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Seanad Éireann debate -
Thursday, 20 Dec 1979

Vol. 93 No. 8

Appropriation Bill, 1979 [Certified Money Bill]: Second Stage (Resumed) and Subsequent Stages.

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

When we adjourned last night I was discussing the temptation that there must be for the Government in their financial predicament to have recourse to continued borrowing. There is an obligation on them at the moment not merely to discontinue borrowing at the level of the past two budgets but to positively reduce the amount that has been borrowed. I said the temptation was there because it would be an easy political option in the sense that it would not bring immediate political retribution on the Government and would tend to lessen the need to reduce expenditure which of course is a hard political option and which can have a lot of political fall-out as far as Government is concerned. I do hope that the temptation will be resisted because, as I pointed out, one consequence of any more borrowing will be to drive our financial situation into a state of total disrepute internationally and I think possibly bring on top of us inspectors from the International Monetary Fund or some other similar agency. We would suffer the indignity that Great Britain suffered some years ago when those gentlemen came to the British Chancellor and told him what sort of a budget he would have to produce. I would venture to suggest, particularly to the Minister of State who is here present, that such a visit from those gentlemen would be a real infringement of our sovereignty, far more so than any casual trespass by British soldiers lost in the by-roads of South Armagh or of helicopters coming in to try to catch terrorists. A visit from inspectors from the International Monetary Fund to tell us how to run our financial affairs would be a real infringement of our sovereignty and would justify protests and motions within the Fianna Fáil Party far more than the matters which have provoked them so far.

I can well appreciate that one cannot sing ballads and blow bugles in the blood about the International Monetary Fund. It is not the stuff of which ballads are made and in that sense I doubt if it will get the attention it deserves, but nevertheless it would be an undesirable development, to put it at its mildest, if it were to happen. I strongly urge the Minister for Finance when he comes to prepare his budget to bear that possibility in mind. Of course it will be interesting, too, to see what is going to happen to the manifesto, to see if we are going to have any declaration about that document. Is the manifesto dead or is it a case of, "the manifesto is dead; long live the manifesto"? It will be interesting to know if the strategy and policies of the manifesto are now going to be totally discarded or are bits of it going to be discarded and some of it going to be kept. We are entitled to have an explanation on that matter, because we all know the importance that the manifesto has played in the political and economic scene of this country since June 1977. If that document is to be discarded either in total or in part, we should be explicitly told that.

However, I have dealt at some length, possibly too long for some people, with the economic situation as I see it, but because of its parlous state it deserves a fair amount of consideration from us all. I indicated the options last night. The option to increase taxation has been preempted by the Taoiseach in his statement regarding the reduction of expenditure. The only option is the reduction of expenditure but that will bring with it, unfortunately, harsh consequences and serious personal consequences for the people who are going to suffer the effects of that reduction in their own lives in the year ahead. It is a matter of great regret for us all that the nation's affairs have been so mismanaged that this option is the only one that appears now to be open to the country.

I understand that in this debate it is proper for comment to be made on the activities of particular Government Departments and there are a couple of matters which I should like to raise in that context. The first Department which I should like to mention is the Department of the Environment and allied to that, the Minister of State's new bailiwick, the Office of Public Works, in so far as those two Departments have an input to make or have functions to perform with regard to the shape of our country.

Many people are disturbed by the physical developments and physical changes which are taking place, particularly in this city which gets the most attention in this regard because of the ravages having been the most intense, but in addition there is concern about the physical changes which are taking place in the towns and villages throughout the country and which are radically altering the face of Ireland but not altering it for the better, I regret to say. "Plastic rules" seems to be the predominant theme, in changes which are taking place. The main streets of our towns and villages are being rendered hideous by the type of development being undertaken and particularly by the type of signs which are now appearing over our shops. Concrete and plastic will be the predominant physical features of this country in aonther decade.

In this city the changes which are taking place, and have taken place, are appalling. The first was the monstrosity of Liberty Hall and the affront of that is now compounded from time to time by political slogans. Then there was the rape of Fitzwilliam Street by a semi-State body, and another semi-State body, the Central Bank, have been responsible for the depradation of Dame Street and of a whole scale of the buildings along the quays with that new building cocked up in the middle of Dame Street. There seems to be no appreciation on the part of the relevant Departments, no urgency about their approach to preserving what we have. I would be proud to be called a conservative in this area because I think we must conserve what can be conserved and what cannot be conserved must be changed with the greatest taste and with the greatest care.

I must refer to the scandal of Wood Quay. On that site are historical remains of the greatest interest and with unique features, yet we are prepared to erect on that site between the River Liffey and Christchurch a new modern office block. I take pride in the fact that as far back as 1971 or 1972—at the time that the cattle market ceased to operate on the North Circular Road and when the corporation were acquiring the Wood Quay site—I proposed in the other House that that site in that most historic part of Dublin should be maintained as an open park for future generations. That was the only opportunity to propose that.

At that stage it had not been excavated. This was the heart of ancient Dublin and an open park on that ancient site would give a clear view from the Liffey up to Christchurch and would have been a desirable development. Those offices could have gone at that stage to the cattle market which then had gone into disuse. It was the property, so far as I am aware, of the corporation and was an open space. At that time, too, the north side of the city needed a lift, and to put the administrative headquarters of the capital there would have given that lift.

Apparently there is an inability in administrative circles in this country ever to change tack: once a plan has been decided upon it becomes gospel from then on and there cannot be any deviation from it, with the result that we are scandalised in the eyes of the people who are concerned about history and archaeology, we are scandalised throughout the world in their eyes because of the rape of Wood Quay and what is going to be done there. A compromise has been arrived at, but like all compromises I am afraid it is unsatisfactory. The very fact that offices are going there will spoil the scale of that area and be a further aesthetic blot on our capital city.

The Government in their approach to these matters are possibly reflecting the general indifference of the people to matters that are not materialist. These matters are more in the realm of aesthetics than materialism and I am afraid we have become a materialistic country, careless about these other features of life. We have become a country with much unrest in it and a lot of selfish lobbies, a country where people are prepared to use improper means to obtain their ends or are careless about the morality of their lobbying.

One example of that which I read in yesterday's papers struck me quite forcibly. It is the campaign that is being mounted against the Irish Rugby Football Union in connection with the Lions tour proposed for South Africa later this year or next year. I do not hold any brief for South Africa and its policy of apartheid—I would be totally opposed to it as would every citizen of any pretentions to standards. On the other hand, I do not think that the evil of apartheid can be tackled properly if the means used verge on blackmail.

The tactics used against the rugby union by threatening disruption of the Olympic Games is a form of blackmail. By all means, lobby the rugby unions, by all means castigate them if that is what you feel, but do not blackmail them into doing something that they are lawfully entitled to do. The Minister for Foreign Affairs allowed himself to be blackmailed in stopping—let it be good or bad or let it be merely window-dressing—what was a multi-racial team from South Africa. Ten years ago such a team would have been unthinkable. A multi-racial team went to Great Britain but did not come as far as this country because the Minister for Foreign Affairs acceded to the pressure from these lobbies which command a lot of media space and if one says anything in criticism of them he is immediately running the danger of not just being an objective critic but of being put on the side of the apartheid upholders. I often wonder if there was an element of bluff in the exclusion of that multi-racial team. It would have been interesting if the question had been asked in the other House, "What is the law whereby the Minister excludes that team from coming to this country?" Because as far as I know once the person lands in Great Britain, because of the free, unrestricted travel between these two islands, the legal powers to exclude somebody are extremely slim indeed. However, the rugby union whether they were given an indication that deportation orders would be served, very properly did not want to confront the Government of the day.

That type of unscrupulous lobbying is not confined to the instance which I mentioned as an example of what is taking place in our country, people being prepared to pursue their vested interests in a way that might not be totally honest and in a way that does not take into account the interests of other sections in our community. We are a country that is displaying at the moment a distressing and dangerous lack of solidarity. There is no realisation among citizens that we are all together in the body politic, and we all can exist successfully in that form of society only if we are all prepared to pull our weight, if we are prepared to take account of our obligations to our neighbour, and that we cannot always have what we all want.

That spirit of necessary solidarity, of one for all and all for one is lacking in our society and is the psychological cause of so much of our malaise. How that is to be removed, of course, is a very big question. One important element in removing it or in changing our attitudes towards each other, towards our obligations to live in a society that works—it is as basic as that—is the type of lead that we get from our political leaders. The lead up to now, and I do not exclude any political party from this criticism, has not been of the level required to change attitudes fundamentally. If people see politics and politicians playing their game in a cynical, selfish way—that the pursuit of power is all and that the means used for that pursuit are ruthless, that there is harshness and that all that earns reward is a willingness to conform and play the game—people themselves are going to react and their approach will be cynical in the same way and they will say "Why the hell should I bother giving way to my neighbour? Nobody does that any more, it is out of fashion."

There will have to be a change of style at the top in this country if there is to be a change of style in the type of society we live in. There is a great latent spirit here which, if it could be inflamed, would radically alter the type of society we live in. It is unthinkable that in this country, so recently independent, an independence fought for and gained at so much physical hardship, we should be so careless about what was achieved and should in a couple of generations become unpatriotic. I do not think that can be so. There is a latent patriotism waiting to be inspired.

There are certainly indications of that from the visit of the Pope here, when his visit was able to spark off something latent and good in the Irish people and provoke the tremendous reaction that he provoked. One could sense the spirit of solidarity that I have spoken of. People did not mind hardship on the occasion of that visit. People put up with disruption of their ordinary business and people made sacrifices. What we will have to hope for is some inspiration of a similar kind in the political field, from all sides, to try to inspire again the latent patriotism there must be in this country, so that we can get rid of the malaise of materialism and the pursuit of selfish vested interests that is damaging us so much. It is only in that way that unofficial strikes will come to an end.

Legislation—and I see that there was a kite flown in today's papers to deal with unofficial strikes—I am afraid will not do it, because it is something deeper; there is a malaise of spirit. Of course, that sort of climate is a climate in which the criminals will flourish. Unfortunately, we have had more than our share of criminal activities in the last number of years. Much of this can be laid at the door of the IRA. The cult of the gun was introduced by that sinister organisation and that pattern has brought this country to a state where lawlessness has reached a serious proportion.

I was becoming blase about it: it is no longer attracting the attention of the public or the condemnation that it demands. People just shrug their shoulders, say "I am all right, Jack", look away, and hope it will not happen to them. Some weeks ago there was a robbery in a Dublin store. The robbers were chased and in a crowded street they turned around and fired a shot indiscriminately. If we read about that happening in the Wild West, or in Chicago in the twenties, we would shake our heads and say, "That is an uncivilised savage country".

It is happening here today and there does not seem to be a sense of urgency on the part of the security forces, primarily on the part of the Minister responsible, but even more significantly, on the part of the citizenry, to rise up and turn against these people who are destroying our society. I think it is important that there be a constant lead given, even to the extent of boring or annoying people, by the Ministers to condemn lawlessness, to condemn subversion, and particularly for this Government to condemn the IRA.

I concede and readily admit that this Government are as deeply opposed and hostile to the IRA as was any Government in the country and will deal as severely with them as any Government ever did in this country. But the significant thing is that the IRA do not believe it. Why I do not know. It is a matter wrapped up in our history, it is a matter of attitudes. I do not know what the reason is, but the IRA do not believe that they will be dealt with as harshly. The IRA believe that there is within the ranks of the Government party, not sympathy for them but some sort of empathy with which they can identify. I think the IRA are mistaken in that, but there is a solemn obligation on the Government and the Government party to let the IRA see that they are mistaken in that belief.

An example of it was in September 1978. O'Connell, a convicted IRA criminal, announced at a press conference that "It is now easier for us to meet than in the time of the National Coalition". I do not think it is, but he believes that it is and, if he believes that it is, then the morale of that organisation gets a lift because they feel that empathy with the establishment of the day. One of the great battles that we have to fight is to break the morale of the IRA. One way of breaking that morale is to indicate to them that they are totally isolated from all streams of Irish political and public opinion. It is very important that, if they feel any identity with any group in Irish society, that group should make it very clear that they have nothing to do with them.

There are simple things. In Portlaoise I was careful to ensure that the regime was the same as in any other convict prison and that the people in it would be labelled as criminals, which is what they are, that there would be no question of suggestion to them by implication, or by doing a popular thing to get rid of the lobbies in the newspapers that they were in any way different, giving them colour television sets or giving them lock up hours or different unlock hours from the other prisons, giving them the impression that there is a feeling in certain circles that they are different and support this feeling among them that there is this empathy there.

It is a very solemn duty on the Government and their party to ensure that nothing they do or say can give any suggestion to the IRA than they regard them other than criminals of the most villainous hue. I think that has to be said. There is now a correspondingly greater obligation on the new Leader of that Government to try to undo his silences of the last nine years, to try to undo that part of his history. He will have to lean over backwards to try to make sure that these people now get the message that he is opposed to them not merely superficially but deeply and completely and absolutely.

They have to get the message that they are not wanted in this country. If we really had the hostility and hatred for them that we should have, because of the depradations they have perpetrated and the enormous tragedies they have brought to so many people, I wonder would we tolerate all the signs of their activities: their grafitti has disfigured every town and city in Ireland, yet citizens who are totally opposed to them are prepared to drive by. In one town only, that is Westport—Senator Staunton's presence reminds me of that—the citizens rose up to try to undo some of the slogans that were daubed in their town, offensive slogans, offensive to this State and offensive to our relations with our neighbours and, of course damaging, to put it on a material plain, to our tourist trade, though that must be the least consideration. The citizens in Westport came together on an all-party basis. That is something I would like to see happening all over the country. Wherever these people show themselves through their ignorant grafitti, I should like to see citizens reacting, scrubbing out these offensive messages.

Likewise, I think there is an obligation on citizens as individuals to show these people that they are not to be tolerated in polite society. There is a carelessness in our approach. In Longford County Council the other day they passed a resolution, at the behest of two Provisional Sinn Féin members, asking for repeal of the ban on their appearing on RTE. Unfortunately, that resolution was passed because the two Sinn Féin members got the support of the Fianna Fáil members in that council. This is another indication which leads these people to believe that there is this empathy within Fianna Fáil.

Of course, that is outrageous and I would urge the Minister for Posts and Telegraphs not to accede to those requests, because it would be intolerable that the spokesmen for the savages who have done so much harm and brought so much tragedy to so many people in this country would be validated by giving them the freedom of our airwaves. The new Minister is from my constituency. I read in the local paper recently that he is going to the United States to talk to the Longfordmen's Association on the occasion of something or other, and I would urge him to take the opportunity to continue the good work done by the former Taoiseach, Deputy Lynch, in bringing home to Irish-Americans what is the true situation here—that the Government are totally opposed to the IRA and that any Irishman who supports the caucus or any other of these front organisations is contributing to bloodshed in Ireland. When we see the statements made, and reported today, by Deputy Blaney, we must believe there is going to be a push again from the United States to try to validate this caucus, this IRA front.

Every Government Minister, particularly now after the change, and because of the change, will have an obligation when he or she goes to the United States to make it very clear that the line of Deputy Lynch with regard to the Irish National Caucus and IRA front organisations is going to be maintained and, I hope, intensified.

I have gone on for a long time, taking more than my share of the time, but there are many problems facing the country, economic and social security. We can only hope that we will get a lead, because there has to be a lead. We can only hope that the change of Government will not make matters worse, that the apprehensions that many people feel about the style of Government that we will have from now on will be misplaced. I can only hope that the leadership we now have will possibly be able to strike a spark that might inspire some practical patriotism in this country, because unless there is an outburst of practical patriotism here our predicament will be worse in the future.

My first reaction on listening to Senator Cooney last night was to start by making the point that, though one could not disagree with his analysis of Irish society—one could not take issue with him over a lot of the sentiments which he has expressed—at the same time, and while appreciating that Oppositions are Oppositions and are not there to govern, I listened very carefully for the best part of two hours to Senator Cooney, trying to pick out from his contribution some statement, some showing the way forward, some indication of where Fine Gael in particular stand on the whole question of economic policy. Unfortunately, I was not able to detect that throughout his contribution. At various times Senator Cooney suggested that an increase in taxation was not an answer pointing out that there should be no cuts in expenditure, that that would be drastic——

I did not say that.

——calling for a reduction in the deficit, and decrying any future borrowing. When you put all that together it is difficult to see exactly——

I did not say that there should not be cuts in expenditure. I said that seems to be the only option available.

Does the Senator agree with cuts in expenditure.

I do not.

When there is no choice because of the mess that has been made, one might perforce have to agree.

The point I am making, therefore, is that it is relatively easy to make these points but much more difficult to produce a policy. We took the course two years ago of producing such a policy. The point I wanted to make is that the Fine Gael Party to date, after two years in Opposition, have not produced a substantial or indeed to my knowledge any policy document on the whole question of the Irish economy. It is about time the Irish people knew, if there is an alternative to the Fianna Fáil Government, if, as Senator Cooney said, there are economic difficulties, what the policies of Fine Gael are in regard to the running of the economy of this State.

They will find out.

Senator Brennan, without interruption.

I have made my point. The new decade is just a few days away. I would like to look briefly at the state of this nation as we stand on the threshould of a new decade. During the last decade we have had the first registered increase in the Irish population since the year 1831. I see Ireland now as an internationally influential and important nation. Its stature as a nation has grown dramatically throughout the 1970s, particularly through our membership of the European Economic Community. Twice throughout the last decade we held the Presidency of the EEC with great honour and dignity. These Presidencies were carried out by both Governments in a dignified manner which stood to the stature of this nation throughout the world.

The growth rate of 1978 and of recent years of this country has been the envy of most developed countries. In 1978 we had the highest rate of all the countries in the EEC. The haemorrhage of emigration has been arrested. With some one million Irish people gone to Britain since the war, it is encouraging that the seventies saw the arresting of this haemorrhage from our nation. We have seen the best progress in 1977 on reducing unemployment and on creating jobs of any time in the history of this State, no matter who was in Government.

I see this nation now as economically more outward looking, more confident as a nation. We are now setting up industries all over the world. Ireland has become not just the base for subsidiaries but indeed is becoming the head office itself. Industrial investment increased by 20 per cent last year. This country is now becoming an international manufacturing base of sound reputation throughout the world.

The point I want to make in a general way is that the very base of the Irish economy is sound although there have been and there are and always will be economic difficulties. I suggest that our record compares most favourably with other EEC countries and with western economies generally. Given the right amount of goodwill, the kind of determination which this nation can muster when it has to, the difficulties will be surmounted in the years ahead.

We have seen the national understanding worked out with good spirit and consensus. If it is adhered to and its spirit is lived up to, it offers genuine hope of some industrial peace. Irish agriculture has become modern, more sophisticated. It came into its own in the 1970s from the Economic War of the thirties and isolation of the forties. It now offers a real future for young people not just inheriting farms as a burden or looking on them as something they must do to please their fathers. They are now looking to agriculture as a profession and as a way of life.

The break with sterling which occurred recently and which caused difficulties, and we will have difficulties with it from time to time, was to this nation a psychologically important decison. It was important to demonstrate to our rejuvenated nation that we have confidence in our independent State as a sovereign nation. This break gives us the opportunity to go all the way to the goal of a strong internationally respected currency. When we have reached that overall and final international respect for our currency which we are working so hard towards, this nation economically will finally have arrived on the world scene.

Looking at Ireland at this threshold moving into the eighties, it is quite clear that all of us, particularly our young people, are becoming more affluent as individuals. I admit that the level of poverty in this country is still unacceptable and must be tackled. In yesterday's Evening Herald I saw that this Christmas there is £593 million in circulation in this country. Most of this money is being spent on imported toys. The average cost of these toys is something in the order of £40 each. I wondered to myself how consumerism and materialism had finally hit the Irish people. There is 28 per cent more money in circulation this Christmas than last Christmas and by tomorrow there will be £130 million extra in the hands of the Irish people than at the same time last year. I noted with some concern that the Confederation of Irish Industry fear that £100 million of this would go on imports over the next few days.

If we need any more proof, I suggest that any of us should call into some lounge bar in Dublin city about 6 o'clock this evening, or tomorrow and for the next few days and there see hundreds of young faces throwing £5 and £10 to the barman time after time and often not even bothering to look at their change. More money has been withdrawn from Irish banks in the last few days than was withdrawn some weeks ago when the banks had to close because of the level of withdrawals; there are three shopping days left and that madness has to stop. We must stop and think what this consumer craze is doing to this country, because now, and over the next few days, people are damaging the very future of the children for whom they are buying these £40 toys.

The major problem facing the country is the upsurge of consumerism and materialism which has a special danger for our young people. We have become intolerant of failure, intolerant of poverty and intolerant of the slow mover or the non-whiz kid. Our young people, forming half our population, not working towards success over many years or over a lifetime; they demand an immediate cash-in-the-hand result for whatever effort they make. They want their kicks out of life now, today—not tomorrow, after they have worked for them. This impatience is strangling our country and losing for it the traditional human and social values which we cherish so much.

The present problems of Ireland are problems of a conflict of affluence, whereas in our parents' time it was a conflict of poverty. Coming into the eighties the scramble is for a bit more than is available to go around, whereas in our parents' time the scramble was for a little bit of what was available—and that was, indeed little. I see great opportunities for this nation; it is on the threshold of great things. I shall give two examples to show what we can do: the tremendous and overwhelming response of this nation to the appeal to help the people of Campuchea and the overwhelming response of the Irish people to the Papal visit. If we can mobilise a fraction of that goodwill for the aims of this country, for our economic future, then nothing can stop us. The talent is there but I do not think that the goodwill is. We must try to mobilise it.

Thinking as a politician of young people, I fear that the centre-ground is being lost to pressure groups. Young people are becoming disillusioned with politicians because they feel that these cannot supply them with that expected instant success. Politicians must, in the interests of the people, try to regain the lost ground and supply the needs which pressure groups—good as they may be—have had to fill in the years past. My worry about pressure groups is that they are based on the rather primitive principle of political muscle. If the pressure group have the political muscle they get what they want, but if not, the people whom they represent go without. Where is the pressure group for the poor of Ireland? Where is the pressure group for the sick and disadvantaged of Ireland? It is the duty of the politicians of the eighties to regain the centre-ground for Irish politicians and reinspire our young people with politics as a profession and a way of life which is, basically, service to the Irish people.

I am not unaware that there are problems and challenges ahead in the eighties. We have the terrible tragedy of Northern Ireland, with some 2,000 people dead in slightly over ten years. There is an unacceptable level of poverty. We have the enormous challenge facing us of supplying our energy needs for the eighties, that will take the brains and the determination of every Irish person. We have the difficulty of industrial strife, on which I hope some progress can shortly be made. It is interesting to note that throughout the seventies the economic growth of the Republic was 50 per cent higher than the rate of economic growth achieved in the North of Ireland. That is a very significant statistic, which we should ponder. While the housing record is very good and admirable, there are still too many young couples who find it difficult to raise and repay the necessary money to have a home of their own, and there are still too many homeless people in our slums. I am conscious of these difficulties. The rising population will put new pressure on our schools, on our housing and, particularly on our employment problems. If you want to know the Ireland in the dying days of the seventies, you must ask yourself, particularly if you have young children, what the future holds for them throughout the next decade. Can they get a decent education, a decent job, be supplied with a home at reasonable cost? Have they the social services and social legislation necessary to live in this society and have they got the quality of life which this country, uniquely, can provide for them? When I look at my children, the answer to those questions must be yes, that they can look forward to all of those things in the Ireland of the eighties.

Senator Cooney spent some time dealing with the Fianna Fáil manifesto and criticised the Government for what he felt might be changes in that manifesto. When Senator Cooney went on to speak of Wood Quay I wrote down his exact quotation. He said, "The difficulty with this country is, once you make a plan that plan becomes a gospel. It is adhered to and cannot be changed". Senator Cooney feels that we should not stick to plans as gospel, as being necessary, static and not flexible. I agree with his philosophy but if that applies to Wood Quay it applies equally to any economic plan made by any Government. The manifesto has been delivered, not only in writing but in spirit. The only outstanding major item in that manifesto is our aspiration to full employment. I have mentioned our record in that regard as being the greatest ever in the history of the State. It is significant that, nowhere throughout Senator Cooney's two hour speech, could I detect any comment on the Irish unemployment situation and when he ignores that as a problem, then it must be on its way to solution.

There are new difficulties facing the economy. The oil situation is one which is coming from abroad. That may, obviously, require alterations and differences of emphasis in economic policy; but if one has not got that flexibility in economic planning, then economic planning itself is a dangerous concept.

I look to the future with optimism, a certain amount of uncertainty but looking at our young population I am confident that the Government will give the necessary lead to make this not only one of the greatest nations on this earth by the end of 1980, but perhaps the greatest.

I do not know if I got Senator Brennan correctly but I thought he said one makes a plan and sticks to it irrespective of what happens. I could not imagine some of the businessmen sitting behind him—I do not know if I understood him correctly, but that is the way it came across to me—accepting that.

I was making the opposite point in reply to Senator Cooney.

Any businessman would scrap a plan if it was not working. It appears that the plan is not working.

It must be flexible.

I do not think the type of society we have can work out a successful plan that will eliminate poverty and create full employment. It will be necessary to deal with something in retrospect to establish some of those points. In 1975 Professor Brendan Walsh of the ESRI published a study of our population and commented on the numbers that would be seeking work over the next ten years. He estimated that the whole industrial service and labour force will increase by approximately 100,000 between 1971 and 1986. Senator Brennan has admitted that there has been a substantial increase in the population, and, obviously, that creates a new situation. Professor Walsh believed that about 25,000 new jobs a year would be necessary if we were to be able to absorb our expanding population and the continued drift from agriculture. Nobody in Fianna Fáil, who at that time were in Opposition, acknowledged that. At least Deputy Richie Ryan, as Minister for Finance, at the end of his budget speech did clearly accept the forecast. He estimated that by 1980 the population would rise to 3.3 million with a work force of 1.18 million.

