We have reached the point of discussing social issues in relation to the National Development Plan. The Senator who was speaking before me was emphasising one particular aspect of social issues, the absence of it from the plan, and was commenting that there are a lot of things that both sides of the House would like to do, that if we have not the necessary economic situation it is not possible to provide all the social services which we would like. Nonetheless, in the White Paper we do have references to education, health and social welfare services generally. There is one aspect which comes in the national plan, in particular, to the priority which we have or should have—that the question of employment and the opportunities and prospects for our school leavers. Section 7 of the plan points out that the Department of Education estimate that the number of pupils in national schools will increase by almost 5 per cent from 536,066 in 1976-1977 to 563,000 in 1981-1982. That is over half a million in primary schools. At secondary level there is reference to a total of 310,000, allowing for a 10 per cent increase. Then we come to the third-level education and there is a figure of 45,000.
There is a major point here about the developments and the progress which we had in the sixties, a point which I think is overlooked to a very considerable extent. We did have increasing employment and prosperity in the sixties. We did have many improvements. One of the factors which was of crucial importance in relation to employment, and which tends to be overlooked, is that we had a vast increase in the number of children who had the chance to go to secondary school, to get a secondary education, shall we say, so as not to get confused between the various types of secondary education. This had an immediate direct effect in that you now had children who had an opportunity to get education which preceding generations did not have. This in itself had a direct effect.
It also had two other effects. One of these is one which can only be postulated, but it is probably true that having had a secondary education, having stayed that few years longer in the country, the children and people concerned were, perhaps, less likely to leave. Certainly it had the important social implication that one did not have the tragic horrific scenes of young Irish children of 14 and 15 arriving in places like London and Liverpool with literally no jobs and literally no education, which I think was one of the most appalling tragedies and disgraces of previous years. With the increase in secondary education, one also had a considerable increase in the level of education of the population. This has already been of very significant importance in relation to the type of modern industries which we have and were able to succeed in attracting during the sixties. It is extremely important for industrialists who are concerned with establishing industry to know that we have a population which has a certain level of education. This situation had double effect. One, the children had the secondary education, they were occupied by it, they had better opportunities. Two, the mere fact that they were educated to secondary level made it more attractive for industries with a higher technological basis to come to this country.
One of the aspects which we must emphasise in the late seventies and eighties is the third-level sector. I say third-level sector because we must include all elements and, in particular, emphasise the technical and the technological aspects. We had had for far too long a post-colonial hang-up on the idea that third-level education of the right sort is a baccalaureate in arts. Indeed, it was tragic until recently to hear quite eminent people in certain of our colleges and higher institutions talking about a university as though the key of the university was its arts faculty. I do not deny that it is a very important part, but that was a Victorian British concept. The top-class universities tended to have a far more specific professional basis to them. In the post-war years we have had remarkable developments in technological universities. I must say one of the most advanced, impressive and excellent that I have visited was in Hanover, which consists of a medical school, technological engineering and related professional training trend of excellent standard which we could well copy.
Therefore, I would suggest that an important part of our planning over the coming few years should be an emphasis on third-level education with a technical and technological bias. Not only do I think that this would be very important directly to the people involved who would have this opportunity, but, quite frankly, it is essential for us if we are to continue to attract the sort of industries with potential, computer-based industries and so on, which we need if we are going to maintain any sort of competitive edge. Let us face it, there is no way in which we can compete solely on the basis of low incomes. We have to compete on the basis of having technology, having the modern equipment, of using it to the fullest extent. To do that we must have people who are able to manage, work and operate in such circumstances.
There is another social issue, and one which I would regard as the most important of all, and that is specifically the question of employment. Basically, this is what we should have as our absolute priority over the coming few years. This is basically what our national development should be over this few years. I think we have to be very careful to make sure that we keep this in the forefront of our minds. I am afraid that there is a definite danger and very good arguments will be put forward. Unfortunately, and one must say this, one got this impression from one of the Senators speaking at the previous debate, that questions of financial orthodoxy, very good arguments of financial orthodoxy, will be allowed to take precedence. I am not saying that financial orthodoxy is not very important or that financial probity is not very important. Of course we must take cognisance of it, but it is not or should not be our first priority to consider balancing our national budget, to consider the degree of our national debt, to consider the degree to which our trade balances or imbalances are developing. Obviously we must take it into account. It may well be that, from time to time, very severe financial measures will be necessary in order to maintain employment, but let us not in any sense put the cart before the horse. The financial measures should take second place to the employment measures. That is what must come first.
