Appropriation Bill, 1976 ( Certified Money Bill ) : Second Stage.

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

As the House is aware, the purpose of the Appropriation Bill is to appropriate formally the amounts voted by the Dáil for the supply services. This year's Bill follows the general pattern of previous Appropriation Acts.

Section 1, which is the principal section, appropriates to the specific services set out in the Schedule to the Bill the sum of £1,693,491,010 comprising the sum of £171,559,010 in respect of Supplementary Estimates for 1975 which were not included in last year's Appropriation Act and £1,521,932,000 in respect of the Estimates for 1976. The section also authorises the use of certain departmental receipts, amounting in total to £157,304,504, as appropriations-in-aid: these are detailed in the Schedule to the Bill.

Authority to issue out of the Central Fund in respect of the items to be appropriated is contained in the Central Fund (Permanent Provisions) Act, 1965.

The debate on the Bill gives the Seanad an opportunity to debate in detail the expenditure contained in the Bill and to discuss expenditure and financial policies in general. On this occasion, I wish to avail of the opportunity to discuss the general economic situation.

As everyone is by now aware, 1975 was for the western world one of the worst years in economic terms since the depression of the 1930s. Output in most western economies fell and unemployment rose sharply. Because we, as a nation, are dependent to a greater extent than most on trade with other countries, we could not escape the effects of a recession which afflicted so severely the economies of our trading partners. It is hardly surprising, therefore, that our national product fell by an estimated 1 per cent in 1975. What is surprising and, in the circumstances, gratifying is that the fall was not greater. Indeed, many economic commentators writing in the closing months of the year were expecting declines in real GNP for 1975 of between 3 and 4 per cent. They were wrong.

The fact that our economic performance last year was somewhat better than expected is due to the recovery which set in during the final months of 1975. This was in marked contrast to the earlier part of the year when industrial output and employment were falling, consumer demand stagnating and investment being curtailed. In this period, too, the underlying trend in unemployment was rising. The lowest point of the recession was, however, reached during the third quarter of 1975. The economy began to recover in the last three or four months of the year and this welcome trend is continuing.

The single, most important element of domestic demand is personal expenditure on consumer goods and services. Accounting, as it does, for about two-thirds of GNP, the implications of a slump in consumer demand for the growth of our national product are obvious. During the recession rising unemployment and inflation combined to erode real incomes. In addition, the prevailing economic uncertainty helped to push savings to abnormally high levels. These factors reduced the level of real spending and this led to a sharp fall in the volume of retail sales in the first eight months of last year.

The budgetary measures of June, 1975, which cut the rate of inflation, boosted real incomes in the remaining months of the year. That, coupled with rising social welfare payments and a recovery in agricultural incomes, stimulated consumer expenditure. In the last four months of 1975 the volume of retail sales rose by almost 5 per cent as compared with the same period in 1974, contrasting markedly with the 6 per cent fall in their volume in the previous eight months. Nevertheless, the recovery was not sufficient to offset the depressed conditions of the earlier part of the year and real consumer expenditure fell by an estimated 2½ per cent in 1975 as a whole.

In 1975 the average increase in the consumer price index was almost 21 per cent, more than 3 per cent below Britain where the increase in consumer prices was 24¼ per cent. The lower inflation rate in Ireland in 1975 was attributable to steps taken by the Government to cut the increase in consumer prices and so initiate a winding down of the price/wage spiral. Subsidies on certain food and other items in the consumer price index were introduced. These had the effect of reducing the increase in the consumer price index at mid-August by four percentage points. In fact, between May and August, 1975, the consumer price index recorded a net fall of 0.8 per cent—its first decline in 12 years. VAT was also removed from clothes, footwear and other items. This was followed by a rise of less than 3 per cent at mid-November. The deceleration in the rate of inflation in the second half of 1975 was so dramatic that in the six months to mid-November the total rise in the consumer price index was less than 2 per cent as compared with 14½ per cent in the previous six months.

Following the record balance of payments deficit of £288 million incurred in 1974, last year saw a remarkable turnaround in our external payments position. The balance of payments deficit in 1975 is estimated to have been only £15 million. This development is largely attributable to a sharp decline in the volume of our imports—a reflection of the low level of economic activity which pertained for most of the year. On the plus side, however, an exceptionally high level of agricultural exports, together with higher receipts from tourism and a significant increase in net transfers from the EEC, also contributed to the reduction in the balance of payments deficit.

While the volume of imports fell for the year as a whole, they revived strongly from September on. This was particularly evident in the case of imports of materials for further production, reflecting both the improvement in domestic output which occurred at that time and the reconstitution of stocks which had been run-down during the recession. Because of the low levels of activity in the economies of our trading partners early in the year, our industrial exports were depressed for most of 1975. However, with the onset of recovery in the major economies in the second half of the year our industrial exports in the last four months of 1975 began to grow rapidly again.

The volume of industrial output fell by over 6 per cent in 1975 as a whole. As in the case of consumer demand and trade, however, there was an improvement in its trend within the year. The decline in the trend in production, which began early in 1974, was halted in the third quarter of 1975. With the revival of consumer expenditure and increased demand on foreign markets for our industrial goods in the final quarter of the year, the trend of production turned up. Output in the manufacturing sector was 3 per cent higher in the fourth quarter of 1975 than in the previous three months.

Output in the building industry is estimated to have fallen by about 6 per cent last year, largely due to depressed activity in the non-housing area of the industry where the effect of the postponement of investment decisions during the recession was most severely felt. Towards the end of 1975, however, some improvement in building activity became apparent.

While for most of 1975 conditions in the non-agricultural sector of the economy were depressed, it is heartening to review developments in agriculture. Last year was, in fact, one of the best ever in this important sector of the Irish economy. In complete contrast to 1974, there was strong demand and a great improvement in prices for our agricultural products on foreign markets. As a result, sales of livestock and livestock products increased substantially. Indeed, the fact that there was some growth in total exports last year is entirely attributable to buoyant demand abroad for our agricultural output. Because of the growth in its main products and, it must be added, a decline in inputs such as seeds, feeding stuffs and fertilisers, the volume of net agricultural output rose by about 10½ per cent in 1975 and, as a consequence, farmers' incomes increased by over 50 per cent.

With the decline in economic activity in 1975, employment also fell. In transportable goods industries the average fall in numbers at work was 15,000 or almost 7 per cent. Employment in the building industry fell by nearly 9 per cent. At the same time, the underlying trend in the number of unemployed persons on the live register was rising. The emergence of recovery in the last three or four months of 1975 was, however, echoed in an improvement in conditions on the labour market. At the end of the year the decline in industrial employment was halted and the trend in unemployment began to stabilise.

In drawing up their policy for 1976, the Government had to contend with the two major problems besetting the economy—unemployment and inflation. Inflation had to get priority. Firstly, it was to a great extent of domestic origin, whereas the unemployment problem was basically a product of the international recession. Secondly, it seriously jeopardised our longer-term prospects for growth and job-creation.

The Government have long made clear that, because of our dependence on exports, a substantial cut in the rate of income increase was essential to our future economic progress; indeed this was the object of the novel measures introduced in June 1975. It was also felt that inflation in Britain and the depreciation of sterling, which had hitherto afforded a measure of relief from the erosive effect of wage inflation on our international competitiveness, would not last much longer. The Government therefore proposed a solution, which the Taoiseach put to the social partners and the nation in December last. This was stark but simple—a pay pause after the end of the 1975 National Agreement.

As regards the immediate employment problems, scope for budgetary action was restricted by the undesirability of increasing the difficulties in the public finances, a consequence both of the recession itself and of the many steps taken to mitigate its impact on the domestic economy, especially on employment. The 1976 budget was designed to provide the greatest possible stimulus, within this constraint, to economic activity. Priority was given to expenditures which contribute significantly to economic activity in general and to employment in particular. The central element in this strategy was the public capital programme for 1976 which was settled at nearly £600 million— almost £130 million, or 28 per cent, more than capital expenditure in 1975. The current budget, although largely redistributive in nature, also took account of the needs of the economy, the revenue necessary to meet general increases in costs and to raise socially desirable transfers being derived from taxation of less-essential commodities. Overall, the effect of budgetary policy was estimated, assuming a pause in domestic incomes, to raise this year's growth rate by 1 per cent to about 2 per cent with consequential benefits for employment.

Nearly six months have now elapsed since the budget. In the interim the pace of world economic recovery has turned out to be rather stronger than earlier envisaged. However, our dependence on the UK market, which is still expected to grow relatively slowly, will hold back our exports. Nevertheless, it is clear from the trade statistics that we are already benefiting considerably from the recovery in external demand: in the first five months of this year our industrial exports were 30 per cent higher in value than in the same period of 1975.

On the domestic front, all the information available points to a continuation of the recovery so far this year. In the first quarter, the volume of retail sales—the prime indicator of consumer demand was 7 per cent greater than in the same period of 1975. While this may well include some additional buying in anticipation of the tax increases, it does suggest an improvement in consumer confidence. Indications of investment, too, are evincing signs of improved activity. Further evidence of a general revival in demand and output is provided by the upward trend of imports in the first five months of 1976.

We have as yet no hard information on industrial production this year but recent business surveys show a consistent improvement in output. The new constant-tax price index which is the best indicator of underlying inflation showed rises of 4.5 per cent and 4.4 per cent at mid-February and at mid-May respectively. But, as happened last year, we anticipate that inflation will slow down for the remainder of the year.

The major uncertainty in looking forward to the rest of 1976 and indeed to the years beyond is the trend of incomes. Regrettably the Government's call for a pay pause until the end of the year did not receive the response which could have conferred most benefit on the whole community. The possibility of a national pay norm remains unsettled. The Government are anxiously pursuing with the social partners the best way of obtaining income developments compatible with the overall national interest. I hope that the pay settlements which may emerge will be sufficiently moderate to meet vital national economic needs.

Given the increase in this year's capital budget and an improving economic climate supported by orderly and reasonable pay developments, demand should show a further increase in the second half of the year. The volume of industrial exports should continue buoyant over the coming months. Because of supply constraint the outlook for agricultural exports is less favourable. As for investment, the large increase in the allocation for the public capital programme should, despite the likely sluggishness of private sector activity, induce an overall volume rise. In brief, a GNP growth rate of slightly more than 2 per cent now seems a realistic prospect. Those who would point out that this forecast does not accord with another one recently published would do well to remember that last year's outturn was better than some pessimistic forecasts said it would be.

While imports, in view of last year's abnormally low level and the outlook for home demand, may show a substantial volume increase, the balance of payments deficit for 1976 should be of manageable proportions. As regards inflation, the quarterly rate of price increase is expected to slow in the second half of the year so that the annual outturn should be better than in 1975, if nevertheless still disquieting. Although the employment situation should begin to improve towards the end of the year, in response to the renewed expansion of output, unemployment in Ireland as elsewhere in the European Community is likely to remain at an unacceptably high level for quite some time. So far as Ireland is concerned unduly generous wage settlements at this time would, through their effect on competitiveness, be seriously detrimental to export prospects in 1977 and later and thereby make more intractable the primary national problem of unemployment. We must remember the longer-term dimension of this problem which is undoubtedly the more important. We have to create many thousands of additional jobs annually for the next few years, both to cater for our growing population and to reduce unemployment from its present level. The targets we will have to meet are much greater than those achieved over similar periods in the past. Clearly, a radical approach is required—in particular a fundamental change in our attitudes. A high rate of export-led growth is a prerequisite to the solution of our longer-term, as indeed of our short-term, unemployment problem. Although we can anticipate assistance from a more rapid pace of expansion internationally, especially in the post-recession phase, this alone will not suffice. We must capture an ever-larger share of world markets, recapture and hold on to a larger share of a growing home market, an outcome which relies to a large extent on whether or not we disimprove or improve our competitiveness.

I have now sketched out the general economic background against which this year's Appropriation Bill is being introduced. The problems facing Ireland are not of recent origin. Some are attributable to disadvantages of naure and geography and others to a certain lack of discipline in our national character. As the National Economic and Social Council pointed out, they have been with us for a couple of decades and no group— political, vocational, privileged or unprivileged—is entirely blameless for many of our shortcomings. In so far as our difficulties were at least in part preventable or curable by our own behaviour, we have lost out unnecessarily. As a nation we have not faced up to the hard decisions which have to be taken to get and keep this country on the right tracks. The time for knocking is over. The nation needs and, above all, has the right to expect from its public representatives objective criticism and sincerity. The kind of knocking to which I refer is exemplified inThe Irish Press today, which carries a headline saying “Budget Rule by Brussels. EEC Aid— But With Strings”. The same newspaper contains a leading article which has several falsehoods. As the whole tenor of the two articles in question is at variance with what the EEC has said about the Irish economic position and as the effect of the articles, if taken seriously, would be damaging to the country, I feel it is necessary to refer to them. If knocks are delivered then those who are knocked have a right and an obligation to defend themselves particularly when the interest of the nation is at stake.

The leading article in today'sIrish Press says that:

The European Community is unhappy about the way the Government are implementing the conditions attached to our last loan of £150 million.

That is a falsehood. The EEC have not expressed any view whatsoever about the fulfilment of the conditions. If they were to express a view, the view would have to be that the Government are conforming entirely to the conditions which are policies which the Government themselves of their own volition have spelt out in the budget statement which I presented in Dáil Éireann in January last.

