bill to postpone the local elections.

We will probably have two Budgets.

The Taoiseach is fond of boasting that he has the finest Cabinet in Europe. That, of course, implies that the Taoiseach himself is the finest Prime Minister in Europe.

So he is.

Cassius Clay is only in the ha'penny place.

Cassius is a champion, too.

The difference between Cassius Clay and the Taoiseach is that Cassius Clay is winning and he is not afraid to meet all-comers. The Taoiseach is not winning and is afraid to meet any comers.

He won last year and he won this year.

The present economic position is the result of the actions and the policy of the finest Cabinet in Europe and the finest Prime Minister in Europe—or should we say "In the world"? We will all be happy then. The results of that policy and those actions show that the claim is obviously false because, if we did have the finest Cabinet in Europe and the finest Prime Minister, we would not be in the position in which we are today.

The Government must accept the blame for the results of their own policy. I think it will be conceded, even by the Government, that one of the most disastrous results of their policy was the position which obtained not so long ago in the ESB. The position in the ESB was not unknown to the Government. They had six years notice that the position might arise a any moment because it is six years now since they prepared emergency legislation in somewhat similar circumstances. That emergency legislation was dropped at that time. It was reintroduced this year. The reason I mention it here, and I think I am in order in mentioning it, is that it is all part of Government policy. When that legislation was put through this House, the Minister emphasised to us that an emergency situation existed and that something had to be done as otherwise everything would come tumbling down around our heads; industry would come to a standstill, and so on and so forth. The Minister was asking us to pass legislation to deal with an emergency which did not, in my opinion, exist. The night we passed that legislation there were no pickets. Ten days earlier there were six pickets.

Now the Minister, who wanted this legislation so urgently, was able to spend the entire week canvassing every village and wayside hamlet in Clare seeking votes. At that time he did not seem to know or care whether or not an emergency existed. Even if it did exist, the Government apparently could not care less. Ten days later, when there were no pickets on, when the position was actually the same because the men were on strike but they were not picketing, when the danger did not appear to be so imminent to the ordinary observer, certainly not as imminent as it was the week before, the Minister came in here and asked us to pass this legislation.

I did not see the position as the Minister put it. I voted against that Bill, believing I was right and that the Government were creating a scare to divert attention from their lack of policy. Events have since proved the Minister wrong. There was no emergency. If the Minister had devoted all his attention, not to canvassing, not to brow-beating the workers and even the Dáil and Seanad, but had concerned himself entirely with settling this dispute it would have been settled just as easily as it was settled in the end. Obviously, his intention was to create this scare to divert attention from the real position in the country.

While I say that and condemn the Government, at the same time I would not go along with the total lack of responsibility and criminal irresponsibility of a prominent member of the Labour Party in the statement he made yesterday in another place. I quote from this morning's Irish Times. He said that the workers were going to demand more and strike if necessary and went on:

As far as I am concerned they do it with my blessing, my encouragement and my help, and even if they have to go to the final wrecking of the country, it would be much better to have the country wrecked and come up again like a Phoenix from its own ashes with equality than the present system of those who produce most being paid less...

I would like to say as one who voted against the Minister's proposals that if that statement had been made before I voted I would have to consider whether, in fact, the Minister knew more about the people with whom he was dealing than I did. If the Labour Party allow that statement to go without repudiation they deserve from the people the fate which the Fianna Fáil Party deserve at the next election and that is oblivion.

I listened with great interest to Senator Murphy but I was astounded by one of the last statements he made—that the Fianna Fáil Government were afraid to set up State enterprises. That seems to me to be quite an extraordinary statement. He went on to say that in his view and in the view of the Labour Party the correct policy for a Government was to set up State enterprises of various kinds in cases where private enterprise was unable or unwilling to do so. I do not know where Senator Murphy has been all these years. I should have thought he would have realised that this has been Fianna Fáil policy for the past 30 years or more. I jotted down a few of the enterprises I was able to think of that Fianna Fáil had started. There are Aer Lingus, Bord na Móna and Irish Shipping. There is Nitrigín Éireann Teoranta, the Bill in respect of which came before the Seanad a year ago. On that occasion Senator Murphy and his colleagues supported it against intense Fine Gael opposition. There are also the Shannon Free Airport Company, the Sugar Company——

What did the Senator say?