He foresaw the need to create 155,000 new jobs in manufacturing industry between 1976 and 1980, an annual average of 31,000 new jobs. That could be described as a massive challenge to manufacturing industry. At least Deputy Ryan faced up to the problem and recognised it. While it is an argument that Senator Cooney has not produced any evidence of his party's policy, at least a Fine Gael Minister for Finance faced up to that situation in 1976. In the course of facing up to it he did not make any false promises. He admitted it was a massive challenge to manufacturing industry and recognised it was manufacturing industry we would have to rely on for growth in employment.

To some extent it is not true to say that Fine Gael have not got some attitude to this. It is not my job to defend the Fine Gael Party but I want to draw attention to some of the problems the country is facing with regard to the creation of employment and the question of the elimination of poverty. I do not think the type of society we live in can create full employment. I doubt if the real will to create full employment is there. I do not accept that the enthusiasm shown to the Pope on his visit is a good analogy. That was a very special occasion and people wanted to have a spiritual experience which took them out of the system for one day. They had to go back into the system again, live with it and suffer all the built-in problems that the society creates. It is not good enough to say that the goodwill could be mustered. I doubt if in a free enterprise society that goodwill could be mustered in that way. If one lives in a selfish scrambling system, that is the way one is going to function. That is what we have done. The Government, notably on their reelection, made promises they have not been able to deliver. They set targets to be achieved, but they did not achieve them. For example, there was an economic growth of 3 per cent this year, when, in fact, the Government were forecasting a 7 per cent growth. Inflation was supposed to be down to 5 per cent by the end of the year but it is now running at 15 per cent. The current budget deficit will be about £500 million. The target we were given was £300 million. The balance of payments will be in the red to the extent of £600 million and, of course, this will affect our external reserves. It will have a dramatic affect on them. The unemployment rate was supposed to be reduced to 40,000 by this time, but it is still running at 87,000 or 88,000 people on the live register.

It is not correct to say that the Government can realise the targets that they set themselves. They set these targets and made promises they could not deliver because it was a good election technique at the time. Unfortunately, the people who suffer are the ordinary working class people by and large. In the end they are the people who take the brunt of it all, in particular the under-privileged and the deprived. They suffer from false promises.

They suffer when Governments fail to deliver—not only in a monetary way but in poverty of another nature. Some years ago emigration was very economical in that it helped to solve the unemployment problem. Fianna Fáil were in power for most of the time since the State was set up and their solution to the unemployment problem was the emigrant ship. They had no regard for the social or cultural cost. Emigration solved some of their problems but it created others. For example, the heavy emigration in the fifties caused a terrible imbalance in the structuring of the population, to such an extent that there was a high dependence on the taxation structures.

The young and old form a high proportion of the population and this places a heavy burden on our social services. Consequently, this puts an awful taxation burden on the working population and we see evidence of this manifesting itself in the marches against taxation, and so on. The more vociferous engage in farmer-bashing but I do not think that is the real problem. There is a heavy burden on the population at work. That is one of the things that is manifesting itself in the marches. People are complaining about the farmers but that is not the whole underlying cause. The cause is the disproportionate percentage of the young and old who are very heavy consumers of the social welfare services. We hear much talk about working towards the creation of full employment. If there were 1.05 million at work in 1926, how many people are now at work in a larger population? I doubt very much if the increase—and I am open to correction on this matter—has shifted anywhere in the region of about 20 to 25 per cent.

We have the situation of emigration, where there are more than one million native Irish people resident in the United States and this is in addition to the hundreds of thousands elsewhere. This was how governments dealt with the unemployment problem. I was born in a Dublin tenement and grew up in a working-class environment. I have been listening to the cry for full employment for years. I am now in my sixtieth year, and I do not see full employment on the horizon. I do not share the optimism that we are going to have it in the eighties. The system that we work under cannot produce it. I am not saying that in an ideological way. I am saying it because I believe that we pay lip-service to a mixed economy but we have not a mixed economy. Are the Government prepared to put real money into manufacturing industry? When are they prepared to take initiatives? We have been depending on foreign enterprise to a great extent to help us with our problems. The Irish entrepreneurs have not been the greatest over the years. They use all sorts of arguments and excuses for not taking risks.

Frankly, I have not got any evidence before me that the panacea for all our ills lies within the private enterprise system. The economy has been unique in its failure to find jobs for the natural increase in the population and for those leaving agriculture and taking up work in industry. Despite the terrible wars the European countries suffered they were able to avoid emigration on a grand scale. I cannot put my finger on the reasons why the European countries were able to do it, but possibly one of the reasons is that everybody was willing to start from scratch. The trouble with the Irish economy was that it never collapsed, even though it was never great. The other economies collapsed and, consequently, the people in those economies and every section in society had to start working from the beginning. Now that everybody has come up together, the whole selfish system is at work again and we have over six million unemployed in Europe.

The extent, the duration and the intensity of the Irish economic failure is without precedent or parallel. I am not putting forward a solution for the future. Senator Brennan said there was no pressure group speaking out on behalf of the people on the poverty line. That is not correct, because the Irish Labour Party has been quite clear on this matter since the foundation of the party in 1912. Anyone who reads any Labour Party document that has been published right up to 1977 will see a consistent pattern of what the Labour Party felt about the need to eliminate poverty and how to go about it. In the Labour Party documents over the years we have offered solutions but most people never paid attention to them. However, we will still carry on, because we feel that the past failure persists. We can see no hope in the private enterprise system of bringing about full employment or the elimination of poverty.

We have been deluding ourselves that the Irish economy is normal by the standards of our European neighbours. We are saying that the present difficulties are only temporary, that they are caused by a world depression. It depends on one's political point of view. Nobody is prepared to say that the difficulties lie at the feet of the Government who are mismanaging the economy, based on the false promises they made and have not been able to deliver. The former Minister for Finance was talking to us about the road to recovery. In the sixties, when the Fianna Fáil Government were in office, the world economy was experiencing an unexpected and unprecedented boom. Our own national gross product grew by 50 per cent in technical terms. During the sixties the wages and profits were exceptionally good. Unfortunately, 135,000 people emigrated in that decade and not one extra person was employed. Can somebody tell how that can be considered the economics of success? Is it any wonder that people like me are cynical when we hear the advocates of the private enterprise system saying that there is a road to recovery and that all our problems will be solved?

With the exception of the Labour Party, between 1967 and 1969, I do not recall either Fianna Fáil or Fine Gael producing any sort of a policy document that demanded full employment. Even the NIEC put forward proposals for full employment and published their document in the mid-sixties, but their proposals fell on deaf ears. It is extraordinary that the sixties were a great time for development. There was a great opportunity to prove that the private enterprise system could work. If we had listened to the proposals of the NIEC it would have been possible to embark on a national programme for full employment. But that opportunity was squandered. We permitted the growth to be converted into personal consumption rather than into investment and employment. Again, the selfish system lends itself to that, so what can we expect?

It is sad that our young people have to depend on the Government of the day to take initiatives to ensure that their efforts, their faith in society and their good behaviour is rewarded by having to queue at the unemployment exchanges. Even though emigration has been reduced, there will come a time when our young people will once again be expendable. I think that the youth were cheated by the promises made to them by the Fianna Fáil Party. The situation is that the young people who are coming on the labour market cannot find jobs. People with degrees can only get work as bus conductors, as cleaners and so on and cannot find their rightful place in society. Is it any wonder that people become cynical when they hear that the system we live under is the best system to produce full employment and to eliminate all the social evils that exist.

During the sixties the number engaged in agriculture fell and the number employed in industry and services increased. However, the increase was only sufficient to offset the fall in the agricultural population. As I said before, during the previous decade the unwanted population emigrated. Is it any wonder that the million Irish-born people living in England, even those reared on farms, cast their votes in favour of the Labour Party? They did so because they believed in a more positive approach to the elimination of unemployment.

It may be taken from what I have said that we should take over the private enterprise system or dismember it. The private enterprise system will remain with us for a long time. If we are really serious about helping people we will have to pay more attention to the question of a mixed economy. I accept the political reality. I realise that the people are not yet ready to accept many of our policies. To do justice to the people there must be greater emphasis on a mixed economy with the Government becoming more involved in manufacturing industry.

It would be more honest to do so than to keep arguing that we can depend on entrepreneurs to create full employment. The fact is their primary motivation is profit. If their profits are high enough, they may consider the poor. We had evidence of that attitude this year in relation to social welfare. However, one of my colleagues will deal with that later.

People go into business to make money, not to provide jobs. The creation of jobs is seldom, if ever, a primary consideration when investment decisions are being made. As we are faced with unprecedented demands for jobs, we cannot continue to rely on random responses to profitable opportunities in which employment is only a by-product. We must make up our minds to manage the volume, the geography and the sectoral distribution of investment so that we proceed towards and eventually reach an investment level consistent with full employment. I cannot see that being undertaken by the Government. I wish it would be.

Again, I am not suggesting that there is any panacea. On the contrary, we need a package of inter-related policies which should be constructed on a detailed, economic planning basis. If the plan is not working, stop and start all over again. That is what the employers do if they are not making money or if the plan is not successful. They do not stick to the plan rigidly; they drop the plan and start all over again, or introduce a new plan. We must clearly state our objectives. We must identify our strengths and weaknesses. Some of them I have drawn attention to. We must quantify the future requirements as well as the other economic variants. To do this we must supplant the market mechanism for allocating resources by a system of conscious decision making by the Government on investment, particularly in the manufacturing areas.

I spoke earlier on the question of the number of people who were at work and I suggested that the figure would not have moved beyond about 20 per cent in a very substantial period. To establish that point more accurately—the 1926 Census put the number at work here at 1,250,000. Fifty years later, when the figures were looked at again, approximately 1,050,000 were at work. There were 200,000 fewer people at work during the period when we were being told that the private enterprise system was capable of creating full employment. The fact that you can go into a pub and see the pub packed and see young people not counting their change, as Senator Brennan said—I agree with him—does not mean success overall. It can be mistaken for reality, the reality of people on the poverty line, 25 per cent of our population. I know poverty is relevant but, it is a social evil and the present system does not seem to do anything very dramatic towards reducing that figure or towards alleviating the needs and the problems of the deprived.

Again, we had not one extra person at work. If I remember accurately, it was exactly the same figure. We had 1.05 million at work in 1960 and at the end of 1970, when all the good money was going and good wages, we still had 1.05 million. As I said, 135,000 people had to emigrate. We had a situation where unemployment oscillated between 5 and 6 per cent. The situation has not really improved. I think business people console themselves with the myth that during the sixties and seventies the efforts that they needed to grow were well worthwhile and they prevented a serious economic situation. To some extent, it could be admitted that they did prevent a serious economic situation from developing.

But business enterprise did not do the thing that I am arguing about: it did not create the jobs that were necessary for our young people and it did use the same method that had been previously used of shipping people abroad. Right through the sunny sixties, when we were supposed to be booming, we were dealing with the same problem that we had been dealing with, arising out of the system we were pursuing, for years. This means, in effect, that the point is well established that the system has not thrown up any evidence that it can create full employment. It has not thrown up any evidence as to whether or not Irish managers adopt new attitudes towards investment, expansion and growth. I do not know whether they will or not. If I were asked to make a guess, I do not think they will. The same old idea will be there: the first criterion will be profit and jobs will be incidental. They will certainly not be going into business to create jobs.

The Government and the Opposition have responsibility to see that business people are encouraged to accept the past reality of our national failure and to try to look at the matter now from a different point of view and to accept, that while we have a long-term ideology about the type of society we want, in the interests of the Irish nation what we favour at the moment is a greater emphasis on the mixed economy with the State becoming more involved. We must not listen to the arguments any more. Every time private enterprise is taken on they give us all sorts of arguments and reasons. They tell us about the increasing costs, competitiveness, escalating wage rates, slower productivity growth, inadequate investment, declining profitability, increasing current Government expenditure, lack of incentive, defensive posture in the business community. They also blame the unions and their short-term focus.

In the long run, the problem boils down to lack of economic leadership from the Governments that have been in power. I say that not only against the Fianna Fáil Government but against the Fine Gael Government also. I am not claiming that during the Coalition term we worked any miracles. What I am claiming is that when there was a world recession none of the Opposition would accept that as the reason for the problems then. Now that they are in office they make all sorts of arguments like the oil crisis, world recession and so on. What did the oil crisis do? It put about 25p on costs. There was the problem of transport and other processing and built in costs. But were not costs going up everywhere? When we entered the EEC did not costs shoot up rapidly? The oil crisis is just typical of the way the world is going but it is used as an argument. I do not think the argument is going to stand up much longer. It is gone. The OPEC people will not make any great difference if we get the people, particularly businessmen, to divest themselves of this self-pitying attitude, recognise the existence of past failures and accept the depth and seriousness of the current problems without bellyaching as they have been.

To illustrate my lack of faith in the private enterprise system I look back at the campaign of Deputy Seán Lemass, in the 1957 general election in which he promised 100,000 new jobs. That promise was never fulfilled although it was made when economic factors would have helped us to create a successful development programme. Three former Ministers for Finance at least have graced the Opposition front bench in turn during the sixties and seventies when there was an actual drop in the numbers of people at work.

An Leas-Chathaoirleach

The Chair does not like to interrupt the Senator but it would be more appropriate if his remarks were related to the year under review.

I take the point, but we must relate to the money being spent on grants-in-aid and so on during 1977 and 1978 and expenditure. The problem is that experience has shown that no matter what money we spend and no matter in what way we give money out, we will not reap the benefit of it. If we are going to continue doling out money in all directions we must be in a position to demand that the people get a better crack out of it and that false promises are not made. We must bring the business people into line to ensure that they create the jobs.

A lot of money is spent on consumer protection. There is a great imbalance between the powers of the consumer and the powers of the manufacturer and supplier. This is caused by the concentration on mass production. This development contributes to widening the gap between the consumer and the manufacturer. If we are to spend money on consumer protection we should look at how this money is to be used and recognise the abuses that creep in. We should try to engender a little more interest in protecting the consumer so that the money subscribed towards consumer legislation in relation to broadcasting and so on, is well spent, so that we will know exactly what is happening. I do not suggest that the gap between the consumer and the manufacturer arises from a massive plot on the part of the manufacturers. However, the consequences are just the same for the consumer. In spending money on consumer protection we must ensure that the money is put to good use. There is a need for better mechanisms to deal with consumer protection. We should also constantly monitor the working of the mechanisms in view of the rate of change and the spread of technology.

The need for consumer protection arises from certain money-related activities in society. A lot of State money is allocated to the mass media. Through the mass media and large-scale advertisements, people are influenced in increasing numbers to buy. That is the manufacturers way of getting the best possible value from his plant and workers, but the thing does not rest there. Having stimulated the consumers, through advertising, some of it State financed, the manufacturers do not leave it at that, but follow up with a campaign to make them re-consumers. We give money to the broadcasting authorities and they are powerless to stop this kind of advertising where a consumer is encouraged to believe that last year's product is useless and should be thrown away and that a new product should be purchased. The psychology clearly is, "To hell with the needs, let us create wants". It is a vicious circle and we are contributors because State money supports the media.

Advertising campaigns are geared to lead people to believe that a certain product is the greatest and then the campaign goes on to encourage people to throw the object away and to buy another in its place. Manufacturers often lure and cheat the consumer by using a system which is legally open to them. Consumers are most vulnerable to this because the power rests with the manufacturer who, generally speaking, does not show a great interest in the consumer. Not only do the media get State money but in many cases certain industries receive State grants-in-aid and so on. Abuses can and do arise out of spending this State money. Because the power of the consumer is continually diminishing if he is not given the fullest possible legislative protection, further technological developments will affect the consumer in a bad way, and his power will be further diminished.

I can understand that to some extent with the increasing size of manufacturing units and the spread of multi-national corporations. A physical and mental gulf is created between the manufacturer and the consumer. It is not like someone stealing your purse but the way they go about it is cheating. With the aid of money, some of which they get through the media, they pursue a course of action that diminishes the rights of the consumer. Due to the development of these corporations and so on consumers' rights are in great danger of disappearing altogether. It is up to us to see that consumer legislation is continually up-dated and reviewed because we are spending money and because people are actually saying things in a way that is cheating. I do not know whether cheating breaks the seventh commandment or not. As a sinner, I hope it does not because there would be a lot of us shaking hands with each other down in hell and we will be so busy we will not feel the heat.

There is a lot of cheating in advertising. Sometimes it is backed up by Government money out of the Estimates we are discussing at present, perhaps indirectly, but nevertheless it is still very relevant. What I am saying is an unpleasant reality. I make no apology for giving greater emphasis to the need for continual vigilance because of these features which are completely undesirable for the consumer who has not access to the mass media and other forms of advertising to try and redress the imbalance. The consumers who get the rawest deal are the poor, the ill-educated and the elderly. All people are the concern of the Labour Party but the poor, the ill-educated and the elderly are of particular concern to us as a socialist party.

I made reference to the tendency for a physical and mental gulf to grow between the manufacturer and the consumer. I explained the traits built into the system. I stressed that there is no evidence to show that the manufacturer has any real concern in bridging the physical and mental gulf that has grown up. I want to emphasise that. Lack of interest in this kind of operation will bring little benefit and we come back to the selfish, scrambling system. Since it is impossible for the consumer to bridge it, the onus is very much on the Minister responsible.

This is the only opportunity we have to comment on the economy, on the imbalances and the undesirable features in it. We are entitled to do that because a lot of the money given to help both the broadcasting authority and the manufacturers will go indirectly on advertising. It might be stretching it to say that it is using State money to cheat a little. As a result of making people reconsume, it is inevitable that the manufacturer will be forced to produce goods of a lower quality so that they become unsatisfactory in use and will stimulate the need for replacements. Then there is the secondary need on the manufacturer's part to avoid as much as possible giving service facilities. If one wants to do the reconsuming trick—I call it a trick—it will not work very well if you are highly-geared to provide services to what might be described as an obstinate consumer looking for the service. They are not going to adopt that policy and then keep an abundance of stocks, parts and so on. Here again, the consumer is at a loss and, obstinate or otherwise, he is just a loser. The gulf between the manufacturer and the consumer is indirectly brought about by some of the money that comes out of public funds.

We are discussing the whole question of the economy and the Government's behaviour over the last two-and-a-half years. I was trying to emphasise that not enough was done in the areas of unemployment and the elimination of poverty. I should like to draw attention to two particular areas. The first is the question of industrial relations. If the new Government intend to make an issue of the serious industrial relations problem we face it will be necessary to point out that these problems are directly related to three aspects of the Government's policies. First, the last general election manifesto created expectations in the community which could not be fulfilled. The fact that these expectations were created has, however, led to industrial unrest and the blame must rest squarely on the Government. There is no use in blaming the unions. A lot of promises were made. The Government said that the money was there. When they took £18 million off the rates, they were in the height of trouble and could not deliver on promises. Second, the unfair taxation system has aggravated the industrial relations position. I am not saying that the unions are always correct. There are too many unions and too much overlapping. Some of the trade union leaders are not as competent as they might be. I speak as a former trade union official. I know that in certain areas they are not handling situations the way they should. I know there is guilt on both sides and I would be the first to accept that not all of the agreements, after being worked out, are honoured. In some areas, there is a lack of integrity but in general the unrest at present is due to the fact that the Government made certain promises and created expectations.

Naturally if one creates expectations in a selfish system one has to live with the consequences of how people try to realise them. If the unfair system of tax remains the industrial relations situation remains aggravated. I hope the Government will take the bull by the horns in this area and have a real look at the whole tax system. I do not go in for farmer bashing. I have great respect for farmers. I do not approve of the way some people are approaching the question of getting an equitable tax system. It is damaging; it causes a reaction and a division between the rural and the urban dweller. I am not in favour of that kind of approach. The onus is on the Government to see that a fair taxation system is brought in. The heavy burden on PAYE workers, if not tackled very quickly, will be a contributory factor to industrial unrest in the eighties.

Credit must be given to the previous Government for at least commencing something, for making a good effort to bring in an equitable tax system. When the Fianna Fáil Government took office they dismantled the system adopted by the previous administration. It was a genuine effort to create a fair taxation system. There has been a step backward on the question of taxation over the past two-and-a-half years. I do not say that in any dogmatic way, because I have not got any figures to prove it. There certainly has been no progress in creating an equitable taxation system. The Government have gone a little bit backwards rather than going forward.

The Government have pursued a policy of non-intervention in industrial disputes. It is encouraging that in recent days there was Government intervention and it was successful. A great deal was allowed to happen over the past two-and-a-half years. The Minister for Labour and the Minister for Posts and Telegraphs could have done much more. I do not like the Government entering into labour relations. I like the parties involved to be able to settle problems. At the same time if the parties to an agreement are not coming together, or if there is some urgent problem which affects the nation as a whole, if some vital service is affected, it is quite right that the Minister should get involved. In an area where the nation is at risk he should become involved much sooner. The Post Office dispute was an example of that. In the new year I hope the Government will be sensible in their approach to industrial relations. Already there are signs that industrial relations will be a major political issue. I hope there will not be a Thatcher-type approach to industrial relations. I would expect something better than that from the Taoiseach.

In the social welfare area, the money comes out of public funds. The amount of money paid to welfare recipients this year was not satisfactory. Deputy Cluskey made a serious effort to see that social welfare recipients maintained their living standards. During the past two-and-a-half years this has not been the case. The actual living standard of social welfare recipients has fallen behind that of the rest of the community because social welfare income did not rise as sharply as other income, generally speaking. The increases have been inadequate.

During the past 12 months the system of paying welfare benefits seems to have collapsed almost entirely. This is not a snipe at the Government. Anybody who sits in an advice centre anywhere throughout the country will realise that what I am saying is correct.

It is not unusual for welfare recipients to suffer the hardship of waiting for months to receive their payments. The postal dispute cannot continue to be blamed for that. If you get a letter from Cork—imagine a Corkman writing to me—about a social welfare problem you know the delay is widespread. There is something wrong with the system. It needs an overhaul so that we can help the socially deprived in our society. I appeal to the Minister responsible to have a quick look at this and, where the disgraceful performance is still in existence, to show the public that there is concern about those welfare recipients getting their money in time.

There has been no real reform of the social welfare system over the past two-and-a-half years despite the money that was put into it, and the efforts made by the Coalition Government have come to a halt. There have been no innovations in the Department of Health or the Department of Social Welfare over the past two-and-a-half years.

Those are the areas that I wanted to cover. I will wind up by saying that in all logic, based on the evidence before us, based on Professor Walsh's figures and so on, based on the failure to realise the Government's targets, we cannot expect to create or generate 31,000 new jobs each year by a strict dependence on private enterprise. In the best years—and I suppose 1973 was a good year—we generated about 8,000 to 9,000 jobs. If we want full employment, if we are really serious about it, we cannot depend on the old attitudes or policies—I say this respectfully—centred on the IDA.

The IDA have done a wonderful job in attracting a great deal of foreign investment. Generally speaking, they have been very good indeed. They cannot do the job on their own. Possibly what I mentioned earlier would be one of the best ways of going about it, that is, for the State to get involved in the manufacturing side of industry. At one time agriculture was responsible for about 50 per cent of our output, and so on, but that is changing now. I do not know whether that figure is correct or not but the manufacturing industry is producing more than that 50 per cent now. This is where the growth is and it is necessary for the State to be involved. The demand for jobs is exerting relentless pressure on the Irish economy, particularly in the absence of emigration. We cannot escape the consequences of what we have had in the past such as high unemployment and we are going to have that again. Since we have the fastest growing population in the EEC it is very important that the Government take another look at the question of employment and recognise that they have not realised their targets. It is admitted that instead of 40,000 on the live register at this time we have 87,000 to 88,000. It is a challenge to the Government. On their history it is evidently beyond the capacity of their existing policies to realise full employment. If I am wrong, I would hope to be sitting in the Seanad this time next year when somebody will stand up and tell me I am wrong, but I believe I am right.

The private enterprise system on its own is not the answer. The IDA cannot do it. The policies that are being pursued at the moment cannot do it, but the will is there on the Government's part and I hope they will put pressure on Irish business entrepreneurs and on other sections of society to bring about the very necessary step up in employment.

This debate provides an opportunity to discuss Government spending and deficit financing and the urgent need to adjust national expectations to national resources. It is not exactly a menu of Christmas cheer. I do not want to become too enmeshed in figures. We are now at the end of a decade in which three different Governments have been in office. The most effective way that I can establish a sense of perspective and appreciation of the trends is to take 1970 as my base line and compare how public expenditure and borrowing have grown over that period with the growth in national production, personal incomes and prices.

In money terms Government current expenditure this year will be seven times what it was in 1970 though GNP is only four-and-a-half times and personal incomes between four-and-a-half and five times what they were in 1970. Government capital expenditure this year will be about five times what it was in 1970. Since prices have gone up just over three times in the decade, the sevenfold increase in current Exchequer spending has meant an enormous increase in the Government's claim on the resources of the economy which, as I have indicated, have been growing much more slowly than Government spending. The Government's claim on national production, even for current purposes, has gone up from 25 per cent in 1970 to 40 per cent today, and including capital expenditure, it has gone up from roughly one-third to one-half. Is it any wonder that financing this rate of increase in public expenditure has proved such an intractable problem, indeed a problem which is being dodged for the time being by phenomenal recourse to borrowing even to meet current services?