Further statements inThe Irish Press today, to the effect that the EEC proposes to dictate to this country how to manage its current and capital expenditure, are also without foundation. The reality behind the story is that Ireland, in common with other countries, has been pressing for better efforts on the part of the Community to see a convergence of economic policy. This involves a transfer of resources from the better off areas of the Community to the less well off. That is inherent in the obligations of the Rome Treaty. Therefore, rather than having any reason to disapprove of any exhoration from the heads of Government in Brussels yesterday, this country is glad to hear that what it had been pleading for for so long has now been accepted as being the correct policy for the Community. That is one which would see a proper convergence of economic policies which is a great deal more than the question merely of convergence of budgetary policies. Common economic conditions require that those areas of the Community which are unable from their own resources to attain the same standards of living as the better off sections of the Community should receive help from that Community in order to move in the direction which the Community was set up to achieve for all, and that is a better and an equal standard of living for all members of the Community.

This country is proceeding on the lines that our own prudence requires us to follow. Those lines are also in conformity with the general objectives of the Community. I am glad that the Community accepts the need to give assistance to the less well-off members of the Community so that Community objectives can be achieved.

We can discuss our economic problems. We will no doubt have disagreements about them, but I would hope that the debate in this House as elsewhere in the next few months will be constructive and that old style of knocking and the attitude of "You are always wrong and we are always right" will be left behind. I would remind the House that a distinguished economist, Professor Patrick Lynch, said on radio last Monday that the reason for the failure of the three economic plans in this country since 1958 was due to a lack of discipline, which, he said, was not on the part of the Department of Finance but on the part of other Departments. He considered that the public sector behaviour was not as good as that of the private sector. I am not saying that the Department of Finance are without blame. I am not for one moment suggesting that I, personally, have not got my shortcomings. What I am saying is that when an objective expert says that blame has to be shared by all, then objective people ought to bear that in mind whenever they propose to make comment on the economic and financial situation.

We have just heard a speech which, even by the standards set by this Minister, seems to be an astonishing one. He has come in here at a time of grave national crisis, at a time when not merely in this country but in other countries and throughout the EEC, there is a recognition that the situation of Ireland is very grave indeed and that Ireland is now capturing attention as the one country in the EEC which has very serious economic and financial problems with no real prospect that outsiders or Irish people can see of solving them in the immediate future.

In this current situation we have a speech from the Minister which ignores the gravity of our problems, suggests that all is going pretty well and things are improving. The impression that a complete stranger knowing nothing about our affairs would get from this speech would be that while we have problems—all countries have problems—ours are no worse than those of anybody else. It was an extraordinary speech, even by the standards of this Minister who has come in here year after year, since 1973 saying: "Well, all right then, there may be this difficulty, there may be that difficulty, but the second half of the year is going to be grand. Everything is going to improve; there is no real need to worry". This is the kind of impression that the Minister always tends to give.

At the end of his speech he apparently opted out of Government. He said that no group, political, vocational, privileged or unprivileged, is blameless for many of our shortcomings. The Government are not mentioned of course. He said:

In so far as our difficulties were at least in part preventable or curable by our own behaviour we have lost out unnecessarily. As a nation we have not faced up to the hard decisions which have to be taken to get and to keep this country on the right tracks.

Then he went on to this question of knocking which, coming from the champion knocker of all times when he was in Opposition, strikes me as rather curious. Nonetheless, as a nation we have not faced up to the hard decisions. How can a nation, as such, face up to hard decisions when we have at present enormous unemployment, inflation worse than anywhere in Europe and a serious balance of payments problem, which the Minister does not appear to consider a problem? There are economic, social and financial problems of the utmost gravity. In these kind of circumstances a nation, as such, cannot deal with these problems. It is a matter for our Government. The Government have to a large extent created them, but whether they have created them or not it is the duty of the Government to tell the nation how these things can be solved and not just tell the nation to take the necessary action. To try to fob the whole thing off by saying cheerfully that no section is blameless, the nation needs to do something about it and so on, is ludicrous. The Government and, in particular, the Minister for Finance are responsible.

At the end of his speech, after his reference to knocking, the Minister said:

The nation needs and, above all, has the right to expect from its public representative objective criticism and sincerity.

He then refers toThe Irish Press. I have not read the leading article so I am in no position to defend it. Whatever the leading article may have said, the Minister's definition of the Community attitude to Ireland is not in accordance with the known facts. I understand that no decision has been taken about the Community in regard to economic policies which would be binding on the Government.

I should refer to the preliminary report of the proceedings of the European Parliament for 7th July when as reported at page 183 a statement was made by Mr. Gundelach on behalf of the European Commission with regard to the condition of the Irish economy. He said:

In the latest Communication to the Council on economic policy to be. followed in 1976 and in the budgets for 1977,——

I take it that this communication to the Council is the one that is now being accepted by the Council and was commented on in this morning's newspapers

——the Commission recommended that Irish budgetary policy in 1977 should aim, in conjunction with an appropriate incomes and prices policy at a strict limitation on salaries, social transfers and other current expenditure together with possibly a modest increase in taxation. These guidelines are in line with those approved by the Council when fixing the conditions for economic policy in connection with the Community loan to Ireland.

That is rubbish.

This is an official pronouncement on the part of the Commission made last week to the European Parliament.

The Senator ought to read the conditions.

I am saying what the Commissioner told us in the European Parliament. But the Minister has been very casual with regard to the conditions laid down for this loan. He was interviewed, for example, on the day the loan was announced by one of the newspapers—I think it was theIrish Independent—and he said that these are not conditions, they are more in the nature of exhortations. They are not exhortations and it was dangerous in the extreme, hazardous in the extreme, reckless in the extreme for a Minister for Finance who had just borrowed £150 million on conditions, to start saying in public that these were not conditions at all, that they were merely more in the nature of exhortations.

Let us consider the implications of this statement of these conditions. I take it that the Minister hesitated very long before he agreed to borrow this money because of the type of conditions that would be imposed. The finance of the country had been put by him into such a state that it was essential in order to keep us going at all to take £150 million. But as aquid pro quo he agreed to those conditions. In other words, he agreed that there would be strict limitation on salaries, that social transfers would have to have a strict limitation. We have already seen in this budget for 1976 that social transfer, that is social welfare payments, old-age pensions, unemployment assistance, unemployment benefit and so on, have not in any way matched the potential increases in the cost of living. The increase in the payments was around 10 per cent but in the first six months of this year the cost of living went up by 14 per cent— helped considerably, of course, by the Minister and his Budget. There will be a further increase in the next six months. One does not know whether it will be 4, 5, 6, or 7 per cent but those who need these social welfare payments, the old, the unemployed, the sick and so on, will have a fall this year in their living standards and apparently they will have a still more severe fall next year because the Minister has agreed with this condition that social transfers, that is social welfare payments, will be subject to a strict limitation in his 1977 budget. He also has agreed that there will be a strict limitation on current expenditure, that is current expenditure generally.

This is a poor look out for employment. It is a poor look out for education, the health services and all the other services that have to be maintained by the State. The Minister who complained so bitterly about references to these matters in this morning's papers has apparently completely forgotten that he agreed to these conditions when accepting the EEC loan.

The Commissioner went on to say in the next paragraph:

If some guidelines will not be followed—here I am specially thinking of the pledge for an incomes and prices policy—other measures will need to be adopted, if not employment and the balance of payment shall be jeopardised.

We all know, of course, that the pledge for an incomes and prices policy is not being followed. The incomes and prices policy if it ever existed at all is in shreds. It would appear that an 18 per cent increase is the minimum one can expect. That would involve a 4 per cent increase in the last six months of this year which would be pretty low. We shall be very fortunate if we can get out of it that well. The figure may well be 20 per cent but certainly 18 per cent is as low as one can reasonably expect it to be. Quite clearly that will mean that the type of prices policy that the Commission expected us to follow has not succeeded. Incomes policy is quite obviously in shreds. The wages agreement, had it held, was in any event at a rate which was far above what was desirable in Irish conditions. What will happen now no one knows but either way it is quite clear that from the point of view of the EEC Commission our incomes policy has failed.

Therefore as the Commission say, other measures will need to be adopted. Otherwise employment and the balance of payments will be jeopardised. The Commission went on to say:

The Community has and will in future by way of loans and subsidies contributed to solving structural problems in Ireland. The Commission is presently together with the Irish authorities studying the problems in order to fix priorities for the financial assistance.

I take it from this that the Government and the Minister are at present negotiating with the EEC for a further loan to be made next year and that they are fixing the priorities which are the conditions for this financial assistance. It is strange to say that one must go to Luxembourg to find out these things. The Minister is even now apparently denying it. Our Government have so ordered their financial affairs that they have been forced to take large loans from the European Economic Community on the basis of conditions which have severely circumscribed the possibilities of Government budgetary policy and which will circumscribe them still more in the coming year. It is absolutely clear that if a further loan is agreed to next year the conditions will be considerably more severe than those laid down for this year. However, I will come back later to this matter.

This Bill which incorporates, as far as the Seanad is concerned, the Estimates which are dealt with in the other House one by one, enables us to review those Estimates and to review the wholecorpus of Government policy and leadership, or lack of it. One thing which is demonstrated clearly by this Bill is the complete lack of financial control that has been allowed to take place under the Government. The Minister has claimed on many occasions that the extravagance of his spending operations were required in order to cut unemployment and that things, as he put it, would be worse if the Government had not spent so much. A more accurate view of matters and one which is being adopted more and more by economists here and abroad is that the Government in this way have created unemployment. The extravagance of a financial policy, the complete lack of any sort of efforts at control over expenditure, have created unemployment by vastly fuelling inflation.

For the first couple of years of this Government, the first years of responsibility of the Minister for Finance, that Minister used to deny that inflation was rising. I remember him, in 1973 and 1974. saying that the figures showed that things were improving, that prices were really not rising any more rapidly than formerly, even less so, as he told us on one occasion. Certainly, he told us, that prices were rising just as fast as anywhere else but it was nothing to do with us and there was nothing the Government could do about it. The Government have at last come to realise that their own activities have had a great deal to do with the creation of inflation. They have at last come to realise, very late in the day, that our inflation is, indeed, higher than elsewhere, that it is to a large extent created by ourselves. While, of course, the Minister would no doubt put this down to national indiscipline and so on, the more serious view of it has been taken by people less enthusiastic than the Minister in defending Government policy. The general view here and elsewhere is that the Government have been responsible. This year at least 5 or 6 per cent of the inflation since the beginning of January has been directly due to the Government's budgetary policy.

The problem has been that from the start the Government's economic policies have been governed less by economic realities, less by what was needed here than by an absolute iron determination that, whatever else happens, they must win the next election. Money had to be spent in order to win popularity and convey the impression, as it was put so often, of a Government with a social conscience who would do things overnight while the lumbering Fianna Fáil machine needed a rather longer period to accomplish. We have the position therefore that current expenditure, which in 1972-73 when this disastrous Minister took office was £663 million has increased, as shown in this Bill, to £1,693 million this year. Formerly it was 29.6 per cent of total gross national product but it is around 40 per cent this year.

One of the curious aspects of this has been that while we have had this rise of almost 200 per cent in current expenditure there has been a much smaller percentage rise in capital expenditure. One would have thought that, from the point of view of the creation of employment, and the improvement of the national economy generally, capital expenditure should have risen by far more than current expenditure. There appears to have been a complete collapse of the supervision normally applied by the Department of Finance. Obviously, one cannot blame the officials of that Department even if one was permitted to do so by the rules of order. I have no doubt that they are as effective and efficient as they always were. One must blame—not just because of the rules of order but because of the realities of the situation—the personal decisions of the Minister and of the Government. There has been the most extraordinary collapse in recent years of the ordinary budgetary constraints which ought to affect any Minister and any Government. There was the extraordinary situation of the two budgets last year, the original and the mini budget, when the deficit planned or promised or whatever in January was £125 million. By June, less than six months later, that had almost doubled to £241 million. By the end of the year it had risen still further to £259 million. This year it is £327 million as against £5 million when the Minister came into office.

The experience of last year showed that the Government were apparently quite incapable of adhering to the expenditure laid down in the budget. The simplistic Coalition view that the more one spends the greater the growth of the economy is now thoroughly discredited. If there was ever any truth in it, it could never have applied in Ireland, whatever about other countries. We have one of the most open economies that exists anywhere in the world. The major effect of spending a great deal of money in Ireland is that it goes into imports from abroad. It has been calculated that something like 40 per cent of every additional pound which goes into circulation in Ireland is sent abroad in order to pay for imports.

Fianna Fáil, obviously, believe in deficits where the circumstances are correct. We do not, never have and never will believe in the concept of budget deficits in order to avoid political problems. That is, of course, one of the great problems we have had with this Government. So often politics and finance have been allowed to mix. Deficits are correct in certain circumstances and, in particular, money should be borrowed for capital expenditure rather than for consumption. One of the great tragedies of the last three years has been that we have been borrowing enormous sums of money not in order to provide employment or to help the economy, but, basically, in order to pay for popular domestic current expenditure. If one borrows money, even on a very large scale, for capital expenditure, provided it is spent in an intelligent way, the economy will develop over the years and resources automatically become available in order to repay the loans. What is now happening is that because of the extent of the borrowing conducted by this Minister and the manner in which it is being used in order to buttress current expenditure, in order to buttress consumption, we have now the position that not only is the Minister borrowing in order to fill his current budget deficit but he is even borrowing in order to service the costs of borrowing. Borrowing, as we have been shown only too well in the last couple of years, in itself fuels inflation.

