Seanad Éireann debate -
Wednesday, 26 May 1976

Vol. 84 No. 3

Finance Bill, 1976 ( Certified Money Bill ) : Second Stage (Resumed).

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

Cáit Uí Eachthéirn

Leis an imreas go léir atá annseo agus an aragóint atá annseo ó tháinig is baolach go bhfuil saghas mearbhall ar cuid againn agus tá cuid dár smaointe ar an mBille seo ar seachán. Theastuigh Rialtas go mbeadh an toradh seo leis an rún agus ná beadh seans ag Fianna Fáil droch staid na tíre a chur ós comhair an phobail.

With all the discussions and arguments this morning our thoughts are somewhat scattered. I am not surprised this motion was put down. It seemed to us when we read it that it was an attempt to stifle debate. Many of the things we had to say were very unpalatable and what will be said for the rest of the day will be equally unpalatable. It is not surprising that we, on this side of the House, were infuriated. Indeed, if we had been allowed to continue in the ordinary fashion the Second Stage would be almost completed by now.

Before I moved the adjournment last night I tried to highlight the main points of the Finance Bill and to show that most of them were to the detriment of the economy and to the employment situation. One of the main points I tried to make was that the Government have failed dismally to keep any of their promises, mainly the promise to reduce prices and to create more employment. Many people have put the question to us in Fianna Fáil: "If you were in Government would you have done better or done differently?" We have stated many times that, if we were in office, this problem would not have arisen because we would not have handled the affairs of the nation in the reckless manner in which this Government have handled affairs to date. As a housewife would say, if we were making the cake we would have a completely different mix, completely different ingredients. We would not have forgotten to put in the soda.

We have, on many occasions, been most constructive. Two years ago we brought to the attention of the Government that a big housing crisis was looming on the horizon. We were laughed at when we drew attention to this. Now the crisis is there and it will take us a long time to get out of the predicament in the building industry. Many of our tradesmen who have built up good businesses have left us and we will, once more, have to get these teams together when the wheels of the economy start moving again.

We also advised the Government about two years ago that unless they were in on the first pay negotiations and unless they subsidised food before the budget, the mix would be different. We were once again treated with contempt when we highlighted those two very important issues. On the motion it was said that the Government seem to be so full of their own importance that they do not want to listen to anybody. It is very foolish not to listen to people who have long years of experience in Government, 16 years of running the State, and experience of pulling the country out of, not only the two crises left behind by the two Coalition Governments, but previous crises such as the economic war and steering the ship of State through the World War. In all those difficult situations Fianna Fáil were not found wanting. It is most unwise of inexperienced people such as we have in the Government now, in spite of their so-called talents, not to have the courtesy or the common sense to listen to suggestions made by experienced people.

During Senator Hanafin's contribution the Minister, who is now with us, almost reprimanded the Senator for his remarks and suggested he was making an unfair criticism. I have here a cutting from The Irish Press, January 29th, 1976. It substantiates everything Senator Hanafin said. I should like to quote what was said by the foreign editor Julien de Kassel, in reference to what an EEC official said á propos the state of the economy and the budget:

The nearest thing to direct criticism came from one official who drew attention to Article 104 of the Treaty of Rome which says:

"Each member state shall pursue the economic policy needed to ensure the equilibrium of its overall balance of payments and to maintain confidence in its currency, while taking care to ensure a high level of employment and a stable level of prices." Of this the official said:

"It would appear at first glance that Mr. Ryan is not pursuing at least some of these objectives."

He certainly is not pursuing the objective of keeping prices stable, nor is he pursuing the objective of keeping down the level of unemployment. There is far more in that article than I am quoting. It substantiates what Senator Hanafin said. For the first time strings have been attached to a loan from the EEC. For the first time we are being dictated to by people who are lending us money because they have no confidence that the Minister or the Government are able to manage our affairs.

Another economic review, the Confederation of Irish Industry's No. 1 of 1976, is well worth reading. The same gloomy picture is painted there. There is no point in saying Fianna Fáil are the only prophets of doom and gloom. Every writer is drawing people's attention to the sorry state and the desperate crisis in which we find ourselves. There is no point in saying Fianna Fáil are imagining that. Unfortunately, it is only too true. There is no question of imagination at all.

As there are other speakers and as the Government are anxious to finish the debate, I will conclude by saying what I said before. We are living on borrowed money and on borrowed time. The Government have a hand-to-mouth policy and are guided only by expediency. One thing is said today and is contradicted tomorrow. This is happening not only in the different Departments but from day to day and from week to week. Ní fheadar lámh amháin an Rialtais cad a dheineann an lámh eile. As Senator Yeats said, it is high time the Government took note of the mess that has been made of our country and handed it over to Fianna Fáil who have proved themselves in many crises previously. Unfortunately, it will take much longer to pull us out of the morass and the mess we are now in than it did after previous Coalition Governments left office. I hope the Government will listen to the advice of many speakers on this side of the House.

Mr. Daly

There are a few points I wish to make but, before making them, I feel I must reply to Senator Aherne, from my native Kerry. She spoke about the Government, about prices, and about the economic war. She did not say, of course, that it was Fianna Fáil who brought about the Economic War. She did not contrast the Economic War with the present day. At that time I was a boy in Castleisland. A farmer came to the fair with his cow and an old itinerant woman was selling Old Moore's Almanac for fourpence. She asked the man if he would buy Old Moore's Almanac. He asked how much it was and she said it was fourpence. He said: “Give me the almanac and I will give you the cow.” You can contrast that with today when a farmer gets £300 for his cow.

Section 23 deals with minimum benefit in kind for use of a company car. I should like to ask the Minister what is the position of an employee who is required, as a condition of the car being available for his private use, to pay weekly, monthly or annually an amount of money to his company. Will such sum of money be deducted from the minimum benefit in kind? If there is no provision for this in the Bill, I wish to ask the Minister to include such a provision. There may be employees who do not have a company car for the full year. In their case, there should be provision for only proportion of the minimum provision being charged.

On section 26, the stock relief provisions of the Finance Bill should be extended to the retail motor trade. There has been a very substantial inflation of prices of cars and spare parts in recent years. The provision is designed to assist the liquidity of firms. This is of particular interest to the motor trade who normally must pay for cars before they are released. A further point is that the motor trade, more so than any other trade, collect and pass over a huge amount of tax to the Exchequer and it is unfair that they should be denied tax concessions of this kind.

Section 79 deals with rates of vehicle excise duty. I would ask the Minister to consult with the Society of the Irish Motor Industry before reaching any decision on the abolition of the existing system of road tax and its replacement by a further duty on petrol. The industry generally would appear to welcome such a proposal but it would create problems in Border counties where, already, there is such a wide gap between petrol prices there compared with the North of Ireland. The industry would also want to have some assurance that the annual registration fee would be kept at a reasonable level and would not be treated as a means for raising revenue as in road tax. Another problem is that petrol pumps will only register to 99p per gallon, and petrol pumps today cost in the region of £500 to £600 and this would mean a colossal expenditure for the motor trade.

Mr. Cowen

I welcome the opportunity to speak on this Finance Bill because, in the first instance, it affords me an opportunity to say that, since the Coalition took office, the hallmark of their performance in the economic sector is their total lack of policy. This has been highlighted by the Minister for Finance on numerous occasions, both in public and in Oireachtas declarations, when he said he did not believe in planning.

Mr. R. Ryan

I never said that.

Mr. Cowen

The point is, with due respect, the Minister has not made any plans, and there seem to be no plans available. There have been promises galore since the general election 14-point programme but all that can be said now is that this Government will go down in history as the most promising Government of all time, promising in the sense that they make promises, they have made promises, they still make them but, of course, they never deliver the goods.

The basis for this abject, economic and financial failure is that, the Government, through their Minister for Finance, either do not believe in planning ahead at all or, on the other hand, are unable to plan. Down through the years previous Fianna Fáil Governments planned ahead in a very significant manner. We had our troubles when in office with regard to planning but we always set out to plan ahead. This total inability of the present Administration to plan has brought about the present desperate economic situation in which we now find ourselves.

We have stated on numerous occasions that it is a simple fact of national life to plan ahead and we have been ignored by the Government. As a constructive Opposition we have shown the Government parties how to construct a healthy economy which would stand up to pressures. Many times the Central Bank has pointed out the folly of no planning but this seems to have been ignored by the Minister and the Government. All rational advice has gone unheeded. Now we have promises of White Papers and blueprints. Nobody can blame us being sceptical about all this because it could turn out to be another Coalition promise.

Stability in society depends on sound economic development. This Finance Bill will not develop the economy since it is the product of haphazard financial moves of a Minister who never planned. The Minister has stated that planning would be useless. He has directed the economy unthinkingly. This Bill, far from placing the economy on the road to recovery and to an advantageous position in world trade, will not keep the ship of State afloat.

We must judge the Government's ability on the basis of the situation. A decline in revenue buoyancy rising taxes and unemployment are costing in the region of £100 million. This all points to the simple principle every housewife knows to be of prime economic importance: we must return to a balanced budget. Deputy Barry Desmond must have had this in mind when he was reported as saying that one would want to be blind and stupid not to be aware of the shortcomings of this Government. He indicated where his remarks were directed when he continued that the Coalition's record in the economic management of the nation might not be too laudable. Deputy Desmond was very lenient with the economic and financial mismanagement by the Government, as shown by this Finance Bill. Very often we hear members of the Cabinet viciously blaming our financial woes on the international recession. At the same time, they appeal to our sense of patriotism regarding domestic recession.

What I want to point out is that in 1973, when the National Coalition Government took office, the country had the second lowest rate of inflation among EEC countries but in 1975 we had the second highest rate of inflation of all those countries. This all adds up to the fact that we have what must be the worst Government in Europe. Considering the economic mess in which we find ourselves, an appeal to patriotism is no substitute for well-defined policies which would create more employment. In the past three years of the 57,000 workers in the manufacturing industries, one in every four of the labour force lost his job. Due to the advance planning of the previous Fianna Fáil Government 50,000 new jobs were created but there is now a net loss of 6,500 jobs. The Finance Bill will not bring us back to the position we were in three years ago. This is the most lamentable deficiency of this Bill. The Bill does contain any measure that would create employment. In any financial Bill there should be in-built plans and objectives to maintain existing employment and create further employment. We can imagine how humilating it must be for a person to be unemployed, and how frustrating it is for that person to see the unemployment figures rising steadily and not be able to find employment.

What about the young people who left school last year and who are unable to find employment? What about those leaving school this year? Where will they find employment? What has the Minister done, in the Finance Bill, to ensure that this year's school leavers will find employment? The provisions in the Bill will not create employment. It will add to the deteriorating economic climate of the country. Indeed, a significant increase in the number of unemployed can be forecast for the future, if the Bill is any indication of the Government's planning. People want work, not Government assistance.

Why has there not been some effort made—as suggested by my party, to have the school leavers employed in hundreds of neglected national and local projects? There has been no effort on the part of the Government to ensure that these young people will find employment. There must be many ways of creating employment, particularly in industries based on agricultural resources instead of exporting employment, which is what is happening by reason of beef being exported on the hoof. There is no reason why those cattle could not be slaughtered and processed at home so as to ensure further employment at our meat industries. We are exporting jobs again with shiploads of ore to the smelter locations of Germany and there is no action by the Minister in this particular Bill to do anything about this. Speaking of ore, the Government have quarried this Finance Bill and it is a monument to three years of mismanagement by the Government. They have decided to dispense with the compilation of a census, a task which could have provided useful employment for some of our school leavers.

A census at this stage would be of the utmost benefit to the nation because it would pinpoint population moves and the availability of skills, all of which information is of vital necessity in planning for employment. But then we must remember that for three years the present Minister has not shown any indication of planning for employment. It is a deplorable decision even during an economic recession not to compile a census. In this Bill there should have been enticement to all sides in industry to come together to help save the economy but no action was taken in that direction in this piece of legislation. I would imagine if those enticements were there, people on all sides would have come together in an effort to help the country in the economic recession and to protect employment. For all concerned, mutual measures would be taken.