The deficits in the current budgets, moderate enough in the early years of the decade, took off, admittedly under the impact of the first major oil price increase, in 1974. For nine months of that year the deficit was £92 million. Then came this sequence: 1975 £259 million, 1976 £201 million, 1977 £209 million, 1978 £397 million and 1979 £500 million, as we are led to expect. This record deficit faces us as against the budget target of £289 million. We have lost rather than gained ground this year. Over the whole decade the amount borrowed to meet current budget deficits will not be far short of £1,700 million. This deficit financing is only one element but a regrettably large one in total borrowing increases in the decade of some £5,300 million, the rest of it, £3,600 million, being for capital purposes which, however necessary and desirable, suffer from a low return and a long pay back period.

The public do not realise what has been happening to the national debt. In 1970, after nearly 50 years of the State's existence, the national debt totalled £1,000 million. By the end of 1974 it had doubled. By the end of this year it will exceed £6,000 million. To say that it is rocketing is, therefore, no exaggeration. Anxious notice should be taken in particular of the rapid accumulation of foreign debt because the interest and repayment obligations on foreign debt involve a real transfer of resources out of the country.

The Government's external debt has soared from under £70 million in March 1970 to £1,317 million last September. In the same period the external debt of State bodies, for which the State is ultimately responsible, rose from £62 million to £323 million. In 1970 our external reserves covered the Government's external debt four times over. Now they are well short of covering it even once.

The State's creditors, domestic and foreign, may not be too unhappy about the rising volume of debt as long as our credit looks good, our economy is progressing and we re-finance our borrowings and make the due repayments. But for us there is no escaping the current rising cost of servicing all this debt. Interest payments alone have risen from £59 million in 1970 to over nine times that amount this year—£546 million. This corresponds almost exactly to the total receipts from PAYE. One could say that PAYE is absorbed entirely in covering the interest on the national debt, both being about one-fifth of current Government expenditure. Of the debt interest total of £546 million, £102 million is interest on external debt, Principal repayments have lagged behind the trend in interest, rising only from £30 million in 1970 to £77 million this year, so we are doing very little to abate the rising total. Even with this meagre element of repayment, debt service now accounts for 22 per cent of Government current expenditure. Add in pay and pensions and the proportion is raised to 62 per cent. Throw in social assistance and insurance and the proportion goes up to 75 per cent, and that is before health and education are taken into account.

I mention these facts to emphasise what I call the "stickiness" of Government current expenditure. There is no chance of reducing it absolutely. Even if its growth is to be curbed effectively it will not be by economy campaigns, however well-intentioned or directed, but only by slowing down future increases in debt, in pay and in social expenditure. This logic calls for a reduction in the scale of public borrowing, particularly for current purposes. It calls for moderation in future pay increases and it calls for genuine acceptance—that is, acceptance without looking for compensation—by taxpayers of the cost of social improvements.

I do not intend by what I have just said to decry or discourage efforts to eliminate wasteful or unnecessary expenditure. I am simply putting them in perspective. The Government have, on several occasions since 1977, in White and Green Papers and in budget statements, committed themselves to a thorough review of expenditure, "a fundamental look at the whole spectrum of Government spending", as was said in the 1978 budget speech. But apart from a cut in food and fuel subsidies and action to contain some unnecessary social welfare expenditure, where has this effort got us? Has it run into the sands?

I see there is a move afoot to have the cattle disease eradication rules relaxed. Without prejudging whatever merits this move may have, all I will say, as I have said before, is that enormous amounts of public money have gone down the drain already in completely ineffective efforts to reduce the incidence of cattle disease. I hope nothing will now be done to open that sluice gate again.

I also hope the budget next February will begin the necessary process of national adjustment. We have not yet adjusted to the high, and still rising, cost of energy. Other countries have been affected, too, but we have now a relatively high rate of inflation, not all attributable to external factors, and an unsustainably large deficit in our external payments. A determined effort is needed over 1980 and 1981 to reduce our national overspending and bring our external deficit down to a manageable size.

I am afraid we are in a rather poor position to meet new vicissitudes. My assessment is that we are overspending by at least 3 per cent. In other words, we should be halving our present external deficit of over £600 million, thus halving our need for foreign borrowing. Our reserves, as we can all recognise, will not bear any further reduction. In normal circumstances, if we stayed put in our claims on resources, we could correct that 3 per cent overspending in a year because new production would add 3 per cent or more to our resources. But unfortunately times are not normal. The OECD, as we heard on the news this morning, are apprehensive about the effects of current oil price increases. It is feared that growth in industrialised countries next year may be virtually stifled. One hopes that we will still be able to make some progress but the necessary adjustment of consumption standards here to available resources may take longer.

To make such an adjustment operations have to be conducted on three fronts. Fiscal policy is one of these. I am afraid that it is already dangerously gummed up by advance commitments on both the expenditure and taxation sides but there is still some degree of flexibility left. The second front is monetary policy, where the obvious requirement is that new bank credit for consumption purposes will have to remain under strict control. The third front is money incomes. There the Government must exercise whatever influence can be brought to bear on the course of money incomes to ensure that they do not push us further into overspending.

Therefore, the primary action must take place in the budget. Government overspending represented in particular by borrowing to finance current services, must be curbed. Indeed, a strong effort must be made to stabilise it in real terms. I do not exclude, as a supplement to this, higher taxation spread widely and equitably. But the basic underpinning of the whole national adjustment can come only from genuine moderation in future income increases, and this applies to everyone. This would make the most effective and beneficial contribution to the adjustment because it would directly help exports at a time when they will be difficult because of sluggish world trade. Therefore, it would help output and employment and, in this way, would keep to a minimum the inevitably uncomfortable effects of what is an inescapable adjustment of national spending to national resources.

I have sympathy with many of the philosophical comments made here this morning about our general democratic condition and in particular about the need to strengthen a sense of community. Perhaps that is easier when there is equitably shared adversity. There is also the need to try to induce in us a less selfish, a more disciplined and more compassionate attitude, and also, of course, a resistance on the part of the Government to pressure from whatever quarter which would result in unreasonable concessions, concessions which would be harmful to the good of the community as a whole.

Finally, may I take up the point made by Senator Harte and say that he seemed to me to be over-discouraging about the achievement of successive Governments here with regard to the creation of employment. I am not disputing his figures at all. It is true that there were more people statistically labelled as being at work in 1926 than there are today, but this conceals a very significant improvement in the quality, productivity and reward for those who are at work today. Senator Harte may be forgetting that in 1926 there were over 600,000 people supposed to be at work in agriculture. There are less than a quarter of a million today. I say "supposed to be at work" because many of them were in the category called "relatives assisting" who were, indeed, supernumerary, living on small farms and at or below subsistence level. There is no comfort to be gained from the thought that they were effectively or acceptably at work, and, therefore, no discouragement is to be derived from the fact that they are no longer there and that the work we have today is at any rate more rewarding, more productive and of a much higher quality.

I should like to begin by congratulating the Minister of State on his appointment and to wish him success in his office.

Like Senator Cooney, I must go on to express regret that the Government did not see fit to send in the Minister for Finance or a senior Government Minister to listen to this important debate. I do not intend that remark to be any reflection on the Minister of State.

I want to talk first about my own sphere, that is, education, and to make some reflection on the extent to which progress has been made within the past 12 months. This document which is called the Fianna Fáil General Election Manifesto has some things to say and promises to make about education. Like Senator Cooney, too, I am not sure whether this document is by now a museum piece, another casualty of the palace revolution, or whether we are to take it still as Government policy.

On pages 40 and 41 of the manifesto, there is a general statement of intent, which says that Fianna Fáil will guarantee equal opportunity as far as possible, and a number of specific promises are made in particular areas. The White Paper which is promised on page 40 of the manifesto still has not shown up after two-and-a-half years. Little progress has been made—and this is evident from recent correspondence in the newspapers—about the promise to reduce the pupil-teacher ratio in primary schools though this was promised as a top priority. There was also a promise to establish a pupil transfers committee, and I know from my contacts with both primary and post-primary teachers that they are very anxious that this committee should be established, a committee which would help to solve the problems of transition bridging the gap between the final class in primary and the initial classes in post-primary. I must confess my ignorance as to whether this committee has been established, but I should like to hear about its progress if it has been established.

The manifesto promised also to raise eligibility limits realistically in the awarding of grants for third-level education. The limits have been raised and the grants have been increased but it is very doubtful if the adverb, realistically, could be applied to these increases. In fact, the percentage of families whose children are now eligible for third-level grants has fallen rather than risen. The grants have been raised but the Higher Education Authority have put their authority behind the students who claim that overall the grants are inadequate. The Higher Education Authority have suggested an average figure of £1,300 a year as a realistic grant. Moreover there has been lack of progress in not facing up to the anomalies as between the third-level technological colleges and universities in respect of entrants. Different criteria apply between the two areas, and there is no reason why a common approach should not be taken. The only criterion for the award of a grant should be the acceptance of the student in a particular institution and not how many honours the student achieved in the leaving certificate.

A report in today's papers on the Higher Education Authority has drawn our attention to the very real inequality that still prevails in our educational system. A report published under their auspices relating to Dublin city shows that 72 per cent of second-level entrants come from the four higher income groups which form less than 21 per cent of the population in the Dublin area. Again where 17 per cent of County Dublin residents belong to the semi-skilled and the unskilled groups, only 1.4 per cent of this group form the third-level entrants. Finally while 21 per cent of the population is in the skilled manual category, less than 7 per cent of these form the third-level entrants. The picture is a dismal one in reflecting the lack of progress towards our much flaunted equality of opportunity in education. I need hardly remind the House that we have the lowest participation percentage in third-level education of the member states of the EEC.

Another promise in the manifesto was that legislation would be introduced for new universities. Again after two-and-a-half years there is no immediate sign of this. There are certain straws in the wind.

Business suspended at 1 p.m. and resumed at 2 p.m.

Before we adjourned, I was talking about the lack of progress in realising equality of opportunity in education. That was made manifest by the HEA report which appeared in this morning's papers and which, not surprisingly, disclosed that those from semi-skilled and unskilled backgrounds have a very poor chance of having educational opportunity.

It is not an increase in grants or in income limits that is going to guarantee this sort of equality. You cannot have equality of opportunity in education unless you have a total transformation of society. No matter how much you improve grants and income limits, people who are foreordained to live in certain geographical areas do not have a dog's chance of the kind of fulfilment that comes with education. You cannot divorce equality of opportunity in education from profound social change.

I said that the Minister had not yet delivered on the manifesto promise to legislate for the new universities, but there are some indications that things are on the way. Yesterday, for example, the Minister indicated that there would be a new university established in Maynooth. This raises the question of concern to all of us in view of recent happenings in Maynooth. The Supreme Court ruling in the case of the dismissed professors was that Maynooth is essentially a seminary and that this gave the trustees the right to do what they did. It seems there are only two options about Maynooth. If it wants to remain a seminary, then it will continue historic tradition in Irish Catholicism and will have to find its fundings from its own resources and from the resources of the Catholic faithful. In that event, what happens in Maynooth is a case simply for the trustees and is none of the public's business.

If Maynooth is to become an independent university—as the Minister has just indicated—and continue to receive public funds, then its archaic statutes will have to be scrapped. Its rules on appointments and dismissal of staff, its attitude to the academic freedom of its lecturers will have to conform to the norms obtaining elsewhere, to the democratic norms which are observed in our secular universities. Maynooth cannot have it both ways. There must be no question—if Maynooth is to become an independent university, supported by State funds—of a self-appointed body of clerical trustees imposing seminary-type rulings on such a new university. The same insistence will have to apply in the case of the other recognised colleges, which at the moment have a religious dimension. These, too, if they are to continue receiving public funds, will have to have a public accountability and must conform to the rules observed elsewhere.

Remarks on education in the context of the Appropriation Bill, however, should not be all that unfavourable. One must congratulate the Minister on having finally seen through the National Council for Educational Awards on a statutory basis. He rightly said that he is very proud of having achieved this, and it is certainly a matter for congratulations. We can all rejoice that the protracted community schools dispute ended in, apparently, an amicable settlement. I applaud the Minister also for his repeated advice, his repeated insistence, to parents that we must try to switch our children from the conventional academic type of education to a more technologically-based education. Even though I am a conventional academic in that sense, belong to a traditional university and my business is to teach one of the subjects in the liberal arts, I must say my sympathies are wholly with the Minister in this matter. Nothing is more depressing for a university lecturer than to see great masses of students undertaking an arts degree, to watch them on their day of hope being conferred, and to see them afterwards becoming increasingly disenchanted as they find it impossible to get a job. Again, the Minister deserves congratulations for his attempt to correct the prevailing academic bias in Irish education.

The most prominent feature of student protest this year was directed at the lack of accommodation. Some of us take student protests with a grain of salt; there is a cynical attitude which says students always demonstrate before Christmas, then they get on to work in the second term, and that it is some form of social recreation. I do not think this is fair to students. More and more, what is very interesting in this whole matter of education is that you have a responsible body like the Higher Education Authority supporting what the students are saying in the matter of fees, grants and accommodation. The protests of the students in the matter of accommodation are amply justified. The price of digs and the rent of flats are more and more beyond the reach of students who have to live away from their families.

In Cork, particularly, the pressure on the available accommodation has been greatly restricted by the appearance of the new regional hospital and the development of the regional technical college competing with UCC for the scarce accommodation in the western suburbs. It is anomalous at the same time that in Cork, at least, there are increasing sections of the central city falling into disrepair. It has been suggested with some good sense that some flats could be repaired and put in use for student accommodation in the centre of the city. In Dublin, similarly, it has been suggested that the crisis of student accommodation should be linked with attempts to correct the decay in the inner city. I do not think Irish students, in all this matter of grants, fees and accommodation, are entitled to, or expect, lavish treatment—perhaps the setting up of a sub-committee to investigate this problem.

There are other kinds of accommodation, of course, which create a problem. In my own university college the pressure of the students on resources of library and lecture theatres is enormous. We have a campus where we are becoming rather cramped, very cramped as a matter of fact, where the student body is now out of all proportion to the actual physical size of the campus. A considerable amount of capital expenditure was voted through the HEA three years ago to set up a new library, very badly needed, with lecture room facilities in the same complex.

I would like to draw the attention of the Minister to the fact that that plan is running into grave trouble; and, since a considerable amount of State money is involved, something should be done about it. What has happened there is that the original contract pegged the wages of the craftsmen to levels then obtaining—it was a period of depression in the building industry. After the boom following the election of 1977, it proved increasingly difficult to get craftsmen to work on this vast library complex in University College, Cork. Now the building is being delayed month by month and the original plan, to have been completed by 1980 or 1981, has been put back more and more, perhaps two or three years. Obviously what is needed is more money at this stage. If it is not forthcoming, in some way there will be more money needed in the heel of the hunt.

In the meantime the interim arrangements for student needs in terms of makeshift library accommodation are themselves wasteful of human resources and of taxpayers' money.

I want to make one final point about the educational scene. There is a crisis of morale at second level among post primary teachers who believe themselves to have fallen far behind in remuneration in comparative terms. I would urge the Minister to head off this problem before it further develops and that the claims of these teachers should be given a very reasonable hearing.

I want to turn to the somewhat esoteric area of foreign affairs. Our citizens do not, perhaps, pay enough attention to this and in the end, I suppose, when you analyse it, it is not just an extravagant optional dimension of our State expenditure. In an increasingly interlocking world, what our Department of Foreign Affairs do is every citizen's business, and I should like to compliment the outgoing Minister and to wish all the best to the new Minister.

I just want to make one general point at the outset about Foreign Affairs, and that is, I think the Department should consider establishing an information service for the citizens. The only news we hear, for example about what our delegates do at the United Nations, is to read in the newspapers occasionally mysterious items, such as the Irish delegation having voted for such a thing, having taken a particular stand on disarmament, having abstained on a resolution dealing with the PLO, when the other EEC members do something else. Without making any judgment on the direction of foreign policy, I simply want to make the point that we are extremely ill-informed on what our diplomats, particularly at the United Nations, are doing. That excellent bulletin Ireland Today, which is issued monthly by the Department, might well consider publishing guides, if you like, for the citizens as to why we are pursuing particular policies at any given time.

We are not directly concerned here about the great debate on disarmament since we are not involved in military alliances, and yet we cannot ignore the threat to world peace which, I think, has accelerated within the past year. This year was the 30th anniversary of the founding of the North Atlantic Organisation and there was a certain amount of sabre rattling to mark the occasion. At the moment a new escalation intention is threatened as plans are being made to plant more missiles in Western Europe. In recent weeks there has been a welcome volume of popular protest in some of the Western European countries at these proposals. It does not concern us directly, but let us remember that increasing armaments are a form of violence, that that violence is indivisible and that the Pope said in recent days—it is reported in the papers of 19 December—that the climate of violence is heightened by the continued nuclear weapons race.

That being so, I would hope that our new Minister should revive something of the passion which a previous Fianna Fáil Minister for External Affairs brought to this whole question of disarmament. It was one of the great achievements of Mr. Frank Aiken that he always put this in the forefront of his contributions to debates at the United Nations. Therefore, perhaps Deputy Lenihan might well consider using our unique role in being a neutral country and not being involved in armaments, to try to influence the more militant of our EEC partners in this regard. One thinks of Mrs. Thatcher's egregious remark that the Soviet Union had better watch out or they would lose 20 per cent of their population in another war.

Closely linked to our attitude to disarmament is our policy on neutrality. I was very glad recently to read in a Dáil debate of last summer—I cannot give the exact reference—that Deputy Richie Ryan beyond any equivocation declared himself, and presumably his party, firmly on the side of neutrality in all possible circumstances. It is to be hoped that the same unequivocal commitment will be followed by the new Government.

We have, of course, been given various assurances on that score in this House as well as in the other, but we cannot have too many assurances that we are going to stay neutral. I would like our neutrality policy to have a more positive aspect, not simply to be an abstention from military alignments but a positive commitment to the principle of non-alignment and closer association with like-minded countries.

The Appropriation Bill, through Foreign Affairs at least and through the Department of the Taoiseach, takes in, of course, policy on Northern Ireland. One deplores the dismal continuation of violence in 1979. I was glad to hear Senator Cooney again reiterating his condemnation of the Provisional IRA in the unequivocal terms for which he is known over the last few years. Let us remember that the Provisionals threaten our State as well as Northern Ireland. Their contempt for this State and for the Oireachtas is well known. One need not say any more about that. One is grateful for the constitutional initiative recently announced in Northern Ireland and one only hopes that the British are not falling into the same pattern of ambiguity that they did in previous times when, for example after 1916, they led Ulster Unionists to believe one thing and Southern Nationalists another. A few short months after the Boundary Commission article in the Treaty, signed in December 1921, people like Lloyd George were putting an entirely different interpretation on the Boundary Commission in order to sell it to their own Conservatives and the Ulster Unionists. One hopes that Mr. Humphrey Atkins is not repeating this pattern. It is not so much that the British in their dealings here have been guilty of any malevolence or deep Machiavellian double dealing. It is rather that they have a tendency to put forward today's pragmatic solutions without caring very much what tomorrow will bring.

With regard to our policy towards Northern Ireland, there is little room for congratulations over the last 12 months. There is no doubt about the commitment to peace of the outgoing Taoiseach, but the policy he articulated rarely went beyond a set of negative cliches. The new Taoiseach has declared that it will be his policy to emphasise and promote things which will unite the people of Ireland, and to avoid issues and policies and action which tend to divide the people—a laudible sentiment certainly; I am all for that.

Yet this Taoiseach, when he was Minister for Health and Minister for Social Welfare brought in, only a few short months ago, a Family Planning Bill which was, putting it quite frankly, a denominational measure and does not fit into the category of policy which could unite rather than divide the people of this island. It remains to be seen whether the new Taoiseach will remove from our Constitution Articles 2 and 3 which have set a territorial claim by this State over the north-east and which is therefore directly inimical to real unity. I doubt very much, despite the long standing recommendation of the all-Party Committee, if the Taoiseach can afford to alienate the tribal attitude of his supporters by moving on Articles 2 and 3.

One of the most alarming developments in the last year in politicians' attitudes towards Northern Ireland is the rapid growth of irredentism, of irredentist attitudes. I hope I will not do the House an insult to its intelligence by briefly reminding Members that the term "irredentism", deriving historically from Italian nationalist hankering after the lands in the Austrian possession at the beginning of this century, Italia irredenta, means the desire to recover lost territory, or what is imagined to be lost territory.

When many of our politicians declare themselves to be republicans and say they have no intention of deserting their fathers who were republicans before them, what they really mean is that they are irredentists. True republicans they certainly are not, because if republicanism means anything it is a view of society which derives from the late 18th century and which has the presupposition of a State and society as secular and democratic and, above all, emphasises the principle of fraternity and brotherhood. I see little of that true meaning of republicanism reflected in the utterances of many of our politicians.

One is alarmed by the increase in irredentist sentiments expressed by many of the Deputies in the Government party over the last 12 months. If the new Taoiseach does not share these regressive irredentist views, let him lose no opportunity of repudiating those within his party who express them.

On Northern Ireland over the last 12 months one aspect that was greatly emphasised by our politicians was the American dimension, or more correctly the Irish-American dimension. The outgoing administration and the Coalition Government were at one in trying to counteract the harmful propaganda of pro-Provisional groups in the United States active among the Irish-American community there and trying to cut off the flow of money to the Provisional IRA from those areas. That, of course, was an entirely laudable policy and it began to have results even already in the lifetime of the Coalition Government.

But let us not expect too much from that policy. It is very welcome that the big four in Irish-American politics have a new and enlightened version of our view of Irish events, but there are limits to what an Irish-American initiative can do. Pressure on the British Government beyond a certain point is counterproductive. Let us never forget that the problems of conflict in this island are for us in Ireland ultimately to solve and not for any outsider, nor for the friendliest of cousins in the United States or elsewhere.

Before I leave this point I want to express my contempt for some of our politicians who in recent weeks have tried to blacken our diplomats, servants of our country, the Foreign Affairs department in America, who have claimed that they are acting in a manner which offends certain American politicians. It is alleged that our Embassy staff in Washington are being unnational in their actions. This is a blackguardly attempt to denigrate the splendid work undertaken in recent years by our diplomats in the United States in steering very successfully a most delicate course —on the one hand trying to correct the dangerously romantic view of Irish America about Ireland and, on the other, trying to counteract the work of the British Embassy and the distorted view which British diplomats have put forward on the Irish question.

In this delicate manoeuvre in recent years I think our diplomats have achieved a great deal of success. If we have sympathetic ears in high places in Washington it is due in no small measure to the work of our diplomats there and it is intolerable that they should now be reproached for this by Provo lovers. I hope the new Minister will defend and vindicate these loyal servants of our country.

I finally turn, in very broad measure, to the society and the economy in general; and, as much has been said about it already in this debate, I propose to make only a few general remarks. Senator Cooney painted a bleak picture of the closing options, which, one by one, are being closed off to the Government's economic policy. With his usual authority, Senator Whitaker added to this bleak picture. It is almost frightening to be reminded of the chilling statistic that the revenue from PAYE goes to pay the interest on our borrowings.

Economists over the last year, academic economists as well as others, have said to the PAYE agitators: "Even if we could ensure that every section of society pays its just share of income tax, there would not be any real, substantial increase in taxation revenue." In other words, many of our academic economists have said there really is not any other "them" who are not paying. There are no legendary groups who are, at the moment, evading or avoiding tax and who, if they paid, would put a rosier complexion on the taxation scene. That may be so; I am not sure. What I do know—and what I said in this House soon after I came in here two years ago—is that the PAYE workers believe that they are being unjustly treated and the Government are too slow in doing their best to deal with tax evasion and tax avoidance. The last Government did not act quickly enough to assure the PAYE workers that justice was being seen to be done in the matter of equitable distribution of taxation.

Senator Cooney expressed concern for what is going to happen to the weakest section of the community in the year ahead if the general economic situation worsens. He pointed out that those most at risk are the people in receipt of social welfare. This was echoed by other Senators and, indeed, it was the concern of the 1977 Election Manifesto which on page 1, expresses special concern for the elderly and those on fixed incomes. These are the people who already are feeling the pinch. These are the people who cannot exercise political muscle, who physically, in many cases, could not march to make their modest demands on the community.

Quite recently, I received a circular from the Cork Simon Community, which reminded me of the marvellous work being done by these selfless citizens for the poorest in our community, the pariahs, the outcasts in our community. All the Simon Community are doing—and I commend the Minister to convey this to the proper authorities—is pointing out that there is no statutory provision for the housing of middle-aged single, homeless people. The Simon Community, while acknowledging the level of State support as being generous, say it is still not satisfactory. I quote from a letter which, perhaps, other Senators received from Brendan Ryan, who is the chairperson of the Cork Simon Community. He says: "Whilst we received general support for our night shelter renovation, support for our running expenses comes to less than 25 per cent of our costs." I recommend to the Minister to see what can be done on these outer fringes of our depressed society.

Over the last 12 months we have heard, increasingly, denunciations of the new materialism, of the new greed which is alleged to be rampant in our society. It is hard, indeed, to deny the existence of selfishness in various quarters, but let us remind ourselves that what we are seeing in recent years is the militancy of classes in pursuit of their share of the national cake, militancy which did not exist a very brief period ago. In other words, certain classes of our society are waking up to the fact that the top sections of our society have long been greedy and materialistic. No voices were raised, back in the thirties, forties and fifties, to condemn the greed and materialism of the well-off sections of our society. Those well-off sections concerned themselves little about the poverty that existed in large sections of our people. What is happening now is that the organised workers are joining the general rush to get what is going. You might say that is reprehensible—perhaps it is—but it ill behoves the comfortably off to chide the working classes for their material expectations. Of course, there is a depressing malaise in the country, in industrial disputes and in the pursuit of sectional interests and so on. But the rot began a long time ago. It began at the top, in the opportunist society of the fifties and it continues at the top.