We have the appalling position that the national debt has risen from just under £1,300 million on 31st March, 1973, to an estimated £3,200 million by the end of this year. We have been relatively fortunate here. Because we were not involved in major wars we did not have to raise very large military forces, and we were able to conduct our business with a relatively small national debt. In relation to our gross national product now, our national debt is one of the highest in the world. A lot of this is external. The figures are rather interesting.

I have a list of the external public debt of the nine members of the European Economic Community as a percentage of gross domestic product in each case. In Belgium the proportion was 0.2 per cent; Denmark, 3.3 per cent; Germany, 0.1 per cent; France, 0.4 per cent; Italy, 0.6 per cent; Luxembourg, 2.8 per cent; the Netherlands, almost nonexistent, 0.02 per cent; The United Kingdom, 4 per cent; Ireland, 16.2 per cent. That is four times the figure for the next worst off country, Great Britain. This is the type of situation in which the Minister has got us involved. Nobody knows how we will go about repaying these loans, or how we will even maintain the annual payments for servicing these debts. The annual cost of maintaining them is a huge impost on the budget.

This vital programme of borrowing, this huge increase in the national debt, might be justified if the policy had succeeded. Unemployment in Ireland has risen as fast as it has elsewhere. We have an inflation rate which is the highest in Europe. In the UK, our near neighbour, they are reducing their inflation rate quite rapidly this year. We are not. Our output fell as rapidly as elsewhere. In most other countries there is a rapid process of recovery. The Minister said it has taken place more rapidly than one had expected. This will be a pretty good year in most countries. Next year may well be a boom year, while we stagnate after all this borrowing, all this enormous increase in the national debt, all this frightful burden which has been placed on the taxpayers which will last for our lifetime. For the rest of our lives we will all be paying for the ludicrous extravagance of the Minister, and for nothing. It has left us in the position of being the sick man of Europe. All other European countries, including the United Kingdom, are showing real signs of a recovery in the tradition built up before the oil crisis. What of the immediate financial future? The Minister will not be surprised if I quote from the recent Report of the Economic and Social Research Institute.

The Senator appreciates that it is a report of two persons. It is not a report of the institute. Look at the cover.

The Minister is very anxious to play down what they say when he does not like it. I noted he quoted them with approval at the end of his speech when they said something he thought could be interpreted in a favourable way. One can only assume that the general drift of their remarks will prove to have been a correct interpretation of the position. They say the GNP will rise by ½ per cent this year and the Minister may say it will rise by 1 or even 2 per cent. The general effect of their remarks is incontrovertible. They say, for example, that non-agricultural employment will fall by 12,500 over the year. If the Minister wishes to challenge that figure, he ought to tell us what he thinks the figure will be. They say the GNP will rise by ½ per cent. The Minister says 2 per cent. I suspect he is being optimistic. The figure could be nearer 1 per cent. Whether it is ½, 1 or 2 per cent, it is not a good figure. In view of the heavy fall in output over the past couple of years, in view of the fact that we have over 100,000 people unemployed, it will take far more than a ½ or 1 or 2 per cent rise in GNP to make any practical difference to us.

Personal consumption, they say, will fall by 1 per cent. I would have thought that was in line with the general view held by industrialists, economists and others. They say consumers prices will rise by 18 per cent. It would seem, if anything, that is a modest estimate. One cannot conceive of it rising by any less. They say exports will rise by 3¾ per cent in volume. That is a fairly optimistic estimate which the Minister probably will not challenge. They say imports will rise by 8 per cent in volume which is in line with what seems to be happening. They suggest a balance of payments deficit of about £200 million.

The Minister said in his opening speech that the balance of payments deficit should be manageable. Does he consider £200 million manageable? If he considers that is too pessimistic an estimate, he ought to give us his view as to what the balance of payments deficit is likely to be this year. Looking at the trade figures, my personal view would be that £200 million seems about par for the course. In 1974 we had a balance of payments deficit of £310 million which was an appalling deficit. Last year, as the Minister said, it fell to £15 million. He mentioned this almost as if he should be proud of it.

I said to the Minister on the Appropriation Bill before Christmas, 1974, that the then trade figures which were beginning to change rapidly at the end of 1974, would appear to show that there might be a very low balance of payments deficit in 1975. I said the Minister's policy should have been such as to avoid this because a very rapid fall in the balance of payments deficit would be a reflection of extreme depression in the economy. I said the Minister should get this £310 million down to something more practical but he should not allow it to fall too rapidly because this would be a reflection of a disastrous fall in public spending. This is, in fact, what happened. The £15 million deficit in the balance of payments last year is not something about which the Minister should be proud. It is a reflection of the absolutely appalling state of the economy and consumer spending last year.

However, this year it looks like being around £200 million, and the difficulty there of course is that it shows, if any showing was needed, that our balance of payments problem, which is a very grave one, is in no way solved, that last year was a pure chance due to the state of the economy generally and consumer spending in particular. This year is not a year in which consumer spending will be on a large scale, but even so this year the balance of payments will be about £200 million. If there should be an improvement in the economy, if ever there should be a recovery in consumer spending and therefore in imports, how is the Minister going to solve this problem? He cannot just toss the thing off in his speech, as he does, by saying that he thinks the balance of payments deficit this year will be manageable; I think that was the word he used. I do not think £200 million is manageable. Certainly the prospect of a further increase, perhaps a very considerable increase, next year, should there be some improvement in the economy, is a very serious one.

That is a statement made by the Economic and Social Research Institute, and I think it is a fair statement. They go on to say: "Agricultural incomes will rise by 20 per cent." I take it that the Minister will not disagree with that. Wages, they say, will rise by 13½ per cent. Again that seems to be a modest estimate; it is hard to see them rising by any less, and in the present position, which has been so mismanaged by the Government that it is chaotic, anything can happen, but I think that is a reasonable estimate; and then they expect profits to rise by 11 per cent.

Three months ago, the quarterly report says, they were estimating a 2 per cent growth rate this year; they now estimate only a ½ per cent and they blame the budget and the proposed national pay agreement for forcing a downward revision of this projection. They go on to say that the budgetary measures introduced were at variance with the expressed economic goals of reducing the rate of price increases and halting the rise in unemployment.

All these things are said by the Economic and Social Research Institute in their quarterly economic commentary. The Minister, as usual, said he did not agree with them. But I think the problem from the Minister's point of view is that these kinds of statements are now being made by economists, industrialists everywhere, not just by this particular institute. One of the great problems we face here at the moment is that confidence has been completely eroded not merely by the economic developments that have taken place but by the fact that the Government in general and the Minister in particular do not even appear to be able to accept the realities. They live in an ivory tower and do not appear to be able to accept the basic facts of our national situation. Then in the most gloomy tones the institute go on to talk about difficulties which seem to be insurmountable. In all the years of reading reports of this kind from various institutes, the Central Bank and so on, I have never heard a statement like that about difficulties seeming to be insurmountable. I think in fact they are not insurmountable. I fear they are insurmountable by the present Minister, because he is simply unable to accept that there are things that need to be surmounted, and that one is not going to surmount them by talking vaguely about the lack of national discipline. I have no doubt there is a lack of national discipline, but equally, whether it is in an army or a nation, one is not going to get discipline without leadership, and that is precisely what we lack.

The Minister, who says these people are wrong in their commentary, forgets that if ever there was a commentator on economic matters who has been consistently and universally wrong it has been the Minister himself. If it were worth the bother I could bring in an immense stack of quotations from the present Minister made in this House about balance of payments, budget deficits, development in the economy, national income, every single one of them outrageously and grotesquely wrong.

One of the great problems we face at present is the fact that our neighbours in the United Kingdom have had a sudden, startling and unexpected success in dealing with inflation. One had grown to assume over the years that, bad and all as we might be in Ireland, at any rate we could be matched, blow by blow, by our neighbours in Britain, that they also were apparently either unable or unwilling to control their economy. But there has been this sudden change for whatever reason; it need not concern us here. We have therefore the 4½ per cent wage agreement in England. We have the already pretty considerable cuts in expenditure being made by the British Government. We have the prospect that by the end of this year inflation in England may be not much over 10 per cent, and the extreme likelihood that by the end of next year it may be down even to 4 per cent or 5 per cent. Faced with that we have the almost certainty that this year, as I have mentioned, the cost of living will be at a minimum 18 per cent higher over the 12 months' period and the extreme likelihood that nothing very startling will happen within the next 12 months or so to reduce that rate. I think the general opinion is that even up to late next year there is no real likelihood that there will be any substantial fall in the Irish inflation rate.

The Irish inflation rate is already double that for the Continent. Until now we have been cushioned by the fact that 50 per cent of our exports go to Britain, whose inflation was just as bad as ours, and the Minister was at pains to point out that at this time last year it was even higher than ours. We are no longer cushioned by this fact.

This will have a very serious effect on our exports because it will make our exports uncompetitive, while our imports from Britain, which of course are in direct competition with our own manufacturers at home, are very much cheaper. As the Minister said himself in his budget speech: "We must set ourselves a programme no less ambitious if we are to secure our future prosperity". That was some time ago and, as so often with the Minister, is a statement with which one can agree, but naturally there has been no programme produced in order to secure our future prosperity.

The issue of the Confederation of Irish IndustriesNewsletter for 8th June, 1976, has some interesting examples of what happens when our costs get out of line. They pointed out:

Less than two years ago footwear exports and imports were in balance. In the first four months of this year we imported almost twice as much as we exported.

From being in balance, we now import almost twice as much footwear as we export. Then over the last four years our favourable export balance of clothing products dropped from 33 per cent in 1972 to only 10 per cent in 1975. In the first four months of this year the situation had deteriorated so that we imported 10 per cent more than we exported. That is the kind of situation that arises when, as is happening with us in this country, one allows one's costs, particularly one's labour costs, to get so badly out of line. They go on to say that the relative performances of the textile and clothing industries provide a good illustration of the very direct relationship which can exist between movements in wage costs. These industries employ in all about 40,000 people. The greater part of their exports are traditionally to the British market.

As pointed out in theNewsletter, during the four year period 1971 to 1975, unit wage costs in the textile industry in Ireland rose 17 per cent more slowly than those in Britain, whereas Irish textile output increased 19 per cent more rapidly than did the British. At the same time, unit wage costs in the Irish clothing and footwear sector grew 12 per cent faster than those in Britain, whereas output in the Irish clothing and footwear sector declined 17 per cent more rapidly than output in these sectors in Britain. There is a very direct relationship between wage costs and output. They point out what is quite clear, that Irish earnings and unit wage costs are going to go more rapidly out of line with those in Britain during the next 12 months.

One of the problems which is of importance to us because of our high rate of unemployment is that it is particularly in the labour-intensive industries that wage costs are so important. Because of increased earnings here far beyond anything that is going to be payable in Britain, we are going to have the position that larger numbers of people are going to be out of work—a great many have lost their jobs but others will lose their jobs—in these labour-intensive industries, particularly textiles, clothing and so on. These are industries that tend to be locally owned, owned by Irish people, and they tend to require a relatively small volume of investment per job created. These are the industries which are declining and closing down. To the extent, therefore, that these labour intensive industries are lost as a result of higher labour costs, they will have to be replaced by industries which are much more capital-intensive. In other words, as a result of our excessive costs we are losing industries where a relatively small amount of capital invested will create a considerable amount of employment. We are going to have to replace them with industries in which a great deal of capital is required to create a very small number of jobs. This is one of the serious aspects of the present situation.

We have this strange matter of the economic plan. The Government, and the Minister in particular, have said on many occasions that they do not believe in planning. They do not believe that in present circumstances it is possible to produce a plan. One would like them to produce a policy now and then, but I suppose a plan is a more elaborate version. If they cannot produce policies one can hardly expect them to produce plans. They have told us on many occasions that they do not believe in it and they cannot. Now the Minister has come out and said he is going to produce some kind of a plan in mid-summer. It is already mid-summer, but nonetheless I presume that, whatever about the climatic aspects of it, he means that he will produce it by September. I would be interested if he could give us some indication as to what type of plan it is going to be, whether it is going to be guidelines or what. One wonders why it has taken so long. It has taken three-and-a-half years in office, a steady decline in national output, increasing unemployment and all the problems we know about. One only hopes that when the plan does appear that it will at least point the way to some kind of reasonable improvement in our affairs.

The Bill before us, which is a reflection of the spending side of the 1976 budget, in so far as it is a reflection of budgetary policy solves none of our present problems. It does not even begin to do so. We have a much larger current deficit, we have further considerable increases in borrowing, it has speeded up the rate of inflation by about 5 or 6 per cent and, in spite of what the Minister has told us, it leaves unemployment relatively untouched. Unemployment at the moment is over 100,000, and it has been over 100,000 for more than 12 months. It would be a brave prophet who would suggest that it will fall below 100,000 by this time next year. Public spending has gone up from 42 per cent of GNP in 1972-73 to 54 per cent last year and 58 per cent this year. The Taoiseach, in speeches recently, has admitted at last that this enormous rate of expenditure—nearly 60 per cent of total national income —is one of the main causes of inflation and unemployment. Having admitted all this, a further increase in the percentage of public spending has taken place this year.