The Government threatened a statutory pay pause, then a voluntary pay pause but after a quick double think dropped both of these draft proposals. Before the introduction of this Bill in the Dáil leading figures in the Government benches, including the Taoiseach, the Tánaiste and the Minister for Finance, were loud in their themes that if there was not moderation this year we would have an economic shambles. The fact is that after three years of Coalition mismanagement we have already reached the stage of an economic shambles. Was it any wonder that a leading newspaper heading last week had the shocking headline that we are broke? When does one know when a country is really broke? The answer is when it is treated as a bad risk and when we can borrow no further abroad. I wonder what efforts the Minister or the Government have taken in regard to those stringent strings which attach to the recent loan from the EEC? I doubt very much if they have taken any. Consequently, any future loan that the Government might seek would not be likely to be made available.

The sincerity of the Minister in the context of this Bill can be called into question because the Bill implies that there is a need for a pay pause and for the curbing of inflation while it does nothing to meet those needs. We were told two years ago that it would be possible for the Government to spend all the money they got from the EEC and at the same time to stabilise prices. All the money was spent but the prices spiral and have continued to spiral. The Government have taken no action to remedy the situation.

This Finance Bill will account for at least a 5 per cent increase in prices. In another country direct taxation was increased by small amounts and in some cases was reduced substantially. This strategy worked because last month Britain's inflation rate was slashed by more than 2 points. It now stands at 18.9 per cent. If the Minister had taken similar action in this Bill the desperate economic situation that we now find ourselves in might have been avoided but he had not the initiative to do this with the result that we now find ourselves on the brink of bankruptcy.

The situation in Britain was made possible by the unions being enticed to be moderate. But in our Financial Bill there is no planning. There is no recognition that in dealing with public and private sectors, in dealing with management and labour, we are dealing with people, people who have rights, who have emotions and ambitions, but above all people who if cared for correctly would tackle with the Government the problem of inflation. This Bill blatantly ignores all the sections which make up the economic entity of Ireland. This working together in harmony is not forthcoming. The Minister is responsible for the scandalous state of affairs that exist. The British rate of inflation will be much lower than it is here. It is forecast that it will be one-half or one-third of the inflation that was forecast for this country.

Side by side with this domestic escalation in prices is the frightening escalation of this Government's foreign borrowing. A habitual borrower is a poor and near-sighted investor. For instance, in the nine months ended March, 1976 the Government increased their foreign borrowing by bringing it to a total of £123 million. That represents an increase of 52 per cent over a nine-month period or on an annual basis, an increase of almost 70 per cent.

What does this mean here at home? It means that 18 per cent of the estimated 22 per cent total growth in the money supply in 1976 will be due to Government borrowing. This adds inflationery pressures here at home and the Bill does nothing effectively to curb inflation. For five years prices have risen at an annual rate of 14 per cent. In 1975 the rate of increase was 21 per cent. In this Bill the Government have failed miserably to deal with the economic situation and we are left to float further towards complete economic disaster.

Regarding the taxing of co-operatives I wish to state that I doubt very much if the Minister is aware of the functioning of those agricultural co-operatives. He has quoted instances of large co-operatives with large turnovers and which he has said have large profits. My knowledge of the co-ops is that they are run on a very small margin of profit, that whatever profits are made are ploughed back into their further development. They act as an incentive to the small farmer in that he gets fertilisers and feeds at the lowest possible cost. Any introduction of taxes will hinder the further development of those many co-ops.

The Minister stated that he knows a number of co-ops that are making a huge profit. If that is true, I agree with him that the functioning of those individual co-ops should be investigated. But I can guarantee the Minister that this category are very much in the minority. The co-ops have proved an incentive to agricultural development down through the years. Let us never forget that we are not at an advanced stage in regard to agricultural development. There is a lot more which can be done in that direction. I very strenuously ask the Minister to reconsider the proposal to tax co-operatives. I would imagine he would be correct in investigating the functioning of the small number of co-ops that have showed a large profit but if he investigates all co-operatives he will come to the conclusion that it would be very wrong to levy taxes on them. The big farmer, irrespective of whether an agricultural co-op is in his area or not, can buy fertilisers in large amounts at a low cost because he has the cash to pay down, and he will get large discounts. But the co-operatives give the same facility to each farmer irrespective of the size of his farm. It would be a hindrance to the development of small farmers to introduce this tax.

Because of the severe increase that were imposed on spirits and beer in the last budget I am convinced that the revenue from that source will be reduced drastically this year because of a decrease in consumption. During an economic recession any fair-minded person would say that if the Minister wished to raise extra money naturally spirits and beer should bear a fair share.

Jobs have been lost right through the country on account of the amount of the increase involved here. I would imagine that even with the big breweries there will be a loss of jobs due to the severity of the increases on spirits and beer. I read recently that the Minister stated he expected the revenue from beer and spirits to be something the same as last year, but from one who is involved in the trade I doubt if he is correct in his forecast. I know from a number of bottling firms in the Midland area that due to those drastic increases they had to let a lot of their workers go, bringing about a situation of increasing unemployment figures. I suppose nothing can be done about the situation now but I mention it to emphasise the effect it had on employment. Very many publicans throughout the country find their incomes less on account of the reduced trade.

I conclude on the basis that one can see in this Finance Bill evidence of the tug-of-war game in the Coalition Government. Sadly we find that as a result of this pulling and tugging the nation is suffering. What is needed in times of economic recession is a sure hand and, I would emphasise, a one-party Government, because decisions cannot be made when there are two political parties not agreeing on how the Government should tackle the desperate economic situation we now find ourselves in. I feel quite certain that if the people were given the opportunity at this time they would ensure that this country would again be in the hands of a one-party Government, a Fianna Fáil Government, because we are the only party that can gain the confidence of the people, and can lift them from the economic plight in which they are, an economic plight brought about by a three-year period of total mismanagement of the financial affairs of our country.

Mr. Garrett

The Finance Bill gives an opportunity in this House to discuss the state of the country last year and what we expect it to be this year. It is not the management of the country but its mismanagement that will have to be discussed because this Finance Bill is the result of mismanagement.

It is remarkable that from about 40 Government Senators we have had about two contributions and the last one lasted about five minutes appealing to the Minister to give the motor industry some concessions. If that Senator had anything to say in the way of praise or to thank the Minister for any benefits he had given them, I am sure he would be very vocal in his expression. Instead Government Senators have been showing their dislike of the provisions by their total abstention from speaking and their absolute silence on the Finance Bill. I think that itself is a fine reflection of the attitude of the whole community. Ordinary Government Members of Dáil Éireann during their discussion of the Finance Bill were very slow in coming forward and the majority were absent from all the discussions. I cannot see how these Members could thank the Minister for anything considering he has looked for pay pauses and wage restraints while taxes and prices have been going up.

The number of people out of work has been given as between 118,000 and 120,000. We get this on our weekly ststistical document. This is far from being the truth, because in reply to a Dáil question addressed to the Taoiseach a few days ago, he gave the figure of people receiving unemployment assistance and unemployment benefit as 147,000. We got the information the same week in our statistical document that we had 117,000 people out of work. These two figures are not reconcilable. We are getting wrong figures and this should be put right. The people should be given the facts. While the Coalition are mismanaging our affairs we are going from bad to worse all the time and we will not improve in any way whatsoever. We have had two periods before of Coalition Government and in each period they evacuated themselves. They were not beaten in any vote in any House of the Oireachtas: they evacuated when they were running short of money. On both occasions it took the Fianna Fáil Government years to bring the country back on a sound, sane footing. We ask the same concession this time: that the Government get out now before things get worse and give us an opportunity, because the longer they are in the longer it will take to get the country back on a sound financial basis.

It is very sad to see how the country has been hit. If we look at county councils we see that their road plans this year are far below, in money terms, what they were last year or any other year. They may be above, as the Minister said, 1972-73; but they would need to be about 65 times what they were then in order to have the same amount of work done in 1976. They have fallen a lot short of this and the result is that we will not have the number of people employed by our local authorities as in previous years because the money is not available. Our health boards are hit very badly. Their services are curtailed. Anybody who is in a temporary position and requires sanction for permanent employment will not be sanctioned. The position is the same in all the health boards.

It is sad that the people who will be very badly hit are the poor people on the medical card who have to go to those hospitals for treatment to keep themselves alive.

Not alone in the road structure, but in the whole spectrum of county council affairs, people have been badly hit. In north Mayo and south Sligo where there is big industrial development taking place we are going from Pat to Tom, from Tom to Mike and from Mike to James to find out who is going to give us money to build houses for the working people. Inside the next few months there is expected to be an influx of about 600 workers to Asahi. The same thing is going to happen in Hollisters and in Shamrock Forge and Tool. We in the Mayo County Council have not got one penny and we cannot get it from the Central Fund to erect houses in that area. Last Thursday morning the new county manager in Mayo, the IDA, the NBA, the Department of Local Government and the Department of Finance met to see if they could do anything at all in order to give us money to build houses for the working people in that area and also to do something about the infrastructure. We have an estate of 93 houses going up outside Ballina. We have no sewerage. We cannot extend the sewerage from the end of the town out to that estate because there is no money to do so. We have applied for it and sent up documentation, but we cannot get it. We were told that eventually we will get money but when?

The money that is being borrowed is put to bad use. That is the downfall of this whole structure. If I borrow money in the bank every second week to spend in a public house the bank manager would soon tell me to get out. If I borrow money in the bank and put it to some capital development and if I make an effort to pay back the interest and principal, they will accommodate me. You will not be allowed to borrow money to spend foolishly. That is what is happening here.

There is at least £104 million being paid out in unemployment assistance and unemployment benefit this year. I should like to ask the Minister for Finance, his advisers and his Cabinet— they are supposed to be a Cabinet of collective responsibility and of consultation—if the £2 million a week that is being paid out in unemployment benefit were to be distributed among the 26 county councils and the county councils were to spend that on local improvement schemes where they get contributions from the people when the schemes are completed would that not put at least 75 per cent of the people out of work back into work. You would stop this scrounging mentality that is in our youth at the present time. That mentality has been forced into them from the day they leave school. They know there is no work available for them so they sign on the dole and they have a few shillings for spending and a few shilling for a dance. If they get married and have a few children they will get about three times as much and they are quite happy to exist on that.

There are people entitled to unemployment assistance and people who need it very badly. The majority of those people are in the west of Ireland. If those people got the dole and the people who are well able to work went to work, their stamps alone would make a decent and respectable amount of money available for those who badly need unemployment assistance. I do not know if it is much good putting any of these proposals to the Government because if that came before the Labour mentality in the Government they would not accept it. They want to buy their way by handouts but they are not giving half enough to the people who badly need it.

From mid-February, 1973, to mid-February this year the consumer price index increased by 62 per cent. From mid-February to mid-May this year, which will be the quarter, the figure has not been officially published but it is accepted by economists that it will be an increase of 65 per cent. There if nobody here who has got an increase of 65 per cent in the last three years. Any Government or Minister under the impression that they are going to get people to accept pay pauses and restrictions and at the same time increase their cost of living and taxation are making a big mistake. They can see that mistake by the number of people of the Amalgamated Transport and General Workers' Union who marched to Leinster House today and held their meeting outside the gate about two hours ago. They were quite justified in doing it. Everything they are purchasing —they have to buy practically the daylight—has gone up to a fantastic extent. Their wage packets are not sufficient to buy the same amount now as in 1972 or even in the first year of the Coalition Government.

There was an increase last November or December, before the budget came in, of 15p per gallon on petrol. Any man who has any spark of sense would know that that was going to be a very regressive step in many ways. If anybody had told me that a Minister of State would put a 15p per gallon imposition on petrol in one sweep of his hand I would have said either he or the man who would do it was mad. I would not believe it. A week afterwards everything went up in price again. Then we had the budget and the week after the budget we had more increases. It is not a budget; this is not a Finance Bill but a continuation of the Finance Bills introduced in 1973 and 1974. It is not even a monthly continuation of them but a weekly one.