How can people in semi-detached houses, struggling with essential bills and with the repayment of mortgages, be expected to observe moderation, when the screws are being put upon them by mortgage societies—moneylenders of various kinds—and when bad example has been shown to them for decades by people who have made fortunes quickly, legally, perhaps, in the sale of land to builders, realising a quick profit, and not doing anything to violate the law, but who morally, certainly, are responsible for much of the corruption that now pervades our societies? Such people have made quick profits without providing any services, or any creative employment. So how can we reproach people struggling with mortgages when they learn from this bad example, when they practise the lesson they have learned from their betters?

The recent palace revolution in the Government party has pointed up more than ever the close alliance between top politicians and the world of very big business. As a historian, and, indeed, as the child of Fianna Fáil parents, I regret to make the observation that Fianna Fáil is, in fact, no more. The simple faith of the small man, with his humble subscription, who placed his shilling or his half-crown on the collection table back in the thirties and forties—my own people, in fact—has been finally betrayed. Within the last week, we have been told that austerity lies before us, that belt-tightening is the order of the day. Are these injunctions going to be taken seriously, coming from this Government and this Taoiseach? Like Senator Cooney, I believe that, despite the present depressing picture, our people are capable of a new idealism and a new patriotism. I believe it can be recreated, but only if our political, social and economic system is totally transformed, only if the republic of virtue is established. For example, I see no reason why everyone elected to these Houses should not be asked to declare their total commercial and business interests. Only thus can we be sure that the servants of the people are really the servants of the people. I see no reason why political parties should not be obliged by law to declare the sources of their funds. However, all moves in the direction of what I would call the republic of virtue are not likely to make any greater progress in the next two years. At the same time, it is in all our interests to hope—it must be hope rather than confidence—that the new Taoiseach will serve the nation with the same dedication and single mindedness which up to now he has largely applied to the pursuit of political power and the accumulation of a considerable personal fortune.

I should like to welcome Deputy Connolly on his first visit to the Seanad and to warmly congratulate him on his appointment as Minister of State.

Before referring to the two main points of my brief contribution, namely, pay policy and oil prices, I want to reiterate that the Government have made truly remarkable progress in tackling and reducing unemployment in the last two and a half years. I feel I should say this in the light of earlier comments by Senator Harte. The record is there as an indisputable fact. The challenge now, against a background of increasing economic difficulties, is to keep people in jobs, to maintain and to improve real incomes and, of course, to continue with job creation, especially for our young people.

Two key factors which have implications for employment are orderly, realistic pay developments and the rate of inflation. On the question of pay policy it is worth recalling that in the fifties changes in pay took place in the context of price changes only. In the sixties, however, the country experienced a period of rapid economic growth which was accompanied by rising standards and a shift from what was essentially an agricultural economy to one with a rapidly growing industrial base. Rising expectations and increased affluence characterised the period. There was more income to share and claims reflected the desire not only to keep pace with prices, which was the order of the day in the fifties, but in addition to secure bigger real and relative shares of the new economic growth.

Since the early sixties up to the present day pressures for comparability and differentials in pay among various groups have become a national obsession. These same pressures are at the centre of much of our present industrial unrest. Expectations have continued to strengthen during the seventies and often exceed what is humanly possible to achieve. This point was comprehensively covered by Senator Brennan earlier in the debate. However, it is again worth pointing out that under Government strategy, real incomes increased in 1978 and 1979.

In Ireland we live in a conflict-prone pressure group democracy and the national understanding ratified last July represents an important step forward in attempting to reconcile the conflicting pressures in Irish society at present. Government, employers and trade unions alike—the three parties to the national understanding—now realise that real wages and salaries are best tackled through an integrated approach, recognising the link between pay, taxation, welfare benefits and a range of other Government decisions exercised particularly through budgetary action. Therefore, it is in the interests of workers to have a say through their unions in the shaping of these decisions on job-creation, taxation, health eligibility limits and so on.

One of the main disappointments, however, since the ratification of the national understanding last summer is that the hoped for industrial peace has not been achieved. In fairness, however, it should be noted that very little of the industrial unrest we have experienced in recent months can be traced directly to the national understanding as such. For example, the major disputes in the banks, in the docks and in Dublin County Council, involved unions that are not affiliated to the Irish Congress of Trade Unions and thus do not regard themselves as parties to the national understanding. A particular worry, of course, in regard to industrial disputes, is that for the past three years, two out of every three strikes have been unofficial. However, the concept embodied in the national understanding has much to commend it and might eventually be developed to include farmers.

I now wish to turn to my second point, oil prices and their implications for our economy. Here again, I disagree with the approach adopted by Senator Harte. Increases in the price of oil can make our economy poorer. That is a reality with which we must live. In 1979, oil prices have risen by at least 80 per cent without taking account at all of developments at the OPEC Conference in Caracas. To compound the problem for Ireland, at 80 per cent, we have the largest dependence on imported energy of all EEC countries. It has been estimated that the increase in oil prices will add between 1 and 2 per cent directly to the cost of living in 1980 with indirect increases adding more to the inflation rate. Increased oil prices also have serious implications for our future growth. On the question of growth, it should be stressed that our recent growth, particularly that of last year, did not happen by accident; it was the result of positive Government policy. In conclusion, I believe the national economy is basically sound but there are short-term problems immediately ahead which have to be tackled through co-operation and realism among all sections of the community.

I am glad to have an opportunity to speak on the Appropriation Bill and I should like to take the opportunity of welcoming the new Minister of State, Deputy Connolly, on his first visit to the Seanad in that capacity and to wish him well as Minister. I hope his stay will be short, until the next general election. Without taking away from the attributes of the Minister or Government Senators, I want to re-echo the remarks of some other speakers at the absence of the Minister for Finance. I take a serious view of the Minister's absence, which has not been explained. In Seanad Éireann we do not have the opportunity to have a major debate on budgetary matters since the budget is introduced in Dáil Éireann. There are few opportunities through the year to have a wide-ranging debate on issues that affect the finance of the country. The Appropriation Bill deals, essentially, with money matters and it is my deep regret that the Minister for Finance is not here to listen to the views of Senators. It is treating Seanad Éireann with a certain amount of contempt. There are serious speeches to be made on issues that affect the country by Senators of varying backgrounds. In view of the change in Government which took place a fortnight ago the new Minister for Finance appointed should have attended this debate. If there is an explanation it should have been offered to this House but apparently it has not been offered. In the absence of such explanation it is my regret that the Seanad is being treated in this manner by the Minister. I think it is quite unacceptable.

An Leas-Chathaoirleach

I should like the Senator to deal with the matter before the House.

Of course I will, but there is a precedent in that at least two Senators in this debate before me referred to this matter and, having regard to the fact that there is a Minister for Finance dealing with finances in this country, it is relevant and within the scope of the debate. I have made my point and I do not want to raise it again.

The debate is happening at an appropriate time, because we are mid-way through the tenure of office of the present Government and at a traumatic stage in that we had a change of Government two weeks ago. In so far as the finances of this country are concerned, it is an appropriate time to question Government policy in areas of the economy. It is traumatic in the sense that the Ministers who had major responsibility for finance and economic planning are no longer Ministers in the present Government and to the outside observer, regardless of the personal attributes of these Ministers, this suggests that within the Government party there is a basic lack of confidence in the policies which have been implemented up to this time. I believe that to be the case and I believe there is a solid foundation for such lack of confidence at this time. I do not think the Taoiseach can escape responsibility in the sense that he was a member of the Cabinet and was not a backbencher.

The system of debating financial affairs is, in my judgment, fairly archaic. There is a parallel with the business community where traditional accounting dealt retrospectively with events which occurred whereas a modern business has a tendency to get into a different realm where more time is spent in wondering what is going to happen in the future, with budgetary considerations and matters such as that. The Government have an opportunity at this time to consider the establishment of some type of budgetary committee system. We have the commitment of the present Taoiseach to appoint five more Ministers of State, in addition to the recent appointment of ten Ministers of State. Perhaps a system could be evolved where each of the Ministers of State would chair a budgetary committee in relation to their area of responsibility. If there was scope for Members of the Oireachtas to take part in such committees it would be a ouch more logical means of assessing and projecting where the State is going rather than the archaic system under which we are operating here today.

I spoke in the most general terms about what I termed Government failure in the economic area. I would like to be more precise in what I have to say because I owe it to the House to be precise if I am to be critical. I would like to revert to the introduction of the budget this year by the then Minister for Finance, Deputy George Colley, and to his remarks on that budget among which he said that it was "the Government's overriding and firm intention to come to grips with unemployment and inflation". He pointed out that it was the Government's determination to restore stability to our national finances and that it was their expectation that the stimulus being provided by the budget would create conditions in which the private sector would take over as the engine of growth. He said that deriving from this there would be an acceptance for an increase in public borrowing as a temporary feature of overall strategy with a reduction in the following years. He went on to say that the results of the Government's fiscal and economic policies were now on the record.

I re-echo the Minister's remarks because the results of the Government's fiscal and economic policies are now on the record. The Minister was speaking in February of this year. We are now speaking nine months later, a relatively short period of time, and the deterioration of the position in so far as State finances are concerned is nothing short of appalling. For example, in 1978 inflation ran at 7.6; the Minister for Economic Planning and Development in this House about nine or ten months ago was speaking in regard to the level of inflation. We had the then Minister, Deputy Colley, on record in the budget speech in February of this year forecasting a 5 per cent inflation rate for this year. He said that was the economic target for 1979. The latest report is that inflation for the past 12 months has been running at an average of about 16 per cent in contrast to the 1978 figure of 7.6 per cent and forecast of 5 per cent in February by the Minister for this year.

I accept that there are factors which fair-minded people would have to take into account. There has been further inflation resulting from pressure where oil prices are concerned and some other issues. But having said that, for the Minister for Finance to make a budgetary speech with a forecast of an inflation rate of 5 per cent when the rate for the past 12 months has been 16 per cent is simply an indication of the extent to which there is apparently no control in so far as the finances of this State are concerned. The balance of payments deficit for 1978 was given at approximately £150 million. The forecast of the then Minister for Finance for 1979 for the balance of payment deficit was £300 million. The reality according to estimates of both the Central Bank and Allied Irish Banks economists will be something of the order of £630 million. Again quoting Deputy Colley on that in his budget speech in February of this year he said:

The forecast balance of payments deficit of £300 million is supportable given the buoyancy in our reserves, but the need to maintain confidence in our currency adds significantly to the size of the deficit. It must not be allowed to increase much above the forecast level. The target to a fall of 5 per cent in the inflation rate by the end of this year is ambitious but realisable. Its achievement will depend upon there being the minimum possible internal contribution to inflation.

What I am commenting on is the extent to which apparently we have lost all control. The Government must budget and make estimates. Of course estimates can be incorrect for different reasons but there are measures of degree in matters such as this. A figure of 10 per cent out would be relatively in the same ball park, 20 per cent might be questioned, 30 per cent would be of a serious proportion while in the case of 50 per cent one would take notice. We are talking about areas here where the inflation rate was forecast at 5 per cent while we have 16 per cent and where the balance of payments deficit was forecast at £300 million but is running at £630 million.

Let us look at the other barometer, borrowing by the State. The then Minister, Deputy Colley, in introducing his budget referred to what he estimated as being borrowing requirements—this was with expert advice from the Department of Finance. The forecast of the borrowing requirements for the Exchequer for 1979 was £779 million, practically £800 million, or 10½ per cent of gross national product. The reality is that instead of running at the level of £779 million, the borrowing level is estimated this year to be approximately £1,000 million, which is an increase of about 25 per cent on what had been estimated. The servicing of the public debt for the first nine months of this year, just the servicing alone to which Senator Whitaker referred, is estimated as running at the level of about £450 million. The servicing of the national debt is, of course, running at an absolutely frightening level and the contribution per head in this State as far as that figure is concerned is incredible. Certainly the facts quoted by Senator Whitaker showed that all the taxes taken in through the PAYE system are needed to service the national debt. The interest on servicing the national debt per head of population amounts to £182 for a family of seven. If you work it out on that basis the contribution would be about £25 a week. For a family of four, the contribution to service the national debt is running at about £14 a week. On borrowing, it is interesting to see what the Minister had to say in his budget speech. He said: "The Government do not ask for plaudits for observing their self-imposed discipline of reducing public borrowing to 10½ per cent of GNP this year. They see it as a necessary part of responsible financial policy."

What we are talking about is public borrowing expressed as a percentage of GNP. In the previous year it had been running at a level of 13 per cent. There was a very strong commitment by the Government over a two-year period to get it down from 13 per cent to 8 per cent. The Government commitment to reduce it this year was from the level of 13 per cent to 10½ per cent. The reality is that £1,000 million, expressed as a proportion of GNP, is 13½ per cent. In this particular area of Government financing, to which the Government paid such great attention and imposed such self-discipline, we are running at a marginally higher rate than in 1978, which means that it will not be possible to achieve the objective for 1980, which is 8 per cent of GNP, unless the Government introduce the gravest deflationary measures. This means that this target, which was one of the central points under which the Government sought election two years ago, is off. According to the Fianna Fáil manifesto the country had been plunged into debt at a phenomenal rate. "The interest on these extra debts is costing £8 weekly for every household in the country." It is running at a higher rate at present. You can see that this Government are not——

An Leas-Chathaoirleach

Would the Senator give the source of his quotation?

Page 5 of the Fianna Fáil action plan for reconstruction. There is nothing to be proud of here. The Government were complimented on their commitment to a reduction in the number of unemployed. The most disquieting aspect of this part of Government policy is the direct relationship between the creation of jobs and the disarray of Government finances. In 1978 over half the jobs created were created in the civil service. Government spokesmen have been complimenting themselves on the creation of these jobs in the civil service. Any Government in power in any country in the world can, at the stroke of a pen, create jobs in the civil service. It is a very simple thing to do. You just create jobs, you tell the paymaster-general to pay them and you take the plaudits for that policy because there are more jobs on the ground. Has anybody questioned the cost to this nation of creating 12,500 jobs in the public service in 1978? I do not know what a job can be valued at but we are talking of a wage bill of £60 million a year. Of course, if new jobs are created in the civil service for which there is no production in this country, they have to be paid out of income taxation. This overloads those paying tax, especially the PAYE sector who have to pay for this, both in the servicing of the debt and in the interest required to do it. I do not see it as a compliment to any Government. I would not like to be associated with a Government that created 12,000 jobs in the civil service in a year of great financial difficulty. It is one of those factors which is creating the problems which we are having at this time, apart from the lack of revenue based on areas such as car tax.

I would like to say a few words about the private sector. The budget this year was strongly committed to the notion that the primer for development was going to be the private sector, that if the Government gave the incentives the private sector was going to take up the options, as a result of which a large number of jobs and further developments would be created. I come from a private sector background and I know how it ticks. The private sector would not see it as its objective to create jobs. It would have a commitment to development, a commitment to profit, which is a natural instinct. There is no evidence that the private sector has been instrumental in creating a fraction of the jobs which the Government thought it would create.

I am not blaming the private sector. I think the Government were at fault in expecting too much from the private sector. In his speech on 7 February 1979 the Minister said: "At the same time, the increased dynamism of the private sector, resulting from the success of the Government's policies, will enable the contribution to growth from the public sector to be scaled down." Further on he said: "As regards financing the borrowing requirement, it continues to be the Government's general aim to raise as much from domestic sources, particularly from the non-bank public, as is consistent with not depriving the private sector of credit for productive purposes and with not competing unfairly with other savings institutions."

The Government have a problem here of their own making. In the latter part of this year the investing public have been starved of borrowings. The attacks which have been made in some quarters on Charlie Murray as Director of the Central Bank nauseate me completely. In my view the Central Bank is merely the implementer of Government policy. These attacks are invalid. There is a good man in charge of the Central Bank and its function under Government. The Government must be ultimately responsible for the position. This year, in which the Minister for Finance set a high target for the private sector contribution to the development of the economy, has been the very year in which the private sector has been more starved for funds for investing purposes than in any year.

It is true that there were guidelines to allow for an 18 per cent increase in borrowing by the private sector. In many cases the borrowings of the private sector have not been going into productive areas. I know of many people in the productive area of industry and business who have had great difficulty in getting funds to expand, whereas a huge proportion of the funds lent to the private sector for the first six months of this year went to enable farmers to buy acreages of land from other farmers. I do not know that that has been a productive factor. This policy of throwing out money far and wide to farmers to buy land from farmers in the earlier part of this year was a direct stimulus to inflation and to far too great an increase in the price of agricultural land in this country.

One of the better effects of the present credit squeeze is that sanity is beginning to prevail in rural Ireland where that policy is concerned. The fuelling of inflation in terms of the value of agricultural land has been the direct consequence of allowing too much going out through that sector and not enough in certain other areas where the economy is concerned.

We had a commitment by the present Government, announced in the manifesto and in speeches since then, to the "Buy-Irish" campaign. Assertions were made by Deputy O'Malley, Minister for Industry, Commerce and Energy and again in the manifesto that the "Buy-Irish" campaign of the new Government would result in the shifting of 3 per cent of purchases to home goods and create 10,000 jobs. We are looking at this campaign now against the largest deficit this country has ever had and in a year in which there has been an increase of about 50 per cent in imports. Looking at the excess of imports over exports there are statistics to show how appalling the present position is. Unfortunately, due to the postal strike, the latest statistics that are available from the Central Statistics Office relate to August of this year. So, for direct comparison purposes the import excess from January to August 1978 was £570 million; January to August 1979, £992 million, nearly £1,000 million. There were exports from this country during that period of £2,200 million while there were imports of £3,200 million. This is in a period when the Government is apparently committed to a "Buy-Irish" campaign to transfer some 3 per cent of purchases from foreign goods to homemade goods. It indicates the shambles there is in this area. The estimated import excess this year is understood to be something of the order of £1,200 million where last year it would have been £800 million, an increase of about £400 million. That is a staggering reflection of where this economy is going. Exports are performing well in the industrial sector but we have problems in the agricultural sector of the economy partly due to bad weather. We have estimates by economists that exports of goods and services are expected to grow by under 14 per cent in value and about 4½ per cent in volume which is not an indication of a booming economy, and is, I gather, the smallest annual increase in this decade.

There are other areas of Government policy about which we must have reservations. I welcome the apparent commitment by the new Taoiseach to an energy policy and I note that he is taking Energy from the Minister for Industry and Commerce and giving it to the Tánaiste, and I wish the Tánaiste well in running a Department of Energy in this country. It is a bit like closing the door after the horse has bolted. The Government brought out a discussion document in 1978 entitled "Energy Ireland". That document stressed the need for diversification. We have had an energy crisis since 1974, five years ago. There has been no activity by the Government in the energy area. Companies from outside this country are prospecting for oil, which is a good thing, and this is under a policy initiated by Senator Justin Keating when Minister. This has been followed to an extent by Deputy O'Malley as Minister for Industry, Commerce and Energy. But there are many other sources of energy such as bogs, coal reserves we may have, setting up organisations for the importation of other solid fuels and work that can be done in biomass and there has been no Government activity. An objective witness to that is the OECD report for 1979 which states: "As yet a coordinated national energy policy has to be presented." We have had an energy crisis for four years and we are spending about £500 million every year on oil or about 6½ per cent of output.

One of our major sources of fuel are the bogs. Since the oil crisis many local authorities—including the local authority of which I was a member, Mayo County Council—made very strong representations to the Government to do something about the bogs. I would like to compliment Bord na Móna on the excellent work they have been doing in the development of the bogs but there are hundreds of thousands of acres of land under bog for which the board do not have responsibility. In the western counties such as Mayo, we have large acreages of bog on which there is no development at present because there are no decent roads into them. Roads have been allowed to get into an impossible condition. It is impossible in many cases to get tractors out of these bogs with turf. There has been no commitment by the Government to drain these bogs or to provide grants for machinery for these bogs except in Gaeltacht areas where special privileges have existed. Yet, we have had five years of energy crisis. We have energy on the surface which if developed would produce a large proportion of our energy requirements especially in households and industry in this country if capitalised on. With the minimum investment expenditure on roads, drainage and matters such as that we could have been taking out of the bogs in the past two or three years a great deal more fuel than we have been taking out. There has been no development in this area and I would urge the new Minister for Energy to get working on it in the national interest.

In the energy sector, the country was held up to ransom in the middle of this year by the Government's gross mishandling of the issue of petrol availability. I had occasion to travel in one or two other European countries around that time and experienced no difficulty whatever in getting petrol. This is the general experience of people travelling in other EEC countries in Europe at that time. The crazy policy of the Minister in attempting to browbeat the international oil companies to sell oil here at price levels below the international price level was disastrous and crippled this country for a number of weeks, especially during a time of year when people such as those in the west with limited revenue depended to a tremendous extent on the tourist industry and on mobility. There was a unique problem created directly by the Minister in contrast to the situation that obtained in all other European countries.

As far as financial matters are concerned I have illustrated, from the speech of the Minister for Finance on his budget in February, and the statistics obtaining in the year before, the forecasts at that time and the reality to date, the gross mismanagement of the public finances, and the total lack of feel for what might happen where estimates in these critical areas of balance of payments deficits, import excess levels, inflation levels and borrowing levels are wild and are running at an average rate of about 50 per cent greater than estimated, are an illustration of the extent to which there has been the most dramatic failure by the present Government. In the history of this country a Government were never elected to power with such immense goodwill and such a tremendous vote. All of this has been dissipated within a short period and it is dramatised by the internal upheaval and the internal lack of confidence within the Government which effectively is a different Government in power from that which we had a fortnight ago.

In the area of agriculture I hope that the Government or any subsequent Government will not attempt to reintroduce at any stage, a 2 per cent sales levy. It is interesting that the party with which I am associated were maligned by the farming community for introducing farm taxation and, to a large extent, lost office because of it, and the Government that replaced us with the stroke of a pen introduced not a tax on income, which I would accept as being a fair type of tax, but an across-the-board 2 per cent sales levy which was obnoxious in the extreme, especially when applied to the smaller farmer in the west whose income is meagre and who does not have the capacity to pay tax, as have people in the southern or eastern counties. On a 2 per cent sales levy basis the small farmers would have been brought into the net of tax for cattle, milk, pigs, sheep, beef and cereals. That would have been unjust and it created upheavals, on consideration of which the Government rightly had reservations. I hope that in the future we will not see the reemergence of that type of taxation introduced either by this Government or by any future Government.

In relation to the west one of the problems is the lack of decent air travel facilities. This is an age where air travel is becoming increasingly important. As well as that the roads in many parts of this country are very much below standard. In the west, and particularly in the north-west, a great deal of industrial and tourist development is being missed because of the lack of air transport to those parts. It is generally recognised in most States that transport is in the realm of a service for which there is a State subsidy. We pay an enormous subsidy to CIE which is running at present at about £50 million a year. There should be a broad approach to the question of an air service by the Government along subsidy lines. There is no doubt that when one goes north from Galway city to Donegal, through the counties of Roscommon and Leitrim, one can see that these counties are not getting a fair crack of the whip so far as communications are concerned. They are not within the scope of Shannon Airport and are a great distance from Dublin. There is scope for an airport development to serve all kinds of interests in Mayo, Sligo, Roscommon, Leitrim, south Donegal and east Galway. I am not particularly concerned where that airport is based, but it is needed.

I was glad to see in the papers two days ago that the Castlebar airport people have applied for permission to cross the road to extend the runway significantly so that they can bring in larger planes, which would be a boon to the tourist industry, to industrial development and for the general convenience of people trying to get in or out of the west with a measure of comfort compared to the present extremely difficult position. If there are applications for grants, facilities or for long-term subsidies for such an airport I would ask the Minister's indulgence in that regard.

In general terms where west of Ireland development is concerned I am disturbed that there has not been a speech by any Minister in the Government in the last 12 months about issues which were debated and which received a great deal of public comment before that. We had a commitment to establish a west of Ireland Development Board, and Deputy MacSharry, now Minister for Agriculture, was regrettably the Minister deputed by the Government to announce the scrapping of the intention.

The former Minister for Economic Planning and Development, Deputy O'Donoghue, when questioned said that the Government had the entire question of regional development under review through the establishment of an interdepartmental committee on the organisation of functions of Government at sub-national levels. We have had absolutely no communication from any Minister since then on what is happening to this committee or whether there has been any progress, or any commitment by the Government to get away from the excessive centralisation which exists here. There are two ways in which this decentralisation of functions could be approached. We could adopt a national approach and through this committee establish a number of sub-districts in the south-west, south-east, the midlands and so on, but I hope that a future Government of which my party will be a member will implement our proposal.

Part of this country is most lacking in development but there is also an extreme level of centralisation where every decision is made in Dublin. The most undeveloped part of the country has the greatest need and it is there that the first board should be established. We proposed that the Government might use the establishment of a western development board as a pilot scheme, the results of which would be a guideline to the Government in relation to the establishment of other sub-national bodies for other parts of the country. That would be a better approach. There is a great deal of disquiet throughout the west with Government policy, not just present Government policy but the continuation of a policy of special economic treatment for Gaeltacht areas, where there were also equally underprivileged English-speaking areas but which because of the concentration on Gaeltacht areas, are now much less privileged than Gaeltacht areas. There is great disquiet at the lack of evenness of successive Governments' economic policies. I do not suggest that there should not be a special policy for the Gaeltacht. I am completely behind that. We have a culture that gives us an identity and something that is unique in a world of material values and it is something we must hold on to. However, I see a policy for the Gaeltacht as being a policy which should be directed at the cultural and educational level.