There is one matter that I should like to talk to the Minister about because of the reply that he gave at the end of the Second Reading of the Finance Bill in this House. It is the much-argued question of equal pay. The Minister's performance has been extraordinary. Now we know, in regard to the question of equal pay, that this is a principle which is being pushed by people for many years. It was incorporated in the Treaty of Rome as an ideal that should be achieved as rapidly as possible. There was a long and excessive delay in doing anything about it but nonetheless when we entered the EEC we knew that equal pay was going to come at some time in the future. The legislation needed to introduce equal pay was enacted through the Dáil and through this House in 1974. It came into force on 1st January last. The EEC directive, which has the force of law in effect in Ireland, was passed in 1975, was agreed by the Council, including the representative of the Irish Government, on 10th February, 1975, and came into force so far as the EEC law was concerned on 10th February, 1976. It was known, therefore, a long time ago by the present Minister and Government that at a certain fixed date equal pay was to become the law of Ireland. In particular, the cost in the public service was known by the Minister as to exactly what would be required in order to give equal pay for equal work. Nothing was done until the very last minute when an application was made to the EEC Commission for a derogation to allow us not to bring in equal pay. I do not know why the Government thought such a derogation was possible. All those who were involved did not realise that it was impossible to be given a derogation of this kind. I do not intend going through all the gory details about how, when this derogation was unanimously refused, the Minister for Finance spoke about the "irresponsible attitude" and so on. At column 319 of the Seanad Official Report for 26th May last the Minister was replying to the Finance Bill and he made a few remarks on which I want to comment. He said:

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 wondered what this referred to and I can only conclude that the Minister believed that when the Government are in breach of their EEC obligations, in breach of the directive which is the law of the land, and in breach of their own legislation which has passed through this House with the support of all sides, nothing should be said about it; that the matter should be concealed abroad in case there would be political embarrassment to the Minister. All I can say is that so long as the Minister and the Government continue to be in breach of their obligations under EEC regulations, so long as they continue to break the law of the land and to break the law of the EEC which under our Constitution is also the law of the land, I propose to complain about it.

The Minister has failed to realise that things have changed, that the European Parliament is not a nonpolitical assembly like the Council of Europe. The European Parliament is a place where one discusses EEC matters relating to the Community as a whole or to individual countries. If it is necessary, in order to push the Minister into the fulfilment of his obligations, to raise the matter in Seanad Éireann, the European Parliament or anywhere else, I propose to do this. In EEC conditions that is what one ought to do. I can think of nothing worse than to enter into a polite conspiracy to conceal from our fellow-members of the EEC that this Government are in complete breach of their obligations to introduce equal pay.

I am buttressed in this belief by the fact that the Irish Congress of Trade Unions made a very violent and public representation to the EEC Commission, much more violent than anything I said. At all times I have been polite and restrained in the remarks I made. On the occasion on which the Minister first launched his attack I had not even mentioned the Irish Government. However, the ICTU made a representation in the most violent tones. They were right. I am not complaining. They described the Minister's attitude, particularly in regard to equal pay in the public service, as a mere subterfuge. If the Minister feels I should not, as he put it, cause political embarrassment abroad, he should address his remarks even more so to the Irish Congress of Trade Unions which probably caused him a great deal more physical embarrassment abroad than I have been able to do or had wished to cause him.

I want to ask the Minister what he thinks will happen to his new scheme in the public service. Instead of introducing equal pay in the public service, the Minister has, as the ICTU said, by subterfuge, said there will be discrimination by marriage rather than sex, in other words, married people will get the full rate of pay and a lesser rate of pay will apply to those who are unmarried, whether male or female. The Minister says this is not discrimination. The ICTU made a representation to the Commission and stated that this was not in accordance with EEC rules. I suspect that it is not. There is a timebomb hanging over the Minister's head and one of these days he may be told from Brussels that his proposals for the public sector are not in accordance with EEC rules and that he must introduce genuine equal pay. I am interested in hearing what the Minister thinks will happen in regard to this.

It is quite clear there has been no genuine effort made by the Government to introduce equal pay in Ireland. For example, one has only to consider the question of equal pay officers. Equal pay officers were provided for in the Act which introduced equal pay. They would be employed by the Department of Labour and would travel throughout the country to ensure that all women workers concerned were in a position to get their rights under that legislation. Two equal pay officers have been appointed for the Twenty-six Counties, just two. This is the bare minimum which the Government feel obliged to do. It would appear that the Minister in particular and the Government in general have no interest in equal pay, have no desire to see it introduced and have made no genuine effort to introduce it. Of course, there was the ludicrous situation when the original notice advertising the posts of equal pay officers provided that there should be unequal pay, that female applicants for these posts would receive a lower rate than male applicants. It was one of the most ludicrous performances ever perpetrated by a Government.

In any event, two officers, whatever they are paid, were appointed. This kind of situation is conclusive proof that the Government have no wish to introduce equal pay. They would like the whole matter to blow away. It will not blow away. Even if the Government sought to amend the legislation, which is now the law of the land, they could not do it. As from 10th February last the EEC law, which is effective in this country, is that there must be universal equal pay, whether in the public services or anywhere else.

In conclusion, I want to say that the Government's entire record shows that they are either incapable or unwilling to run the country's finances in a rational way. The trouble is that it may take years to solve the problems created by the Government. It is depressing in the extreme. After three-and-a-half years, during which the economic condition of the country has deteriorated steadily, the budgetary position has become steadily more catastrophic. We find the Minister, after all this time, coming in and making a speech which, in effect, suggests that things, after all, are not so bad and they will improve by themselves. The plan, whatever it may be whenever it appears, may, perhaps, restore some confidence but there is nothing in the record of either the Minister or the Government to date to suggest that it will do so. We do not oppose this Bill, it is necessary to provide for the continued running of the country, but the Estimates contained in the Bill do not suggest that the Government have any idea where they are going.

I only missed a short portion of Senator Yeats's speech. I hardly think he chose the moment of my absence to make a constructive contribution, to make one suggestion as to what should be done in the present situation, a situation which Senator Yeats sought to attribute entirely to the decisions of this Government without specifying the nature of the decisions, without specifying what schemes, if he were in Government, he would not have approved that they should borrow for. As one concerned with the future of one of the last free democracies in the world, I find this contribution, coming from the spokesman of Fianna Fáil in this House, at this time to use his own word, depressing.

He referred to what is described on the cover as "The Quarterly Economic Commentary of the Economic and Social Research Institute". That commentary, as I think the Minister pointed out to him, is a commentary only of two persons in the Economic and Social Research Institute. I find the judgments of the commentary unimpressive in the language which was used by the two authors—"The economy is now faced with difficulties which seem to be insurmountable"—particularly when I am able to turn to a contribution of one of the two authors, made in February of this year after the budget—which, by the implications of his language created the insurmountable problems —at a seminar organised by the Association of Scientific, Technical and Managerial Staffs. In the course of Mr. Durkin's contributions—that is the author to whom I refer—he is good enough to tell us that, personally, he would have preference for a lower average standard of living for those in employment if it meant that total employment was higher. It was gracious of him to express that preference.

He goes on in the course of his contribution which, apart from the first anachronist chauvinism from Mr. Anthony Coughlan of Trinity College, Dublin, contained many interesting and useful papers, to speak of the widespread misapprehension that the fall in exports was due to a loss of competitiveness. This, he indicates, is a type of delusion which it is difficult to get the Establishment to get rid of. If one turns the page and reads on one finds him saying, in reference to one action of the Government and one external decision which the Government would have had nothing to do with, that the increased oil prices and the increased social welfare contributions of employers—£1 a week per employee—must necessarily damage competitiveness. He also says—this man who thinks that the Establishment is deluded with this idea that we have suffered through loss of competitiveness abroad—that there are people out of work in Ireland because of loss of competitiveness abroad. One finds him saying that the great pity is that incomes did not grow more slowly in the early part of 1975, thus possibly keeping the volume of exports and hence production and employment rather higher. I find it difficult to be depressed, therefore, by the judgment which is shared by a man who contributes such contradictory statements in another article published as part of the seminar organised by a trade union. He says: "The economy is now faced with difficulties which seem to be insurmountable." The economy is now faced with difficulties but I do not believe them to be insurmountable if the people have a will to surmount them. I believe the people can and will have that will, but they will not have it unless they face the realities of their own situation, realities which are insufficiently referred to in the quarterly commentary—not merely this quarterly commentary but other quarterly commentaries of the same institute. The people will not accept the limitation of resources which faces not merely them but the Government also.

I find, in another paper by another member of the institute at that seminar, a superior comment about the Government, the Department of Finance and, indeed, the EEC to the effect that they seem to be concerned merely with accounting, with Government expenditure, and not with the whole business of production of the economy. This, I find, totally irreconcilable with the extremely impressive document which we have recently had—one of many— from the National Economic and Social Council, which recognises the seriousness of the trend and the proportion of the resources of the community which the Government and the public sector absorb and which refers to an analysis and a consultant's report which did not relate to the period after the formation of the National Coalition Government, but related to the period preceding their formation.

If there is a trend for the Government—using that word to describe the whole public sector—to absorb an increasing proportion of the national resources, that trend set in the previous ten years. Paragraph 1.4 of the report says:

Over this ten-year period, real public expenditure on goods, services and transfers, grew at a rate substantially above that of the real GNP (6.88 per cent as against 4 per cent), As a result, the share of total real public expenditure in gross national product rose from 34.4 per cent in 1963-64 to almost 44 per cent in 1972-73.

If there was such a trend, this Government did not start it. You may say about certain of their decisions that they accelerated the trend, but I do not remember howls of criticism from the Opposition benches when the Government decided to make adjustments in favour of people in receipt of social welfare. I do not remember any opposition to the proposed increases in social welfare either in Dáil Éireann or in Seanad Éireann. I remember cautionary notes being expressed by Senator Russell and myself on this side of the House about these increases. But let us face the facts. Let the people face the facts. Let us tell them the truth. Let everyone who writes tell them the truth. Let everyone who publishes, publish the truth. The truth is that theper capita income on the average of the citizen of this Republic is one half that of the per capita income on the average of the other EEC countries. Yet the Government are faced with expectations based upon the belief that what can be afforded elsewhere can be afforded here. That is untrue, and if we are in difficulties now, we are in difficulties because we did not face that truth. But maybe this is the downside, that we are facing the difficulties now, that we are looking at realities, that we will have to reshape our expectations in the context of the reality of our resources. Some of these expectations are greedy and some as the National Economic and Social Council on page 45 said, at paragraph (D) 5.18:

Because of the increasing popularity of international conferences of professional bodies and the influence of professional journals, a very strong "demonstration effect" is at work: the higher standards in the richer countries tend to become those to which it is believed Irish standards should be raised. However, this does not increase the ability to meet the cost.

I will give one illustration. A favourite recommendation of many organisations who are very properly concerned to effect reforms in the law is to constantly refer to the great desirability of family courts. I will not go into the technical arguments for and against family courts. I make one point which no one that I know of who writes on the subject in any depth will ever deny. They are extremely expensive as they involve the bringing together of highly professionally trained, and generally highly remunerated professional skills, to work with other skills that have to be trained to meet them. Even in America whose resources are very many times our own complaints are expressed about the cost, apart from the other criticisms as to the workability of the family courts which is another matter for another debate on another day. I merely make the point that that is an example of where a desired improvement, if the discipline that persuades the person of the desirability of it is to be properly adjusted to our realities, must become inter-disciplinary. This is one of the great needs at this moment in this country.

One of the very good things about the very unhappy fact that taxes are so high, and that there are so many unemployed, one of the very good things about this, a very bad thing is that there is a great and serious national debate taking place with regard to how to solve our problems. I have read writings from people trained in disciplines other than my own, agricultural economists, technologists, economists, bankers, managers, and trade unionists, and what seems to me to be lacking—and this is a well-known frailty of the ecology of the brain—is that when the brain develops one particular technique, it seems to become unbalanced to some extent, so that someone who gets absorbed in accounting tends merely to be interested in the accounting and tends merely to be interested in balancing the budget. The man who knows all about how a tax operates tends to be interested only in the operation of the tax and not to be interested in the economic consequence of the tax. The man who is interested in macro-economies and thinks about swelling up demand, pumping in from somewhere money to create demand, is not aware of the legal and the business difficulties of the negotiation of loans or of the financing of the demand so to be pumped in.

If the political parties in this House would more honestly forget their petty differences, because they are petty and personal, it would be better. If there was an ideological bias on the other side more decisively against that to be found on this side of the House than there is, we should tend to have rational debates instead of nitpicking kind of speeches. I think we are at a point where we will either make the wrong decision or the right one. We should first spare a moment for scathing condemnation of all those who pursue their sectional interests without regard to the common good. Scathing condemnation should be their lot and it should come not merely from this side of the House but from all parts of the side of the House and from all parts of the other side of the House. The greater the degree of knowledge they have of the situation the greater their guilt. The more inherited resources, the greater their guilt. The more they received from their educational system or the more they enjoyed the privileges of having an inherited tradition of education, the greater their guilt. The more they are members of professions who in making special claims on the Government in this situation disregarding their other incomes, including my own profession, the greater their guilt.