Yesterday's newspapers carried the heading "Prices of Oil and Petrol to be Increased Again". There is no consideration for the fact that a gallon of premium petrol is selling at 88.9p per gallon and the State takes 52.4p in taxes. In the budget, petrol was taxed to the extent of £29 million between VAT and everything else. It is unbelievable that people can see their way to do those things and laugh at the thought of getting away with it. The excuse we got was that we were being brought into line with the price of petrol in Britain in case there would be cross-Border smuggling.

If you take butter, the motor car and various other things, we are not being brought into line at all with Britain and Northern Ireland. Because we were some pence below Britain in the price of petrol we had to increase the price of petrol in order to bring ourselves up to the price that was being paid for petrol in the Six Counties and Britain. It was a very foolish and ridiculous excuse but the Minister got away with it. There are many homes in my area where people have to commute 20, 25 and 30 miles to their work. We have Bord na Móna, the ESB and we have people commuting more than 50 miles to work in the Asahi plant in Killala. They were taxed on their stamps. They have to pay more in PAYE. They were taxed on their petrol and they were doubled in regard to road tax. Every man who had a 14-horse power car was paying something in the region of £44.50 for it, but since the budget came in he has been paying £84. The tax he is paying on petrol is very high. How can any man who is earning £50 to £60 per week afford to keep a wife and family and still pay all these increases? If the Government think they will get away with it they are mistaken because as soon as they go to the country they will be told that it is time for them to pack in because the people have had enough of them. I think they will be soon told in a smaller way than in a general way.

The situation is absolutely ridiculous. When petrol tax is increased it is not just the motorist who is affected; it is the housewife, the consumer, who will be hit, because it will affect the distribution of all products used in the household. If there is an increase in transport costs naturally the people who have to pay these increase will need more money. It eventually boils down to the fact that the person who is paying the increase is the consumer and the housewife. They are the people who are paying more for everything through the extra taxation. It is a vicious circles when prices go up there will be less consumed, when there is less consumption there will be less productivity, when there is less productivity there is less employment and more redundancy. The higher the taxation the surer it will be that there will be more unemployment. When it is boiled down, if the housewife reduces her consumption the next thing which happens is that her husband or son or somebody related to her who is working is out of a job.

We have mishandled our educational problem and nearly everything which the Government should be doing they are not. They are using red tape. Why have they not come into this House and told us that they will do something about unemployment and the economic state of the country and get it back on a straight footing? Instead of that we have two Ministers talking about the pill, contraception, divorce and so on. They are trying to distract people's minds from the real things which are hitting hard, such as unemployment and the rising cost of living. I wonder would anybody on the other side of the House blush if a leaflet was produced with the 14 promises made in January and February, 1973, that they would stabilise prices, reduce unemployment, curb emigration and so forth. We were to have an Ireland flowing with milk and honey. I ask the Minister or anybody who represents him was there one iota of any of those promises made in 1973 kept? They were broken before the ink was dry on the paper. That was a saying about the Treaty of Limerick, that the British had broken that treaty before the ink was dry. The same thing has happened with this Government. As soon as they got their mandate on 14th March, 1973, all these promises were used in the smallest room in the house, for a peculiar purpose.

It is a sad reflection on the Government that they have brought this country to the state inside three years. It is in a terrible state when you think of £150 million which we have borrowed from Saudi Arabia. We could not get that loan without having certain people to go guarantors for us. There were certain conditions written into the loan. I think it is written into this loan that it is only a five-year loan. It is taking £20 million per year to service that loan plus £30 million a year that has to be paid back in capital in order to have the loan repaid in five years. If anybody can tell me where we are going to get that £50 million and the £104 million we are paying out in unemployment assistance benefits, he would be a magician. The only way we can get that money is by higher taxation because our borrowing power is over, our credibility abroad is over and there is not a hope of us being able to get money. What we are trying to do is to keep our domestic troubles at their present level to keep the dole men satisfied, to keep the redundant men satisfied and keep the pay-related men satisfied. I do not know where we are going to get the money. It is sad but true that it is the first time in the history of this State that we have had to have guarantors to vouch for us when we went to borrow money from a foreign country. In 1929, 1930 and 1931 we got money from America and we did not have to have guarantors for it. But I am afraid that day is gone. The bed of roses which the Government think they are lying on is gone also and the thorns are beginning to show. The Coalition Government are going to feel the effects of all this before they are finished with the people.

On the taxing of co-ops, the North Connacht Farmers' Co-op borrowed £1.25 million in order to continue their capital development programme. They have to repay that loan, but if they have to pay taxes how are they going to pay? They are already paying taxes, as are all co-ops. They are paying tax on groceries, hardware and household goods through high VAT rates. Now the Government want to tax the agricultural produce they sell. This is another effort to stifle the agricultural industry, which is the basic industry of this country. Not alone have the Government taxed the co-ops but about a fortnight ago in the slaughter subsidy they put on an 800 per cent increase on the slaughter of an animal, cattle, sheep and pigs. A fortnight before that a 12 per cent increase was put on the price of feeding stuffs on account of the skim milk that was ordered to be put into the mixture of feeding stuffs. If the Government can tell me that that is not an effort to stifle the agricultural industry I say they are wrong.

It is only in keeping with the attitude and the practices of the Government. From 14th March, 1973 to the present time they have liquidated 1,081 industries. If the Minister spent as many days out closing down those factories as he spent opening them he would have spent three times more time closing than opening them and he would be well fed at all the functions, if they could be paid for at all. Since March, 1973 1,081 factories have been closed down by the Coalition Government. These were the industries which Fianna Fáil built up under the industrial leadership of the late Seán Lemass. I do not see where these factories are to get the money to open up again. If they look for loans they will be told that they have already got loans and that nothing can be done about it.

It is sad to see the country in such a state of bankruptcy without any real effort on the part of the Cabinet to bring it back to a sane position. It is even sadder to think that there were only three contributions to the Finance Bill from the Government side, and in none of them was a word of praise for the Finance Bill. But there was only very slight criticism. It reflects the true belief of the people in the country because I suppose these people talk to their constituents and neighbours and ask where they are going to from here.

I want to ask the same question: where are we going to from here? I guarantee that before Christmas, if this Government do not get out, there will be many a hungry mouth on Christmas Day in the homes in the west because this Government will not even have the money to pay unemployment benefit. Unemployment assistance has been paid with borrowed money. The proper way to use it is to put it into capital development to help the economy of the country. Every aspect of the economy has been hit by this Government. As Senator Cowen said, there is no agricultural or economic policy. The only one policy in industry is to close recently opened factories.

It is time for the Government to come up with a policy or a plan. As everyone knows, the Government will not give money to local authorities for roadworks unless they can produce a five-year plan. Yet this Government are living from day to day, hoping that some miracle will happen tomorrow, that there will be a flush of gas or oil to relieve the trouble they are in. These miracles do not happen overnight. Unless we plan for the future, this country will have to wait—even for the full five years—for Fianna Fáil to take over again. The people will have to go through hardship before we can improve the economy, because desperate ills need desperate cures. If the Government last that long, good luck to them. If they do not, they should get out as soon as they can and give us a chance. I guarantee we will cure the economy.

I would ask the Minister to consider the contributions from this side of the House. The speakers on the other side of the House have not made any worthwhile contributions. They only juggled with figures—and figures can be juggled with. When I was going to school there was a little green book in circulation. In that book the first juggling of figures proved that one was equal to two. Another one was an 18-inch square which, by cutting it up into certain triangles and so on, could be turned into a 65-inch or a 67-inch rectangle. Figures can be juggled, and there are no better jugglers of figures than the Coalition Members of both Houses of the Oireachtas.

In 1972 the Government were getting more tax per gallon of petrol than they are getting now on a percentage basis. That is right on a percentage basis. But the difference between the tax on a gallon of petrol in 1972 and 1973 and now is not a question of percentages at all but of actual monetary facts, hard currency. On 88.9 pence per gallon of premium petrol today, 52.4 pence of that is going to the Government in taxes. Let the Government make up their minds to get out as fast as they can and let us take over.

Mr. M.D. Higgins

I found Senator Garret's rhetorical question "Where do we go from here?" most hopeful. A related series of asides indicated, perhaps hopefully, although I somewhat more dismally think that he might not have been so serious, a commitment by his party to the notion of economic planning. Such a confusion has come to typify contributions from that side of the House. On the second last occasion on which I spoke here I said that it would be of great benefit to all of us if we had some points of clarification. Are the Opposition, who see the remedy to all our ills in their return to power, in favour of balancing the books or are they in favour of deficit budgeting? Sometimes those Members suggest that we can reduce taxation and, at the same time, balance the books and reduce foreign borrowing. I am at a loss to understand how one can claim to be consistent in an attack on borrowing to meet, for example, social welfare payments and at the same time suggest that living standards will be increased all round.

When the Labour Party initiated a debate on the necessity for coherent economic planning it was attacked. Yet, later in the week the Government were attacked for not having an economic plan. Are budgets to be deficit budgets or are they to create revenue surplus? Are we to have planning or are we not to have planning? As regards sections of the community which are not taxed already, they are not to be taxed. Yet, without the plan and without new sources of revenue everybody is going to receive more. I am trying to see some semblance of sanity in all of this confusion. One thing occurs to me. Perhaps the Fianna Fáil Party are going to improve the quality of life, that is, that we will abandon traditional economic assumptions and will ask people to take less but to remember that in so far as we have removed the present Government all is really well.

I want to say some simple things about the issues raised under the Finance Bill. First of all, I do not subscribe to the simplistic mentality that you can work your way out of an economic recession by changing personnel in charge of revenue distribution and redistribution in the same way as one changes the position of a footballer on the pitch. It is interesting, when people have decried the lack of contributions on this side of the House, that the only recipe they have offered is, in the words of Senator Garrett: "For God's sake, get out of power! Let us back." This was preceded by an onslaught—and I thought that that was going to be somewhat encouraging in some respects—that the present Government had no policy on agriculture or finance and that they had a policy in industry of wrecking jobs.

I thought the House was then going to hear what Fianna Fáil policy in agriculture, industry, science, technology and public expenditure would be. Being a person of long memory, I remembered what a Fianna Fáil politician told me on one occasion. He said "Your party is out of power and mine is in power because we don't need any of these ologies, isms, plans or policies." I knew, in fact, although I hoped the House would hear something new, that it was the old fox that was there after all; the fox that can say with one bark, "Planning is good", and then when it suits "Planning should be avoided" and on another occasion "We must reduce taxation but we should not increase revenue". This apparent confusion need not delay the House too long. While people have criticised decisions made by the Government, there is one thing clearly transparent, that is, that the lack of any alternative policy is probably the single greatest asset of the Government.

If I might expand on Senator Garret's points, he suggested that "It is ye who have done this and it is ye who have done that". As somebody who has been involved in the teaching of economics for a brief period, I would make the point that these reductionist kind of arguments serve very little purpose. I do not think that Fianna Fáil, in some of the mistakes they made, inflicted them on the people through any personal sense of malice. Rather, I feel it is this—something which will not be agreed with by the majority of the people, as I am frequently reminded— that it is not the group of people who form the Cabinet of the day who inflict social or economic ills on an economy or on a society; it is forces, more precisely market forces, which dictate levels of investment and of employment. This is because a system which links a particular kind of relationship between labour and investment has brought about the present economic crisis.