When we get into the economic area we are in an entirely different position. We have a crazy structure on the west Mayo coastline where if one starts at Mulranny one is in an English speaking district but if one goes into the eastern part of Achill Island one is in a Gaelic speaking area. The western part of Achill Island is an English speaking district. To go from Achill to the Erris Gaeltacht one must drive through Ballycroy which is English speaking to Bangor Erris which is English speaking and on to Erris which is Gaelic speaking. We had an Údarás election in which there was great confusion because running from townland to village there was confusion about who was or was not entitled to vote. There were anomalies in that election in that areas which were nominally Gaeltacht areas had votes, but in some instances Irish is rarely spoken. If we are talking about political developments or the establishment of boards or the economic well-being or lack of economic well being of people, it is monstrous that there is discrimination among people based on an accident of birth. What is happening around the entire west coast is that the English speaking districts in poorer districts are now in a much worse state than Gaeltacht areas because there has been such an uneven handedness in policy.

I am all for special privileges and development aids for the west such as there are in most countries for the weaker sections, such as that given for parts of Italy and the Highlands and islands in Scotland. I seek an evenhanded development in which underprivileged regions, irrespective of the language, get equal treatment. It is unjust and I will be very interested to see what the results of a case brought under the Constitution by some of these people in Ballytroy or Clare Island will be. We have had a scandalous position where the islands are concerned. There are special privileges for Aran and Arranmore and complete lack of privilege and appalling neglect in Inishturk, Inishbofin and Clare Island. The consequence of the policy of successive Governments has been the denuding of these sections, a much higher level of emigration, more people on the streets of London, Nottingham and Birmingham from these regions and others. People in these communities have not been getting the privileges to which they are entitled.

The establishment of a board or an Údarás election, with which I agree, but broadened to include the people of these under-privileged areas, is a much more sensitive and democratic approach to this problem. In so far as Gaeltacht development is concerned, the concentration of special aids within the Gaeltacht has bred cynicism, deceit and dishonesty among some of the potential recipients who are under pressure to perform where the language is concerned in order to get certain grants. I do not think that has done the language any good. It disturbs me very much and I do not see justification for it. I would welcome change in this area.

On the question of decentralisation, statistically we know that this country is very centralised. There is immense scope within the Department of the Environment for decentralisation of a very sensible kind. One of the weaknesses in previous Government policy where decentralisation is concerned is that to a large extent it has not worked. The Government were committed to the transfer of the Department of Lands, for example. This became a catchphrase—take a Department out of Dublin, land it into a provincial town and suddenly 300 or 400 new jobs are created in that town. There are a great number of problems with that type of decentralisation. There will be disquiet in many other parts of the country because the venue selected will not be convenient to visit if one has business to conduct, which in most cases is normally done in the capital city.

The facts of life as far as the Department of Lands transfer is concerned is by way of being a scandal because there was a commitment by Government to establish the Department of Lands in Castlebar. A new building was built there at enormous cost. There is a notion abroad that the Department of Lands is now in Castlebar and not in Dublin. The reality is that only a small proportion, of the order of 10 or 20 per cent. of the Department has been transferred.

The transfers have, with a single exception, taken place at a relatively low level within the Department. There is only one civil servant working in the Department of Lands in Castlebar at principal officer level, which is a middle grade within the Department. There are all kinds of problems regarding promotion and other matters. Effectively it has not been transferred and has been a failure. It was successful to the extent that a couple of hundred girls of western background are now working there and are able to go home each weekend. Viewed against the original objective of transferring the Department of Lands, it has been a dismal failure. Other Government agencies which existed in Castlebar for a number of years in very inadequate offices have taken up a great deal of space in the building which was intended to house the Department of Lands.

I was a member of Mayo County Council for 12 years. In the Department of the Environment the administration of housing grants—I made this case before and will make it again in the absence of any response—represents a ludicrous bureauracy at work. If somebody wants to build a new house, they apply to the Department of the Environment and they get an application form which they send back to that Department. In turn they apply to the local authority, the county council, for the supplementary housing grant. When the roof is on the house they write to the Department to advise them so they can get half of the grant. The Department write to the inspector in the county in question to have the inspector inspect the house. The inspector inspects the house and writes back to his Department to tell them that the roof is on the house. The Department then pay their share of half of the grant at which time they write to the county council to tell them that they paid half of the grant. The county council then pay their share of the first half of the grant. When the house has been completed the man building the house writes again to the Department of the Environment to tell them that the house is completed. The Department write to the inspector in Mayo to tell him that the house is completed. The inspector calls to the house to confirm that it is completed, writes back to his Department to tell them that it is completed at which stage the Department pay their final share of the grant and write to Mayo County Council to tell the county council that they paid the final share of the grant. Then the county council, in turn, pay their final share.

In an age when we are supposedly committed to more efficiency in the public service, what I have described is nothing short of a scandal. The administration of that process could be very simply done by the county council through all of the stages of grants and inspections. There could be a block approval from the Department, or a monthly note to the Department of the number of inspections and the way finances are running. I am not just talking about housing, but about reconstruction grants, water and sewerage grants, and all the other areas. By using the method I have outlined, at the stroke of a pen you might have 20 or 30 extra jobs in every county in the country. That would be a more effective type of decentralisation than much of what the Government have been doing.

I want to express again my disquiet at the absence of the Minister for Finance from this House.

The presence or absence of a Minister or a Minister of State is not a matter for this House.

The precedents established by two other speakers do not take away from my objection to the Minister's absense which is very inappropriate in the present circumstances.

The Chair ruled on that matter earlier.

I summarised all of my reservations about the handling of our public finances and the reasons for disquiet recognised within the Government party. Having said that, there are new Ministers in office and I wish them well in coming to grips with the extremely difficult and intractable task.

I should like to welcome the Minister of State, Deputy McEllistrim, to the House and I wish him well in his new endeavours and new responsibilities. I will confine myself to a few contentious points and perhaps make one or two more localised points.

I find, listening to this debate, that my brain is getting tired from going around the same course with everybody. At various stages, psychologically I respond where I agree or disagree. It is almost with a level of mental exhaustion that I start out on my own part. I should like to say at the outset that we are facing a crucial set of decisions. There is a danger that, in playing small-time politics, which we are inclined to do in this debate in the Seanad, Senators might not give their full attention, at an objective level, to the gravity surrounding the things they say and the lines they take on policy suggestions. Basically, this Government have delivered very well on many of the basic economic requirements of a country at our level of development. While we get begrudging admissions about some of these successes I suppose in a political sense understandably, we get an awful lot of flak when we come up against some of the problems which are not at all unique to this country.

It is important that we decide on what the objectives of this nation must be and, for my book, the objectives of this nation are to lift our economic activity to a point where it will provide employment at a reasonable level for all those who seek it. We hear talk about full employment. I am not willing to go down that road too far in a discussion on definitions. It has been discussed in NIEC reports and by various speakers over the years. The notion of being fully occupied is a useful one. Those who end up unemployed must not be left on a psychologically degrading dole queue. Something special must be done for them which keeps them active, retrains them, heads them in a different direction. To me that is what we are about. We are trying to have a fully-occupied psychologically satisfied work force with a minimum of people involved in retraining, but some level of retraining. We are trying to design an economic system which will maintain that, while, at the same time, not going out of control as measured by normal economic parameters of control.

The danger is that at this point people might lose their nerve in a situation where the economy has speeded up, where it is producing the employment, and where it is producing more in the productive area. I should like to illustrate what I mean by that in a moment. So the major decisions to be made, keeping in mind those objectives, and keeping in mind the constraints within which the economy has to operate, are crucial at this time. There is one figure that frightens me when I think about this objective. I do not know whether Members of the House realise it but, in between 16, 17, 18, 19 years of age, there are some 74,000 of what the economists call cohorts in each of those age groupings. Just to be sure that I am communicating clearly: there are about 75,000 18-year-olds. In the 23-year- and 24-year-old bracket there are about 45,000. So when the 18-year olds reach the age of 23 or 24, there will be 50 per cent more there than there are now. This is our problem.

When I hear policy statements about reducing our growth, or bringing the economic level down, I get concerned. Those who make those statements want to be very sure they are right in terms of economic theory. I am not saying the view that I take is right, but I have a view and I say it behoves us all to be very careful before we take up a position on this. Otherwise in five or six years' time, we will have one big problem with the young people of this island coming on stream and no healthy economy to absorb them.

There are two issues which have been trotted out relentlessly in recent times by the media and by various speakers, and we heard them today. One is the issue about expectations—that expectations have been raised. Is there anything extraordinary about people's expectations rising in an atmosphere of growth? Is there anything extraordinary about a per capita consumption—and I just want to knock this one about consumption—on 1977 figures, of £950, which is about the same level as Greece, when the comparable figures for the UK are £1,200, and for Belgium, a richer country, £2,500. Why should people who are doing the same job, but in different countries, not have some expectations that their consumption capacity would lift as the economy lifts? Why blame Fianna Fáil and the manifesto for people's expectations being raised? There is a basic psychological explanation for it.

Over and above that, this consumption lift that we are all talking about is not all that extraordinary. I refer Senators—and I will not bore the House by giving all the details—to table two on Household Appropriation Account as published in the OECD Economic Survey, August 1979, which shows that the percentage change in 1975 was 18 per cent, in 1976 it was 22 per cent, in 1977 it was 19 per cent, and in 1978 17 per cent. Why are we told that under this administration consumption increases have taken off? That has got to be laid. I challenge the people who are commenting in the media to read table two of the OECD report and tell me where it is lying.

The cost of the manifesto promises is given as a reason for raising expectations in an unreasonable way. The rates removal costs are probably of the order of £90 million. I will not stand over that figure. I was looking for it earlier. The relief of the registration tax on cars hardly reaches two digits in million terms. We were trying to give some untaxed purchasing power back to the middle wage earner, a very laudable way of doing it, without necessarily adding to the top end where it would add to inflation. What has happened in terms of the economic developments that have taken place during the period so far? In a three-year period of Coalition Government their increase in real terms in the gross national product was £170 million. In the same period of this Government's office it is nearly £700 million, and that is where the money comes from to pay for the promises. This notion that it comes straight out of increased taxation is just simplistic.

The idea was to get economic activity in real terms up to a level that would pay, and that was done. There are various issues arising which are a matter of concern, and I would be the first to admit that. The balance of payments is certainly a matter for concern. We must beware that we would not deliberately go about disorienting the economic growth as it stands at the moment. That is the big decision for the policy makers. You can read what the economists have to say—and of course the economists always differ—and depending on which one you take, you can make your particular point. For my book we have to keep aggregate demand up to the full employment capacity level. I could be shrewd and prudent, but I would risk accepting a balance of payments at a level somewhere between where we are now and what was budgeted for.

The situation this year is special for a number of reasons. One of them is the fact that EMS was introduced and what happened in terms of money flow was new in the country. The other thing was that agricultural exports were down. That has been mentioned before and I will not belabour it. Some Senator said that imports were up by 50 per cent, which is not the right figure; it is somewhere around 23 per cent, 11 per cent in volume and 12 per cent in price. A report in The Irish Times showed that the imports were mostly in the machinery and capital goods area, which means they are going into the investment or productive side of the economy.

A lot of it was private cars.

No, it was not. Private cars were down by 20.6 per cent in September.

They were up the year before.

I am giving the figures—20.6 per cent in the latest published result of trade and the machinery and transport equipment amounted in that period to £78 million, which was 23 per cent up on the same period last year. If we are producing a healthy economy in terms of industrial production, and all the industrial output figures and industrial export figures show that, we would want to be careful about slowing that process down. That is the point I want to make.

The balance of payments has been affected by a tremendous drop off in agricultural exports. In the same period food and live animal exports were 14 per cent down on the 1978 level. Live animal exports were 50 per cent down, and we all know the reason for that. Meat exports were 10 per cent down and so on. I will not bore the House with the figures. The general principle is that agriculture figures are down. Clearly, they must come back again as the farmers stock up. Also, at this time the EEC policy in relation to agriculture is going through a review. The nature and the breakdown of agricultural exports in the future will have to be looked at again. I would be concerned that, at a time of so much change, when we are getting the employment targets right, we would upset the progress.

We all know that oil causes a problem for the balance of payments. I will not labour that point, but I remind the House that the oil costs run at something like £450 million. If the OPEC prices go up, say, by 20 per cent we will be talking about an increase of £90 million. There is only one way we can absorb that, and that is by some decrease in our standards of living. It must be communicated to all the people that their expectations must be depressed somewhat. The point I was making at the beginning of my contribution is that we should not be surprised that people should have expectations, but there is no harm in depressing them. But we must depress them appropriately and say that oil is going to cost us another £100 million next year, which will come out of the increased economic growth we are trying to maintain.

Consider what happens if we do not maintain it. What is going to pay for it? On the unemployment side the figures are there. There is an excellent graph in the OECD report which shows the trend of employment over the last decade. What the policies of this administration have done in relation to employment can be seen. Senator Harte spoke about no change in employment back to 1926 and Senator Whitaker briefly pointed out to him that agricultural content in employment would explain that. I had time to pull out the figures and even I was surprised when I looked at them. The industrial and services employment together are the area of employment in the economy which has been expanding, where our strategy is switching from agricultural employment to industrial employment. Every country that switched from agricultural to industrial employment grew because industrial growth rates are higher. That is not to say that we cannot grow on agriculture, and that is another point. The figure for 1926 between industry and services was 566,000. The figure for 1978, which is the one I have handy, is 820,000. This notion that employment has not changed by over about a million plus, for God knows how long, emphasises what is purely a structural phenomenon. The employment has been achieved in the manufacturing area and in the related service area. To kill another myth—the 100,000 mentioned by Deputy Seán Lemass at the end of the fifties was achieved because the industrial and service employment in 1958 was 660,000 and in 1968 was 760,000 exactly 100,000 more. This myth of the 1,000,000 only employment must be laid once and for all. Industrial employment is expanding and service employment is expanding.

One way of analysing this situation objectively is to ask ourselves what other people are saying about us. For instance, if I take The Economist of November 24-30 1979 in which they had a brief on this country: the headings “Ireland seeks the high road”, “From fields to factories”, “Good growth investment”, “Europe's Taiwan”—this is in terms of industrial output. This is the way objective analysts are looking at the way our economy is going. They are also saying, exactly as I put it in the beginning, while there are two control items, the inflation rate and the current account deficit which are there before us, it is up to us to manage those constraints while still maintaining the basic economic growth that we have put into the economy through the fact that our investment percentage has gone up at a notable rate.

In 1977 the volume of investment rose by 6 per cent and in 1978 it accelerated to 15 per cent. Contrary to what Senator Staunton was saying, the private sector spending grew by an estimated 20 per cent. Therefore, the private investment side was going and is coming with us but they are watching us now to see what we are going to do. Turn off the tap at this stage and they might be very willing again to go into a feeling of depression and say: where is this country going? In terms of industrial achievement—and I am not going to spend too much time on industry because we all understand that industrial policy and strategy are going very well; what I am afraid of is that it might get depressed by interference from other areas of the economy—our average rate of return on US manufacturing investment was nearly 30 per cent. That is a great selling point that has been mentioned before for the IDA. But 30 per cent, compared to the next highest, West Germany, 20 per cent, and compared with Britain, 10 per cent, is real success in our industrial strategy. I think Fianna Fáil can make some claim for that.

I would like to lay another myth about that particular one, which is brought up regularly by some people in the other House particularly, that it was the Coalition that started the IDA. The Coalition certainly set up a small unit to promote industry which was known as the IDA, which worked hand in hand with another unit that was in the Department of Industry and Commerce which was called An Foras Tionscail at the time. But the IDA we know today was set up by the Minister, Deputy George Colley, when he amalgamated those two and produced a whole new animal. Therefore the notion that what is happening today was set up by the Coalition is an out and out myth and it is about time it was recognised as such. The IDA are doing an excellent job. I am sure most Senators would agree with me on that and will forgive the political point.

Following the theme of what other people are saying about us, I have another report on the Irish scene by the Chase Manhattan Bank, in one of their International Finance leaflets, dated December 10, 1979:

Ireland's economy continues to outperform its European Economic Community (EEC) partners with real GDP growth of 5.5 per cent in 1977 and nearly 7 per cent in 1978.... The twin engines of growth have been exports—primarily agricultural—and investment. These have been encouraged by the Government's continuing commitment to rapid growth and generous tax incentives.

Then they go on to point out that things are going well but that there are some problems. They go into the problems of the currency issue, the EMS issue, which I want to cover separately in a moment.

Again here is the confidence of the international commentators encouraged, by the way, by the existence of our independent currency, because they are watching it carefully and using it as an indicator of how we are managing our economy. Therefore these reports will arise more frequently than heretofore when they depended on the less frequent reports of the OECD. It is interesting to see what the Chase Manhattan Bank think of 1980 and the Estimates. They are expecting the gross domestic product to go up by 3 per cent. They are expecting investment, as a percentage of gross domestic product, to be about 28 per cent, whereas it was 30 per cent this year. They are expecting inflation, consumer prices, to go up 11 per cent. They are expecting the current account balance of payments—which has been estimated at £630 million in 1979—to be down to £400 million in 1980. That is what the outsiders think about us. I would not like to let them down on that because we are depending on presenting a good face internationally for the further expansion of our industrial arm, which is the one that is going to provide the jobs.

I would mention also that the final statement in The Economist under the heading “Business Brief” which I thought interesting said:

None of these difficulties will be "solved" in any final sense. But they seem much more manageable than those that faced Ireland 20 and even ten years ago. And there are plenty of countries which would gladly do a swap.

I will make some comments later on what Senator Whitaker said. I cannot resist saying at this point in my contribution that I would like to have seen a similar analysis between 1960 and 1970 to his 1970 to 1979 one.

Much more favourable.

For instance, do people realise that the negative trade, coming up to the end of the sixties, was one-third of the export level at that time? Talking now about the trade running at a negative rate of £1,000 million—which is more like a quarter of the export level or less—I would like to see that comparison done on a decade by decade basis. Needless to say I was not able to do it while I was waiting in the last few hours, but it is a point.

I shall say a few words about the EMS situation. I believe that in the current year, and into the next year, we will all be still learning about how to run the economy in what is a new game. There are negative effects, in the sense that, in the past, the fact that we had ready access to the London market for credit—could almost lose ourselves in it and not draw too much attention to our-selves—had some advantages. We do not have that now. But perhaps we have the advantage of seeing more clearly what the Government's taking up of credit is doing to total credit. Perhaps the trade unions will see more clearly that when the Government are in a bind in relation to credit they mean it; that it is not just a case of running in the back door in London and finding that one can expand credit in a time of inflation, that is does not show up and that Government taxation yield goes up because, in effect, what one is getting is an inflation tax which helps to finance any increase that might come in, say, public service pay or otherwise. Lest I forget later I should point out that the level of public service pay—far from going through the roof—because of Fianna Fáil creating jobs in the public service only—as a percentage of Government expenditure has dropped back. In fact there has been a cutback. Public service remuneration as a percentage of Government current expenditure in 1973 was 31 per cent. In 1975 it was 34 per cent and for 1979 it will be 29.5 per cent. There is another myth floating around that there is an increasing level of expenditure in this area taking place during this administration's time.

The EMS represents a new period. It puts us in a new position to examine what happens to our economy, to learn more about how inflation works, how inflation is imported and what amount of inflation is imported as opposed to what is generated locally. Economists differ on this as well, even though it is generally accepted that where a country's currency is pegged to another country's currency eventually the inflation rate of both will be the same. In a country like Ireland, where we are a small open economy, this is more likely to happen. It will happen, of course, if the currencies remain together. But, if we continue to inflate at the present rate and do not bring our inflation rate down by economic management to levels which are similar to the levels in the countries to which we are pegged, as in the EMS, we will have trouble at home. It is not just because you join the EMS that your inflation will hop over to the German level of inflation. We have got to do something about it at home. The key point I am going to make is that the only way that can be done, the only discretion that is available to us in this, is by way of income control. It is not a question anymore of glorious debates among erudite economists. It is the only discretionary measure we have, and to the degree that we allow wage increases to cost-push inflation we will be cutting back employment—and this means less employment for the young people coming forward as shown in those figures I mentioned earlier.

I certainly have come to that conclusion. I have been watching this situation for the past two decades. It is the old question of whether it is price-pull or cost-push. We being a very open economy, our prices are dictated—oil is an example—very much by outsiders. We are price takers. I am now convinced that we must get it across that we need an agreed incomes policy, not just to help to run the economy conveniently for the Government but to provide jobs for our young people. I have suggestions to make about that, but I have not got time and neither do I want to take up the time of the House in doing so. But I would say that the formula for wage and salary increases must be related to past economic growth, not expected future inflation levels. How can you expect to run an economy where the wage increases are linked to somebody's expectation of what inflation is going to be in a year's time, because as sure as night follows day that inflation level will be reached because you make it happen. We must find a formula for wage increases and as a general guideline—I am not talking about relativity; that is another matter—it should be related to past performance. I have ideas about that and I have written about them, but I will not develop them in the House.

Another area I want to say just a little about relates to the question of where we get our resources. Where do the Government get their revenue? There is a notion that we are way out of line on this one. I will just give one statistic on it, which I did not realise myself but which is a bit frightening. The Government revenue as a percentage of GDP for the EEC is on average 43 per cent. In Ireland it is 37 per cent. The idea that we are way up at the top needs to be laid. As well as that a point I did not realise was that the social welfare contributions on average from the EEC is 14 per cent whereas in our case it is 4½ per cent and that is where the difference lies—in social welfare contributions. I have not yet gone into that in sufficient detail to see what the implications of it would be, but I certainly would draw the attention of the Minister and his advisers to that point. It is significant because the difference is significant.

On the question of borrowing and on the level of borrowing, it is very easy to wax eloquent on the problems of debt. Senator Whitaker and myself had been exchanging some play here on this both last year and the year before. He was right this year in a sense that the borrowings are very high. I am putting more emphasis on external debt than I am on total debt. Last year I think I was right and it was purely by chance because, again the EMS was affecting us. We have a big decision to make here. What level of borrowing will we incur on behalf of our grandchildren? That is the question. Will they thank us for being prudent at this point and time in the development of this economy, tightening it down and ensuring that it will not operate at the level of output that will be required to employ fully the population of this country in a couple of decades time? This is our question. We are at that point, and it is a very significant point.

The level of external debt is at £1,300 million. The interest payments each year, looking at the Central Bank report, is something of the order of £90 million. My personal view is that the economy could take that for the years we have now while we learn to live with our own currency. That would be my decision if I were in the position of having to make that decision. When we start talking about the interest payments on the debt being equivalent to the PAYE yield, that is unfair because we must make the point again that the repayment on domestic credit is a transfer. It does not go out of the country. It is just a case of the Government deciding how they are going to make the repayments or of their rolling their debt forward. I would be concerned with the external debt because clearly it is a flow of funds out of the country; but much depends on what you use those funds for. If you are using them for infrastructure, which does not very directly contribute to industrial output, there is a long pay off on it, as Senator Whitaker has said. Much of the funds that have been borrowed externally can be said to be going to industrial productive investments. An example is the Bill we passed yesterday for the Industrial Credit Company. There the Industrial Credit Company are being put in a position, and encouraged by the Government, to borrow EMS currencies from abroad and to channel those into small industrial developments. The increase in the capital formation that has occurred in our period is beginning to pay off. It went up in 1977 by 8 per cent, in 1978 by 15 per cent and it is running at just less than 20 per cent this year. As long as the external debt is tolerable, we should stick. I will not over-tax the House's patience by going over the manifesto and saying what has been achieved, but I would just mention——

That might not take too long.

I grant the Senator her crack, but she might spend her time a little more effectively if she read the midterm analysis of the manifesto by Brendan McDonald, published by Fianna Fáil. Granted it is a party paper, but it takes each point and shows what has been achieved. I have nothing to be ashamed of as I read it. I am not going to go into this in detail because it is available but, before anybody starts on this side-swiping political pathway he or she should get the facts right.

I am sure you will forgive me if I say one or two words about expenditure in the area where I spend most of my time. I am worried about the housing programme in the Dublin area, and I made this clear in contributions to the parliamentary party meeting, and my working papers have been distributed to various people. Therefore, the basis for my figures are available. I believe if Dublin Corporation, encouraged by the Government, do not build 2,000 houses per year over the next five years we will never reduce the housing backlog. Obviously we could build more as a way of reducing it, and this has been discussed in Dublin Corporation—I am sure Senator Robinson might have something to say about this but an achievable level is 2,000. This would mean, increasing the local authority programme for housing, from £83 million by about another £10 million, and that £10 million must be spent.

I am saying this not because of any bias on my part, because I am interested in the inner-city area, but because we are talking about the capital city. It is a terrible shame that five families can be living in a tent on the side of the road in Dublin for eight weeks and merit only a few small lines in the national press. As I said to one of my colleagues, if that happened in Kerry or Galway it would get prominence in the local press. But because it is under out noses here, we put up with it, and say that the points system does not look after it. I know the points system does not cover it, but the challenge is to find a commonsense system that will not allow something like that to get out of control. There is a cancer in housing in the inner-city. While we are talking about appropriations of money for local authority housing. I want to draw the attention of the public to it.

With the population increase, which has been revealed by a belated census, the problem is becoming aggravated. In terms of appropriation, an extra £1 million was made available this year for the activities of the interdepartmental committee set up to look at the inner-city problems. They were operating under the Department of Economic Planning and Development. I hope this will not disappear in the new structure and that the committee, if anything, will be strengthened. I am sure the Minister will bring back that message when the Department is being reorganised. That committee had great potential as was apparent from the report they produced. If only half the items covered in that report were achieved, they would make a tremendous difference to the make-up of the inner-city of Dublin.

One example which I saw recently and which brings this down to a practical level is the youth employment projects which have been running in the Seán McDermott Street-Summerhill area, and also in the Sherriff Street area. They have their problems, because you have young people who never worked in a business before working with amateurs, trying to get the business off the ground.