What can you expect the ordinary man in the street to think when he sees highly-professional bodies claiming substantial increases in their incomes to be paid for—by whom? They have to be paid by people who are much less well-off than those who are going to receive those incomes. The more the people are in quasi-monopolistic positions and look for more the greater their guilt too. They are not all on the employed side and they are not all in manufacturing or rendering services. Some of them are in farming. The more shrieks that go forth from the farming population who are within the range of taxation—and small is their number—when they are asked to make a contribution the more indignant I become at their failure to appreciate the need for all members of the community to restrain themselves in demands. If these demands continue to be made without regard, if this complaint about the cost of Government services being shared by all with incomes continues, we will end up handing each other useless pieces of paper. We are engaged in a type of economic cannibalism, of eating our own children's future.

We can make the right decision. There is a great deal of exciting seminal work being done, published and unpublished. Indeed, some of it is to be found in this brochure which I got from ASTMS. It is a difficult word to pronounce unless you are one of the elite and know how to pronounce it which I do not. There is a lot of good material in that brochure, of recognition of our realities, of suggestions. One of the recommendations which I would make to the Minister and the members of the Cabinet in the preparation of their Green Paper is not to reject anything or the consideration of any contribution merely because it can be seen to have been in some degree intemperately expressed or biassed in some unhappy direction or another. I get value and light from most of the contributions that come. I do not get value and light, being concerned to reform the system, from revolutionaries who tell us that what is wrong is the system. It will be a great comfort to us all while the wrong system is being trampled upon, presumably, and replaced by its alternative. I do not find myself unable to accept suggestions whether they come from ideologues of the left who generally know themselves to have an ideology or ideologues of the right who generally do not, but are.

I think that one of our tasks is to try to see what shape of society we want to have, based on the facts we are now faced with, what decisions we may have to make which will be —and must be, I think—radical and involve restructuring in some cases. They must be courageous. There must be some element of risk-taking in them because the image is not that of someone who can go to a library for two years and produce the perfect text to solve the problem which will have become a great deal worse by the time he has produced his text. It is not the activity of the professional man who likes to give all the time in the world to trying to receive and reach the perfect solution which we need at this juncture but rather something like the decisions which men make under fire, whether they be soldiers in the field or policemen on duty. We shall not make the decisions which will put right, as can be put right, the problems of this country unless we are prepared to make some mistakes.

There has been frequent mention of plans. An interesting fact has emerged and that is that the capitalists—if I may call them that— now want a plan just as much as those on the left looked for a plan.

You will have to whisper that quietly.

I will speak that fact as loudly among capitalists as among my fellow impoverished Senators for it is true. However, there will be difficulties and I think that the Minister's approach of producing a Green Paper is the right one. With a view to having the plan successful it must be based on some consensus as to what is desirable and based also on some clear-sighted recognition of facts.

It is important to note that in the words, not my words, of the National Economic and Social Council—by the way, you can call it something other than a plan if you have a hang up about something you said in the past about planning. I am prepared to eat plenty of words and I invite everybody else to be prepared to do the same as a necessary aperitif to the meal to be enjoyed—they call it a development strategy. They say that no such strategy has existed since the mid-sixties. That will come as a great surprise to the Front Bench of Fianna Fáil because the mid-sixties was 1965 and this Government did not get into power until 1973 so, if we are three years late with it, Fianna Fáil were eight years late with it. They say there were, of course, the Second Programme for Economic Expansion and the Third Programme for Economic and Social Development, but the extent to which Government was committed to them was at best always ambiguous.

Neither of these programmes was debated in Dáil Éireann. Neither of them seemed to be widely accepted in the public service as a frameword for thought and action and indeed, very little was heard of the Third Programme after it was published.

Now we do not want a Fourth Programme about which little will be heard after it is published. The way I would like to start planning is, first of all, in the realism involved in the recognition of the limitation of resources, in the emphasis which the objective plan must place upon the importance of solving the problem of unemployment. Psychologically, may I say that I am not certain that that should be, from the point of view of stimulating private investment, the description of the plan. It is necessary to disabuse the public by continued promotional exercises that there is any possibility whatever of this society creating viable employment, and it is viable employment we want, unless there is a recognition of the crucial role of profits, crucial to future employment. Recognition of this should be a task shared by everyone in this House. Call it additional value, call it anything you like, whichever system you work, be it a free system or a repressive tyranny, the test for the success of the enterprise is: does it reward the savings, whether they are freely invested or represent compulsory savings? The criterion must always be when the profits, whether goods or services, are marketed in response to the needs of the markets they must reach, do they generate a return which rewards the investor?

The first thing I would say about profits, as published in the Press, is that they do not represent the figures they appear to represent at all when regard is had to inflation. If there is not a proper provision for the replacement in inflationery terms—there is no admission that inflation will be encouraged or wished for here involved in accepting that fact—because we are a linked economy and always have been, very much more dependent on the world trade than the most dependent of the rich countries: the most dependent rich country on the trend of world trade is Britain and we are broadly twice as dependent as Britain. We cannot ignore the world save at our peril. If there is inflation in the world which inflates the price of goods and produces an inflated cost in replacing machinery, which the very highly equipped and modernised Irish industry has, that very highly equipped and modernised Irish industry must earn sufficient profits to be able to replace it—and the profits we are talking about are not distributable in any real sense—or, else, in due course the company will go out of business. At the end of the lifetime of the machinery in question, if there is not money there to replace the machinery out of accummulated profits, there will not be employment for those who work on with or direct those machines.

Another fact about profits, at the present level of taxation—I am ignoring the various reliefs which do not apply in certain types of cases anyway; I am ignoring export tax relief which will taper off and peter out in 1990—the company in question already has the State half-partner in every company making profits because half of them go to the State in taxation, or such proportion in any given case as the various allowances ultimately determine. One only has to read the list of bankrupt companies to see that the people who go into business take risks of losing all. Those who take risks must earn money by way of return for the risks they take in excess of what they can get from a dead deposit in a banking or a financial institution. If they can get 14 per cent on a safe loan to the Government, or whatever the current percentage is, the percentage return must be high if they are taking the risks of seeing their profits in certain years recede altogether. The better we can make them, the better chance there is of the industry in question not merely staying in business but expanding its business. Expansion of Irish business is vital. As James Callaghan, Prime Minister of Britain, recently said, "Today's profits are tomorrow's jobs." That is a fair phrase.

It is not simply a question of profits. We have just got to get the catechism of the clichés cleaned up a bit. That is one of them. Another one of these things that comes into this catechism is the multi-national. The multi-national, I gather, among some people who have the benefit of being employed by them is criticised by representation which comes undoubtedly from the left, which undoubtedly is basically chauvinistic and is basically anti-American. The multi-national is as good as or as bad as you are. There are good multi-nationals and bad multi-nationals. I know of one multi-national who have a system of constant renewal of their directives to people managing their affairs and the two notes they strike in the texts they circulate throughout the world are: innovation and integrity. They have elaborate machinery to discover malpractices designed to secure an increased turnover for the multi-national in question. We have the youngest active working population in Europe. I have not the percentages now but it is increasing at a rate slightly more than the Netherlands, that is something like six times as fast as Denmark. It is more than twice as fast as France, it is 50 per cent up on the rates of increase in Italy and it is 30 times the rate of increase in Western Germany. See what affluence did to them. It was Herbert Spencer who pointed out a long time ago the close connection between affluence and procreativity.

Affluence perhaps and freedom of choice also. We have not yet created freedom of choice in this country.

I would have thought that Senator Robinson might leave her King Charles' head out of this debate.

The Senator is bringing it in.

I was about to invite Senator Robinson, with everyone present, to celebrate the fact that we have reversed the trend of the famine, to celebrate the fact that we have an increasingly young active, and it must be our duty to see, educated workforce available as one of our strengths. We have strengths and this is one of the strengths if we make the right decisions about them. The young people are more mobile and, while I suppose that mobility has its dangers, I believe that this increased mobility will fit into the type of programme we ought to be shaping for our children and grandchildren. We have a regional industrial policy but we really have not got a regional infrastructural policy.

The emphasis with regard to this young and active population of ours leads me to the second point I want to make with regard to it, namely, the emphasis there must be, and that there is increasingly, on the necessity for technological training of that work force. I know you can get to a point such as was reached in America where all the colleges and universities were dismissed as merely existing to supply labour to the armaments industry and so on. From what I know of the young people of Ireland, they would be very glad indeed if they were given the skills which would get them jobs and I regard the creation of employment for these people and the adaptation of those who have been rendered redundant as the first of our social services. May I pause to congratulate AnCO on the increasing success and extension of their activities in this matter.

I am on very dangerous ground in questioning any assumption made by so very learned a man as Professor Brendan Walsh but I wonder if one of his assumptions is necessarily correct, that there is going to be such continued outflow from agriculture into employment. My impression, and this is where one is setting impressions against scientific calculations and that is a dangerous business, is that a lot of the outflow from agriculture has been mortality, simple death and the collection of the holdings resulting from death. But with regard to the more developed countries, whether during the period of his projection which is an arbitrary period anyhow up to 1986, I do not know if we will reach that stage of development. Certainly his namesake, Dr. Walsh of the Agricultural Institute, records that there is evidence that this trend of movement from the countryside to the cities is being reversed. Certainly in some of the richer countries it has stopped and in some cases reversed as people move out from urban centres to the countryside and reinvest their accumulations there or place their children there, financed by their accumulations. At any rate the potential of agriculture is very great.

I have not got the exact figure but, broadly speaking, the last figures I saw would put the average milk yield of an Irish cow at about one-half that of the average continental cow. From what I know, a great deal of scientific work has been done capable of being applied to agriculture which has not been applied as yet extensively to Irish agriculture. I am told—those are the figures that Dr. Walsh gives—that there are approximately 18,500 scientifically trained people in Ireland at whatever date he made his calculation and that of these there are only 550 employed in agriculture. He gives a basis for his definition of scientifically trained people—this may be acceptable or unacceptable—and these are approximately the figures he gives.

Questions arise with regard to the effect on the self-confidence of rural society of the movement of children away from the countryside into urban centres for education. The questions arise because there is a deadline in the percentage of people who are doing rural science at a time when there ought to be an increase. When referring to the importance of clarifying the public mind on profits I said that profits were not everything. Certainly they are not. When they are distributed you can see what kind of characters can emerge.

I should have thought that the meat export industry was a fairly profitable operation over the years. Again, according to Dr. Walsh, only .02 per cent of their turnover was applied to research and development, so there may have to be some strings attached to some of the tax reliefs which are available. Here the questions of choice will require to be made because the evidence seems to suggest that what might be apparently good agricultural economics may not be good business for the food processing industry. I am told, for example, that the supply of milk on the Continent is of more uniform quality throughout the year, that the seasonality of milk production has positively increased in Ireland with serious consequences to the degree of capital investment required in the food processing industry because they have to be ready for the peak and able to cope with it, and that the peak does not produce the high protein fat casein content. I understand that copper, apparently, is one of the elements we take when we drink a glass of milk.

The very advances in agricultural techniques and science applied to Irish agriculture may have added to the problems of the Irish food producing industry. I am still talking about manpower, moving from agriculture through food processing generally on to manpower. Undoubtedly, the Institute for Industrial Research and Standards have done good work in relation to this. The Waterford CoOperative Society and others have introduced a bonus scheme to try to spread out milk production throughout the year.

Later in the afternoon I will be suggesting to the Minister that he must not reject the possibility that appropriately designed tax reliefs may be less costly to the Exchequer than direct grants. Stimuli which lead to the spread of technology between firms to the acquisition of technology from abroad—it is being rendered available here under one scheme or another—ought to be a prime object of public policy.

director of the Institute for Industrial Research and Standards. There is a

I referred on a previous occasion— I refer to it again because of the extreme importance of the paper which I think is now published—to Mr. Cranley's paper. I think he is the message which the president of certain element of truth in the famous Harvard sent back when he visited the University: "Everything going fine here. There is a spirit of pessimism prevailing in every department." That, up to this moment, has been more or less my theme. As the lunch hour rapidly approaches, appropriately my optimism is beginning to lead me into some description of reasons for hope, grounds for optimism, and not merely the lunch bell, which surely must ring any moment, while we take advantage of the improvements in the food processing industry.

Business suspended at 1 p.m. and resumed at 2.15 p.m.

Before lunch I referred to the things that are going for us. There is need to emphasise these things in the present situation because a spirit of pessimism prevails. I referred to the rate of increase in our active young population, active in work and ready for the tasks which lie before them. I want to refer to the resources available now compared to the situation which existed when the State was founded. The proportion of our population engaged in industry at that time was approximately the same as the proportion of the population engaged in industry today in India. Our industries were based on imported raw material and 98 per cent of our exports went to one market—the United Kingdom. Those who have noted the change in our population position have done so in a scientific fashion and have properly evaluated the particular problems relative to it. The high dependency ratio means that the output per person employed in industry in Ireland must be much greater than that of the output of persons employed in industry in this large market to which we now have access because of the number of dependants they must support.

In 1922 the agricultural sector had low productivity because it was dominated by a price-fixing market, the United Kingdom, and represented a high proportion of the total output. The proportion of the work force engaged in agriculture, still with a lower productivity than the services industry, has, at last, access to a price-fixing market with an institutionalised system of stabilising prices; an institution which, admittedly, is under danger of assault. Our voice is represented where it never was before.