The Irish economic crisis, let us be clear on this, cannot be considered in isolation. At present in Nairobi the fourth meeting of the United Nations Conference on Trade and Development is seeing one of the most interesting confrontations that has yet taken place: a confrontation between the world of the rich and the world of the poor. John Armstrong of The Irish Times, only two days ago could write a report which clearly stated that the 77 poorest countries paid over $1 billion annually to the developed countries for the use of patents and some developed technologies. When the amount of aid given by the developed world to underdeveloped countries, those 77 countries, is put into ratio, one can see that it is but a tiny fraction of what is being extracted from the Third World in terms of resources and real wealth.

These principles which have brought about a world crisis and a world confrontation between people who believe in a certain kind of economic system and those who believe in an alternative are reflected in the economic crisis which affects this country. It is a crisis between those countries which possess resources and those countries which have not only extracted— extracted at deep personal cost— resources from the Third World but have in their expenditure and their usage created a very vulgar and wasteful society in the western world. Therefore, any consideration of the Irish economy —the last speaker invited the House to consider the economy generally—and the position in which it finds itself involves, inevitably, a consideration of the present state of the world economy. Here, as I have stated, the principles are basically the same. To put it in more human terms, it has been the indiscriminate exploitative extraction by the industrialised countries, as we know them today, of basic raw materials and their employment in wasteful and undignified commodity products.

That has brought about and is sustaining famine in the Third World. Inevitably, any of us who are participating in societies which sustain those economic systems are partners—we are not independent and we are not isolated. Our consumption pattern and the greed of the western developed nations is the primary source of the deprivation, the hunger and the famine of the other part of the world which has been gutted for its real wealth over centuries. It is interesting, that it is in 1976, at the fourth conference of UNCTAD, that this confrontation has taken place.

If the House needs further evidence that a single nation today is no longer in control of its economic instruments, I suggest this: my own reaction to the proceedings of the UNCTAD conference is that frequently Government initiatives have had to be tapered to take cognisance of the demands of multinational corporations. In other words, even though nations meet, the greed of the multinational corporations cannot be curbed. Therefore one might say that the international capitalist system, founded as it is on the expansion of such multinational corporations, has no political monitor or control. The single greatest challenge facing all of us in the international community is to redress that position.

Coming to Ireland's case, I want to reiterate some points. I believe that the Finance Bill as such is a limited instrument in what it can do if we retain the traditional concept of economics. What the Finance Bill can set out to do is to gather revenue and distribute it in a particular way. One thing that is patently clear is that the pressure of Labour members of the Government is evident, for example, in the manner in which the living standards of those drawing social welfare payments have been protected to some extent. There has been an increase in expenditure on social welfare from £91 million to £142 million. I do not suggest that that is sufficient to either eliminate poverty in our society or to reduce genuine distress. What I am saying, in so far as redistribution is being made, is that an attempt is being made to try and hold up that vulnerable section of the community, a vulnerable section of the community that is frequently treated with abuse by those who do not understand their plight. It is often forgotten that those who, for example, find themselves unemployed have for the greater portion of their lives contributed with their labour to our present society.

In speaking on the Finance Bill and accepting the necessity for economic planning it is not sufficient—I wish Senator Garrett was here because I would grant him a point on this—for a person contributing to a debate on the economy to ask the House to believe that Fianna Fáil might do better. On the other hand, to simply say: "We are going better than when Fianna Fáil were in power", would be insufficient.

In the last 12 months there has been public demand for the concept of planning. The concept of planning— and future Finance Bills will reflect this, I hope—is the opposite of some of the principles upon which present economics is based. For example, the economic base of power in the present system, as it works, is based on the ability through ownership and control over means of production to determine the distribution and disposition of the surplus that is generated in production itself. That is, those who have power largely conferred through ownership of the means of production decide to exercise that power as if they were distributing the results of economic growth in the same way as they would distribute a residuum. We should be more optimstic and constructive in the debate. We should not only speak about the necessity for a plan but we should speak about the implications of having planning at all.

There is, whether we like it or not, a direct contradiction between the concept of planning and the kind of ad hoc distribution of revenue surpluses which have gone on until now. For example, budgets in the history of this State have been surrounded by mystery. It was as if the Minister, having gathered a certain amount of revenue, could dispose of it in a number of ways and one would have to exercise guess-work as to where it was to be spent. The minimal acceptance of the concept of planning means that one articulates social goals and stresses that the wealth generated in the community will go towards the relief of social distress, the answering of social needs and will serve social goals. This eliminates the element of mystery for the conscious purpose of creating a just society. In that case production—manipulation of resources—is no longer dictated by the forces of the commodity market. In that case, one is controlling, in so far as one is using the economy instrumentally, the kind of society one wants. As the world economic crisis has begun to be analysed, we should realise that the economic order that is in crisis is an undignified order, an order at world level that provoked a massive confrontation between those in greatest need and those who accumulated resources through greed. At a national level, we have to realise that the resources of this country must be used in the interests of the community in general.

What happens if one wants to change a society? Any socialist who believes in economic planning must be prepared to move forward to a structure of economic relationships in which money-market criteria are no longer dominant. The criteria must instead be direct satisfaction of social needs, and this implies a number of things, particularly the democratisation of decision-making. Let us consider, as we discuss the Finance Bill and the requirements of finance in general, what our financial instruments have to serve. It has been pointed out to us in one document after another, particularly by Professor Brendan Walsh of the Economic and Social Research Institute, the magnitude of the task which faces us socially in the years ahead. Ireland's population is likely to increase at a far greater rate than that of the other member countries of the European Community. That population growth will take place among the younger age group. Emigration having slowed up and the natural increase having stabilised, we can now look forward to a growth in the active population in Ireland in the next decade of 17 per cent. The comparable percentages for the same period in other member countries would be: 16.1 per cent for the Netherlands, 11.3 per cent for Italy, 8.4 per cent in France, 6.6 per cent in Belgium, 3.2 per cent in the United Kingdom, 2.8 per cent in Denmark and 0.6 per cent in West Germany. This huge increase in population will automatically bring with it the responsibilities and obligations of job creation if people are to contribute to society.

The necessity for a plan can be seen immediately It has been demonstrated again and again that whatever has been attempted in the past is markedly insufficient to make up the number of jobs that are required for these huge population increases. This means that it is not financial measures as such that will require the greatest change but the introduction of new financial institutions. In other words, the kind of relationship of production to capital acquisition which we allowed to dominate in the past and which created this vulgar waste-making society and still sustains it, will simply be not on. We will have to ensure that revenue gathered from future resources will be used in such a way that it will answer the demands of social need. One of the primary elements of social need is the right to work.

A demand for economic planning in general for the purpose of the achievement of social goals, a social need that has been demonstrated by independent scholarship, means that we have to be serious about both our future financial institutional requirements and our financial measures. It is markedly insufficient simply to stand up in a debate and say: "If we were there we would do better". That is no answer to anyone looking forward to the planning of our society, to answering social need as it will manifest itself in the years ahead.

Senator Garrett mentioned something which might unfortunately be a cultural characteristic of this island. He drew on that great word "Ye", whoever they might be—I am not sure whether it includes the Divinity or several divinities, or whether they are real people—and said: "Ye closed down 1,081 factories since March, 1973". I remind the House of my remarks at the beginning of this speech that it is not the individuals of the day who closes down factories and eliminates jobs but rather market forces which are linked to a private enterprise economy and which are participating in a world economic order that is dominated more and more by the profit motive and is falling under the pressure of the multinationals rather than of national states.

What then of the future? This House would have done much better if it had bravely said something like this: The base from which revenue can be gathered in this country at present has definite limits to it. There are limits as to the levels of taxation that one can put on that base itself. I reject altogether the principles of collection that have dominated until now. I have suggested that the economy be consciously managed around the attainment of social goals rather than the Minister of the day be distributing revenue from the residuum of growth.

I should like to put some further questions to people who might want to participate in this debate concerning the financing of our country at present and economic head. It is sometimes said that what is necessary is the return to economic growth, but I raise the point, quite unashamedly that there is a deeper question—economic growth for whom? Does the demand, the simplistic demand "Return to economic growth" mean by those who make it that we are happy with the distribution of the existing products of growth? Remember we could return to growth. It is conceivable we could achieve a growth rate, and the disparities in our society between those who possess wealth and those who are poor could grow, and grow very much indeed. Therefore we should be taking advantage of the economic crisis and seeing, as I have seen, the economy mismanagement as instrumental for the achievement of social purposes and socially debated goals, and within that notion of the management of the economic instrument, the notion of the attainment of growth as a minor instrument. All of this is extremely important if we are to move forward.

It is very well worth while in a time like this to look at the structure of our consumer behaviour. I argue that there are many aspects of consumer demand at present time which might generate revenue in the short term but which in the long term are not to the benefit of the world community in general. Many consumer practices that have grown up and that have been sustained through advertising in our western society are directly inimical to the interests of the world community as a whole. It is consumer vulgarity in the western world which is the other side of the coin of famine in the Third World.

We might too look at the nature of our dependency. In discussing, for example, income we need to ensure that there is quite a difference in a revenue measure which will affect the income of somebody who is an extremely wealthy person and a measure which will affect the income of somebody who is just buying the basic necessities of life. Quite a difference arises. To move forward then at the invitation of Senator Garrett, I suggest that there is this merit in one of his suggestions. He asked—I do not agree with him—that the money spent on social welfare be reallocated in the manner in which he suggests it could be done so easily.

One thing we might look at in the short term—and I emphasise it is short term—is the manner in which savings have continued to accumulate while investment has not taken place at the same rate. This has meant that surpluses have risen within the commercial banking sector. At the same time we are aware of the level of unemployment wavering something around 118,000. We are also aware that very many public infrastructural schemes have been planned and designed, particularly since the financing of a great proportion of them was removed to central funds. These three terms taken together—the existence of worth-while social infrastructural projects, the accumulation of commercial banks' surplus and the high level of unemployment—would mean plans in the very short term, would probably result in the creation of sure jobs and would not in the short term have an inflationary effect.

This would, however, not be an answer to the long-term reorientating of our economic structure which must be shifted from the idea of production for profit or, if a related corollary, production of commodities for market consumption which will generate profits. Rather must we speak about production for use by those who are in need. It is that kind of thinking which lies in the Labour Party's insistence on a debate at the present time on the future of the economy, on the necessity of economic planning.

We might rather in simpler language say this. We want to rescue future generations from the indiscriminate and harsh effects of market forces and enable the Government of the day, through their financial instruments and institutions, to answer social need and consciously to improve our society. Our demand for planning therefore implies advanced production techniques and answering of social need.

In a speech which was given yesterday and reported the speaker said that one can answer some of our economic ills by increasing productivity and that an increase in productivity will bring about an increase in revenue. But things are not as simple as that. Productivity in the narrowest sense means pursuit of the production of exchange values without regard to the consequences. The guiding principle is not the social need of which I have been speaking, not the most effective use of resources to meet social needs and social aims, but the production of exchangeable, saleable and marketable commodities to create the greatest profit.

Indeed many people, without realising what they are doing, tacitly support the politics of the market economy. They do so not because they are forced but because tacitly they are induced through advertising and through the subtle operations of the market mechanism to scramble for commodities that do not answer their real needs in the best fashion. This is an example of ad hoc consumption, an example of what happens where there is no social plan, where there has been no debate about the purposes of the use of resources in general.

I doubt very much if we can expect reasonably to raise much more revenue from the structures we have at present in society. It is obvious that if it is a primary social aim that one has the right to work one must also take Professor Walsh's figure, that thousands of young people will need employment. The private sector is not able to meet that demand. Here again I opened with the principles of confusion among the many spokesmen of Fianna Fáil. I wish to goodness that they would make up their mind whether they believe that the private sector can——

Mr. Keegan

The Senator should worry for himself and his own party.

Mr. M.D. Higgins

I am concerned for society which transcends both the immediate opportunities of the Senator's party or, in fact, the purpose of mine. Is the private sector capable of generating the number of jobs that are required? The obvious answer is that it is not. If we were serious and if we were to have a worth-while debate in this House, all sides of the House would agree about the necessity of having a careful economic plan. Where we would differ would be the emphasis we put on the means of implementing that plan or how social goals might be achieved.