The suggestion of financial precedence is also coming to us from the EEC. I think the EEC Commission have recently made some comments in this direction. We have to be very firm about this in our relationship with the EEC, make it very clear to the EEC that our primary problem is that of employment and employment opportunities for our school leavers. It is not a question of the precise financial balances which we may happen to have or may not have.
I am very sorry to have to do this, but one must take some degree of difference with Senator Whitaker. May I preface that by emphasising my great admiration for the tremendous work which Senator Whitaker has done. There is no doubt that, as far as I am concerned, at any rate, he is very much the prophet of the fifties — the man who paved the way and put forward the plans for our previous development. I am sure that it is not really his intention, but I am afraid that what is tending to come across through the media is an emphasis on finance and the idea of employment is getting slightly lost. This could be a very dangerous and, if I may be permitted to say so, a pernicious emphasis.
Senator Whitaker referred approvingly to Dr. Kieran Kennedy and I should like to refer to the book which Dr. Kennedy and Brendan Dowling have written. I am referring, toEconomic Growth in Ireland: The Experience Since 1947. Chapter 111, page 48 reads:
If the amount of public discussion on a subject were taken as an index of its importance, then the state of the balance of payments and the behaviour of prices would seem to be of overwhelming importance in the post-war Irish enonomy. Maintenance of the external and internal value of the currency are, of course, legitimate areas of concern in economic policy. But the priority accorded, particularly in the 1950s, to the preservation of external balance seemed disproportionately greater than concern for output and employment.
That was the financial orthodoxy of that time, this tremendous concern with that particular aspect of financial matters. Now I fear we are turning towards a matter that Senator Whitaker mentioned, and he is absolutely correct to mention it, that is, the question of the inordinate volume of public indebtedness. Senator Whitaker suggested that this might rise to a figure of about £500 million by 1980 and, of course, I would not dream of attempting to contradict his figures. At the same time, we really have to remember that in the White Paper, first of all, we do take cognizance of these financial features and on page 84, in relation to public expenditure priorities, it is stated that in formulating policy changes to moderate the growth of public expenditure the Government will give first priority to expenditure directed at enlarging employment and maintaining existing employment in the directly productive sectors of the economy.
I am sure that Senator Whitaker is aware of this, but I must point out that that is really what we are doing.
I should also like to refer to some facts and figures about our financial situation, and I am taking these from the 1978 edition of theOECD Observer which is the 14th year of it. Our total official reserves, as of the date quoted here, which was 31 December 1977, in millions of US dollars were 2,372. To put that in perspective, this considerably exceeded the figure of Denmark which was 1,670, and was virtually equal to Australia, a much wealthier country than we are, standing at 2,383. Admittedly it does not compare with countries like Switzerland, the United States and so on, but it is still a very satisfactory position. On the other hand if we take our private consumption expenditure per capita— again, there is a slight suggestion here that in some sense or other we were spending too much or something or other of this nature — the total amount as at current prices in US dollars was 1,580, which was lower than a very poor country such as Greece, which was lower than Italy, which was scarcely above that of Portugal.
We on this side of the House would disagree very much with people on the far side of the House in regard to capital formation. We consider that capital is one of the things that we urgently require. Measures taken by the previous administration, unfortunately, had a most pernicious effect in that direction, and it is essential that we have capital. But one must point out that our gross fixed capital formation taken as a percentage of gross domestic product at current prices came to 24.5, which was considerably above that of Italy at 20.3, or Greece at 21.5 or Denmark at 21.5. Admittedly it is far below certain countries such as Japan and so on. Nonetheless it is still a relatively high and good rate of fixed capital formation. So let us not over-emphasise our financial poverty or indebtedness.
