First, I would like to ask the very relevant question: was this White Paper planned? Was it designed to be a plan or was it just wishful thinking? In my short experience in political life I have never seen a document to be so off-beam in such a short time. It is no more than a few months ago since it was actually published and never in the history of this State have we had so much turmoil, change of direction and change of views in such a short time. One would also have to ask the question: is it real planning in the strict sense of the word? It would appear to me that in the recent past a lot of the planning that we have been hearing about and a lot that has been proposed for us is certainly not working out in practice. I must say very quickly, of course, that it is very important that our economy be well planned. It is very important for the future success of this nation but, certainly on the basis of the last document, if the interim period is anything to go by we are heading for disaster.
What has happened since the publication of the White Paper or indeed coincided with it? The first thing that happened at the end of December was that £20 million was hived off the food subsidies. Whether the Minister would like to accept it or not this has created a great deal of hardship for many people. That has been borne out by the fact that in the very recent past our inflation rate has been made public. It appears now to be between 10 and 11 per cent despite the fact that the Minister for Finance said on that very morning that it would still be 5 per cent for the entire year. I am not an economist but I cannot see how you can reconcile these facts. Certainly, if it is much more than 5 per cent for the year and is nearer to 10 or 11 per cent our economy is in serious trouble.
The next thing that happened was that in order to gain from the farming community a sufficient yield of tax they were asked in the budget to pay a 2 per cent commodity tax. The first tax, I understand, for many years on actual production. To say the least of it that has started a vicious circle in this country and nobody is sure where it will finish. It has triggered off a set of events which are unprecedented in our history. If it happens that we have severe problems, the architects of that budget, and in particular of the 2 per cent levy, will have to answer the people in years to come.
There is no doubt that that budget item was ill-conceived and not very well considered, as was shown by its subsequent withdrawal. It was withdrawn because farmers were asked to come up with a taxation system that would yield the same amount of tax, but on that basis it does not stand up at all.
If, in the opinion of the Government, this was the proper way to tax farmers, they should have gone ahead with it and carried it out. If they were of the opinion that it was not the way to do it, it should not have been introduced in the first place. I would like to hear the Minister's views on the subject when he is winding up this debate. I believe this is crucial.
When the PAYE sector saw the Government were weak on this spot, they brought on to the streets yesterday tens of thousands of people to show in no uncertain way that they were not satisfied with their taxation proposals. The point I would make, and which did not appear on the White Paper as such, is that unless there is a certain amount of stability and good relationships in industry, commerce, the farming community and so on, as an economy we will not go anywhere. I would ask the Minister if he is still convinced that we are heading for a 5 or 6 per cent inflation this year. With the wage demands that are being sought, coupled with rising inflation, it appears that we will have a remarkable deficit at the next budget.
Is it proposed to withdraw another section of the food subsidies shortly, or do we take it that we have seen the last of the subsidy withdrawals for the rest of this year? There are certain people in certain places who are now saying quite openly that we might have more subsidy withdrawals on 8 or 10 June. There is no doubt that the removal of food subsidies in part has contributed to our inflation rate. That, coupled with the fact that we seem to be on the way to dearer fuel and energy, would seem to indicate that the predictions in the White Paper will be off target. It is well to acknowledge that there were a number of undertakings given both in the White Paper and in previous documents, certainly in the Fianna Fáil manifesto, which have gone haywire.
Take Posts and Telegraphs. I understand that it is the desire of the Government, as stated in the manifesto and the White Papers, that the telephone service would be overhauled to meet the needs of the eighties. There is no need to comment on that. Never has that service been so bad and never has there been such a dull and bleak future. From an industrial point of view, even without the strike, if there is not the will to get on with the job at Government and civil service level irrespective of whether we have money to invest it is likely that we are on a downhill road.
In the context of the White Paper, what will happen on 1 May if the proposed yield from the farming community does not match what the 2 per cent was likely to yield had it gone through? What steps do the Government hope to take to rectify the situation whereby the farming community decide, on one hand, that they are taxed to the hilt, and on the other, the PAYE workers believe they are entitled to a massive cut in income tax? From the point of view of economic planning and development those are vital areas for the remainder of this year and indeed many years to come.
On the question of agricultural development, the White Paper made a number of points, some of which we entirely agree with. First, £42 million will be spent on drainage. There are a number of points to which I would like to refer as this scheme concerns my part of the country. It was talked about six, eight or nine months ago and was launched officially, I understand, on 1 January. I have not yet come across a farmer who has actually been approved for a grant. I am beginning to wonder at this stage if it is a 1979 scheme or a 1980 scheme. It is vitally important that progress be made. The proportion of money laid out for arterial drainage as opposed to land drainage is open to question. There is no doubt this is a very important development but I believe there are vast areas of several counties, including County Galway, that could do with a greater allocation of finance for arterial drainage. It is very difficulty to drain land unless you have a proper out-fall. I believe there was a certain amount of haste in the actual drawing up of that scheme and thousands of farmers along the basins of the rivers in Galway, the Suck, the Islands river in Glenamaddy and Williamstown and so on see very little use being made of the new land drainage proposals. Because of the out-fall problem they cannot drain land.