I very much share the concern of the Senators on all sides of the House who have spoken about loss of employment, but a time like this is an opportunity for us to look at the kind of employment we have generated. Inevitably the way the private enterprise system has worked has meant that any commodity that has an exchange value that will generate profit finds itself justified and any job that is involved in the creation of such a commodity is justified. Now, it is logical to assume that when one takes the other side, the planning of attainment of social aim, the jobs that will be most valuable in society will be those that will be addressed to the greatest needs of society. It is necessary therefore not only to speak about how we are going to create numbers of jobs, but where those jobs are and what people will be doing.

It is opportune now to advert to something else, and that is that the creation of industrial jobs and economic growth, as it is referred to frequently, from an external source has served us very badly. We have, for example, people commenting on the state of the Irish economy, suggesting that things are so in Europe and Britain and therefore they are so in Ireland. I have often referred to it as a kind of an influenza economic theory—things are bad and this spreads around the world, and they get better and this spreads around the world. We all know that this need not be so and those people who have tenaciously and with tremendous consistency attacked the notion of planning and the notion of the Government interfering in the economy as standing in the way of creating future jobs for the future population of this country are people who cannot have their cake and eat it. We either bash the private enterprise system, which is bankrupt and inefficient, or decide to develop as much as possible the popular acceptance of the concept of public planning and public ownership. If revenue in the present circumstances be gathered from the existing disposal of resources, it is of the utmost importance that future resources and the revenue which they will generate should be held by a State banking company rather than the commercial banking sector. In other words, whatever will be generated from our new wealth, will be controlled by the State, thereby making it amenable for disposal and usage in job creation in a way that it is dignified and in accordance with an adequate social plan. To do otherwise would be to allow profits and the benefits of the new resources to move to private hands in an indiscriminate fashion outside this country and around the world.

It is an elementary form of political honesty to say whose side one is on. I believe that what we have seen in terms of world confrontation, politically between the resource-possessing and the resource-consuming countries, is no accident. Its minor ramifications in our own economy, which are huge when we look at our own needs, show that we need an entirely new approach towards the financing of our needs. Whether we like it or not, many people who are not convinced socialists for a number of reasons may feel the necessity of socialist planning pressed upon them.

In other times when one compares this crisis with others which have occurred, historically different capital-possessing countries have been able to bail each other out through international fiscal movements. The present crisis has a single characteristic which sets it aside. Many of the major economies are in crisis at the same time, and it is this kind of crisis which has called into question the very principles of economics upon which society has been based. That is why it is such a healthy thing that one of the positive responses to the crisis would be the demand in public for a debate on economic planning.

Regarding the disposal of existing revenue, where concessions have been allowed for research and development within existing industry. If we were to set about the task of economic planning and if we had had a sufficiently wide-ranging debate on the kind of society we wanted, we would be faced with the positive implementation through measures of that plan. I have said already how surpluses that might be generated from use of resources should be used so that they could be spun-off into other socially useful ways. It is obvious too that even at the other level we have given tax concessions for certain development.

Here we need to advert to an important point within the structure of science and research and development itself. If people have been deluded into accepting the market mechanism and its justification through advertising, when we look at it in terms of the history of civilisation one of the enormous tragedies of our time is that people of immense talent have spent their lives in either propping up such parasitical activity as advertising or in creating the technology of a consciously despoiling nature. Some people, even scientists, have lent themselves to the development of products which are in terms of the world community a danger not only to our own generation but a danger to other generations. It might be useful to draw a distinction between a concession we might give towards technology which will be employed for its socially useful purpose and technology which will be applied for the production of a commodity which might perhaps be contributing merely to the degraded profile of society as it is.

The nub of the argument I am making is that all of our financial measures should be not simply dealing with the narrow problem of restoring growth but should be the expression of an instrument about which we had a social debate. There should not be such a casual character about the transfer of public revenue. It appears to me that there should be basic distributions of taxation and of wealth. It would be taken as a matter of right that a person has a right to a certain level of living and certain basic necessities.

Let us not be dishonest and suggest that, apart from a gesture, that has ever been stated in the history of Irish economic debate. I remember reading with great care the First Programme for Economic Expansion which made no mention of social aim, the Second Programme for Economic Expansion which had a paragraph and the abandoned Third Programme for Economic Expansion which had a little more on the social purpose of economic growth. As we speak about how we are disposing of the finances of the nation, my lack of pleasure in speaking is not due to the immediate or present crisis; it is because we are discussing these measures in a society that has not set its face towards any great task, that frequently mouths something about economic growth without giving social expression to what it means by economic growth.

We are speaking about the disposal of moneys by a society which has unconsciously, as regards the majority of the population and consciously at the level of Government, set itself against planning, decrying planning as an interference with private will and enterprise. The choice is now clear to us all. We can continue with this old game of hide-and-seek about the revenues of the State or we can put finance into its perspective. Financial measures are an aspect of short-term economic management.

Lord Keynes said he looked forward to the day when economics would take its place in the back seat of the car. He was hardly a socialist. Economics are not the real reason we meet in Parliament. We structure our economy to achieve a certain kind and quality of life. What I have said has been very much helped by what has been said by Senator Garrett in his contribution. I ask people that when they come to speak on the state of the economy or on the Finance Bill in detail that they not speak merely in terms of this football imagery—"Ye did it; we would do it better; if we were in we would do better", and so on. We are as a society suffering from quite a sufficiency of simplistic thinking. It would be extremely unfortunate if in the most important area of all—the area of social programming and economic planning— we fell to a level of imagery that used ye's and we's and they's in the same way as cargo cults arise and disappear in the Melanesian Islands.

Mr. Keegan

I sympathise with the previous speaker. He would appear to me to show all the evidence of being a very frustrated person. He spoke at length without making much mention of the real problems facing this country and the Irish people at present, or with scant references to the Finance Bill before this House.

This is one of the biggest Finance Bills that has come before the Seanad for many years. It is becoming bigger and bigger because of the far-reaching, more detailed and complicated implications which are being written into our financial structures in Government circles. Therefore, I am not surprised that the previous speaker deliberately dodged the issues facing the people at present. I wondered for a moment if I was listening to a lecture on socialism or Marxism or was it somebody trying to brainwash the House into new thinking in order to distract the people from the real problems of the day. Has the west gone completely Marxist and socialist? I do not believe they have. This is a Christian society, a society that believes in the principles of Christian democracy. This is a society that has struggled hard over the years to preserve the freedom and democracy which we have. Let us hope that the time will return when real progress and real democracy will be evident in this country.

We had an example this morning of efforts being made to restrict debate in this assembly. That was a retrograde step. I am glad it was resolved by agreement, because our democratic institutions must be preserved and upheld no matter what emergencies we may come through or what difficulties may arise from day to day. Therefore I was pleased agreement was reached with regard to the extension of time to debate fully this Finance Bill because of its far-reaching implications and its effects on every section of the community.

The Leader of the House did say this morning that in the past it was the normal practice to allow two days of debate to a Finance Bill. He mentioned that that was the case during the term of the Fianna Fáil Government. There is no comparison between the Finance Bills of the past and the Finance Bills of today. Taxation then was insignificant in comparison with today. As the previous speaker said, there was no gutting process in operation then. We heard about the gutted peoples of the Third World. I think we have the gutted peoples of the Irish nation because they are being, not only gutted, but bled white by the penal taxation code which is being imposed upon them at present. It is all happening in the name of socialism. We have had three-and-a-half years of a socialist experiment in this country and we see the result. We see the highest rate of taxation ever experienced in the country. We have the highest rate of borrowing ever experienced and the highest rate of unemployment. We see money shortages everywhere. Why is all this happening? We have got a lecture on social reforms. Why is it happening when we have all those intellectual people so close to Government?

By and large the Irish people have lost confidence in those who are handling our economy. They have lost confidence in investment procedures. The private sector is no longer ready to experiment in job creation because of the way that sector has been handled over the past few years. It is no longer profitable to work hard to make money to start a business enterprise or to give employment. Therefore, I am not surprised or disappointed that so many people have decided to place their investments in other parts of the world. They have lost faith in our system in this country. They have been described over the past few years as the idle filthy rich. Those statements have done a great deal of harm. The people in this House who boast of the fact that they are socialists and talk about the filthy and the idle rich are now reaping the reward of their statements over the years.

The money is gone and the people are unemployed. No economy can be built up without financial resources. The financial resources must be there as also must confidence in the people; confidence in their ability to invest wisely and confidence in their ability to create the growth and development that is so necessary if this country is to be lifted out of the morass in which it is.

I do not think that any member of this Government has the will, the determination or the capacity to save this country. The Government seem to be content to let the nation drift and let things just happen without any long-term economic planning, without any financial programming or without any job creation prospects. I could go on and on but there is little use. The people have become frustrated. They have reached the point of despair. I have mentioned that investors have lost faith in our financial structures and in the ability of the Government to create job opportunities. The lead must come from the Government. They have been elected by the people through the democratic process. We still have the democratic process with us no matter what our socialist friends might think. The Government were elected three-and-a-half years ago to do a job which they promised to do but, alas, the evidence of their failure is more apparent each day.

In this budget we have new and increased taxation. We have had a penal increase in motor taxation. One would not have faulted the increase in motor taxation if there was some return to the local authorities in the form of road grants, but that has not happened. Road grants have been reduced. Local authorities are finding it difficult to maintain the road programmes they had embarked on over the years. More money is being used at Government level and less is being made available to local authorities, despite the fact that there has been a huge increase in motor taxation, not to mention the steep increase in petrol prices which occurred in recent times.

Now we have a new dimension being added in the Finance Bill. We have new penalties being imposed upon those who use red diesel oil in their trucks in preference to commercial diesel. I see no provision in the Bill for error. I know a lorry driver who was asked to fill up a tank and, through inexperience, he filled it with red diesel although the commercial diesel was in a tank nearby. He was new to the job and he did not know the difference. The owner of the truck offered to pay the duty on the red diesel but it was no use. He was brought to court and fined heavily.

The only conclusion I can come to is that it is a grave mistake to give power to people who do not have to answer to the electorate. I mean giving power to the Revenue Commissioners to impose stiff and severe penalties on people without offering some redress to the people who are the real victims. This is wrong. I said it here before. I said it when Fianna Fáil were in power. It is wrong to give additional powers to the Revenue Commissioners who are accountable to nobody. They are in a sheltered position. Some of them may be reasonable men. Others may be bully boys who try to enforce the law and penalise people and collect revenue no matter how they get it. I am anxious to hear what the Minister has to say with regard to allowing some hearing to people who are caught through no fault of their own. I mentioned the person who was heavily fined. This was a miscarriage of justice and it is something which needs to be rectified whenever the opportunity arises.

We have of course the new tax on gas units which were installed in motor cars in recent years. It is extraordinary that, when somebody uses their genius to discover a new invention, there is always somebody else waiting to reap a reward in the form of taxation. We see a new implication in this Bill in which liquid gas is being taxed in the same way as commercial diesel and petrol. I am beginning to wonder if any motorist will be justified in installing this piece of expensive equipment in his car to try to provide himself with a cheaper method of transport. I am convinced that it is no longer profitable to do so and that these gas units will disappear eventually. This is a pity because we hoped to have available to us a supply of natural gas from our own resources which could be used to propel our vehicles in preference to imported expensive oil. I hope this commodity will not be overpriced and placed beyond the reach of the motorist.

I am disappointed that the motorist has been hit so heavily in this Finance Bill. We know people have to travel to work. We know people are engaged in activities which require them to travel to their work, people working on building sites, for Bord na Móna, the ESB, commercial travellers, and so on. The recent budget impositions imposed restrictions on those people and created many additional hardships for them because of the necessity for using a car to get to their place of work.