Senator Whitaker referred to the Central Bank, and he is perfectly correct and proper to make a reference to it. Can we cast our minds back just a little bit to the time when we were having the advances of the sixties and there was one hiccough during the period of that advance, a hiccough in 1966? Again, I quote from the authors whom Senator Whitaker has referred to, Dr. Kennedy and Brendan Dowling. On page 233 they point out that:
The only serious set-back to the expansion of total output occurred in 1965-66.
On the following page they go on to say:
Action to check demand was initiated about the middle of 1965. In May 1965 the Central Bank advised that the rate of credit expansion should be decelerated and that priority should be given to loans for productive purposes,...
The following paragraph reads:
In retrospect, it appears doubtful whether a cut back in public investment was necessary.
We have to be terribly careful that we do not again start to listen to well intentioned statements but statements which, no matter how much praise they happen to get in financial circles in London, New York, Zurich or in financial circles anywhere else, or what halos we may put around ourselves in relation to our extremely satisfactory financial standing in world circles, what matters and what should come first, within reasonably prudent financial limits, is employment. That is what must come first.
In regard to planning in general, with great respect to him, I must say I found Senator Whitaker's speech rather extraordinary, and vague and even confused in certain aspects of it. I quote from Volume 89, column 185 of the Official Report:
Let me first make it clear, however, should that conceivably be necessary, that I am not against planning in the sense of a comprehensive and coherent programme of development. Indeed, I have been complaining for years about the absence of a plan and I warmly welcome the early restoration of planning by the present Government. The question of what Department should be in charge of planning has now been resolved and I have no more to say about that. A much deeper question remains to trouble us all — whether we have the kind of society in which planning is relevant.
I find that an extraordinary statement. When I was last speaking on this subject I quoted the excellent book which Senator Whitaker wrote as a relatively young man on credit creation. That book was written a long time ago, but perhaps one can come back to the seventies and quote from a speech of Dr. Whitaker's which was printed in the journal of the Institute of Public Administration of Ireland, Vol. 25, No. 3 of 1977. The second paragraph on page 288 reads:
Plan A Supreme Policy Document
First, let me indicate what I think a plan should be in a democratically-governed country. It should be a complete and internally-consistent statement by Government of the policies and actions to be followed in order to achieve specified objectives of an economic and social character. It is, in my view, the supreme policy document of the Government in power. For that reason, the basic plan should appear very early — within the first year — of the term of office of any Government, its life should coincide with the normal four to five year life of a Government, and the degree to which the plan's objectives are achieved should be the foremost measure of the success or failure of a Government's economic and social policy.
I am afraid I agree wholly with that statement. I find it a little hard to relate it to his speech here the last time we were debating the subject. He goes on to say:
It is, I believe, indispensable to good management — and therefore, to good Government — and it can, through its combination of realism, dealism,——
To my astonishment last week, Senator Whitaker was criticising idealism. We need a lot more in this country, not a lot less.
——equity and purpose, be a strong community—binding force and a generator of the confidence and cooperation needed to achieve difficult goals. Our experience shows that the psychological factor can, at times, be the most powerful factor of production.
That is something for all of us to bear in mind. The psychological factor is very important and it is not necessarily helped by the sort of speech that we had last week.
Senator Whitaker's own study on economic development, which was correctly lauded by Kennedy and Dowling, lauded for a number of different aspects, goes on to say, and I quote from page 254:
And the overwhelming achievement ofEconomic Development was in dissipating the prevailing pessimism, even before recovery from the economic depression had begun.
What an optimistic attitude prevailed at that time in the midst of so much pessimism. I would be very, very sorry if the prophet of the fifties were to become the Cassandra of the seventies.
There was one further point, and it epitomised the very grave serious divergence between financial theory and the realities of life, and this was the reference to Santa Claus. I suppose most of us smiled and I suppose that most of us could afford to smile at the reference to Santa Claus not calling. If you are really out of work, if your father really is unemployed, if you have given preference to all these excellent financial plans and references to national development, have given them priority, and the effect is that the father of a family is out of work, the children do not see Santa Claus very often in most circumstances.