The Sugar Company. That is typical of the kind of thing to which Senator Murphy was referring.

I thought that was a white elephant?

There was a private Belgian firm purporting to engage in the manufacture of sugar. When Fianna Fáil came to office this firm was almost bankrupt and practically no beet was being grown. Fianna Fáil took it over and set up the State Sugar Company which has been extremely successful ever since. This is a classic example of what Senator Murphy was referring to. More recently a subsidiary, Éireann Foods, was set up. Then there is Irish Steel. Recently the State bought the B. & I. Steamship Company. There are other smaller concerns such as Min-Fhéir Teoranta, Arramara Teoranta and Ceimicí Teoranta. There are others I have not thought of. If that is the kind of thing Senator Murphy wants to take place, I think he should come in with us. It is far more likely that that policy will be carried out by a Fianna Fáil Government than any other. The only occasion on which there was a Labour Minister for Industry and Commerce I do not remember any activities of that kind. But I do remember there were some State hotels owned by the State Tourist Board at the time and these were sold by the Labour Minister for Industry and Commerce. Why? Because he said they were interfering with private enterprise. I think in this regard at any rate Senator Murphy is in the wrong Party.

Leaving that aside, Senator Murphy had a great deal to say about labour relations. If it were possible to simplify things in the way Senator Murphy succeeded in doing life would be so much easier. In Senator Murphy's view labour relations are a sort of cops and robbers. The employers are on one side—fierce wolves prowling the streets of Dublin with teeth showing and slavering tongues ready to pounce on innocent workers. That is one way of looking at it. It is the safe one. You do not have to think very far in it. I cannot see that kind of attitude being particularly helpful or accurate.

I am not going to go into the question of the £1 per week. Obviously, there are two sides to the question. It is justifiable to assume that the employers, rather than just being stubborn for the sake of being stubborn, may genuinely have felt that their businesses and the national economy as a whole were likely to be damaged by an excessive wage round. Indeed, Senator Murphy in a later contribution rather confirmed that view when he said his supermarket friend told him about this price rise. I would have thought it would have occurred to him that a considerable number of these price rises would have been due to the fact that employers who found their wages bill had gone up by £5,000 or £10,000 a year found it necessary to pass on some or all of that wage rise. Then you have higher prices which, of course, undoubtedly tend to depreciate the value of the rises gained.

All I am saying is it is only fair to suggest there are two sides in any question of labour relations. You cannot just take the simple line of saying that on one side you have the wicked employers and on the other you have the innocent, virtuous workers always in the right. I do not think either side is always in the right. I do not think either side is in the right in this. But when we come to the really serious strikes which have affected the country, such as the ESB strike and the bank strike, it was not a question of £1 per week. If the claim had been for £1 per week, there would have been no strikes. I am not saying whether they were right or wrong, but quite obviously it had nothing to do with the general claim of the Irish Congress of Trade Unions that everybody should get £1. In regard to the paper mills strike, which unfortunately is going on a long time, there are other matters involved, such as shift work, apart from the £1 a week claim.

Senator Murphy also said, as Labour speakers so very often do, that we have a lower proportion of our total tax revenue coming from direct taxes than any other country in Europe. That is certainly correct, but it is due not to the fact that our direct taxes here are low but that only a small section of the population are covered by them. There are a great many self-employed people in this country, and I am not going to get embroiled in the question as to whether farmers should pay taxes. The only point I wish to make is that, as regards the amount of tax which would be paid by well-off, larger farmers, there are very few of them involved. Eighty per cent of Irish farmers have less than 50 acres. I doubt very much if you could ascertain the exact amount of their profits, and, furthermore, if there would be any serious increase in the total amount of income tax raised. If Senator Murphy and those who think like him, and indeed Senator FitzGerald, look at the burden of tax imposed on those who do pay direct taxes and compare it with that of other countries, it will be found that the level of income tax and the tax allowances here do not leave the ordinary income taxpayer any better off than his counterpart in other countries. In fact, in relation to a number of other countries he may well be considerably worse off.