It would have been reasonable to expect that some effort would have been made to give some tax remission to the man who must use his car to get to work. When the Minister wants money he goes to the surest source. The surest way of getting additional taxation was to tax the motorist because a motor car is of little use to anybody when it is lying idle. You must buy petrol, diesel or gas if you want to get to your place of work. Many people had to decide whether it was more profitable to stay at home, leave the car in the shed, and draw the dole, the pay-related benefits, and so on.

I am concerned about the taxation of vehicles whether or not they are being used. Many people have motor vehicles which they do not use and they will now be compelled to tax them irrespective of their use. I do not know as yet what the real implications will be when the grim realities are faced up to. I do not know if any reasonable excuse will be accepted for not taxing a car which is not being used. I would hope sanity would prevail and that some effort would be made to ensure that invalids would be fully considered. There are invalids who do not use their cars during the winter months. It would be a severe imposition on those people to have to tax their mechanically propelled vehicles for a 12-month period instead of a three-month period as some of them do at present. They only move about during the summer months when the weather is warm. I hope that some effort will be made to alleviate the hardship and distress on those people who really need to get out in order to break the monotony of their lives. They are invalids and they need a little relaxation.

I am disappointed too that, in spite of the increased expenditure, no further allocations were made available to local authorities for housing grants, water and sewerage schemes, and for house construction in general. In my county, we have had to accept a smaller allocation for house building this year than other years. The allocation for County Westmeath for the provision of rural cottages for this year enables only six to be built. That is a disastrous situation. It deserves to be highlighted because it is a really serious situation. I always looked upon the housing industry as our greatest source of employment. It creates spin-off jobs through the use of timber, concrete, slates, tiles, and so on, all of which are manufactured here. All this helped to generate wealth because the money was retained within our shores.

I am disappointed more money has not been made available for building because we still have a housing shortage. There is no doubt about that. More and more houses deteriorate and fall into disrepair each year and, therefore, it is reasonable to expect that more money should be made available to local authorities to allow them to continue their programme of house building. Local authorities have made wonderful strides over the years in the provision of houses. They have also made great strides with regard to the installation of water and sewerage schemes. Their efforts this year have been hampered by lack of capital. Water and sewerage schemes are top priorities. Then the houses can be provided.

The withdrawal of the new house grants was, in my opinion, a retrograde step. Those grants had not been increased for a number of years. They should have been increased to a more realistic figure because of the high cost involved in providing houses. If a reasonable effort was made to assist people to provide their own homes, we would be taking more and more people off the local authority housing lists. People want to provide their own homes and they know they can do so more speedily than the local authority. If the incentives were there, people would build their own homes and fewer would be depending on the local authorities for housing. We have a real crisis in that industry this year. Many people will be disappointed when they discover they have little hope of being housed this year. This was one industry that was able to absorb the unemployed. It was one industry where people could be put to work quickly. They did not have to wait for factories to be built. They were employed in the initial construction. This opportunity has been missed.

We also have the millstone hanging around our necks of foreign borrowing. We have now discovered it is costing the Irish taxpayer £355 million to service all the borrowing that has taken place in recent years. The sum of £355 million would create many jobs at present. It would create jobs in agriculture, in the building industry, in our road structure and in the provision of water and sewerage schemes. It is a tragedy that all that money has to go to service foreign borrowing when it could be used to create jobs at home. This should bring home to us the grim reality of borrowing on the scale that has been embarked upon in recent years. Let us hope that sanity will be restored and that some effort will be made to reduce the rate of foreign borrowing. What we need are schemes and incentives which will encourage more investment by our own people.

If people feel they will be allowed a fair return on their investments, they will invest and will respond to the call to provide job opportunities. When they are called the idle filthy rich, when they are taxed out of all proportion, they cannot be blamed for becoming disillusioned. There are no really wealthy people here. This is a young and poor nation out on the periphery of Europe. We are a nation which had a long and hard struggle for our economic independence and, therefore, it is only natural that we have no real wealth. We have been exploited by foreign powers for generation after generation and, so, it can be said that we are a comparatively young nation—in fact, one of the youngest nations in Europe— without a great deal of mineral wealth or a great deal of the expertise which was freely available to other countries.

That brings me to the question of our natural resources. Our greatest single natural resource is our agricultural industry, the soil of Ireland. Not enough is being done at present to induce increased agricultural production. We have, for example, the farm modernisation scheme under which the bigger farmers receive higher grants and the smaller farmers receive smaller grants. That may be socialism. I do not know—thank God, I do not know— but our learned socialist friends are here and they will probably lecture to us later on whether that is a good system. I believe it is a wrong system. The people who need the assistance are the small farmers. The farm modernisation scheme should be revised at the earliest opportunity because —and let there be no doubt about it—agriculture and the land of Ireland will always be there.

We hear talk about mineral wealth. In 25 or 30 years the mines will be exhausted but we will still have the land of Ireland and we should spare no effort to use the land to its fullest productive capacity. An effort must be made now to ensure that we have increased agricultural production. It can be done if we have long-term planning, if we have a proper marketing system. We have not got that at present. We are dependent on the market situation in other countries. We need long-term planning for agriculture because it is one of the best ways of securing permanent employment. Every man working in agriculture is gainfully employed. What he needs is an incentive. If we gave agriculture as much attention as we gave to industry, we might have been more successful in halting the flight from the land.

It was suggested some time ago that we should provide more off-farm jobs for people who are leaving the land each year. We have now discovered that those job opportunities are not available in rural Ireland. Thousands of our men and women have come to Dublin to seek employment. They emigrated in recent years but they have now discovered that the safety valve of emigration is no longer available. They are becoming disillusioned and frustrated because there are no job opportunities.

We have a fairly successful educational system. Young people are now well educated. They are equipped and geared to meet the challenge of the future but, when they have completed their education, they discover there are no job opportunities for them. This happened because there was a lack of confidence on the part of the private sector. They felt they were not getting the lead they should have been getting from the Government. They felt the incentives were not there for further investment in this country. Therefore, we should redraw our priorities, try to stabilise the numbers engaged in agriculture and then plan and gear ourselves towards providing employment for the thousands of school leavers each year.

Much has been said about social welfare and the liberal increases in social welfare benefits recently. Those increases have barely kept pace with the cost of living. There is no point in anybody saying: "Look at the liberal increases in social welfare and unemployment benefits." All those increases were necessary because of our inflation rate over the past few years. Nobody can say social welfare recipients are better off. They are not better off because of our high inflation rate and the continuing price rises which seem to occur week by week and day by day. A woman recently said to me our Ministers need not worry about family planning or contraception because rearing babies is now too expensive. Each week baby foods and other baby requisites top the price list. We appear to hit hardest at the weakest sections of our community.

I am not surprised people are becoming frustrated and disillusioned and that thousands of people are living on the point of despair. Confidence is lacking. We need to restore confidence. We will not restore it without a change of Government. The socialist experiment has failed. I cannot understand the silence of Fine Gael members who seem to do the bidding of the Labour members all the time. The result is high unemployment, low investment, and local authorities trying to operate on shoestring budgets. We have all round chaos and the remedy will not be found without a change of Government.

Mr. Horgan

I should like to address myself to the problems of the person described by the Minister for Finance in his opening speech as the hard-pressed taxpayer. There is not a very good realisation on the part of the hard-pressed taxpayer of precisely why he is hard-pressed. Some of the reasons for this have already been suggested by Senator Michael D. Higgins when he pointed to the population projections set out by Professor Brendan Walsh of the Economic and Social Research Institute. It is true that, even though they are, I understand, in the process of being revised downwards, these projections for our population growth are very substantial for anybody paying taxes in Ireland at present.

We have—and I do not apologise to Senator Alexis FitzGerald for saying this—a very high dependant ratio of very young people and very old people who are large consumers of the social services and who cannot contribute to the funds out of which they are paid. The indications are, even if Professor Brendan Walsh's population forecasts are revised downwards, that this dependant ratio, already very high by EEC standards, will further increase towards the end of the century. The tax base, that relatively small middle ground, will become further and further under substantial pressure to produce the amount of money needed to keep the social services going even at their present level of availability and subsidy.

I would agree with Senator Michael D. Higgins that this underlines the need for planning. I do not propose to go into this in any great detail. I would argue, not just for planning in the long-term and for the explicit endorsement by the Government of a planning mechanism which would make sense of our conflicting priorities, but for imaginative thinking in the short-term. There are many areas in which imaginative thinking can help, if not necessarily to reduce expenditure, at least to avoid wasteful duplication.

I suspect there are many Government Departments which are spending money in the same areas, or in overlapping areas, in which some form of cost-benefit analysis or study could indicate how they could spend the same money to much greater effect. I suspect there are substantial overlaps in some areas between the Department of Social Welfare and the Department of Education. There are certainly overlaps in some areas between the Department of Defence and the Department of Education. There are all sorts of areas like these in which we must try and co-ordinate things as much as possible. We are not privy to what goes on inside the Cabinet but, given that politicians are human, it seems almost inevitable that there is always a great stress, even within a system of collective Cabinet responsibility, on the rights, prerogatives and claims of individual Departments. If we had effective planning, unnecessary rivalry and frictions between Government Departments would be substantially reduced and, with them, any degree of waste to which they may in the past have contributed.

As an example of what I mean in the short-term, I want to make a few comments on the section of the Finance Bill which concerns motor cars and specifically on two items: the increase in the duty on petrol, and the measures aimed at catching people who avoid paying tax on their motor cars. With regard to the increase in the price of petrol, it is arguable that the amount of discretionary spending on petrol is perhaps not as high as the Government thought when they framed this section. I hope it is and I hope the section will have the desired effect. It is at least arguable—and it has been suggested on all sides of the House—that this discretionary element is not very large.

There is almost a suggestion in the particular framework of the tax provisions relating to motorists, that what we have here is an attempt at formulating some sort of transport policy. Even though this may be valid as far as it goes, I would argue that it can never take the place of an integrated transport policy which was desperately needed. We still have, after I do not know how many years, buses and trains competing against each other on the same route, neither of them being used by individuals who instead are in cars along roads parallel to the railways. The fact that we have not got an integrated transport system is due to a lack of coordinated and coherent thinking over the past several decades.

It is not enough to complain about the lack of a policy in the past; we must set out to create some form of integrated transport policy for the future. It will be a transport policy into which taxation elements like this can be fitted and in which they will find their natural place. I am convinced we will have far more public acceptance of fairly stringent tax measures like this, especially as they affect individual motorists, if they are seen as part of an overall and integrated transport scheme from which people will, by and large, benefit, and which will improve the efficiency of the transport services and transport arrangements within the community as a whole.

I should now like to turn to some of the other provisions dealing with taxation and more specifically those dealing with personal taxation. As anybody who has ever tried to fill out his own income tax form knows, our tax system becomes more complicated by the hour. This has produced a phenomenon in which there is a considerable lack of understanding of the tax system both on the part of people who are beneficiaries of it, and on the part of people who are contributaries to it. There is a lack of an overall picture of what the tax system is, what it is setting out to achieve, and how precisely it proposes to get there. I would argue, moreover, that this lack of a coherent picture is, perhaps, especially evident among people who are beneficiaries of the tax system.

It is not often realised how many people are beneficiaries of the tax system in the widest sense. When we talk of beneficiaries of the tax system, we tend to think of those who are in receipt of social welfare allowances, of personal allowances of one kind or another, children's allowances, unemployment allowances, and so on. It is not often realised that there are all sorts of beneficiaries of the tax system. For example, anybody who has children in school after the compulsory school leaving age, at school or at a third-level institution is a substantial beneficiary of the tax system. Th National Economic and Social Council in their report on the inequality of income in Ireland pointed out that in certain circumstances an extremely well paid taxpayer can, if he has a certain number of children at school or at a third level institution, actually receive more from the State by way of benefits than he is paying to it in tax. It could be argued that our educational system is one of the greatest offsets to progressive taxation that has yet been devised. This fact is not often understood well enough by the person paying tax.