It is a very different day from the days in 1938 when we celebrated the Anglo-Irish Treaty, a very different day from the day when we celebrated the 1948 agreement with the United Kingdom. We are now part of the negotiating team which negotiates the price for our agricultural produce. We have a young, adaptable, highly-intelligent and highly-educated population. We had the wit to use our independence. That wit was expressed in many ways by the activities of people on both sides of this House and that wit can be expressed now at an important moment of decision.

We were put in a position on the 6th December, 1921, when we signed a treaty—we are not going to go back on that now—which was described by Michael Collins as a stepping stone to freedom. Do not mind what view is taken on either side of this House on that decision; just look at one effect of it. The wit of this State, the wit of the politicians elected by people of this country, the politicians in this House and in the Lower House —as I jocosely refer to it—changed, transformed, the British Commonwealth of nations, so that it was a different thing, a totally transformed institution, when the world war broke out in 1939. That freedom which was a stepping stone next to freedom was then exercised freely and properly to achieve and then, with skill, exercised to maintain our neutrality, whatever view one takes about that decision.

Our position is transformed because we also had the wit first, in the thirties, at a time when the depression was of a kind where protectionism—as I now think, though I did not then— was appropriate and we began the first development of industrial skills in the country, their first full expansion. The wit of our people was again exercised when it established the Industrial Development Authority 27 years ago. The independence and the wit of our people were exercised again when recognising our interdependence towards that of Great Britain—itself the most dependent of all the large countries on the trade of the world—when we introduced the export tax relief. There has been a large expansion of industry induced from these two decisions. Many skills developed. Nobody, for one moment, is satisfied that that has solved our problems. But it has created one good problem for us—emigration has stopped.

We have a growing population. The managing director of the Industrial Development Authority is not, according to his published words, dug in behind the methods, the priorities or the preferences that have been applied. He has operated the whole debate to criticism. It is wide open to criticism, that is to say, criticism not so much about what has been done— which, in a way, is for the historians and for our great-grandchildren to read about and who might become frightfully tired in doing so—but as to what we should now do.

The debate breaks out in some forms —should it be capital intensive, should it be labour intensive? It is, I think, a question which does not get a simple answer, yes or no, to one or other question. It is a question of where one locates the capital intensive and where one locates the labour intensive industries. If our problem now is the employment of our people most specifically, having got ourselves off the ground by our own effort, it seems reasonably clear to me that you do not finance capital intensive industry unless you have got a fair projection, that your own judgment tells you there will be linkages, downstream or upstream, that these are either going to create a demand for goods that are here, raw materials that are here for them to take into their industry, or a demand of industry for what they produce.

Our export tax relief is under nobody's control in the sense that, technically, it is a revenue, a fiscal right, but grants can play their part. The capital intensive industry if it does not create a demand for raw material must create a supply which will create new industries. The technological advantage of having the half-way process is now too expensive for us to have. The location of the capital intensive industry must be where there is the most ready access to the skills, the amenities, the technologies, the sciences, the super infrastructure, indeed the superstructure— on the whole, in the large centres. But we should be looking as well for the employment intensive industries. We must look at these in the context of that world which has changed as much as I describe to you when I say that in 1922 our industrial segment was about the same proportion as that of India today.

At one stage of my life I had the job of lecturing on commercial law and in the textbook then relevant the illustration given of a contract that was absolutely void was a contract of persons engaged in the enterprise of flying to the moon. I faithfully parroted that out. There has been an enormous sociological change here. Taking 1,500 as being an average sort of small town, the percentage increase between 1961 and 1971 of that was quite extraordinary and the implications of that are remarkable, implications for the distribution of industry. I can go on and argue the importance of a regional policy. A regional policy is being practised by the Industrial Development Authority, but it has got to be practised in the context of what is happening to the services, the infrastructure, as well, the road transport system, the sewage disposal, water purity and all those elements.

Ross and Baker, two members of the ESRI, prepared a splendid paper on the town and country situation here. They drew a distinction which is arbitrary in its way—it is sufficient for our purposes—between what they called the autonomous sector and the induced sector. The autonomous sector would be industry, tourism and agriculture which is not simply supplying the needs of the locality but oriented nationally, whether on its way abroad or on its way to the city of Dublin. It has shown that the less developed the area the more service employment is induced. The employment generated at a certain point of development in the induced section by the location of the industry in that area will reduce, but efficiency results and there is also the possibility of this technological transfer between the number of autonomous units. Included among the autonomous units, incidentally, and this is very pertinent to Government policy, are the decision makers with regard to education, health and many of the local government operations. The analysis shows that where these administrative decisions are delegated there tends to be a growth of employment quite outside the number of people employed by the particular authority that has the decision making business operating there.

In relation to any plan this seems to be a most vital element One ground for hope is past success. Somebody said once something like: "plucking the flower of safety by grasping the nettle of danger". We plucked a free democracy out of a civil war and never let us fail in Leinster House to congratulate ourselves on that but never let us fail to examine ourselves as to whether or not we are still living up to the performances of those people on both sides of the divide, some who never held office, people like Tom Johnson, who played their part in the history of our parliamentary institutions.

We should ask ourselves how relevant are our debates. We must make them relevant if parties are going to retain credibility. Our economic geographies when we were children, even the youngest of us, told us we had no resources but when Navan is on stream we will replace Australia as the third largest exporter of metal in the world. Our fish exports have increased by 600 per cent over a period of years and all the logic of our position is that we should become, as Mr. Cronleigh said, and Dr. Roy Johnson in an admirable article pointed out, the fish factory of Europe. I am not one of those who thinks that everything civil servants say is wrong and that what fellows like us say is right; not for one moment, but I ask the Minister, on this point, to examine the statute book. He will find that up to recently —I did not have time to look up the legislation—there was a restriction imposed by law as to the size of boat that could be used by an Irishman when fishing in Irish waters. I happened to have been involved in that. I never could row a boat; I had difficulty in falling out of one when someone else was rowing.

One is tempted to say, sit down, you are rocking the boat.

I hope I will not fall out of any other boat I may get into or be in.

Or hope to be in.

My ambitions are reasonably careful. The point I wish to make with regard to that is that public policy in regard to fisheries was under a particular influence. I will leave it at that. It was not a political influence but it was misdirected. I led deputations to Ministers of both parties and they were all about as open-eared as deaf but not mute people can be as to the recommendations I was making. We must grasp these opportunities and we cannot grasp them unless we are prepared to be decisive, radical and prepared to revise and forget what we all said in the past. I am among those who will have to forget things I said in the past about lots of things.

On afforestation, in 1920, 1 per cent of the acreage of Ireland was under woodlands. Full credit to the Department of Lands, or whatever title it happened to hold during the relevant years, as it has a tendency to change its name, that figure is now 5 per cent and in 1978 there will be an outflow of products from all of that patient restraint. That money could have been set aside for the pleasures of the people, but it was employed to build up something of real value for the future. With regard to things like woods, mines, minerals and gas, it seems to me that in all of these things there must be crucially involved technology in alliance with economics. The engineer or technologist does not tend to count the cost, but the economist tends to count the cost. That is his job. There is evidence that the relevant institutes that exist at the moment are collaborating together, and these disciplines are working together.

I have dealt with regionalisation. I know there is the problem of the loss of efficiency if you break up a Department of State and move it away from Dublin. They think their children will not get the same opportunities as others, and so on, and there are all sorts of human problems. With regard to decentralisation we may have to go back to the whole question of local government. The system in relation to local government, in my view, ought to be the same. I believe in capitalism not because of its ugly face, not because of the greed of some of those who operate it, and that does not include all of them: for many of them it is mere proof of the success of their enterprise. The really important thing about the reformed capitalism we are talking about in 1976 as distinct from the exploitative capitalism which Marx wrote about in 1848, is its decentralised decision. That is why it is bound to be better run, assuming there are proper laws curbing what they can do and the resources at their disposal, and fiscal laws. This I approve of and I should like the Minister to know that.

There is a corollary to taxing fringe benefits and the corollary is this. Now that we have got the incomes commensurate, let us tax them so that the ambitious are left free to do the good work in Ireland they have done abroad. Their ambitions should be inspired, of course. That should be the tone of our society. They should be inspired by a concern not merely for their own children but their neighbours' children and they should have a cosmic altruism which takes in not merely this generation but all the generations of men. This is not a specific requirement, or limited solely as an approach to the christian. Anyone with a sense of common humanity would have it. We damage everyone if we hold back the ambitious. We damage everyone if we deny educational opportunity merely because it has been proven that giving educational opportunity does not achieve equality. How could it achieve equality? Horses that lose in the Grand National are not capable of running in the Derby. Is it likely to be different with mankind? Men who could win the equivalent Derby might create employment for thousands of our men if properly inspired and motivated.

Perhaps their ambitions should not require the inspiration of a pecuniary reward. And it is not always as I have said necessarily a pecuniary reward. But excessively high direct taxation creates a sort of a sense of resentment that such a percentage is scooped off, more than the loss of the pecuniary reward very often. It is the irritation of it. I should have thought there are all sorts of other ways in which the ambitious can serve the community. In any case, the Minister for Finance, although in an important position, is not the rector of a Franciscan Friary. No rector of a Franciscan Friary receives more penitential punishment than the Minister, whether to correct him for his own sins or simply to improve him still more.

People must be governed as they are, and we all know they are. The motivation is different in many cases. We may have to make a choice of vices which are good for society. A famous 18th-century pamphlet was written on that subject called "Private Vices: Public Virtues". There is no doubt in the order of vice, where you would put greed and envy, greed ahead and envy below. Envy is damaging not merely to the envious but to the envied.

I should like to conclude by saying our problems are real. In my view, it would be very unjust to say these problems have been created by the Government. If I thought that they were, I would say it. Perhaps this Government, in their entirety, did not become aware of the problems created by the desire to solve the real social problems which existed earlier.

Perhaps that is true, but our problems can be solved if our people's virtues are employed. One of the things I find most distasteful in reading economic literature is the odd piece that comes out, which is generally in relation to this theme, a sort of short-term comment on the defect in demand, as if some farmer if he did not go off and buy a washing machine to please his wife, has in some strange way damaged the economy, that he has reduced the real disposable income expressed in demand.

I put my flag up and hold it high among those who save in this community, but anyone who knew the Kevnes analysis of this knew there could be a savings investment gap. There is need for close attention to be given to the institutions that receive the savings. There may be justification of the regulation of their investment, provided the Government realise—as I think the Government realise and as the NESC certainly realise—that resources will be better managed if the decisions about them are decentralised to the people who know how to manage them.

There is an necessity to clarify the idea of profit. We want a new wording for it—the value which is added by the combination of imported skills, locally developed skills, the acquired machinery, the bringing together of the whole enterprise, the management. It amuses me to note that those who complain about profits are very quick to say that the management is at fault when a company goes into liquidation. The management is at fault when a company goes into liquidation but the management is not entitled to profit when it does not.

I hope the Government will be making decisions and, as I understand the approach, the right ones. Things have been topsy turvy worldwise. We are tremendously dependent on the whole world. The earlier report of the NESC stated quite clearly that there was no agency that could affect world events in Ireland, but that does not mean that, while we cannot affect world events, we cannot damage ourselves or improve ourselves. We certainly can.

As I understand it, the Minister is shortly to issue a Green Paper. Perhaps that should contain some basic decisions. Being out of earshot of what is going on, I have to guess that it should in some way relate not merely to the short term and the medium term, but also to the long term. There is nothing sacrosanct about 1986. People say: "We have to have projects to identify." There is no way of doing that. Projects will emerge if you identify where an investment is capable of receiving support, producing the up-stream or down-stream linkage which is so valuable. The outside world is not a fool. It knows our situation, and among the advantages of our situation is this very growth in our young, active labour force.

I could see increased stability resulting from this. I see advantage in young marriage. One of the social evils that nobody has talked about is to see young people with plenty of cash in their pockets. Apart from the dangers of the various diseases that can beset those who have money of that kind to spend at any age, it is not good for them. An increase in their real disposable incomes might improve some quantity in a quarterly report issued by the Economic and Social Research Institute, but it might be very bad for them. The responsibility of early marriage will lead to a concern for their children, and it is concern for the children of this country which should predominate in the tone to be struck in the Green Paper.

If I see justification for the capitalist system in freedom, may I say quickly in case any one has doubt about it, that I have not the slightest objection to national enterprise, State-sponsored bodies engaging in industry. I would have thought that it should be classed as a duty on all State industries to have a retraining department so that if people become redundant they are trained and the company has the resource and the legal authority to enter into conjoint ventures and set people up again. It is a world in which we have reached the moon. We have reached the stage when questions arise on another level, whether the regulation of technology will not be the next problem in other terms than the terms we are talking about. We cannot afford to talk in terms of the advantages of leisure when we have such numbers of people to provide for.

The first element of the infrastructure is the stability of the State. There can be a stable State and a repressive police regime for the medium or according to the degree of repression in the long term. That is not the sort of State the Irish people want. The Irish people want a stable State in the sense that justice is administered according to law by those whom they freely elect to govern. The people are free to change them if they do not like them. Among the structures that may have to be changed—and this is a free decision for all of us—are the structures of our parties themselves.