Senator FitzGerald told us a great deal about what he believed to be the causes of the difficulties which have arisen in the past year or so. I do not want to misrepresent him in any way, but, with all due respect to him, I think the list of causes he gave—the Government should have done this and the Government did not do that—had quite a considerable amount of hindsight about them and knowledge after the event. If any Government, in deciding its economic policy, could see through the eyes of a prophet everything that was going to happen inside the country and outside the country over the next two years, then, of course, it would not make mistakes. No Government would ever decide upon any policies which would fail to work out. Life would be very easy, but life in practice is not as easy as that.

At least it is good to have an acknowledgment that the Government did make mistakes.

The most honest contribution yet from that side.

No Government is perfect. Had the Government known, for example, that there would be the British surcharge; had they known there would be a falling off in economic development in Britain so that our exports to Britain tended not to increase as they otherwise would have; had they known there was going to be an international shortage of credit; or had they known that last winter's weather was going to be the worst, certainly, for many generations and, perhaps, the worst in modern history; had they known all these things they could have made allowances for them, but in practice no Government could foresee that kind of thing. It might be possible to avoid having difficulties by adopting a purely negative approach, by not pursuing any schemes except those which were certain to work out. I do not believe in that kind of Government. I think Fianna Fáil have taken the correct line. They have taken the line that we should try to develop the economy as fast as it is possible to do so.

Senator O'Sullivan and other Fine Gael Senators ought to realise that there is every difference between our difficulties in the past year or so and the difficulties they faced in 1956 and early 1957. Our difficulties this time have been the difficulties of an expanding economy. That is not the case at all in regard to the difficulties which arose in 1956 where you had a stagnant economy. I do not know whether Senator O'Sullivan realises or not that during the entire three years in which the Coalition Government were in office the national income was actually declining; not only were we not advancing but we were going back.

Senator FitzGerald said the Government should not be so despondent. I do not know where he got that idea. The Government are not despondent. No Minister has been despondent. The Minister for Finance and other Ministers, in the Budget debates and at other times, have made it absolutely plain that in their view these difficulties we have had over the past year or so are temporary and that once we get out of these—and it looks as if we will very shortly—we will go ahead, if anything, faster than we did before.

There is no despondency on this side of the House or on the part of the Government. So far as Senator FitzGerald worries about despondency, he should discuss the matter with his Fine Gael colleagues. It is his colleagues who have been spreading the despondency, not purely, I think, for political reasons, although that comes into it, but also because they look back with horror to the days when they were in office in 1956 and early 1957. Then there was no expansion visible; things were bad and looked like getting worse. They cannot get it into their heads that the situation now is very different indeed.

Senator Rooney, for example, spoke about an artificial and temporary period of prosperity created before the last election by Fianna Fáil with the taxpayers' money. I do not know where Senator Rooney has been all these years that he does not realise that between 1958 and 1964 there was an uninterrupted period of national expansion of a quite unprecedented nature, the like of which we have not had in recent Irish history. It was a period in which, each year, all the national indicators were advancing.

Inflation can be very pleasant.

I think Senator Rooney was referring to the year 1964, before the election.

Yes, and an artificial and temporary period of prosperity.

A temporary period of prosperity which lasted since 1958, six years, in which our exports rose, in which industry went ahead, in which the national income and people's earnings and standard of living went ahead.

Until the Government made a mess of it.

I do not know what meaning one can take out of the word "temporary" as used by Senator Rooney when that situation lasted for six years.

Deputy MacEntee holds the same view, when he mentioned soothsayers.

We should consider some of the advances which were made in this allegedly temporary period since 1958. Since the First Programme for Economic Expansion started in 1959, the national income has gone up by approximately one-third. That is a sort of global figure which, perhaps, does not mean very much in itself but we should think of it in more critical terms, reflected, say, in earnings. Industrial earnings in that period, including the £1 a week which everyone is getting now, went up by about £5 a week, that is, approximately 75 per cent. It may be said that the cost of living has gone up also. All right. The cost of living has gone up since 1959 by 25 per cent. That compares with the rise in industrial earnings of 75 per cent, which is a very big increase.

The agricultural wage, though still not as high as we would like to see it, has gone up by £4 a week—85 per cent —compared with the increase of 25 per per cent in the cost of living.

Debate adjourned.
The Seanad adjourned at 10 p.m. until 10.30 a.m. on Friday, 1st July 1966.