The present arrangement of allowing people who pay mortgages to set off mortgage interest against income tax liability is also a substantial way in which people who otherwise would pay heavy taxes can benefit from the operation of the tax system. It is possible in this day and age for somebody to get a mortgage of up to £20,000 for a house and if he and his wife are earning enough and if their mortgage is high enough they can bring about a situation perfectly legally in which up to 50 per cent of the cost of paying for the house is paid for by the taxpayer. He can reduce his actual payments by about half if he is entitled to income tax relief at the top end of his scale. We almost have a system of taxation, incentives and benefits which turns the society into the sort of society which must have been envisaged by George Bernard Shaw when he gave his advice to all persons wishing to become socialists. His advice to such persons was that they should make as much money as possible in whatever way possible and legal within the system, particularly the unfair ways, so that, first, they could show how unfair the system was and, secondly, they that could amass so much wealth that in their advocacy for socialism they could never be accused of the politics of envy. It is not often realised when we talk of the welfare state in our society that we have two welfare states. We have at one end of the spectrum the beneficiaries of the system of taxation which we are here adjusting in the social welfare branch. At the other end we have the beneficiaries of the taxation system at the upper end of the scale. However hard pressed these people are it is fair to say that they too are beneficiaries of a taxation system and in a sense can be described as the inhabitants of a second welfare state at the upper end of the spectrum.

On the other hand we have in between these two welfare states a third group of people, a group of people who are not poor enough to be recipients of social welfare or to get any substantial advantage from taxation reliefs and who are not rich enough to be able to set any particular relief against their income. These are people who fall into what might be known as the property trap. They are the people to whom any taxation reforms and social welfare reforms should be addressed expressly. These are the people who feel most bitter about the present system, who perhaps understand it least and who have least of all any understanding of the overall and cohesive policy of a tax system.

It is very good that during the past few years, the Government have begun to try to integrate our tax system. It is good that we are getting, if rather slowly, some kind of indication from the Government that they are aware of the rather haphazard way in which the system has been built up in the past and that they are attempting to reshape it in order to make it more socially responsible and more progressive as a form of taxation. In the process of doing this they have received many object lessons on the ways in which taxation reliefs which may or may not have been introduced as temporary measures rapidly become established rights and even entrenched privileges. The classical example of this has been the tax relief to the co-ops. I have been looking at some of the figures for the co-ops. Some were mentioned in some detail in the Dáil. I find it astonishing that my personal income tax in the last year was probably as high as that paid by many of the co-ops with a turnover of £1 million or close to it. When people defend the co-ops let them remember that one of the principles on which these co-ops are run is that the more that is put into it the more that is got out of it. So that the tax relief for the co-ops was always substantially benefiting the larger and better-off of its members.

It is good that the Government have decided to do something about this. I personally regret that it was decided to soften the blow because I do not believe it is a very hard blow at all. Overall I see this measure as part of this slow but deliberate progress towards the rationalisation of the taxation system to bring it to a much more equitable basis than it has been up to now. I am glad the Government are doing this deliberately but I ask them to make haste not quite so slowly as has been the case up to now.

Mr. Butler

I shall be very brief. Although I am not well I came here today because it has been mentioned that as I am an employee of the co-ops I should say something on that section of the Bill which proposes to tax these organisations. We have demands from all sections of the community, be they social welfare recipients, the industry section or the farming section. The only way that extra finance can be given is by increasing taxation. There is also the demand for the security of our State. This demand is one which should be acceded to. The security of this State should be a first priority so far as the Government are concerned. It is a task which today costs up to £200 million. We wish to defend our State and we wish to live happily in it. We want to be able to know that our wives and families are protected when we are away. If we have no security in the State we have nothing. Such a situation would stymie investment, for instance, because no one is anxious to invest if there is a doubt as to his return.

I do not blame the Opposition for opposing the Finance Bill, 1976 or for opposing any Bill. That is their job. There are many people on the Fianna Fáil side who are contributing to this debate in a respectable way but there are others who spoke without confining themselves to the Bill. We are a Christian state and therefore accept that all should be enabled to carry out their duties to their families and so on. There are demands from all sections and those demands, when they are made, are taken up by Fianna Fáil at the other side and made a platform for opposing the Government.

Fianna Fáil should examine some of the demands they are making, because if the Minister for Finance gives to every section of the community what they are looking for, the State cannot function. There is a world crisis, not just a national crisis. Yesterday we heard that there were 1,250,000 unemployed in Britain. What affects Britain affects us and has done so since the foundation of the State. Britain was a great help to this State for many years when she gave employment to many of our people. But that cannot continue because Britain has her own huge unemployment problem. Therefore we must fend for those people who will stay with us. It is good they are staying in this country. Even if they are unemployed they are getting enough to ensure that they have the necessities.

It is not a good decision to tax co-ops. The Minister knows my stand on this proposal as I have made representations to him in regard to it. There is no point in my making a platform of it here but I will continue as a member of Fine Gael to do my duty at parliamentary party level to try to change the proposed taxation. We have time to do that. The co-ops will not be paying tax until 1978 so we at parliamentary party level will again approach the Minister and the Government to amend that section of the Bill. We will prove that farmers are willing to pay their fair share of tax. The Fine Gael Agricultural Committee, of which I am a member, is now discussing this question with the farming organisations. We have met the IFA and will meet them again. We are meeting the ICMSA today and will meet them again. We will try to reach agreement on what can be considered a fair share of tax. Farmers realise they must pay tax today, even if that is opposed by some members of the Fianna Fáil Party. What is a fair share of tax? By taxing the co-ops they are paying some of that tax and I should think that when we have met the Minister again and before the co-ops will be paying tax, we will have convinced him that this measure should not be taken.

Although this Bill is likely to be passed, I shall remain in Fine Gael because by being within the parliamentary party I shall have more influence than if I were an outsider. Fine Gael is one of the most democratic parties in the country, a party that is fair to all its members and listens to what they have to say.

We must look at the situation as it is now and as it has been for the last three or four years during which time the financial state of the world has been in a turmoil. How could anyone say that the Minister for Finance or the Government should have been planning in those past years because the many decisions of the big nations in that time would have upset any plan here? We had to wait for the climate to be right before devising a plan that would be possible, that would be workable. Many plans have been made in this country and many plans have failed but I think we are coming now to a stage where the Government can and must produce a plan. This would have been impossible in recent years when we had the situation of the oil sheiks changing the price of oil regularly. That situation has affected many jobs, profits and industry. Until such time as we know that we have a final decision by those people it is very difficult to devise a plan that is worth while. Those oil sheiks know that they have to depend on the other nations of the world if they are to succeed themselves. They know that because of the huge increase in their oil prices the demand for petroleum products has reduced substantially. They realise that they also must be part of the world plan. There must be a world plan and not just plans for individual nations, whether they are developed or otherwise.

We must do our share for the underdeveloped nations of the world. As Christians we must pay our share to that section of the world community that cannot do anything for themselves. Regardless of whether this requires extra taxation, it is a task that we must undertake.

The Minister for Finance has done an excellent job. One of the improvements he has made is to increase personal tax reliefs. Nothing has been said about that by the other side of the House. The Minister realises that tax reliefs must be given to the people who deserve them most. He is faced with demands from all sections of the community, including the public service. The public service, too, owe a duty to this State. Those people who are in good secure positions must realise that there are others who are not so lucky. All of us owe a duty to those who are not able to fend for themselves.

We must also invest in industry, both small and large industries. We must invest in industries that will expand and develop. It is no good pouring money into industry that is likely to fail after two or three years. Although farmers are reasonably well off today there is much room for expansion of the agricultural industry. To this end both farmers and the Government must do their bit—the farmers because today they are better educated perhaps than those of the past and because they can avail of such organisations as Macra na Feirme and the ICMSA in order to produce more.

If we look at the agricultural scene-I am one of the people in the co-operative movement—we find that last year we were complaining that we had too much investment in the processing end of the industry. This was true but the farmers criticised management for creating that situation. Today there is no such thing as spare capacity. The farmers have produced more and this is because they have confidence in the country and in the Government. Naturally, like all other groups, they are upset if taxation is being imposed on them.

All sections of the community rallying round together will put this country on the highest rung of the ladder. There are many good aspects of this Bill and we will continue to make progress.

Minister for Finance (Mr. R. Ryan)

I am grateful to the Senators for the manner in which they have debated the Second Stage of this Bill, although I would not find myself in agreement with all that has been said or indeed all the approaches. There is one matter that I would like to discuss at the outset. A great deal of excitement was generated here today suggesting that the Government, and the Minister for Finance in particular, was responsible for the disgracefully short period the Seanad is being allowed for discussion of the Finance Bill. I want personally to put it on record that I endeavoured to get the co-operation of the Opposition in the Dáil to ensure that the Seanad would have some weeks in which to debate this Bill. Last year when I was debating the Finance Bill in this House I expressed my own personal view that, of the four months the law allows for debate of the Finance Bill, at least one month should be allowed to the Seanad. It was my anxiety that we would have received the co-operation of the Opposition in the Dáil to allow the Seanad to have a month, and if not a month at least some weeks, in which to debate the Finance Bill.

All my personal efforts, all the efforts of the Government and all the requests of the Parliamentary Secretary to the Taoiseach, the Chief Whip, to allow the Seanad to have more time to debate the Bill were obstructed deliberately and consistently by the Fianna Fáil Members of the Dáil, who refused to take the Finance Bill on the days on which we wanted to take it and who required that it be taken at a later date. When the Bill was debated there they persisted in wasting hours upon hours in making the same political points, many of which had little relevance to the Bill and certainly had no relevance to the financial details of the Bill itself.

In 1974, in order to afford more time for the debate on the Finance Bill and in a desire to see the Seanad having an adequate opportunity to put a better input into the Finance Bill, a provision was made in section 85 of the 1974 Finance Bill extending to four months the period within which the Oireachtas was required to confirm the Financial Resolutions passed on the day of the budget. If the Oireachtas failed to confirm a Financial Resolution passed on budget day the Financial Resolution lapsed, so it is obviously necessary that by a certain date they pass the legislation. Having extended the period, the Fianna Fáil Opposition had the temerity to waste two-and-a-quarter hours here today condemning the Government's efforts to get this Bill through in time. Their colleagues in the Dáil used up an additional month in order to frustrate the contribution which the Seanad could make.

Mr. Lenihan

Talk like that to Congress. Calm down.

Mr. R. Ryan

I will insist upon talking and condemning hypocrisy in any tone that is necessary. I can understand why other people object to the vehemence of my condemnation because they know that the vehemence of my condemnation is thoroughly and completely desirable.

Mr. E. Ryan

Perhaps the Minister would tell us why this could not have been carried over until tomorrow.

Mr. R. Ryan

Out of respect for an tUachtarán. I believe the President is entitled to get 24 hours to read the Bill passed by Dáil and Seanad Éireann before he is asked to sign it. Indeed he is entitled to have a week within which to read the Bill. He has certain functions that are guaranteed by the Constitution.

Mr. Lenihan

He has no function in regard to a Money Bill. Read the Constitution.

Mr. R. Ryan

In relation to the Constitution he has certain functions which require him to sign the legislation.

Mr. Alexis FitzGerald

No man is required to sign what he has not been given an opportunity to read.

Mr. R. Ryan

And get the authority for signing it.

An Leas-Chathaoirleach

These interruptions will have to stop. Will the Minister proceed with his reply to the debate?

Mr. R. Ryan

I sat right through the night on one occasion to facilitate the Fianna Fáil Opposition. Most of them lay on couches around Leinster House and those who were not on couches were laying bets that I would not stick it out until 9 o'clock in the morning. I am glad to say they lost their bets. It is just typical of their deplorable hypocrisy that they have deliberately, as a party——

Mr. Lenihan

I know why the pay talks are where they are.