This new inner-city committee recently provided funds for professionals to help in that regard. I hope that will be maintained and that the appropriation of £1 million for various pump-priming activities of that kind in the area will be maintained. Otherwise, the improvements in the level of peace in that area could be disrupted again. We must keep the young people occupied, train them and head them off so that they can have productive and satisfactory employment.

That means that the whole question of the movement of traffic in Dublin has to be looked at. It comes up time and time again in committees and commissions and so forth, but there are a couple of small things that could be done. For instance, if the toll roads bridge, which we discussed as the Bill went through the House, gets under way it will change the flow of traffic across the Liffey at the lower end of the docks. We must encourage this and get on with it. Let us not have years of discussion, planning committees and planning appeals for something people see is essential for traffic improvement. The people on the Clontarf side, who are trying to get into the city and who get snarled up in the North Strand and Fairview, could be helped very easily by building the Embankment Road, as it is called, as fast as possible. It will only cost £350,000 I am told. Let's get on with it, build it. We are not talking about a road which might make a marginal contribution to the movement of traffic, say, in the midlands, the West, Limerick, or on the outskirts of Dublin. We are talking about something which is contributing to the snarling up of our capital city. A £350,000 roadway built across the Fairview Embankment would immediately alleviate the problems in that area. I cannot see why it should not be done. This is the only venue available to me to make this matter public.

My contribution on appropriations would be incomplete if I did not say something about our national culture as opposed to the economic side. I am very pleased to see that the Government have delivered Bord an Gaeilge, Údarás na Gaeltachta, that the elections have taken place and that a whole new democratic dimension has been introduced into development. I very much regretted having to listen to Senator Staunton bringing up this old divisive point about relative aids for the English-speaking west and the Irish-speaking west. We must accept that one of the main objectives—as far as the Fianna Fáil Government are concerned a primary objective—is the development of bilingualism. If there are a few pockets of land population still using Irish as the main language of communication from the cradle, then I cannot understand how any Irishman would say that it is not right to give them special aid to ensure that that will prosper and grow and not to set up a dichotomy of criteria which is divisive in the extreme. Either we believe that we must restore the language and invest in it, or not. That is one of the things I want to draw attention to.

There were appropriations being made in Roinn na Gaeltachta for the promotion of the language through the use of advertising. Most Senators will accept that that programme, that way of doing it, has been very tastefully done and very acceptable. It is extraordinary that we are quite willing to spend hundreds of thousands of pounds in advertising drink, but some people raise questions about spending a few hundred thousand pounds in reminding people through that box that dominates us so much—just buying a bit of time out of that continuous cacaphony of sound and vision that hits us—that they might use their own language every now and then. The money being spent on that is being well spent and I would urge the Minister to make the point to his colleagues that it should be increased because it is having a good effect. The strategy of using advertising, coupled with the approach being used by Bord na Gaeilge under the chairmanship of Liam Ó Murchú, can make a tremendous contribution to the achievement of our language objectives. Likewise I commend the increase in funds being made available to the Arts Council I would like to take the opportunity of mentioning the cross-Border activity going on through which the equivalent of the Arts Council in the North of Ireland and the Arts Council here have got together and are meeting periodically in different places. That is a praiseworthy move and is worth funds being expended on it on our part.

There are one or two points I have to make about what Senator Staunton said. He mentioned the expected figure of 5 per cent for inflation at the end of this year. I do not mind him pointing out that that will not be achieved, but I think it is unfair to give the impression that the 16 per cent figure that has come out now is an average figure for the year. It is not. He also made the point that the then Minister for Finance, Deputy Colley, was saying at the time that 5 per cent was the end of year inflation rate, the annualised rate that would be achieved in the end of year figure. That is the point I am challenging. It is unfair to say that it was on an average basis. Let us see what the inflation rate will be running at when the figures come out in January or February and we will have other opportunities to discuss it again.

I would point out, when we talk about this massive borrowing rate that the Senator brought up, that in the time of the Coalition the borrowing rate was 17 per cent of GNP at peak and it was brought back. It was targeted for 10½ per cent and will be something like 13 per cent this year, but there were extenuating circumstances for it. The important point is that the borrowing that we brought in produced jobs and increased industrial expansion and industrial product, whereas the borrowing the Coalition brought in only gave us dole queues. The question is: where did they spend their money? I leave that to the House to answer.

I have already made the point that, if the borrowing is channelled into productive investment, then the youth of the future will thank us for getting the industrial structure, the industrial output right, getting the skilled structure right.

I agree entirely with Senator Staunton that the way land was traded in in the last few years was not something we could be proud of. We cannot blame the Government for that. One bank gave credit to a farmer to buy land and another bank gave credit to some other farmer to look for the same piece of land. In fact the banks were bidding against each other for land. As the Minister has reminded me, the ACC were involved as well.

The Government said, "Let us examine the way credit is being managed in this country". The Central Bank intervened. It is the duty of the Central Bank—they are independent of the Government by legislation—to protect the currency. The currency will come under attack if the credit policy is not handled properly. We have an 18 per cent limit and the Central Bank will punish the associated or commercial banks if they do not maintain the guidelines put forward. They do not have instant access any more to handy markets in London to get them out of a jam every now and then. Therefore, I agree with Senator Staunton that land prices went through the roof due to bad management of credit.

Senator Whitaker made the point that our reserves are now standing at a figure which barely covers our external debt. That is an interesting criterion and a relevant one. I would accept it, but it would be fair also to say that one usually looks at external reserves in terms of the extent of how many months trade they cover. Despite the fact that there has been a bite into the reserves, we are still safe relative to other countries, although we are a small open economy and we would need more reserves to stabilise our trade. I am aware of the problem the Senator raised. It concerns me in any analysis that I make of it, but in terms of basic policy, whether it is to be expansion or contraction, my view is that the reserves are safe enough.

Senator Whitaker's figure of 3 per cent overspending obviously is right—if we are to get the current deficit down to an appropriate level it would be about 3 per cent—but I wonder where will the cut have to be made. I saw a very interesting article by Mr. Hazeltine in one of the English newspapers last week in which he pointed out the difficulties he was having.

The danger is that the public service, if asked to cut, will cut capital expenditure because that does not bite into them that much, but they will not cut it in terms of management inefficiency, which Senator Staunton illustrated vividly when he was speaking about grants. There are management inefficiencies running through the public service and they are contributing to this large cost in terms of Government current expenditure. They are also contributing to some of the problems we have today, for instance with the telephone system. If that Department had been operating properly in the last 15 years their forcasts would have been more accurate, the structure of the Department would have been right and we would not have to take the draconian action that has got to be taken now. There is a lot of room for expenditure reduction through more effective management in the public service. A Minister who comes into a Department for a couple of years cannot get to grips with that. The challenge is there for the Department of the Public Service and their reorganisation group to be more effective in the service they are giving to improve productivity within the public service.

I would say to Ministers that they would want to be careful that they do not end up protecting, like the barons, their own castle once they get into position, not letting the air get into the particular pieces of territory that they and the Secretaries of Departments control. It is understandable that a Minister should stand by his civil servants, in both operational and political terms and in social terms. Obviously they would become friends of his after a time and he depends on them in many ways. The air must be let in if we are to have efficiency.

There is one very important aspect that we are inclined to forget. Ireland is part of the EEC. It is one of the ten countries involved, now that Greece is about to go into the EEC, with others coming on stream. At a time when we have high inflation tendencies and balance of payments problems the EEC as a group and the Council of Ministers should accept that a small developing country like Ireland should not have to run its economy by the criteria by which Germany has to run its economy, or France or the UK as large, developed industrialised societies. We are going through rapid transition from agriculture to industry and to say to us at a point when we are winning, "your current deficit is at £630 million, it is £200 million out on your budget, so we will mess all the good work that has been done in the past three years" is wrong in setting a criterion that is much more appropriate to large, developed countries in the EEC.

If we belong to a grouping like that, in the interests of our economy catching up on theirs, this is no time for them to be admonishing us about our balance of payments or our current deficit being in some difficulties. This is a time for them to say "You are doing great, keep it up, we will stand by you if you need a few quid". If they do not stand by us, what will happen is that the young people of this country—we have the highest population growth rate in the system—will begin to ask where they will get work and will go to the UK if they cannot get work at home, or to Germany, and add to the problems of those countries. We know from the OECD forecast that the other EEC countries will have increasing unemployment problems in the immediate future. Let the larger countries—Denmark, though small, is the richest country in income per capita in the EEC—to encourage us and tell us, “Keep it up Ireland. You are doing fine and if you need a few quid we will give it to you”.

This annual debate on the Appropriation Bill gives Senators an opportunity to assess and to comment on the performance of the Government throughout the year. In any year it is a difficult task, but it is all the more difficult this year in that we have a change of the members of that Government that remains a Fianna Fáil Government and must retain responsibility for the state of the nation. There has been a recent change in Government. We must be selective and each of us will identify particular priorities.

I will begin by examining the Government's economic strategy and performance and how successful or unsuccessful they may have been. I am constrained by an earlier ruling of the Chair from commenting on the occupant of the Ministerial bench other than to extend a very limited welcome to the Minister of State. The limitation is not in his person but in the fact that he is a substitute for the Minister for Finance who should be here for a debate on appropriations particularly when there are no duties or responsibilities in the other House because the Dáil is not sitting.

I commend Senator Mulcahy for a spirited if very selective defence of the Government's performance in the past year. It would be the easiest way to achieve the objective if we were to transfer him to this side of the House so that he could use the same figures and statistics for a further analysis but from this perspective of the Government's performance. He would acquit himself in a spirited way in taking to task the Government for not meeting a number of their key economic targets and predictions.

I would like to deal briefly with these. They have been dealt with at considerable length by other Senators, notably by Senator Whitaker. It is necessary to point to the failure to meet very basic economic predictions in order that we may analyse why and what the cost was of the predictions and of the failure to reach the economic targets as we enter the 1980s. The range of targets missed is very formidable and I am only here to deal with some of them. There was a prediction of economic growth for this year of 7 per cent and it looks as though we will reach a reality of about 3 per cent which is less than half the original prediction. This prediction was modified during the year. This was one of the expectations raised and it has not been met.

At the moment we are running at a 16 per cent inflation rate, though the prediction of the former Minister for Finance was that the target inflation rate would be down to 5 per cent at the end of the year. There is a very big gap between 16 per cent and 5 per cent. The current budget deficit will be around £500 million, compared with the target set of the order of £300 million. All of us are deeply concerned about this year's balance of payments, which will be in the red to the extent of about £650 million. This, we all appreciate, has depleted our external reserves and is causing outside observers to look at this economy with slightly different eyes, perhaps, from those of the outside observers quoted by Senator Mulcahy. There is no doubt that we are much more exposed to external gaze and external analysis in view of our membership of the European Monetary System.

The figure that might have justified some of the vulnerability of other targets is the unemployment figure. Although there has been some improvement, and I am happy to give credit for that, the unemployment figure does not come anywhere near the manifesto expectations. As I would calculate it, if the figures were on stream for the manifesto commitment they would be down at about 40,000 now. If they were down at 40,000, we could, perhaps, risk both the visible vulnerability on the economic front and the divisiveness. I shall spend more time talking about the real cost in social terms and the cost to the infrastructure and social cohesion of our society rather than as seen by statistics, which can be manipulated and painted in a particular way and are not as reliable as looking more deeply into the kind of society that we are and that we are creating around us.

Senator Mulcahy seemed to be disappointed that the Government were being blamed for raising expectations. He tried to suggest that expectations rise as a natural process in an economy, and are not raised in that manner by a Government. I disagree fundamentally with him on that. The basic problem with the manifesto was that it bought expectations; it put a price on the support of a Government, was a very successful operation at the time, and the Government that put a price on their support got overwhelming support—they got a 20 seat majority in the Lower House. Certainly, expectations were conditioned and influenced by that manifesto and by the promises held out.

The trouble is that there was a considerable delivery at that time on the manifesto commitment. Instead of the Government, having got in on this promise that we could not afford, modifying at that stage some of their commitments in the manifesto, they insisted on going on and delivering on a number of commitments which favoured the better off—and this is being said again and again—favoured the so-called productive elite that was to be the motor in revitalising the economy and bringing about a transformation in the job situation. This has not happened; it has not happened for the kind of reasons given by Senator Staunton, who spoke as somebody familiar with the values and priorities of the private sector or private enterprise. He explained, in a very interesting contribution, that the creation of jobs is not, and would not be, that kind of priority with the private sector and that a lot of the pump-priming and the incentives given have been a wasteful use of very valuable resources. The commitment to trying to cope with the need for substantial new job creation and expansion in employment in the young and growing population is right, but there was a wasteful misuse of the resources of the State through the tax policy, through the removal of rates as an immediate decision, right across the board, on private houses.

There is a danger in saying something like this in this House because Senator Dowling is sitting there waiting to get in on his misrepresentation act. I am rather flattered by the way that he constantly misrepresents me after I have sat down. It shows that I must be striking home with some of the points that I make. However, if the Senator feels that he would like to misrepresent me, may I make it clear for the record, before he does, that the point I make on the total removal of rates on all dwellings is that it was not a progressive move; it favoured the better off in our society and promoted a greater divide between those who have a job and an income that is on the rise and those who are either without a job, or on a fixed State income, which was going to be very substantially hit by rising inflation and rising costs.

There has been a tendency to place undue emphasis on external factors, such as the increase in the price of oil, to explain the rising inflation. Certainly, the rise in oil prices does have a very dramatic effect on transport costs and prices generally, even on some of our industries, such as the textile industry. There is no doubt about the impact that it has. There is no doubt about the impact it had during the time of the Coalition Government, during the period 1974-75, when relatively little consideration was given to the trauma, on our economy at the time, of the substantial rise in oil prices as a result of the activities of the OPEC. Although this is a factor there are other factors which lie directly at the Government's door. These factors go very near home for the ordinary people at the bottom of the rung in Irish society—for example, the removal of food subsidies and the intensification of the cost of living, the way in which inflation has hit the bottom 25 per cent in our society. This is the reality of our discussion about the Government's economic strategy. If one makes those at the top stream of our society better off, the cost is borne elsewhere. When it has an inflationary spiral effect, the people who really suffer are the poor, who are poorer in real terms since Fianna Fáil came into power, and the old who cannot afford the basic diet which is required for them for medical reasons. The people who know this and speak out about it are people like those in the Association of Professional Social Workers, people like those in ALONE, the groups who work with the people in our society who are on a small fixed income, which has been eroded and hit where it is most vulnerable, in basic foodstuffs, in the cost of heating, the cost of light and so on.

This is where the performance of the Government becomes a very serious reflection on what their priorities are. In analysing the performance in this area I should like to spend a little time examining the performance of the person who is now Taoiseach, who held responsibility for two important ministries—the Department of Health and the Department of Social Welfare. There is a general tendency to divide the appraisal and to tend to say that the Taoiseach, Deputy Haughey, had considerable success as Minister for Health but very little if any success and, indeed, substantial failure in Social Welfare. I have heard that kind of analysis from a significant number of people, not all of them members of Opposition political parties either; from journalists and others, in commenting.

It is difficult to see from whence has come the reality of the reputation of success as a Minister for Health which Deputy Haughey seems to have. He certainly has promoted—and I approve of the value behind this—the area of preventive medicine to some extent and the budget of the Health Education Bureau reflects this kind of value. In promoting preventive medicine Deputy Haughey very successfully promoted himself, as we all know. That takes a little from the value of what he was doing as being a genuine, important commitment to our medical service. Some of it was unduly "gimmicky" and lightweight on reflection, contrasted with the need for the improvement and extension of our medical services and the need for the taking on of the medical profession, which he did not do. It is very likely that the medical profession will, as a result, remember him as a great Minister for Health, but I am not sure that that should console those of us who are concerned about having a medical service which gives the best value and the best deployment of the resources of the State.

What Deputy Haughey failed significantly to do as Minister for Health was to assume the responsibility which he had for reform of the law relating to children. There was a decision taken before Deputy Haughey became Minister for Health that the overall responsibility for child-care and for the law relating to children would lie with the Minister for Health. This responsibility was assumed by Deputy Corish when he was Tánaiste and Minister for Health. That decision was in the realisation that one of the problems relating to reform of the law concerning children was a division of responsibility, that the Department of Justice had some responsibility, and the Departments of Health, Social Welfare and, of course, Education had some responsibility. It was in order to have a co-ordination and assumption of responsibility that the Minister for Health was designated as the Minister with responsibility for children.

If we look back on the Year of the Child, 1979, it is not only disappointing but shameful that we have not had a Children's Act. Where are our priorities? We still have extremely backward Victorian legislation, dating from the British Parliament, the Children's Act, 1908. We have an age of responsibility of seven, and a complete lack of the availability of modern supportive legislation in the area of child care. The only contribution we have made is to open a children's prison in Loughan House. That shows such a poverty of approach to the whole problem. I am aware that there is a task force on child care which is due to bring out a final report and it might be said in reply to me that we will have to wait for this report.

The political reality is that if there is a real priority in the Department, and in the Minister, he can influence the time scale of the bringing out of a report. Those who were involved in compiling the final report of the task force on child care cannot be very impressed about the implementation or the concern to implement, the interim report. There again the then Minister for Health, now Taoiseach, must take a considerable responsibility. I find it hard, therefore, not to concentrate my contribution this afternoon less on the economic side, because that has been adequately covered, and more on the absence of fulfilment of a number of other promises which were at least referred to in the manifesto.

I will begin with the area of the lack of reform in the law relating to children and the missed opportunity to introduce an amendment to the Constitution, writing in in a more balanced way the rights of the child. When the record is being examined by social historians it will reflect very badly on Fianna Fáil because there was the opportunity in the past year, there was a need for a referendum on the narrow issue of the potential illegality of orders made by the Adoption Board and the need to make an amendment to Article 37. Since there was the necessity for a referendum it gave an opportunity to introduce a clear statement of the rights of children and to remove the basic status of illegitimacy, which is a blight upon our law, in particular because our Constitution states that we will treat all citizens equally. It is a blight of increasing importance because when society does not provide any legal mechanism for terminating a marriage when there has been marriage breakdown then we are going to have increasing liaisons outside marriage and where the children have no protection, are illegitimate, are not equal to other children in our society. That situation will get worse, but the Government have missed an opportunity to bring in an amendment to our Constitution which would right a balance. Most commentators on the Constitution acknowledge that there is an imbalance, that it is parent-centred and that there is a need for a clearer statement of and assessment of the rights of children and also there is a need to remove the stigma, status and discrimination of illegitimacy so that all our children are equal before the law and before their parents.

That was a significant failure by the Government which was reflected in an historically low poll. Although the referendum was on a very important issue for the thousands of adoptive parents and children here there was a low turn-out because people felt that the Government had totally failed to understand the need for more substantial reform and the need for an improvement in the situation of the family relationship in our society and of the protection of children. That failure is shameful and unacceptable in this Year of the Child. If one analyses the situation in Ireland, the Year of the Child has been a great failure. It has been a year of charitable events, of festivals, of medals being struck and of a certain educational impact in various groups, organisations and unions who had meetings on the Year of the Child. However, I can tell the Minister that I attended and spoke at a number of these meetings that every time there was a meeting held here on the Year of the Child the Government came in for hammering, and they deserved it. At the end of year on this record all I can do is give them a further hammering on their failure during this Year of the Child. I am putting it in that unequivocal way because it is a very substantial failure.

I should like to turn to another area where the manifesto made a commitment, to reform the area of family law. We have not seen evidence of a real felt concern for the unhappy situation in which so many families and so many women find themselves in Irish society. They find themselves in that position because of the absence of reform in family law, the absence of reform in the court structure for the hearing of family law cases and the absence of accessible remedies for marriage breakdown. I do not believe there is a Senator who does advice work in a constituency, who can be unaware of the sorrow and oppressive burdens that so many people carry, which drives them on to our medical services, makes them dependent on tranquillisers and on drugs because they cannot get access to a remedy. If they go to a solicitor, they will be told that there is no point in looking for a judicial separation; it is a non-remedy which would cost more than £1,000, and one would have to call witnesses to prove adultery or cruelty. At the end of the day it does not give one anything. It does not give one the basic possibility of starting again, of having the right to remarry. There is a lack of concern to do something about this despite the commitment in the manifesto. During the elections in June 1977, a number of Fianna Fáil people spent a lot of time pointing to this commitment to family law reforms and to the reform of the court structure. It seems to have disappeared altogether and is not something on which we have been given any indication that there is likely to be legislation or a serious commitment.

There is a substantial need for reform in the area of family law. I would go further than Fianna Fáil are prepared to do, as can be seen from the comments I made which are on the record of the House, on the first question answered by the former Taoiseach, Deputy Jack Lynch, at the start of the period in office of his Government. He said that the Government did not intend to introduce legislation seeking an amendment of the Constitution which would allow divorce legislation to be enacted. I do not know if it is possible to persuade or influence a Government that says "no" from the outset to something which is, obviously, a sensitive and a complex issue. If it is possible in any way to influence a Government change on that, it is extremely important that the legislators anticipate a very, very serious social issue. It is important that we give a certain amount of leadership in introducing a remedy for marriage breakdown which allows remarriage and that we have the courage to meet the possible, and indeed predictable, responses there will be in our society. There is need for levelheadedness and courage among politicians in order to introduce the remedy of divorce.

Certainly I commend to every Member of this House and indeed to the Minister of State a recent study called The Case for Divorce, by William Duncan, a member of the law school in Trinity College who lectures in family law. It is a very balanced, very humane, very compassionate analysis of the arguments for and against and the coming down on the side of the case for divorce in our society. I think it is not an issue that we can or should run away from. It is of critical significance for an increasing number of men, women and children in our society and I believe that the Government should face up to the responsibility there.

I turn to another area where there has been, to put it mildly, a dismal failure and this is the failure to introduce a scheme of civil legal aid as indeed the Government pledged they would do in the Court of Human Rights in Strasbourg last February in the course of the hearing on Mrs. Airey's case. There was an undertaking given then that civil legal aid was accepted in principle and the Government hoped to introduce it before the end of the year. The Dáil has adjourned until 20 February and this House, I am sure, will adjourn sine die when we complete discussion on this particular Bill and it is very hard to see how that commitment will be met.

It is possible, I suppose, that the Government could introduce an administrative scheme. Indeed it is looking likely that this will be the way they will eventually approach the subject. Once again, if this is the approach, the Government have failed to understand what legal aid and access to justice is all about because you cannot through an administrative scheme with no legislation give people a right and condition that right, show them the way in which that right can be exercised and can be available. All you can do in an administrative scheme is exercise an administrative discretion and if you feel like entering into a strict budgetary policy the following year you can wipe away that scheme and there are no rights or no responsibilities involved. The individual is just left without this charitable discretion of being able to avail of an administrative scheme. I think that is the basic difference between the Pringle recommendation of a comprehensive Bill establishing a legal aid board and establishing a countrywide access to legal aid and an administrative scheme involving legal assistance centres with a panel of barristers which appears to be the way in which the Government are slowly moving, if the rumours are correct.

Another reason why this would not be an acceptable scheme is that the Government have not begun to understand the role of community law centres. We only have the one example of a full-time community law centre here in Ireland, the Coolock Law Centre. Happily, the Coolock Law Centre is very well placed. It is the Taoiseach's own constituency and he is at least intelligent enough to know a good thing when he sees it. I think that he will not know Coolock well unless he knows how good the Community Law Centre there is. But it is not a centre dispensing legal services on behalf of the State. That is not what it is about. Only a portion of the work done in the Coolock Community Law Centre relates to individual cases and problems, whether they are cases on which people are advised and helped or cases that have to go to court on people's behalf.

That is only a portion of their work. They have other extremely important work, too. Some of that work is to research the legal problems in the area, particularly if they get a recurring problem, for example, in relation to tenants' rights, consumer problems or in relation to family law problems. They have the capacity to analyse and research. The Coolock Law Centre have done very important work in this area; for example, when a number of barring orders have been made by the District Court, they have examined the problems, whether the Garda would enforce the barring orders, which they found they did not, and all of this kind of back up. This is an essential part of the work of a community law centre.

Another part of the equally essential work is that it relates very directly to the local community, that there is a local management committee consisting of the tenants' organisation, the local women's organisation, residents' organisation, whatever are the local organisations there and that they participate. The community law centre is part of the local community and helps people in that community to understand law, to understand how it affects them and to understand how they can try to seek reforms which will make the instrument of law more relevant and more helpful in their daily lives. It seems to me that these kinds of arguments would be totally absent from an administrative system that merely worked through legal assistance centres involving the recruitment of solicitors paid by the State to discharge legal services in those centres.

Of course the other major criticism of that approach would be that it would be a dispensary form of legal aid but without the advantages that dispensary medicine had because we are told that there are only going to be 15 of these legal assistance centres. Therefore, they would be dotted rather sparsely around a country of three million people and they would only be really available to those who were fortunate enough to live adjacent to legal assistance centres. Again, that is totally failing to recognise a right and totally failing to introduce legislation to bring about that right.

While I am on the area of family law reform in a broad sense and access to justice, I would like to make a brief reference to the Bill that contained the word "family" which went its tortuous way through the other House and its equally or still more tortuous way through this House—the Health (Family Planning) Bill, 1979. Whatever happened to that? Has the Taoiseach now decided in his wisdom—as we were forced to tell him from this side of the House—that the present situation is better than that entirely hypocritical Bill, or is he shortly going to bring in regulations? If so, what will be the content and scope of these regulations? Perhaps the Minister of State might enlighten us on whether there is a date set for implementation of this family planning Bill. As I said at the time and still believe—I hope to be proved wrong but I really have very grave doubts about that—if the regulations close the existing family planning clinics and purport with whatever loopholes to confine the availability of contraceptives to married people, we will see a still sharper rise in the abortion rate. If we do, the responsibility will be very clear and very direct and I hope that it will be assumed with sadness and the ability to rethink that situation. So much for family law and the absence of a commitment to reform and the absence of the fulfilment of even the limited commitments in the manifesto on that issue.