I understand the west is likely to expect, and to get, money from the EEC in the region of £150 million or £180 million. On paper that looks excellent. I hope it is right, but how exactly will it be spent? When it will be spent? What contribution will the Government make, and over what duration will that money be coming to us? I understand it will be used for the promotion of group water schemes and infrastructural developments, like sewerage schemes and so on. It is in that area that it will be used, together with other facets of agriculture. There will be £150 million or £180 million—I am not sure which as the reports contradict one another—direct from the EEC. Is that the size of the budget? Do we put in half of it—in other words, we put up £75 million for their £75 million? Will it be over ten years? If it is, there is nothing dramatic about it. When one judges the capital allocation to the local authorities over a significant number of years it would actually get lost in inflation.
Those are the questions we are asking. We are finding it difficult to get answers. It is important that, if we are in a position to capture £150 million plus, the Government of the day should be in a position to match it, pound for pound, to ensure that all the vital structures so lacking in the west and in the designated areas would be righted at a time when it appears that the EEC authorities are very concerned about the less favoured areas. Anybody who believes that £150 million will solve the problems of the west, particularly over ten years, is living in cloud cuckoo land.
It is important at this stage in our development, with less than three months gone in this year, with rising prices, with escalating house prices and interest rates, that the Government take a long, hard, look at how this price escalation is hitting the lower income groups.
On the question of land structure, the White Paper was hazy about a land policy. The Minister for Agriculture has repeatedly said that he is introducing a new land policy. However, despite the fact that we have been listening to that for at least nine months, I see no sign of such legislation coming through. It is very important, if we are to hold any type of structure and maintain any type of population in rural areas, that a proper land structure be formulated very quickly. There is no doubt that it is the people with money and security behind them, whether in farming or otherwise, who are buying the land. What is happening now is that on a number of family farms of 20 or 25 acres the farmers are only able to pay the current rate of interest, at anything up to 17 per cent. With land at £2,500 to £3,000 per acre, it is economic suicide for them to invest in an additional ten, 15 or 20 acres of that type.
It is ironic that at a time when more than half the population believe farmers are rolling in gold, at a time when the bigger farmer is certainly making a fair amount of money, the small farmer is not in a position to better himself. This Government saw fit, with one swipe of a pen on budget day, to take 2,500 people off the farmers' dole and greatly affected the living standards of another 5,500. It is very had to reconcile a policy that on the one hand will debar people from subsidy, which is what the farmers' dole is, and on the other will not allow for a situation where the very people for whom this type of assistance was initiated, are denied the opportunity of bettering themselves by purchasing land.
Any type of Land Commission acquisition at the moment will cost a farmer, even with the subsidy, at least £150 to £180 and, in some cases, £200 per acre. There is no way under our agricultural price structure at the moment that a farmer could live and repay that type of money on an additional ten or 20 acres. That is the real problem. Whatever the Minister decides, the financial arrangement for a smaller farmer who wants to better himself must be such that he can do so. Nobody is suggesting that the price of land will decrease. There is no sign of that.
In the market place there are more customers than we have land for and this type of price will obviously be the order of the day. That is of very little use to the 60,000 or 70,000 small farmers, most of whom genuinely want to stay in farming, who are trained for nothing else, who have families and will use the infrastructure which is already there. They are desperate because they are being priced out of a living. If the Minister for Agriculture does not take sufficiently swift action the problem will certainly cure itself in the next five or ten years. But we will be well on the road to the big man taking over and we will again revert to the situation where the big farmers will be in the same category as landlords in the past. Our population in rural Ireland will dwindle and there will be many more problems than heretofore.
Whatever might be said in the White Paper, the time is absolutely right and it is vital that the Minister for Agriculture, in co-operation and in conjunction with the other Ministers, should grasp this thistle and tell us his land policy, irrespective of whether the Land Commission is scrapped or not. I believe that, so far as land division is concerned, the Land Commission is very necessary. The expertise built up in that commission over the years would be very hard to replace. The commission should be amalgamated with the advisory services and together would provide a very lively team of experts who would get on with the job providing and ensuring that the land wealth of this country is divided in a proper and efficient manner.
Never before—and I do not like to have to say this—have I seen a Government with all the answers—with all the talents, according to themselves—getting into such a knot. I hope that the spectacle on the streets of Dublin or of Portarlington will not have to be repeated because it is not good for the country or for democracy. If it is repeated we will have to lay the blame entirely on a budget which was ill-conceived, ill-timed and ill-considered. One would hope that in the future when a so-called strong Government, the strongest ever in the history of the State, introduce a budgetary measure they should research it well beforehand and decide either to go ahead with it or not.