Mr. R. Ryan

——held up the Finance Bill for 16 weeks in the Dáil. They deliberately refused to take it on the days on which they could have taken it. They deliberately debated some sections ad nauseam. They could have all spoken together—they made the same speeches and there was no reason why they could not have sung in chorus instead of singing separate prologues.

Mr. E. Ryan

The Minister made the same defence each time.

Mr. R. Ryan

The only variation in the innumerable speeches they delivered on co-op tax was that each of them took care to list the co-operative enterprises in their own constituencies so as to capture headlines in the local newspapers. That is supposed to be a serious contribution to what Senator——

Mr. Lenihan

This nonsense is an insult to the Seanad by a Minister of State.

Mr. Yeats

Senator Butler was not very appreciative of the co-op tax.

Mr. R. Ryan

It is the most important Bill of the year and when they get the answers they do not like, when their noses are rubbed in their own dirt, then we have Fianna Fáil Senators here pretending to be dignified people——

Mr. Lenihan

Does a Minister have to go on like this?

Mr. R. Ryan

——in a charade of parliamentary abuse holding up the Finance Bill at a time when it ought to have been got through. From the day upon which Dáil Éireann passed the Financial Resolution it took 16 weeks of laborious debate to debate it, and Fianna Fáil alone are responsible for this Bill arriving on the floor of the Seanad only yesterday, and even then they are responsible for the fact that the Second Stage is only concluding at 4 o'clock on the second day. Now apparently their view is that the Minister for Finance is not to be allowed to speak uninterrupted because he is telling them the truth. In 1971 the number of days allowed for the Seanad for debate on a Finance Bill——

Mr. Yeats

God help the country with you in charge.

Mr. R. Ryan

The Dáil is to blame. I said last year that the Dáil was to blame but the Senators—and I blame Senators as an institution, although I do not want——

Mr. Lenihan

On a point of order, the matter into which the Minister has gone for the past ten minutes is a matter that has been gone into extensively by the Leader of the House speaking for the Government. He spoke all through the morning, elaborating and giving his views on the procedural aspects involved in the motion. It has already been dealt with. The Minister is now following the same ground. I would submit, as a matter of order, that the Minister's function now is to apply himself to the Second Stage debate on the Finance Bill, 1976.

An Leas-Chathaoirleach

It is the Minister's function to reply to the debate. There was as much criticism during the debate on one side about the amount of time that was being allowed to the Seanad to discuss the Bill. It is the Minister's duty to reply to that point in his reply.

Mr. Lenihan

We spent an inordinate amount of time this morning on this aspect. The Leader of the House, in his capacity as Government spokesman, and we on this side of the House dealt with it. What we now expect from the Minister for Finance is a reply on the merits or otherwise of the Second Stage debate on the Finance Bill.

An Leas-Chathaoirleach

The Minister must be permitted to make his reply.

Mr. R. Ryan

The Minister will speak on all points that are relevant to the Bill, and most of the points made by the Opposition have nothing whatsoever to do with that.

Mr. E. Ryan

I can understand the Minister's reluctance to deal good, bad or indifferent, with the Finance Bill, 1976.

Mr. R. Ryan

We will insist on putting on the record—and I am not repeating myself—that I was chastised and blamed for the delay in bringing this Bill to the House when I did my level best personally and politically to have it here much earlier. I am surely entitled, if democracy has any meaning, to defend myself against charges that are wholly groundless and against charges which, far from having any validity, are entirely contrary to every effort that I made to bring the Bill here. I suggest that the cure for all this would be for the Senators——

Mr. E. Ryan

We and the people will give the answer.

Mr. R. Ryan

——and the Fianna Fáil Senators in particular to get the co-operation of their own colleagues in the Dáil to ensure that next year the Finance Bill arrives in the Seanad with at least some weeks available to the Seanad in order to conduct the debate. Both in the Dáil and the Seanad I had to sit down and listen to the most outrageous attacks being made——

Mr. Yeats

Am I not right in saying that it is totally disorderly and contrary to the procedure of this House to criticise the activities of the other House?

An Leas-Chathaoirleach

That is a point of order.

Mr. Dolan

Is it not correct to say that the Minister did not sit all day in the House? He was a bare hour in the House. He was out making a hash of the pay talks.

An Leas-Chathaoirleach

That is not a point of order.

Mr. R. Ryan

The Minister will deal with all relevant matters. A relevant matter which has been brought in in the course of this debate is the amount of time allowed to the Seanad for the discussion of this Bill, which is grossly inadequate. I have said that, but I insist on putting on the record where the blame lies and suggest to those who are complaining that they could show their sincerity by making arrangements with their Dáil colleagues to ensure adequate time in future instead of wanting, and I say deliberately wanting both here and in another place which I am not permitted to mention, to get up and do a song and dance about the amount of time which was allowed to them to discuss the most important Bill of the year when any shortage of time was attributable to their own laziness or disinclination to debate it or to take it on the days which were made available to them but which were not convenient for them—whether it was Punchestown or for some other reason I just do not know.

Now we will deal with some of the issues which were raised in the course of this debate. I recall that last year and the year before we had Fianna Fáil Senators demanding tax concessions from the Government to provide more money for the building industry and tax concessions in particular for building societies which they said were about to collapse and which, if they did not get the tax concessions which Fianna Fáil wanted for them, would not be able to provide money for the building industry. We refused to be parties to those unnecessary tax concessions because tax concessions given to one group means that those who are still caught in the tax net have to pay more. They would not like to be reminded, I am sure, that we were entirely justified in our stand but I propose to put it on record. At the time they were making demands for the tax concessions for investors in building societies, the amount of money attracted to building societies was £181 million, in 1973. Without any tax concessions, the figure for 1975 rose to £286 million and this year it is likely to be a record of £360 million.

As always, Fianna Fáil tended to rush into tax concessions that were not called for and they have bitterly and viciously fought every Finance Bill that we have introduced here whenever we sought to remove tax concessions, particularly when they were available to the better off members of our community.

It was suggested that enough was not being provided in the public capital programme, especially for the construction industry. We were accused of various forms of increased expenditure on the one hand and accused us of the insufficiency of expenditure on the other. It is interesting to note that the public capital programme has increased by 140 per cent since 1972-73, which is far, far in excess of any intervening inflation. And the building construction industry as far as the Exchequer is concerned has increased by the same figure of 140 per cent in the intervening period and, as I pointed out, the building society funds have also increased from £181 million to about £360 million this year.

So it is not shortage of funds that is creating any problem in that area. Certainly, it is not any shortage of any public funds. We have pumped the money into the industry. Ireland's construction industry has suffered much less than the construction industry in any country other than in OPEC countries over the last three years. That is a statistical fact that cannot be disputed. We have maintained the public capital programme and the construction industry operating at a level which nobody else has been able to maintain. The housing area, that area so grossly and miserably neglected by Fianna Fáil, has received special attention. Therefore, not only have we maintained Fianna Fáil's highest output but we have actually got nearly 7,000 a year houses in excess of the Fianna Fáil record and that at a time when the rest of Europe was cutting back very dramatically on its house-building programme. Then I listened today, or last night, to Senator Hanafin saying that we had not half enough houses. It is not so long ago since Fianna Fáil published a Government White Paper saying there were too many houses in Ireland, saying that the figures proved a need for a very substantial reduction in the housing output. That was Fianna Fáil's white paper, it was not ours. That dictated Fianna Fáil's deliberate housing policy for years and years in this country until, out of fear of social and political upheaval, they decided around 1970 that it was time to correct their gross miscalculation of the housing needs of this country.

There were also suggestions made from the Fianna Fáil benches reechoing the suggestions made by some elements in our community that social welfare contributions are excessive. There is only one other country in Europe where the Exchequer's contribution to social welfare is greater than ours, and that is Denmark. Denmark is also the country that has the highest level of taxation, which is causing quite an amount of political and social difficulty in that country. The people resent the high levels of taxation which they have to pay there. But those levels would not be necessary if Denmark had a better integrated and developed insurance system.

Our insurance contributions lag considerably behind any insurance system in the rest of Europe and as we are being exhorted by so many conscience-stricken members of Fianna Fáil, including Senator Yeats, to follow European practices in all things, I am surprised that he of all people should have been saying in this House that the level of contributions which have to be made for social welfare were too high when he knows, or ought to know, that the level of the contributions for social welfare are well below the European average and are about half the European average.

Mr. Lenihan

For a very obvious reason.

Mr. R. Ryan

Senator Yeats is very good at wearing his European heart on his sleeve when he can cause political embarrassment to Ireland abroad and at home. Maybe he ought to wear it at all times and not be selective on the occasions in which he uses it. I have not noted any lack of personal interest in the remarks made by Senator Yeats here or in the European Parliament about the disposition of the Irish Government, or my disposition in particular, and if people want to be European and pretend to be European I want them to be consistent and European at all times and then they should not require that we depart from European practice in relation to our social welfare code.

Senator Yeats also referred to what he regarded as the inadequacy of personal allowances in the income tax system. I find it very hard to accept the sincerity of complaints of this kind from a representative of a Government which for 11 years made no variation whatsoever in the value of income tax personal allowances. When we have done it in each of the last three years at a time of immense budgetary difficulty, it comes ill from somebody who represents the party that did nothing for 11 years to dare to criticise us for what we have done.

Mr. Lenihan

Dare to criticise? The arrogance. That is the quote of the year.

Mr. R. Ryan

It demonstrates the height of hypocrisy for people, who for 11 years did nothing, to criticise others for the inadequacy of what they did in three years. At least we did something worth while at a time of considerable budgetary difficulty. As they have been very generous in delivering their criticism, they might at least show as much patience as we who received the criticism did. I did not interrupt the Members opposite and I would expect that they might extend to me the courtesies which they say the Seanad usually extends when I am advancing arguments, which I know hurt them, which I know are causing difficulty and which they certainly would wish not to go on record.

The amount of time left for debating the Finance Bill as distinct from debating various political points that have developed in the course of this debate is unfortunately all too short. Nobody is more aware of that than I am. Nobody is more concerned about it than I am. No one is more disappointed than I am, because I wished it to be otherwise. But, as I said at the offset of my remarks, the blame lies not with the Government, who tried to expedite the passage of the Bill through the Dáil. If we did not succeed the fault certainly did not lie on our side of the House, because in that other place which I am not permitted to mention I was accused of deliberately silencing supporters on my side of the House—that I would not let them come in to support me. I was also accused of being there without a supporter because nobody wanted to come in to support me. The truth is we were trying to hasten the passage of the Bill through the Dáil in order to allow the Seanad to have ample time to debate it so that there would be no occasion for the kind of complaints which were made this morning for the purpose of hitting the headlines. Those who do not want to hit the headlines and who want to get the work of the Seanad done in a sensible way have another 12 months at least in which to arrange for their colleagues in another place to ensure the rapid passage of the Bill through there so that there will be ample time for the Seanad to debate it.

Question put.

The Seanad divided: Tá, 24; Níl, 8.

Tá

• Barrett, Jack.
• Blennerhassett, John.
• Butler, Pierce.
• Codd, Patrick.
• Connolly, Roderic.
• Daly, Jack.
• Deasy, Austin.
• FitzGerald, Alexis.
• Horgan, John S.
• Iveagh, The Earl of
• Kerrigan, Patrick.
• Kilbride, Thomas.
• McAuliffe, Timothy.
• McCurtain, John Joseph.
• Mannion, John M.
• Markey, Bernard.
• Moynihan, Michael.
• O'Brien, Andy.
• O'Brien, William.
• O'Toole, Patrick.
• Russell, George Edward.
• Sanfey, James W.
• Walsh, Mary.
• Whyte, Liam.

Níl

• Brennan, John J.
• Cowen, Bernard.
• Eachthéirn, Cáit Uí
• Hanafin, Des.
• Keegan, Seán.
• Lenihan, Brian.
• Ryan, Eoin.
• Yeats, Michael B.

Tellers: Tá, Senators Sanfey and Kerrigan; Níl, Senators Hanafin and Cowen.

Question declared carried.