I would like to turn to another area which I believe is in need of radical reform which once again the Government have not only tolerated but have helped to bring about in the way that it is, namely, the whole question of local government reform. I have the privilege of being a member of a local authority. I have been a member of Dublin City Council since the local elections last June. It has been a learning process in finding out how little power the Dublin City Council have. It has been a process in learning that whatever power local authorities had has been greatly eroded by the method of the financing of local authorities now and the dead hand of central government on that financing. In the case of young talented politicians who come into local authorities as the first rung of a possible political career, the kind of people we want to see from whatever party or independent coming into the local city councils, local authorities around the country, I wonder how long they are going to take part in this charade. How long are they going to call for this and that knowing that they have no power to influence the decision? I would like to give a specific example of that. On Monday, 10 December, the Dublin City Council declared a housing emergency. Senator Mulcahy referred to the housing needs in Dublin and I endorse his plea for more money and attention to the need for a significant advance in the new house building programme. At that meeting of the Dublin City Council there was a lengthy and broad discussion on the many aspects of the housing crisis.

It is not just the length of the housing list, which could reach 7,000 before the end of the year, or the transfer list of 2,000 families. The fact that you have to have chronic ill-health or some other chronic condition to be included on a housing list, the absence of security of tenure for flatdwellers and tenants, the deterioration of the housing stock in Dublin, the lack of adequate maintenance, the many many unlived-in dwelling houses that are being allowed to rot and deteriorate and the lack of enforcement of any controls or the bringing in of a new housing Bill to give better controls in this area, all of these aspects were discussed by the city councillors and a series of motions were passed. One of these declared the housing emergency and others called for action, for the building of 3,000 houses in 1980, for a raising of the SDA loan from the unreal figure of £9,000 to at least £12,000, for the revision of the eligibility limits which, again, should be indexed to the average industrial earnings. The reality was that, although members of the city council could talk for as long and as eloquently as they were able, they could not do a thing. They could not do anything about the housing crisis, for the housing emergency that they have declared in Dublin. All they could do was to hope that the representations that they made would be conveyed in a letter from the city manager to the Minister for the Environment.

That is one example and there are so many other examples. The example of Wood Quay is a very good example of the Dublin City Council. A clear majority of the members of the Dublin City Council are committed to preserving the national monument portion of the site, totally opposed to building the civic offices of the city council on that site. Yet the city council were unable to take an effective decision and were unable to persuade the then Minister for Finance, and presumably the current Minister for Finance, to have money provided so that the city council could take an effective decision. That is a key example of the lack of power at local authority level and of the danger of over-centralisation, of the danger to our democracy and to our structures.

I would stress the necessity for local government reform. I would urge this in particular in the area of greater Dublin because that is the area I happen to know and that I happen to see the defects in. The need is for smaller, representative elected units in Dublin, representative of something like 30,000 to 40,000 population, fitting in to a wider local authority structure at the regional level which would embrace Dublin city, Dublin county and Dún Laoghaire. Unless we have fairly quickly a coherent structure at the regional level to deal with the kind of problems that Senators have been mentioning—the problem of the decline in Dublin, the housing, the traffic congestion, the roads, all the problems of a sprawling modern city —and to plan and develop the infrastructure we need in the city of Dublin, and unless we have responsive local bodies we are going to have a further deterioration in the ordinary quality or calibre of life for people living in those areas.

There is no doubt that there is immense frustration there. There is hardly a family who are not frustrated at being unable to either make any representation to a particular department of the corporation or to get a response that is meaningful to a complaint, whether it is about maintenance, or lack of planning enforcement, or lack of whatever essential service that the family may feel they need. It is not so much that anybody expects miracles or expects that everything will work so smoothly; it is the lack of any identification of the central offices of the corporation with the local problems in each area, particularly in the planning area and the enforcement of planning controls.

There is a lack of credibility, a lack of faith in the citizens themselves that the planning office are aware of their local problems or concerned about them or knowledgeable about them or are willing to do anything about them. This, together with evidence of lack of enforcement, has eroded civic confidence throughout our city and has played its parts in the rising vandalism and crime rate, some of which is a frustration with the lack of evidence of concern at local level and lack of evidence of a possibility of exercising any kind of power or influence over planning or decision-making.

I would urge the necessity for local government reform. I would join with Senator Mulcahy and press for urgent consideration of the housing needs in Dublin, though I will do it in a much broader context, as I explained than Senator Mulcahy mentioned.

I would like to turn to another area on which I feel we may be commenting at even greater length this time next year and that is the area of industrial relations. It seems to be clear from the brief statement which the new Taoiseach made that he intends to have legislation on industrial relations brought in as one of the first moves of his administration. This was confirmed by the Minister for Labour, Deputy Fitzgerald. It is clear that the Government intend to make an issue of the serious industrial relations problems which face us. I do not think that there can be a citizen, even perhaps a child, who is not aware that this past year, 1979, has been a very bad year as far as industrial relations and serious industrial disputes are concerned. Before the picture becomes too simplistic and all the blame seems to be going in a particular direction, I think there are three aspects of the Government's policies in the past year that have contributed to an aggravation of the industrial relations picture and have seriously eroded what ought to be an important part of our social fabric.

The first point I would make is in relation to the expectations which were created by the manifesto. That introduced an element into our politics that we could, by some magic formula, afford the various promises in the manifesto and that we would go on being able to afford them provided we put Fianna Fáil in the driving seat. This heightened expectation which was not related to the reality of our economic and social life. This heightened expectation has soured industrial relations and has aggravated industrial unrest. Secondly, it is clear that the present unfair taxation system has aggravated the industrial relations position. I would refer in particular to the position of the PAYE sector. It may very well be that you can produce figures to show that the situation is not as bad as people think it is; indeed, I read with interest a contribution by Senator Whitaker on this point. When one is examining taxation and taxation policy, one is talking about how people compare themselves with others. The PAYE worker justifiably says: "I am carrying most of the burden and I am not the person in the best position to pay". It is in a comparable taxation situation that the PAYE sector feels victimised, feels the system is unjust and feels tha others are not being fairly taxed. There is no doubt that this sense of grievance and sense of injustice is very deep, very real and will be part of the industrial relations scene until the Government are prepared to meet legitimate demands and requirements. I say "legitimate requirements" because I think that we have to be aware of the limits on our society and of the high dependency rate, of the need to support our services and of the essential base of income from taxation for that purpose. It would be wrong and unjustified to look for the easy remedies from this side of the House.

At the same time I think that the PAYE worker must look with increasing bitterness at the kind of measures which the incoming Fianna Fáil Government carried out and which are now part of the Government's economic strategy. I am referring to the abolition of wealth tax, to the changing of the provisions of the capital gains tax, even to the lowering of personal income tax to 60 per cent in an overall context in so far as it affects some very wealthy people living in this country who are only paying tax on their income at 60 per cent. I am talking about the very wealthy, the millionaire class, and some of those seem to be entering the political scene with increasing success.

Combined with this unfairness in favouring the better-off was the provision which hit the ordinary housewife in budgeting for her family for the week—the removal of the food subsidies. This, too, has aggravated the situation. Then the Government have been rightly faulted for being afraid to come to terms with the need for fair taxation of the farming community. Once again one has to be very careful, and the Labour Party are very careful to distinguish between the situation of large farmers and the position of small and smallish farmers and the difficulties of the agricultural sector at the present time. Even though the Labour Party call for fair taxation with regard to farmers, they opposed for obvious reasons the 2 per cent tax on production which the Government introduced by their 2 per cent levy at the wrong time, in the wrong way and potentially in a manner incompatible with our obligations in the European Community. That is a matter that has still to be tested by the courts.

It does seem to have been a basic error of judgment, to have shown a basic lack of understanding of the importance of the agricultural industry and of the importance of ensuring that any method of taxation was not one which penalised production and which damaged the farming community at a time when they were already coping with a very serious economic situation. I believe that this unfair taxation system has aggravated the industrial relations scene because it has spread division and envy and resentfulness and, as I say, there is a very serious need for the Government to commit themselves to a fairer tax system and if necessary to sacrifice some of their high-flying economic objectives with the productive elite to which they are being very nice by introducing a system more compatible with social justice and social cohesion in our society.

I appreciate the concern of Senator Mulcahy and others like him that this economy will rise to the challenge of feeding, clothing and housing a young population, but it must also bring together this young population and not create ever more division strands, ever more envious and bitter strands, ever more inequitable strands. That is my major criticism of the Fianna Fáil strategy and approach to their economic policies.

The third point I would make about the Government's approach to industrial relations—I have already mentioned the creation of expectations that could not be fulfilled and the failure to introduce a fair tax system—is the Government's pursuit of a policy of nonintervention at all costs in industrial disputes until very recently. The Posts and Telegraphs dispute was a good example of a failure by a Minister to judge when he should have positively intervened. The country suffered very dramatically. In particular the west and south-west and other regions of the country suffered a terrible blow as a result. That was an error of political judgment and showed a lack of the sense of when to intervene. It is fair to compare the then Minister for Labour with his predecessor, Deputy Michael O'Leary, who knew, because he had very close links with the trade union movement and because he had a very close understanding of the reality of industrial relations, when intervention by the Government could be helpful and necessary and when a strike was so damaging that it was necessary to spend long hours if required seeking to mediate and find a solution.

I am not at all happy with the sudden intervention of the Minister for Labour in the last few days in the unofficial CIE dispute. I do not know enough about the inside of that but I think it is fair to say that it must be disruptive of normal trade union negotiations and approach if a Minister intervenes in an unofficial strike in that manner and is prepared to give a commitment to pay more in those circumstances. Whereas I would say overall, over the year, one could criticise a total unwillingness to intervene by Ministers who seem to go asleep for long periods in their Ministerial seats while the particular Department under their responsibility is involved in a serious strike which causes enormous hardship, we have had a recent example of a sort of premptory intervention which also seems to be intervention at the wrong time and in a premature way. This kind of strategy of the Government has undoubtedly aggravated an industrial relations situation which is very difficult and very complex.

Again, it has a lot to do with the structure of the trade union movement, with attitude to work, with the tax on the worker which is contributing to the building up of the Irish so-called black economy. I would be very interested if the Minister could give any estimate of how big at the moment our black or non-taxpaying economy might be. It may be much more significant that we think. This is to some extent pushed forward by the present strategies adopted by the Government.

If I have been critical in some measure of the Government's performance and of the failure to implement reform and bring in legislation in certain areas, I think that I have to spend a little time in trying to be constructive and to say where the Government should try to introduce the kind of legislation and implementation of policy which will go some way to creating a better social cohesion in our society. The Government at the very beginning of 1980 should commit themselves to a new housing Act which would give power to ensure that we make the best use of our housing stock, power to prevent exploitation for speculative profits out of housing, power to ensure that houses could not be left derelict and unlived in until they have deteriorated and then could be demolished. We need a comprehensive housing Act. Obviously, for the reasons I was giving earlier, we need a basic reform in the law and procedures relating to children—we need a new Children's Act. Indeed, we need a great deal more activity in the whole area of family reform and legal aid. We need local government reform, comprehensive local government reform which will redress the present imbalance with its centralising effect and its erosion of local democracy. We need that badly and we need it quickly because of the effect that the present system may have even of encouraging young people to become involved in local politics and not driving them away in cynicism from bodies which do not have any real power or any substantial influence.

We need a fair rents tribunal and protection for flat dwellers and tenants. I have first-hand knowledge in Rathmines of the vulnerability of so many people in relation to their homes. It is strange that Ireland, which pledges itself in the Constitution to protect the family as the basic unity of society, is doing so little to protect the homes of so many families. A family consisting of a mother, father and two little children live in one room in Rathmines paying £15-plus for private rented accommodation on a weekly tenancy. If they complain, or if they point out the damp on the walls, or the absence of proper toilet facilities, or whatever else, they know they could be given a notice to quit and that they would be out and a queue is waiting to pay £15 or £16 for one room in Rathmines.

This is a typical picture. We have such a severe housing crisis that families are oppressed by their living conditions but dare not raise an objection because there is no balance between the landlord and the tenant. There is no protection in those circumstances. It is a significant failure in relation to families or single people, whether they are young single people who come to the city to the universities and colleges, or who come to work in Dublin in the public service or in the private service, or whether they are elderly people. Very often elderly people in private rented accommodation are the victims of the total lack of protection. We need new legislation in that area and we need it fast.

This Bill is not concerned with new legislation, it is rather dealing with past administration.

What I was trying to——

It is not in order to advocate new legislation on this Bill.

I accept the Chair's ruling on that. I was trying to avoid the possibility that I might be seen as being totally negative and destructive of policies without having any alternative priorities or suggestions to offer. I had thought, but obviously I am wrong, that it was impossible to be out of order on the Appropriation Bill, but clearly I have managed to be. I accept the Chair's ruling on the matter and I will not continue with my list.

If I were to try to sum up my greatest reservations and criticism of the Government's economic strategy it is that it is essentially divisive; it is essentially helping the better off and placing a greater burden on the lowest 25 per cent. It is striking how as a people we can tolerate grinding poverty, grinding debasing inhuman poverty, inhuman conditions in our society. To some extent, there is a failure by the media as well to bring home to people the conditions in which their fellow citizens are living. We had a very generous response to the publicity for the people in Campuchea. In 1980 we need to concern ourselves very deeply about poverty and deprivation and the lack of social justice in our society. Both politicians and the media can play a part in communicating to people who would respond more generously and more seriously to the kind of overall problems facing the country. If the economic strategy is still entirely geared on pumping the economy and on pumping the private sector in the hope that they will turn around and start employing people as a priority value, that does seem to me to be very close to the reality and the values of the private sector. If the Government will take the real plunge and make a commitment to use a national development corporation type approach and to use the public resources of the State to develop the economy and expand in the possibility of jobs, then it will be borrowing a little from the Labour Party approach and philosophy. There is nothing wrong with that. Governments should be in the business of borrowing good ideas, but there they would have a much better chance of using the natural and human resources of the State to meet the challenges of the eighties.

In dealing with the Appropriation Accounts the economic aspects relating to these are certainly the most important. Perhaps they should have been emphasised more, because we are probably facing the gravest economic crisis which has occurred since the second World War. A far graver economic crisis is approaching than even that of 1973. At that time the increase in oil prices occurred against a background of a relatively buoyant world economy. Even so, it had enormous and deleterious effects which were only very gradually being overcome. The World Bank as quoted in the autumn report of the Central Bank refers to:

the broad global pattern of current account balances, the Report points out that several years of progressive reduction in the disequilibrium between oil importing and oil exporting countries came to an end in the first half of 1979, when a succession of oil price increases culminated in the decision taken by members of the Organisation of Petroleum Exporting Countries (OPEC) toward the end of June to put into effect further large price increases. These price changes occurred against a background of rising demand for oil and the impact of the Iranian situation on the supply of oil, which together pushed up spot market prices early in 1979; and they have been accompanied by similar changes in the pricing of oil exported from other countries.

Although the exact implications of the new OPEC prices depend on a number of still uncertain factors.

The report nevertheless estimated that there would be a 60 per cent increase in the 1978 prices of oil:

With such an average price, the current account surplus of the major oil exporting countries will be raised to an estimated $43 billion in the calendar year of 1979 and to more than $50 billion for a full year beginning in July 1979.

That report is already hopelessly and totally out of date. Since then there have been further vast increases agreed or brought into effect by OPEC and yet further increases are in the pipeline. These are particularly relevant, unfortunately, to our Appropriation Accounts because 80 per cent of our energy requirements are dependent on imported oil. There is no way that we can possibly avoid the enormous bill which will result. Against this very serious situation we must consider the present accounts.

The accounts go into great detail. They deal in matters varying from so many billion dollars right down to £95 for two abortive journeys by hired lorries. Nonetheless, I wonder if the Minister could consider the suggestion that perhaps the Comptroller and Auditor General in future years, instead of merely giving us a comparison between one year and its immediate predecessor could, perhaps, for the major statistics, such matters as customs and excise yield, give a ten year summary of the changes. This would be much more valuable and would give us a great deal more information than that presented under the present format, if that were at all possible, and technically it would not be very difficult.

In this new situation it is only right, proper and necessary that we should take prudent note of that. Hitherto unemployment has been the major matter to which attention had to be devoted. There is no doubt that striking progress has been made in dealing with unemployment. It is probable that a very high percentage of adults who are ready and available for employment have opportunities for taking it up. It is common knowledge, although it is not often referred to in this House, that it is, in practice, extremely difficult to get anyone to fill vacancies in certain jobs even though they are advertised many times over.

In certain industries, such as the computer industry, there is something in the region of 2,000 potential vacancies. Some of this relates to our traditional patterns of education and leanings towards certain types of jobs and employment. Our counselling services in the schools should give more attention to the newer and more potentially rewarding industries and types of industries which are becoming available.

Another area where in the future, there will be many opportunities in this country is the micro-chip industry. It is necessary that we should provide opportunities in technical colleges for technologists and others to participate in that and ancillary industries as opportunities occur, rather than having to import people from outside. Apart from the increase in jobs that have been provided, in the manufacturing industry no less than 17,000 new jobs were created last year, we have also had a more important increase from a long-term point of view. That has been the increase in investment which has taken place. From being a country in which investment was relatively limited we have now reached the stage in which we tend to have a higher proportion of GNP going into investment than that of many other countries, far higher than Britain and even higher at present than the Federal Republic of Germany. A great deal of this is foreign investment but there has also been a very substantial increase in domestic investment. This is something which augurs very well for the future.

We do not give ourselves sufficient credit for the way in which our economy has been transformed over the years. I am not referring to the transformation which has occurred under the present Government, although this was an excellent effort which has not been fully publicised. But in general terms Irish Governments have made a magnificent job of transforming what was basically a very unsophisticated and primitive agricultural economy into what is now a modern, industrial economy which is competing very successfully in world markets, which include some of the most advanced and competitive nations. We are now one of the world's largest exporters of pharmaceutical and electronic goods.

I referred to the micro-chip industry. People do not fully realise the enormous importance of having attracted to this country one of the major micro-chip concerns. This may well be one of the crucial factors in the continued development of the economy throughout the eighties. All this has been achieved in the face of great difficulty. Other speakers referred to the increase in GNP and so on which has occurred while other countries were, in many cases, having a negative change, certainly far less than we have been having.

There is another aspect to our development which has not received as much attention as it should. It is that we have managed to develop our economy so that it has become much more broadly based, not only in terms of being an industrial economy as opposed to a purely agricultural one, but also in terms of markets. We have got away, very substantially, from dependence on the British market. A few years ago 70 per cent of our exports went to the British market and the rest of the world took up only the remaining 30 per cent. We have now got a much more even balance with about 50 per cent in each direction. The figures are about 47 per cent and 53 per cent.

There has been a lot of talk about taxation. Quite rightly, many of those in the PAYE sector feel that they have an excessive tax burden. This is something we must look at. It relates to the fact that we have an extremely small tax base and a relatively high public sector borrowing. Senator Whitaker has commented on the size of the public sector borrowing and the considerable proportion of our current spending, 23 per cent, which goes to servicing the public debt. This in turn has many other inevitable consequences. People have spoken about monetary control but it is extremely difficult to institute it effectively when there is such high public service borrowing.

We have an open economy which has been exposed over many years to the British economy. Whether we liked it or not, as the British economy inflated, we inevitably, sooner or later, followed course. We had no choice. We have imported inflation. Our linkage to the currencies in the EMS, which are relatively low in inflation, will mean that, in due course, inflation here will be reduced. It will not be an easy job but a very long, difficult, hard course. It will mean that we can no longer award ourselves either wage increases or any other earnings which we have not genuinely earned.

This takes us on to what the general public today largely think of as, perhaps, the most immediate problem in the sense that it affects their day-to-day lives, and that is the problem of unofficial strikes. We must take action here. If we cannot deal with these unofficial strikes, particularly in the essential industries, we will not be able to handle the economy successfully or do all the things we would like to do in relation to the social services and the many other deserving causes and matters to which, I am sure on both sides of the House, we would like to give more money. The economy is not sufficiently strong and if we, by our own foolish actions, prevent it from growing, we cannot look after the people who really need to be looked after, the aged, the children and many other deserving people.

I agree with a great deal of what my colleague, Senator Mulcahy, said but I would be slightly less sanguine. We are facing an extremely serious economic situation which will be extremely difficult to deal with and will require the co-operation of all people, not just the Government alone although they must obviously play their part, a key and major part. It will need a great deal of help from all of us at all levels.

There has been a lot af discussion on the question of Ireland developing its world markets and competing on world markets. We have touched on very broad areas of the economy and on an Appropriation Bill this is a very suitable activity. I intend to limit myself to one small area and I will follow the admirable example of Senator Conroy and be brief.

In any discussion on the development of this country and the role that the various Departments which we are discussing today play in that development, it is extremely important that we keep in our minds the fact that we have one disadvantage, which is a very large disadvantage, indeed, to the Government Departments which are trying to bring us forward economically and in every other way. That disadvantage is that we are an island country. We are, in fact, an off-shore island of another island, and this creates for us enormous disadvantages. It means that we must develop, and we must study very carefully how we can overcome those disadvantages with modern transport methods.

Therefore what I am about to discuss has to do with these Departments which look after tourism and transport and industry and commerce. We rightly vote large sums of money to both of these Departments. If we examine developments in the past year, it seems that there has been some kind of schizophrenia in the area of the Minister for Tourism and Transport. You would imagine that we would be encouraging cheap travel in and out of this country, that we would be encouraging people to be able to move around and to explore our markets, and encouraging tourists to come here from where ever they wish to come. Unfortunately, earlier this year the Irish Government, in the person of the Minister for Tourism and Transport, made a decision to force Trans America Airlines, who are not a member of IATA, to increase their price. They were flying people in from New York to Shannon and on to Amsterdam. They wished to have a very low air fare from Shannon to Amsterdam as it is the last leg of the journey. The Irish Government, under pressure from IATA, agreed that the IATA-type fare would have to be imposed. They increased the fare from something in the area of about £30 to well over £100, which is the standard IATA fare for that leg of the journey. That seems to me to be an extraordinary thing for any Minister to do.

You cannot look at it in isolation, because the Minister for Tourism and Transport has to look after Aer Lingus. Aer Lingus are bound by the rules of IATA and IATA were founded in a post-war situation because of the fear of American domination of civil aviation. Such a decision to stop an airline giving a cheap fare from Amsterdam to this country and from Shannon to Amsterdam directly closes off one large area of tourism, and it may well be closing off a large area of businessmen who may wish to use that route as well. The system of being tied in to the IATA structure needs examination.

In a debate in this House almost exactly a year ago we discussed at length the London-Dublin air fare. Since that debate the fare has now reached the level of £85 for a distance of 290 miles. That is the normal fare paid by business people. Anybody who cannot plan to go at specific times, or plan ahead or a person who wishes to do business in London or a businessman in London who wishes to come here, must pay that very high fare of £85. To get from Los Angeles to San Francisco you pay £18 return. I know many problems have been facing Government Departments in all areas because of the oil crisis and the dramatic increases. In the past few years since the oil crisis broke, the increases in air fares directly attributable to fuel price increases are only 14 per cent of all increases, so we cannot blame the £85 London-Dublin air fare on the oil crisis.

Some Senators will be aware that it was questioned in the European Parliament this year whether or not IATA are legal. I should like to quote a gentleman whom we have all heard of and who has been in touch with this Government during the past year, Sir Freddie Laker. He considers that the present system of European air transport is illegal, and he intends to campaign for unrestricted air travel throughout Europe. In other words, he intends to campaign for an open skies policy.

It is worth-while reminding ourselves that the initial Laker fare from London to New York was £59, which was also the Dublin-London fare in September 1977. The Laker fare into New York from London is now £70, and the Dublin-London air fare is £85. I stress the importance of this for our Minister for Industry and Commerce and our Minister for Tourism and Transport because the London-Dublin route is the second busiest route out of London in Europe, and when you think of our position that is easily explained. We are an offshore island. Aer Lingus and British Airways have a monopoly on that route. They carry one million passengers each way every year and they are getting away with charging this £85 fare. Senators should be aware of the implications of this for the business community.

I might mention that the publication of Bord Fáilte called Link, which is a publication for the travel trade, in December 1979 issue says it is expected that fares ex London to Ireland will be increased by 8 per cent from January 1, and fares ex other UK points to Ireland will be increased by approximately 15 per cent. This was the first I heard of these suggested increases. I wonder when the Government will tell us about them, or will they tell us about them on Christmas Eve? There has been a debate on this issue in the European Parliament. All European countries will be faced shortly with this question, because the Commission are inquiring into whether the whole IATA structure is legal.

It has a particular relevance to Ireland where we are very much dependent on this form of transport. The attitude might be: "Businesses can afford it. We will use businessmen to subsidise those people who cannot afford it." No matter who is paying for it the end result is inflationary and damaging to development. It is damaging to tourism because it cuts off anybody who takes a sudden notion to hop over to Dublin. It is unfair to expect business passengers to subsidise other travellers. The Government have not decided whether Aer Lingus are providing a social service for which the taxpayers who can afford the £85 fare will pay, or whether they are supposed to be a self-supporting body.

Those are all the remarks I want to make on this Bill. There has been a long and exhaustive debate on all aspects of Government policy and actions in the past year. This is one small area which is of great concern to me. It will bear examination and the Government should take a decision on it in advance of being forced to do so by the European Parliament or the European Commission.