Maybe the very structure of Government itself will have to be changed. If our situation in 1922 was that there was about the same proportion of the population engaged in industry as there is now in India, I do not see why our Cabinet should be more or less the same size. You can kill a cat with cream, they tell me. I have found more expensive ways of doing it. You can kill a cabinet by overpacking it, by blocking it with lots of decisions that should be made elsewhere.

There are a variety of solutions to that problem. One of them occurred to me in reading the OECD debate the other day when Senators present at the debate may have noticed that there was a sort of top group who, I imagine, spend most of the time in the Bahamas. Then there was an advisory board and secretariat. We have talked about junior Ministers and so on and that is down a dead lane obviously. People are not going to be satisfied with a plan that is going to be operated by an overburdened cabinet. We could have a national planning agency which could be overburdened by detail that ought not be going up there. I would visualise the advisory board or something like it equivalent to the national planning agency, the kind of term I do not like. The decisions should really formally come from the cabinet, but the work ought to be done by the National Advisory Board and behind it the secretariat.

The secretariat clearly must be provided by the Department of Finance, because we come back to the beginning do we not? We are talking about the Appropriation Bill, about the amount of the resources that the Government requires in order to administer the services that the people are demanding. It is the Department of Finance which historically has been the practitioner of discipline of the kind that the country has always needed, never more needed than during those 20 years when the world boom was on before the recession hit us, and never less operated.

No plan can be managed without it being adjusted on a yearly or a two-yearly or three-yearly basis, whatever it may be. I am not skilled in the administrative sciences but all over the field science must be applied, administratively as well as socially, in industry and in agriculture. We do not want quick gains or quick profits. We want the solid profit of a really intelligently administered capital employing skilled people. The people whom I hope we will live to see employed here will be in skilled occupations, and then all the questions about the conditions of their work will arise.

As I have mentioned profits, I would like to say that I am not going to suggest to the Chair and the Parliamentary Secretary that there should be any compulsions on this, but I quite honestly do not think, and I do not even desire, that we are going to get full co-operation in getting full return for the teamwork unless the team generally enjoys the benefit. At the very start I would remove all fiscal disincentives to transference of share-holdings to employees or employee trustees. I would change company law to make is quite clear that the company must have regard not merely to the interests of its shareholders but also to its employees, and must have regard too to its consumers. The science that I talk about that should be applied to administration, social activity and the public sector of course—which I dare not venture to make more efficient—and produce the same service at less cost—should also be applied to the conditions of employment and the kind of schemes capable of being worked out, so that misconceptions on both sides with regard with this as being a trap of some kind my be dissipated.

I said I was ending, but I had forgotten that I had told the Minister before lunch that I had a point to make with regard to fiscal incentives, and that will be my ending.

One of the problems arises in relation to what I mentioned earlier in regard to the family courts. I do not see quite how it fits in there, but there are other fields where it does in the demand for community service, youth activities and the countless voluntary operations. I hope I am not misrepresenting David O'Mahony of Cork when I say that he said that goods provided to the poor—and that is an unscientific word—collectively are provided more expensively than when provided by the market mechanism.

The market mechanism, of course, is an unfortunate capturing by the operatives of one technique of the very valuable concept which I wish the socialists were aware should be richly active among their concerns, and that is the concern for freedom. It is not a question really of choosing one washing powder over another: it is very much more vital and important than that. It is being free to do something for your children or not according to your choice but not according to the State's choice. It is being free to stop working if you want to, to deal with your income if it is that kind of an income so that you can. It is a whole lot of other things that I need not tell this House are involved in freedom. But the National Economic and Social Council, supporting David O'Mahony spoke about the relative price effect—"the Government pay more for everything, in effect, than anybody else."

In this quite interesting—however it may have been inspired—brochure by ASTMS, there is a very interesting, very relevant and I must say rather unexpected piece which fits in with the quotations from David O'Mahony and the reference, which I cannot say was more than that, to the NESC. It was in the paper by Mícheál Ross, which is a very good one and it reads:

Not all the aspirations of Irish people can or need be met by the State. Given the growing shortage of funds, the example of developing countries bears imitation. Could funds be diverted for the training of professions to develop para professional services under professional supervision? Is it necessary for veterinarians to inspect meat, dentists to inspect schoolchildren's teeth? Gynaecologists to inspect pregnant women? etc., etc. Other countries say no. Should students in physical education be selected on their academic achievements? Is the provision of education wasteful in terms of the needs of society? Could hospitalisation trends be reversed? The lowest infant mortality rates in the world are those in The Netherlands where childbirth is in the home, normally under the supervision of a trained midwife. This would release hospital beds, restore job opportunities to women, reduce State costs, etc., etc.

Will you for God's sake wake up to the fact that direct taxation is too heavy, that you are going to increase people's freedom of choice if you give them an incentive to give their money tax free? Let the State in its informed wisdom decide which of these are entitled to benefit, but let people say: "I am going to give it to Gael Linn this week; I am going to give it to the Irish League of Credit Unions next week" and so on. The point is that it all started when they abolished tax relief in respect of charities because they thought the Church was getting too much money years ago.

These are the very bodies that need to be supported and that people should be encouraged to give their money to by appropriate tax reliefs, because they will get it and spend it much more frugally and much more intelligently than if it were pouring out of any Department. Look at the tidy towns competition. How much does that cost the country? How much would that have cost the country if it were run by the Department of Local Government?

Mr. Alexis Fitzgerald

I thank the Parliamentary Secretary. The point is that all these things work and would work better and would relieve, if they were appropriately controlled and regulated, pressures that are genuine, because they are expressing real needs if people were not greedy for themselves but were anxious for other people, they would relieve part of the pressure on the Government. There could be a system whereby they could be relieved. They could go to others to give tax relieved contributions to aid them in their enterprises. Could anything be more important at this moment than to provide, for example, proper provision, playing grounds, interests for the young and so on? Everybody knows that all the rich men of America have got together and created charities whereby they pay their great-grandchildren salaries of $50,000 a year. All of that is capable of control and all of that is exactly the kind of thing that the Revenue Commissioners can control. I conclude with that particular recommendation. I hope the Parliamentary Secretary will faithfully report the last piece of my speech.

I suppose it is fair to say that this Bill gives us an opportunity to pass judgment on and discuss the way that the £1,693 million is being spent, money which has been collected by way of taxation squeezed out of the taxpayer and supplemented by way of borrowings at very exorbitant interest.

On one of today's papers it was mentioned, and it has been adverted to already, that our partners in the EEC seem to be very unhappy at the manner in which this Government are implementing the conditions attached to the last loan of £150 million which this country secured from the EEC. The EEC have demanded that we introduce more stringent measures to help to protect our economy. That statement has appeared in a very reputable newspaper, one that there is tremendous weight to. It pinpoints quite clearly that for the first time in the history of this State our Government have gone abroad borrowing and were unable to secure their last loan in a foreign capital, among their own friends in the EEC, without entering into a type of negotiation and without asking those people to more or less be guarantors that this loan be repaid. Since the State was founded, irrespective of which Government were in office, we paid our way right down the line.

The report the Senator is quoting from is an invention from beginning to end. It has been denied by the Minister. There is not a word of truth in the report the Senator is referring to. It has been specifically denied by the Minister.

I should like the Minister to make it clear to us what conditions were attached to this loan. Is it not true that our partner members in the EEC had to guarantee the last loan that we got of £150 million?

The conditions of a political or administrative kind that the Senator refers to, which were alleged in a report in a newspaper this morning, were invented. They never happened.

If the Minister has denied this and it is not true, that is all right. I would feel very annoyed if the good name of this country had been sullied abroad in any way, in other words, that we would have to go cap in hands to foreign capitals to borrow money. Since the present Government took office they have indulged in a spate of borrowing unheard of since the foundation of the State. We all know from the old proverb that "He who goes a-borrowing goes a-sorrying". It would be all right if the money borrowed had been used for capital development but so far as I know, and the statistics are there to prove it, out of every £100 spent in this country, £34 is borrowed money. I do not know if the Minister wishes to deny that but these figures can be substantiated.

It should be the aim of any good Government, among other things, to try to slow down the rate of inflation, create employment, stabilise the cost of living and keep down prices. These are some of the measures the people expect the Government to aim for at present. I cannot see them fulfilling any of the worthy objects contained in the 14-point plan submitted to the electorate and which they promised to do. I admit there was an oil crisis, as the Minister might say when he is replying, and we have been fair about that. It has been admitted that much of this inflation has been caused internally and has escalated our troubles. This is because the Government did not take corrective action at the proper time. They were warned about this two or three years ago. The salient facts are that the Government took office at a time when our economy was never better, the budget was balanced—there might have been a deficit of £5 million in 1972 but in 1975 we had a deficit of £259 million. If the projection is reasonably correct, it appears it will be £365 million by the end of this year, £1 million per day. That is not the type of government the people expect and it is not the type of tax load one would expect any Government to impose on their citizens. I feel it is bad policy to borrow such large amounts unless this money is used to increase employment.

It does not matter what documents learned Senators quote from—and we have had a number of them today— the salient facts are that there are up to 120,000 unemployed. We cannot run away from that figure. The ordinary man-in-the-street will say that the true test of a Government is the answer one gets to the question: "What are the Government doing for their people? Are they making a reasonable attempt to provide employment for their citizens?" Recently, reference was made to the number of youths in our population. I admit it may be reasonably difficult to obtain these figures but the reason for this is that last year the Government were so short of money, despite all the borrowing, they were unable to take a census, which was the practice since the foundation of the State. In an effort to save money, they neglected one of the most important tasks of any Government. Statistics of our population are vital for planning for the future. It was wrong for the Government, as has been said before, not to carry out this important duty and provide these necessary statistics.

According to the OECD report this year, we have a higher rate of inflation than any other developed country. I would not be proud of making such a statement: it was made by people who had done a reasonable amount of research to back up their statement.

These are some of the problems aggravating our people at the present time. When we joined the EEC in 1973 we had great expectations of securing, for the first time in our history, an alternative market for our produce. In 1933, as Senator FitzGerald mentioned, we introduced an industrial arm and worked very hard to build up industries, train our people and produce manufactured goods. We were doing well as far as agricultural goods were concerned, but we were handicapped by the fact that we had to sell most of our agricutural produce to the British market. Because of that, Britain—when it suited her—paid us whatever price she thought they were worth. We never knew what to produce: if the commodity was scarce it was dear, and if we over-produced we were penalised. It was only when we entered the Common Market—it was one of the main reasons for our joining—that we had a window in Europe and felt we would have alternative markets for our agricultural produce. Agriculture is one of our main industries. If it is doing well, there is a good chance that there will be a reasonable amount of employment.

As things are at present in the EEC we are not being made aware of what is happening in agriculture. We are getting conflicting reports from one week to the next. One week we are told of the milk powder mountain, the next it is the beef mountain, and all this is very misleading for the farmer. Last year the farmers were told to produce more milk, but that is a very expensive undertaking, as Senator Butler knows. When a herd is built up, it is poor consolation for the farmer to know that the more he produces the less he will get for it.

One would expect the Minister for Agriculture and Fisheries and his officials to ensure that practically all the surplus agricultural produce of this small country, which probably produces only 2 per cent of the total agricultural output of the EEC, having regard to the distance that our products have to be transported, and so on, would be absorbed by the EEC. He could even go so far as to walk out, as was done by some other countries when the EEC decided to allow eastern countries to export beef to the Common Market or agricultural produce from other non-EEC countries, to the detriment of our farmers who were labouring under very primitive and adverse conditions at home. We have an excellent climate for producing agricultural produce. Everybody in agriculture knows that the cheapest food is what the animal can eat out of the ground—in other words, grass.

There should be more scientific research done so far as trying to ensure that the farmer would be able to keep his cattle longer out in the open, so that he would not be forced to take them off the grass for six months of the year. Irrespective of what scientists may tell us about poaching soils and so on, there should be some type of grass developed that would ensure that the soil would not be damaged so much and that the period could be extended. This is one way in which the Government and the Department of Agriculture and Fisheries could help the farmer. All over the country there are committees of agriculture and scientists attached to agriculture and all this talent should be harnessed so as to ensure that we will play our full part so far as the EEC is concerned. It is vitally important to this country.

Thousands of jobs depend on agriculture, not alone out in the fields but in the manufacture of farm machinery of all classes, the manufacture of milk powder, cheese and cream, and its associations, and the services industries that back it up. More important than ever, most of these industries and co-ops are located in rural Ireland and it is high time that co-ops and industries located out in the country got every encouragement to survive and to stay there. We do not want a situation whereby most of the people will rush into the capital and leave the rest of the country bare. One way of ensuring that that will not happen is to ensure that the Government, the Minister and his team will lean over backwards to help those who are engaged in the hazardous and difficult occupation of agriculture. There is no time schedule or no five day week, so far as the farming community are concerned. It is a hard slog for the farmer from Monday morning to Saturday night and, indeed, even on Sunday, from the time he is a small boy until he is an old man going out the other end. These things are of tremendous importance so far as the farming community are concerned. Our agricultural policies should be overhauled, particularly now that we are in the EEC.

The meat industry is closely connected with agriculture. Any intervention payments that are coming back from the EEC, any payments that are coming for TB or brucellosis tests and so on, should be made direct to the farmer. It should not be beyond the officials engaged in agriculture all over the country to devise some type of a scheme whereby the producer would get the actual money that is coming back rather than allow the situation that arose last year or the year before, when the meat processing industry cleaned up at the expense of the ordinary farmer. People are now lamenting and moaning over the fact that the cattle population has decreased. A cattle population that should really be on the increase has gone down by 600,000 in the past couple of years. That is one of the reasons for the collapse of the fertiliser industry. It is one of the reasons why many people are becoming unemployed.

When agriculture goes down many of the other associated industries go down alongside it. That is detrimental in the situation in which we now find ourselves. There is no doubt about that. It should be the aim of all, irrespective of which side of the House we are on, to try to get people to work, even one, two or three in every area. There is no easier way of doing that than trying to increase the agricultural output, thereby providng employment in agriculture and its associated industries. It will not cost the £4,000 or £5,000 that it often costs the Exchequer to put one man into a job in industry behind some machine.

As far as city dwellers are concerned, grants applicable to farmers have been boosted and a picture has been painted that the farmer is rolling in luxury and that he goes to the races a couple of days a week. Half of that is tommyrot. This type of farmer certainly does not exist in my part of the country, and I doubt if he exists in many parts of this country. Those people are not true farmers at all. It is important that some of this money should be used to ensure that these grants, if necessary, would be increased to keep the farmer in production.

I deplore the attitude of this Government this year in introducing a tax on the co-ops. It was bad policy, apart from the political structure of it. It was wrong for a Government to tax an industry, particularly at this time when we were trying to make our mark in Europe. The co-ops were built up by the farmers throughout the country over a long period and they were working under very difficult conditions. They have to go into the banks and try to get loans to buy the machinery that might sit in their yards for one or two years before it is bought. They have to buy in large lots. They have quite a lot of overheads. I, certainly, would have been in favour of removing the tax the Government imposed on the co-ops. As I said, co-ops are factories in rural Ireland. They are places that keep families living on the small farms.

The best way to get rid of small farms is to tax the co-ops out of existence and have a big co-op at a centre far away. That will mean that families will move away from the small farms and into the big centres of population. There will be vacant schools, vacant churches and vacant community centres in rural Ireland. We will be faced with the difficult problem of trying to build skyscrapers for some of the rural families in our big cities. This will create health hazards and other hardships for our population in the future. It is very important that this money for agriculture should be used for the very best advantage of the farmer because he is at the centre of this issue.

Some reference was already made to industry. Those in the Industrial Development Authority and the county development teams who are charged with trying to provide industry in various parts of this country have a very difficult job. I could not agree more with Senator Alexis FitzGerald when he says that there must be a profit element in this. Let us be fair to the people who come together and set up a little industry in any part of Ireland and put their own money into it. They are entitled to get some type of profit out of that. Surely no man would be foolish enough to put his money into an industry and take the chance of losing it unless there was some incentive for him to do that. The incentive for him to do that is there only if the Government and their team try to negotiate markets and help them open up new markets through the Department of Foreign Affairs and the IDA. The industrialist is a very important person. He is putting his money in there and will create a few jobs in his area. That is very important because no matter what our population structure may be people will not stay around if there are no jobs. If there are no jobs these young people about whom we have heard so much today and who are a very important asset so far as this country is concerned will eventually be forced to revolt. They cannot hang around doing nothing; they want work and the duty of this Government is to lean over backwards to try to provide employment for them. Local authorities also play a small part in this. Our local authority in County Cavan have, over the years, given exemption from rates for an extra three years to any industrialist coming into our county and setting up factories. We are not being over-generous in doing that because we realise that when an industrialist comes into the county he usually builds a house for himself and later a few other houses and eventually the county council will be recouped so far as rates are concerned.

As regards industries already established, the Government should be very quick to come to their aid if they are in trouble. It is not good enough for people working in an industry to wake up some morning and read that the receiver has been called in, as happened in my constituency very recently. An effort should have been made beforehand, if accounts were being produced, to try to salvage that industry, because when an industry closes in an area it has a very bad effect on the people living in the area and indeed a very bad effect on the workers despite the fact that they may get redundancy payments and other benefits. That is not the solution. They would be much happier working in their jobs.

There should be more liaison between the Department of Lands and the Department of Agriculture and Fisheries. It is wrong that in many parts of the country the Land Commission can come along and acquire farms for afforestation without consulting the neighbouring farmer living in the area. In every case where a farm is coming on the market or is being sold secretly to the Forestry Division there should be a notice in the local paper. Or there should be consultation with the adjoining farmers because if an adjoining farmer was encouraged, got a loan and was allowed to buy that particular farm it might make the difference between him remaining in the area and emigrating. There is much more employment potential in the land as it is than when it is planted. It may look all right for tourists and other people to see large parts of mountain and wasteland planted. We are in favour of that and we are glad to see that happening, but there are very many acres of land already planted that would have been much more productive producing sheep or cattle and keeping a family living in that area and families are more important in rural Ireland than trees, irrespective of how dainty or attractive the trees may be.

More research could be done regarding deep ploughing of wasteland and hilly or mountainy land. I have seen in Kerry where they imported a machine from Italy, I think, some years ago and ploughed up the side of the mountain and they were very successful in reseeding and replanting that land and now they are growing green grass on it. It is no harm to say that the Acting Chairman is an expert in this and I know that he has very efficiently transformed a piece of and in my constituency so that you would not be blamed for thinking you were in County Meath if you were walking across that mountain. This is an example of what can be done. It creates employment in an area and it is the type of effort that should be encouraged by the Government. The man who is living locally and is willing to put his capital into it should be considered because he is not a fly-by-night, he has an interest in what he is doing and is creating employment in the area and that is of tremendous importance for the country.

Some of this money is being used by the Department of Health and it will be fed back to the health boards. Many of the health boards are at present in trouble because they are not getting as much money as they expected to get. Because of inflation, giving them the same amount as they got last year does not solve the problem at all: it means that there has to be a cutback. I would freely admit that perhaps the health boards were not the best solution and that there may be quite a lot of expenditure in cases where there would have been other means and ways of doing some particular thing in a cheaper way.

When health was under the county councils they had a greater say in what was happening. At the same time we must admit the health boards are fulfilling a very useful function and now that they are there and the buildings are built and so on, I suppose we must keep them there. The idea behind them all is to try to provide a better service for our people and any civilised country such as ours should lean over backwards to try to help people who are sick or infirm or who are ill. The able-bodied men, whether unemployed or otherwise are at least able to cater for themselves, but when people are maimed or sick it is the duty of a nation to try to do everything possible to alleviate their sufferings. That should be our duty here.

There is another small point that I mentioned before and which I thought this Government would have been able to concede long ago. It is in relation to children who are between the ages of 12 and 16, who leave primary schools and who go to post-primary schools and because they go to a post-primary school they are denied dental treatment. That is very detrimental to the health of these people later on. As a matter of fact, I think they are denied all medical treatment.

Some years ago there was a great furore in this country about fluoridation and efforts were made to try to ensure that people in future growing up in this country would have their own teeth at the age of 50, 60 or indeed 70. There is no reason why they should not. There is no substitute for ordinary teeth. It would be money well invested for a nation to try to get over that problem. I admit that it is not completely a Government problem because there are many areas in the country where you cannot get dentists irrespective of what you pay them. Somebody will have to consider this situation: many professional people qualify at our universities and on third-level strata and are helped in their education by the taxpayers but these professionals are then often unwilling to take up positions in any part of their own country except perhaps in a large town. Yet, they will go to some of the Third World countries or somewhere else and they will work under very adverse conditions. These people should show a little patriotism and realise that they owe some return to the State. It is not good enough in 1976, despite all our third-level education, that we would have this scarcity of dentists and that our young people would suffer because of that.

The main reason they are suffering is not because of the scarcity of dentists but because they do not look after their teeth properly when they are very young and their parents do not make them. The Senator should put a bit of emphasis on that side of it also. The State cannot be responsible for watching the children's teeth as well as everything else.

I am not saying that the State should be responsible for watching their teeth but I want to tell the Parliamentary Secretary that if he had a child who was 12 years of age——

You are saying that the State must do this and the State must do that. What about people looking after their own teeth?

The Parliamentary Secretary will get time to reply if he wishes to reply later. But I want to point out that we are paying through taxations this enormous amount of money and we expect to get service for it. I would expect that the Parliamentary Secretary and any man with a family would be very concerned as regards the health of his children especially if he were not able to pay for the dental care and he would expect the State to ensure that the period between 12 and 16 years would be bridged and that the service would be provided. That is a vital period in the life of any individual.

Every time a county medical officer speaks on this subject —which is very frequently—he says that the main reason for the bad teeth in this country is that parents allow their children to eat ice-pops and biscuits and do not assist them in washing their teeth properly. The Senator ought to concentrate on people's responsibility towards themselves and their families and lay off the State for a change.

With all due respect to the Parliamentary Secretary, I am not getting off this subject: I am pursuing it until eventually some Government will concede that the children in this country between 12 and 16 years of age are entitled to free dental treatment if the parents cannot afford it. They should have it and no Parliamentary Secretary or Minister should come here and try to crib about it and say that it is the fault of the parents and that it is the fault of the food they eat and so on. Have the Government not some responsibility? Why was a case brought in Dublin regarding fluoridation before the Supreme Court.

The State must do its best——

Did you not have an interest in this?

——to supplement the efforts of the people themselves? That does not mean that people need make no more effort and that they can lay the whole burden on the State. No State could stand up under that burden. I am listening to the Senator saying that the State must do this and the State must do that and I am still waiting to hear him saying that the parents ought to do something or the children themselves must learn to wash their teeth and not be eating things that will damage their teeth.

I am sorry if I am getting the Parliamentary Secretary's rag out but what I am telling him is that there is £1,693 million of taxation here that has been taken from the people——

I will say no more than what most county medical officers have said.

Senator Dolan to continue, please.

I do not feel that it is right for the Parliamentary Secretary to get hot under the collar over this. These are people who cannot afford to provide the service for their children. There are places in this country where there are nine and ten small children in a family and there is no income of any kind whatever.

I do not deny that but the people themselves have a responsibility, so far as it can be done, to avoid getting into that situation.

Acting Chairman

Senator Dolan must be allowed to continue.

The Parliamentary Secretary will not put me off like that, with all due respect. The point I am making is a very valid one. It is one I would make anywhere, and feel justified in making it, because I would be fighting for the lower income group who cannot at that vulnerable age afford to have their teeth seen to. It is the duty of the State to try to ensure, by the medical and dental services provided, that our citizens grow up healthy. This is most important when the children go on to secondary school. I make no apologies to anybody for saying that. If the Parliamentary Secretary is so worried about the money the State would be spending on this, let him talk to the Minister for Health who, very recently, was doing his very best to ensure that there would be free medical services for every Tom, Dick and Harry from the lower income group to the greatest swank in the country. He promised he would introduce these free medical services at the top.

At what cost?

He did not say anything about the cost, but he was going to add it on to this £16,000 million, or whatever the figure is that we have here.

It is an old saying that prevention is better than cure. All I hear the Senator talking about is the cure. The State must cure this and the State must cure that, but there is not a single word about the duty of individuals to prevent these ills happening so far as that can be done.

Why does the Government not prevent people from manufacturing goods injurious to teeth?

Because there is freedom.

I know there is freedom and I appreciate that.

The Parliamentary Secretary has a constitutional right to make a speech here, if he would like to, and we would be happy to listen to him.

Acting Chairman

Senator Dolan is trying to speak and is being shouted down by other Senators. Senator Dolan to continue, please.

The Parliamentary Secretary or any Minister will not shout me down. I am trying to take a stand on behalf of the youth between the ages of 12 and 16 and I will continue to do that while I am in public life in the hope that problems will be resolved successfully for the betterment of the health of future citizens.

Perhaps I can move on now to another matter. I refer to the amount being spent on Posts and Telegraphs and the operations of that very important Department. In many parts of the country we are totally dissatisfied with the performance of the Minister for Posts and Telegraphs because of the absence of a good telephone service. I heard a parliamentary question answered with regard to the number of telephones installed in Dublin. That may be good for the citizens of Dublin but I can assure you that the people in rural Ireland are very conscious of the need for telephones. The latest effort by the Minister is very unfair because he is now trying to entice the local authority, through the ratepayers, to erect telephone kiosks in various areas. From the beginning that was one Department which paid its way and did so for a long number of years. In that situation it is very unfair for the Minister now to expect the ratepayers of County Cavan or County Monaghan, or any other county, to subsidise the erection of telephone kiosks. Very recently a new telephone kiosk was needed at Ballyhaise, which is a Department of Agriculture College, and the Minister was not satisfied a kiosk should be erected there. It is a very thickly populated area.

I would also suggest that some money could be made available for painting and decorating post offices. They are very important buildings. The people who run them are hardworking. They take charge of quite an enormous amount of money and protect State finance by way of saving certificates and so on. Indeed, they often handle as much money as many of the banks do and yet the same respect is not afforded to them. The work in post offices is done very efficiently. They are places tourists visit.

An Leas-Chathaoirleach

If I might interrupt the Senator, on the Order of Business this morning we agreed to interrupt proceedings to allow a statement from the Taoiseach.

I would be very happy to facilitate the Taoiseach.

Debate adjourned.