Cuirim fáilte roimh an Aire Stáit nua, Tomás Mac Alastraim. Ba mhaith liom chomh maith cur ar an clár mo bhuíochas don iar-Thaoiseach, Seán O Loinsigh, as an seirbhís a thug sé dúinn i rith a réime. Cuirim fáilte chomh maith roimh an Taoiseach nua, Cathal Ó hEochaidh, agus na hAiri, agus guim orthu go n-éireoidh leo sna hiarrachtai ata futhu. Ba chóir é sin a rá mar níor chuala mé aon duine á rá sa Teach go dtí seo.

The Appropriations debate is useful. It provides the opportunity for Members of this House to appraise the performance of the administration and of the economy during the current year and perhaps to make some assessment of the public approach to our affairs and to the future prospects for the economy.

We have had over the past couple of years a considerable improvement in the employment sector Three years ago one of the major points of focus in the minds of people was the substantial number of those on the unemployment list and the substantial number of young people coming on the market looking for work. Considerable credit is due to all those who over the past couple of years since the last election have participated in the drive to expand industry and provide employment. If we are thinking in terms of justice to the ordinary person, the right to work is the top priority and the creation over the past two years in the productive sector—I distinguish between that and the public sector—of nearly 40,000 new jobs is an achievement of which we all should be proud.

Some recent election results would indicate dissatisfaction with the administration but my own experience in Cork recently, where two by-elections took place and where there is virtually no unemployment problem, was that the feeling among some people was that if you had a job you did not have to worry and you did not need to vote. Nevertheless, the responsibility on any Government to provide for young people coming on stream the right to work is one that cannot be set aside.

On the other hand, problems are developing for the new Government. We have a level of inflation which is not acceptable. We have a level of increase in prices in the housing area, as we had also in the land area, tending to accelerate the inflation level. We have excessive borrowing and excessive expenditure by the State, and we have had during this year a fairly clear breach of the guidelines laid down by the Central Bank to the banking system in the provision of credit for their customers, thus accelerating the increased level of prices in housing and in land. This has been remedied but the economy is to some degree still suffering from the after-affects.

Other factors increasing the level of inflation are salary and wage increases above what is economically sustainable in relation to the performance of the economy. We are all aware that there are factors in the inflation spiral which are beyond the control of not alone the Government but of our economy. The price of imported energy is one over which we have no control whatsoever and the same applies to the price of imported goods but there are areas which, if not under the control and direction of the Government in relation to the inflationary spiral, are certainly under the control and decision of ourselves as a community and of the many sections of the community who seek what they see as their rights. We have seen also during the year a number of unsatisfactory or undesirable strikes, particularly in the public sector. These caused a loss in potential job creation, particularly in relation to the Post Office strike with its effect on tourism and on the economy. It is a bleak picture but one should try to be as hopeful and optimistic as possible. Perhaps as a result of these experiences during this year some people may have learned a lesson, and we may not see a recurrence of that irresponsible behaviour. We are moving into the eighties and there is a need for all of us to examine our attitudes towards our life here and the performance of the economy. We, the State, the trade unions and management in industry, have shown ourselves capable of succeeding where we wanted to and where we got the right lead. In the case of the recent Papal visit full co-operation was displayed between the different sections. Telephones were provided in places that might not have got a telephone for the next couple of years. It demonstrated, to our own surprise and certainly to the surprise of visiting journalists, our competence in achieving a target where we wanted to achieve it.

The question posed by the visit of Pope John Paul II was, did we merely regard him as a visiting head of State like the late President Kennedy, who got a similar reception, or did we take to heart the things that he talked about?

Indeed, did we, as a community learn the lesson that we need to take a look at our behaviour as a people, and our responsibility to our community. Mention was made earlier in the debate of the malaise that seems to be affecting us. In some areas there is no doubt but that we are suffering from some form of malaise. If we look at the Appropriations Accounts and study the receipts area we find an extraordinary level, for example, in the excise revenue. Even in the accounts for the past two weeks we have an increase in the excise area of as much as £28 million and a total up to last week of £450 odd million. It is necessary for us as a people to take a good look at ourselves and ask what we really want.

I do not intend to take up too much time in the House on this area but it is worth pointing out that in the earlier part of this century we, as a community, or those who went before us, were motivated by a common aim, first of all, to achieve freedom for ourselves and then to use that freedom for the benefit of the community. Unfortunately, in the establishment of the State we experienced considerable set-backs. Progress was blunted by a descent into civil strife. Not only was the strong motivation of national idealism blunted by that but perhaps because of the divisiveness of the period, the lack of political co-operation during that period, we failed to set many of our institutions of State on a new road more suited to the requirements of our people than to the previous era. During that period however we did make considerable progress. I believe that one has to seek a little further to find an explanation for the present atmosphere of what I would describe as sectional divisiveness, for the fairly high level of personal selfishness, one might say cynicism, and for the unsatisfactory level of industrial relations, particularly in the public area.

There is no doubt about it that today and for many years past the Irish community is and has been dominated by the demands of interest groups seeking their own ends, indeed threatening to disrupt the economy and the prospects of people's livelihoods if they do not get their way. Perhaps one of the reasons for the lack of the sort of motivation that inspired earlier generations has been the impact on us as a people of the Northern Ireland tragedy. I say that because certainly up to the fifties there was the hope that progress could be made in the attainment of national ideals. I believe also that the last ten years have brought us face to face with two rather unpleasant facts. One is that the public mind has begun to realise that the level of intransigence that exists in Unionism in the North of Ireland, apart from the complication of British involvement in the affairs of this island, and the level of resistance towards a policy of reconciliation with the people of Ireland as a whole, is so strong that there does not in the public mind appear to be any prospect of any sort of agreed reconciliation, any possibility of not alone political co-operation between that part of the island and ourselves but indeed between the two divided sections of the Northern community.

The second fact which impresses itself on me is that we have seen violence of a kind never experienced before. I believe it has tended to turn the public here away from belief in a national ideal of peaceful development on this island, that in some sense the ideal has gone sour, certainly if the levels of violence which have been applied are to be seen as justifiable in order to achieve a true idealism. Despite that we must persist, whatever may be the obstacles, in seeking reconciliation, peace and some sort of sane working relationship on this island. The fact that there is a national dilemma, which is causing an undercurrent of frustration, cynicism and apathy, does not absolve us, apart from seeking reconciliation, from continuing our efforts to use the self-government we have to build a better society in this part of Ireland.

Therefore, we are left, coming into the eighties, with a society which to a considerable extent has become divided and more materially orientated than is good for us, or certainly than is necessary for us to sustain life. Some may say to that, "So what?" At this stage the answer must be that we are, despite what Senator Mulcahy said earlier, living beyond our means as a community. We know that at the end of this year there will be an excess in expenditure abroad on the import of substantially consumptive goods in excess of £600 million. We know also that, as a State, despite earlier targets, we will in all probability have overspent to the tune of about £500 million.

The overall statement of receipts in the appropriation accounts totals just over £2,000 million. Included in that are the current areas of controversy: income tax, sur-tax, corporation profits tax—part of which is the PAYE tax of £609 million—corporation tax £100 million, value-added tax £415 million and so on. We have a situation where the taxation system is under attack and we are also dealing with a current Exchequer receipt which will be substantially short of what is needed to run this State. There is justification for the reform of the attitudes in relation to our taxation system. For example, in this country because of the narrow base the maximum level of tax at 60 per cent is reached somewhere above £9,000 per annum, whereas a person working in Britain earns almost two-and-a-half times that before reaching the top level. In West Germany and other wealthier economies, one can go five times the level that is allowable here before being in the upper taxation bands. From that point of view it is understandable that there is discontent. I believe that there are areas of our tax code that are not suited to our requirements. The system encourages evasion and leads to envy and a sense of grievance. It encourages deceit because it is possible to draw social welfare and to work on the side and pay no tax. It encourages laziness. We have the experience in industry of people leaving off work because they have reached the higher tax level.

In this area, therefore, there is a major problem facing us and it cannot be solved other than by a thorough examination of the entire taxation system. That examination needs to be undertaken, not by the Revenue Commissioners whose function is to collect, but rather by trade unions, employers and, if it were practicable, by representatives of all parties. We need examination of this system as if we were setting up a new State and devising a budget and a tax system according to our circumstances and to suit our needs.

I referred to the problems of industrial relations. We know that this area needs serious and urgent attention. On the bright side, we have a wonderful record in the private productive area. The example was given earlier of the findings in the United States which showed that the smaller units are best. The example being given by competitive industry here exporting out of this country of a satisfactory industrial relations system is an indication that part of the problem lies in the difference between the need-to work, to compete, to co-operate between management and worker in securing essential export markets and the apparent lack of need in this regard in the public monopoly areas.

From my experience this year in several elections, I have found that the public mind is very clear on this issue. People have said that these strikes should not be happening and that it is the duty of trade unions, management and Government to get down to setting out a fair code of industrial relations. The public expect to be protected against unnecessary and damaging strikes which they see to be directed against them and against those more in need and less able to fend for themselves. I have even found that the industrial relations unrest we have been through during this year has, to some degree, created a lack of confidence in or cast a doubt on our ability as a people to govern ourselves, and some doubt not alone on our political institutions but also on our political parties. This is far too serious a question and it is one that we, as a community, must face up to, because too many wrong and irresponsible things have been happening in the industrial relations area. It is not helpful to blame any handful of irresponsible workers if the position is that they have a right to stop others from working and that a majority of workers have not easily available a similar right.

If we have to accept the position that a majority in an election decide who the Government is to be then the same principle should be clearly set out by democratic ballot for any group of workers, particularly in the essential public service area. People do not understand why the privilege of secure employment in the public areas concerned should be used to threaten and deprive the public of essential services to which they are entitled.

The new administration has also to face problems in relation to what has happened to the price of houses and to the availability and the cost of credit. This is one of the major problems, outside of the local authority housing sector, facing young people today. We may need a reappraisal of the role of the banks and financial institutions in relation to the credit allowed and the areas in which that credit is allowed. The other area I want to deal with is in relation to the announcement a few days ago that the subject of energy will become a new departmental responsibility. I welcome this decision. One of our main preoccupations during the coming decade will be the question of energy and the economic and social problems that will lie in this area. It certainly will be a critical area for a small, rapidly developing economy such as we have in Ireland and there will be a very grave need for a stable supply of energy.

Having listened to debates in the European Parliament last year, I was conscious of the very serious attitude being adopted by the European Commission towards this problem in relation to Europe and the possible serious situation in the event of a crisis of world dimensions where Europe was dependent to the level of 60 per cent on external oil imports and the dangers inherent in that to employment. As we all know, we are far too dependent on imported energy. I believe we need an alert and active programme on conservation.

Senator Mulcahy earlier today referred to the problem of traffic in Dublin city. I refer to the hundreds of thousands of motor cars moving in and out of our towns and cities every day, nearly all of them with only one person in the car. At the same time, our chaotic public transport system is at times virtually choked and unable to move because of the motor traffic. This must be a large area of waste which imagination and leadership should be able to deal with. In that context, I believe the recent demands for a national transport planning authority are justified. I think we are not really seriously attempting to solve this major problem, although I agree with the suggestions made by Senator Mulcahy in relation to the city.

There are, of course, many other ways of conserving energy. In relation to our own needs all we have got at present, independently, is hydro-electric power. We need rapid experimentation on, for example, the development of wind power. I am told this is not as economic as one would hope, but perhaps we may be looking at a future when every unit generated independently will be of considerable value. One resource we have and which we are not using in the energy field is land, particularly many thousands of acres of cutaway bog which are lying virtually idle. We also have other large areas of idle land. The Department of Industry, Commerce and Energy recently cleared the decks for a pilot scheme in experimenting in biomass for energy production. Recent estimates, I understand, indicate that the production cost of energy in this area through a rapid rotation of tree planting may now have reached the cost price of imported fuel. If that is the case, this might be the place where we might adopt a springboard and move forward. We have the land. More than half our population are in their early twenties. If the cost factors referred to are correct, as a community we should be considering an active programme in the development of our own resources through the use of our land.

Listening for the past number of hours to all the various contributions with considerable interest, one must have great faith in this democratic process to go on hour after hour speaking on this subject when, at a time like this, there is not much new to say and, remembering what I often heard when talking to people, that they are not really listening to what you are saying. Most of them are thinking of what they will say when you are finished.

Thinking about the whole question of power which was raised from the point of view of local government, I tend to ask myself about the power of this House and the Oireachtas generally in relation to the economic matters we are discussing. Some of my doubts tend to be increased by the fact that we have seen so few Ministers appear in this important debate, and the fact that the Minister for Finance is not available. One wonders whether all our suggestions are being taken seriously, will be taken seriously, and listened to. I hope they will. I have not completely lost faith but I tend to think that, if this was an annual price review with the Irish Congress of Trade Unions or other bodies like the IFA, the Minister would present himself to hear their views. That is why I worry about the future of democracy as we know it.

Economic matters have been fairly well covered, although I will briefly return to them. Senator Robinson spoke about the problems of the urban society, the breakdown in marriages, family problems, housing problems and all these things. I was conscious of all this. I come from an area where average incomes are the lowest in the European Economic Community, the lowest in Ireland. We have one sort of problem in the Dublin district, where there is one-third of our population, and we have another problem in the area I represent. Solving my problem would certainly contribute to a great extent to a solution of the problems in the Dublin area.

We discussed the institution that is being provided for the detention of juvenile offenders. That institution is very near where I live. I know quite a number of the people who are employed there, but I have not yet known a single person of my acquaintance to be committed to that place of punishment or detention.

I take a lot of clinics in the heartland of this most deprived area in the west. I travel 40 or 50 miles on a Saturday evening and I meet people. I accept what Senator Robinson says about the problems that come to her notice in the urbanised areas. It is remarkable that I have not had a single problem of the type she mentioned—the breakdown of marriages or difficulties relating to it. I appreciate that this is the difference in the two societies in which we live. Therefore, I reflect on the economic situation which is creating her problems and the economic situation in which the people I represent find themselves. We have a wonderful society in the west which has few of the problems that are becoming serious in the twentieth century. What we need is the economic development of that area in order to prevent the movement of people from it, which would only aggravate the problems in the urban areas.

I said we had the lowest average income, and that is true, but I did not say anything about poverty. While we may have the lowest average income, we have not got the sort of poverty we read about and hear about and observe on our visits to the more deprived areas of Dublin city or other urban areas. We have not got that sort of poverty and when our young people are pushed out of the agricultural rural society in the west and when they find their way to Dublin, or London for that matter, they do not find themselves participating in the lower levels of society—they are not the people who will have to go without jobs, and they create an employment problem for other people by taking up the jobs which people born and brought up in this environment should be getting. That will always happen because the background from which they come leaves them more employable—most of them have had experience of work. They will not be the drop-outs of the urban society but they will contribute to its problems.

Along that line I will refer briefly to a grievance I have had for a number of years about what happens in regard to the EEC Regional Fund, the money that is provided for the development of the less developed areas in the Community and the way that money is taken and put into our budget and is not passed on to the west of Ireland for the development of industry and infrastructures which would enable those areas to maintain their present structures of population and to survive and progress from an economic point of view. I do not want to labour that point. I would ask the Minister to take note of it and to appreciate that the people in the west of Ireland feel very aggrieved about the fact that this money, which was of rather less significant proportions in the early years at £6 million or £7 million annually, has now reached the stage when it is a significant amount of money.

It is obvious that the common agricultural policy has not brought about the development in the west that one would have expected and that the vast bulk of the benefits from that policy have found their way into the richer areas of the country where agricultural production is higher because the benefits from the common agricultural policy as it is at the moment are directly related to the level of productivity on a farm and therefore the benefits of this policy are not enjoyed in the west to the same extent.

In regard to our towns and villages, it was observed by the Agricultural Institute that there has been three times the growth in spending in the purchase of inputs for the agricultural industry in Munster and Leinster as in Connacht and Ulster. For that reason I ask the Government to look at the spending of the regional fund and not to use that fund just as a substitute for schemes already in existence. That is what has been done with it from the very beginning. I do not think this is the best way to spend the money.

The whole question of the economy has been well discussed. The common belief throughout the country is that the present economic difficulties were brought about directly by the promises that the Government made of relief in taxation for short-term gains to sections of our community, particularly rates on private houses and tax on cars.

All of these taxes were replaced by other taxes designed to bring in even bigger amounts of money, and the difficulties the economy faces now are therefore not directly the result of the relief of those sections from taxation because they were replaced by an increased farmer tax, increased social welfare contributions, the abolition of food subsidies, the value-added tax on road making materials—a thing which most people failed to take any notice of—a reduction in the number of medical cards, limit on spending by local authorities and a resultant decrease in the amount of money which could be provided for them from central taxation. Health contributions for the self-employed are really a new form of land tax that has been imposed unnoticed throughout the farming areas. There have been increased rates on agricultural land and now we have evidence of a new campaign to impose rates on agricultural buildings. All these things are providing more revenue for the Government than the taxation relief conceded to a section of our community. That is not the problem.

One of the things I would like to see is that in our educational system we would incorporate some sort of course to explain to young people in their final years in schools how the economy works. I do not think that the course need be very extensive or expansive. It is the sort of basic education that could be given to people which would prevent politicians, trade union leaders or leaders in all walks of life from deluding these people into thinking that there are some means by which financial concessions could be made, jobs could be created, improved standards of living provided without a direct effort by the citizens: that the benefits they would get would be in direct proportion to the efforts and the investment that they made in this area.

It is pitiful to hear the sort of requests that are made to public representatives by people generally, requests that we should in parliament speak for them, as if that meant anything. Recently I had to create an enemy for myself because I refused to make a promise that I would raise in the European Parliament the question of a particular river. It was the same as if it were here. I said there was no procedure by which it could be raised, that there was no fund from which I could suggest the financing of the improvements that were requested. I pointed out that raising the matter by me would simply be idle work and I was not prepared to do it.

This cannot be seen by people who all their lives have been led to believe that politicians and leaders generally can make these sort of promises and by some means or another hope to fulfil them. People believe that around a table in Dublin 15 people can solve the problems of this country. At the last election the greatest crime that was committed was not those promises, however misguided they might have been, but the attitude that was fostered in the minds particularly of the very high percentage of young voters, that by voting for the right people they could contribute to a solution to all our problems. The reaction in the Cork by-election was of people who knew that this had not been done.

It has been pointed out by experienced politicians time and time again that the electorate have very short memories. Therefore, perhaps a change in our educational system, some effort to get into people's minds in their early years some sort of theory regarding economic realities might prevent politicians and others from taking this sort of advantage. These promises, this raising of expectations, have brought about in-discipline right through our whole community.

There are many comments we could make on the present economic situation. I could agree with Senator Brennan that we could and should give ourselves bouquets in certain areas. We have done remarkably well, but one must consider that most of our successes have been due to the industries that we have brought into Ireland and, because our economy was small, the impact these industries have had. We are boasting about 17,000 new jobs. We know we have got single industries with employment potential for 1,000 to 3,000 and this gives us some indication of how easy it is to solve our unemployment problem. We are in the European Economic Community and we are an area which attracts particularly American industry. They are the people who have solved our unemployment problems.

No Government throughout the years of our development have the right to grab credit for the success we have enjoyed in that area. We should recall that when the National Coalition left office we had the second highest growth rate in the developing world, and the jobs which resulted in the following two years were due in no small measure to confidence in our economy created by the fact that in those years of tremendous difficulty we succeeded in achieving that sort of growth rate. When I heard an outgoing Minister state that a bad year, bad weather and the oil crisis had contributed to his failure to achieve his target, I did not say he was dishonest: I believe these things contributed, but what did the same people say when we said that in 1974?

That is the sort of dishonesty that encourages cynicism, particularly among our young people, that will create the kind of climate in which they will not accept the warnings which we give to them in times when we are disposed to be sincere and in which they will not accept from us the sort of solutions we offer them, when only a year or two earlier we had tried to believe that all these problems could be solved by simply producing a magic wand.

There are a number of points that have come up in relation to the whole question of the economy. Senator Mulcahy, as Senator Robinson pointed out, is to be commended on the manner in which he defended the performance of the Government. Indeed with Members like Senator Mulcahy on that side of the House I can understand why Ministers are not sent in to bear the responsibility for the policies being pursued by the Government in office.

However, when he made a point about taxation and how it is a smaller proportion of earnings in this country than it is in the Federal Republic of Germany, one must remember the difference between the average earnings and consider that the lower your income the closer you are to a subsistence standard of living and the higher your income becomes the more it is possible for the Government to take away without creating any hardships, because after all we are in a Community where prices are tending all the time to level themselves out and where the necessities of life being bought in one country or another in this Community, if you shop around—I am not talking about the main streets of Berlin or Brussels or Dublin—can be got at fairly close to the same price in every part of the Community.

That is why our level of taxation, as applied, hits far harder at living standards than does taxation in the Federal try than does taxation in the Federal Republic of Germany. Considering all our economic problems, we must remember a point that has not been sufficiently emphasised. It is the whole question of productivity. If we compare our GNP per capita with that of any other country in the European Economic Community we find that there is the answer to the problem we face. As long as the average German worker produces almost twice as much as the average worker in Ireland, naturally we are going to find ourselves in a situation in which we cannot compete with them and in which we will be dependent on the European Economic Community for their favours and for them to make the moves towards economic convergence to give us the opportunity to enjoy their sort of standard of living.

Industrial relations is a serious problem. As an employer, I cannot honestly say that the workers of Ireland are to blame for what has happened. All sections of our society are equally to blame. Recent surveys in the United Kingdom have found that though British manufacturing industry has been losing its competitiveness in relation to other industrial nations in Europe, British agriculture has been improving its position. Analysing the situation they came to the conclusion that the reason for this was the closeness of the British labour force in the agricultural industry to management, the fact that management worked along with them, that management understood them, that management worked together towards the objectives they had set for themselves and that consultation in every area of development always took place.

There is something to be learned from that. Our industrial relations can only be improved if we resolve at every level to make our workforce conscious of where they are going, of their place in the community, the importance of the role they play. If workers see management, trade unionists, politicians and everybody else making the sort of effort and having the sort of commitment that they expect from the average worker, then together we can solve our problems. It goes without saying that sometimes we have trade unionists taking advice from trade union leaders who are not really concerned with their well-being but with political power.

Yesterday evening, in discussing another measure in this House, the Minister of State at the Department of Agriculture commented on the effects on the national economy of decisions taken by the European Parliament recently. This is very relevant to what we are discussing today, because naturally we can point not only to what the common agricultural policy has done for farmers but also what it has done for Ireland. One thing people do not generally remember is that six years ago expenditure in the area of agriculture was something like 14 per cent of our national expenditure. Today it is between 3½ per cent and 4 per cent, which means that the opportunities for investment in education and industrial development and so many other areas would not be there if we had not been relieved by the common agricultural policy of the necessity to carry out these expenditures.

I would like to correct any misconception that people have that the European Parliament, or any decision of that Parliament, would put in question the future of the common agricultural policy. Nothing could be further from the truth. The first point to remember is that the motion voted on by the European Parliament contained two paragraphs one of which stated that the main concern of the European Parliament was to eliminate the problem of surpluses within the Community because of the risk they posed to the common agricultural policy. In other words, the Parliament was concerned that the problem of subsidies would kill the common agricultural policy and therefore they said that we must come to terms with it. The Minister of State, Deputy Hussey, did not appear to understand that.

I noticed that at a meeting of the Council of Ministers, as reported in the Irish Farmers' Journal of last week, the place of the Minister was taken by the Minister of State, Deputy Hussey, and that the spokesman representing Ireland's point of view was the Secretary of the Department of Agriculture, Mr. O'Mahony, who made a statement which, according to the report, took many observers by surprise but one that was in fact prepared and sanctioned by the Minister. The report goes on:

In it he said that Ireland recognised the cost of the Common Agricultural Policy would have to be controlled, and that the creation of long term surpluses would have to be curtailed.

If the Parliament is challenging the existence of the common agricultural policy, I want to point out that there is no difference whatever between the Parliament's resolution on the question and what the Minister has said and admitted, and with which I agree. I would support the Minister in that statement against anybody who might for short term political gains try to tell the people of Ireland that anything else is true. We cannot have it both ways. The Minister may not be reasonable in Europe and come back here and be unreasonable and expect that we will not hear about it—the world is getting a lot smaller and we have a very observant press.

Furthermore, I would like to state that the member of the Council speaking on behalf of the Council of Ministers and speaking, I am sure with Irish interests in view, stated that there is no difference of opinion between the attitude of the Council of Ministers and the attitude of the Parliament on the question of agricultural surpluses. A further resolution was added in case there would be any doubt about it, proposed by another group in the European Parliament, to the effect that it must be understood that the Parliament did not propose to attack the basic principles of the common agricultural policy or to destroy its structures. Nothing could be clearer and I want everybody to understand that, in spite of any problems that have arisen between the Parliament and the Council of Ministers, the people of Ireland or the Irish economy need have no worry that Parliament is preparing or proposing to dismantle the common agricultural policy.

What Parliament wants, and it is in the interests of Ireland, is that we get a further extension of the policies and that we can forever live with a common agricultural policy alone. Just as national expenditure in the area of agricultural has been relieved by the common agricultural policy, I believe we could get relief in other areas by the development of other policies. But as long as we have a budget in Europe which is seen to be spent—80 per cent of it—on a common agricultural policy and half of that on the financing of surpluses which nobody wants, or for which nobody is prepared to pay we are going to have a conflict between the common agricultural policies and others. In order to promote Ireland's interest, what we need is an extended budget for the European economic community.

With the present situation, we have nine Ministers driving, all of them seemingly with their foot on the brake and none capable of reaching to the accelerator. That problem was recognised by the European Parliament and that was the reason why I voted as I did. I do not say that all the people who voted the same way as I or my group did, voted for the same reason, or that the communists voted with the Fianna Fáil representatives in that parliament for the same reason as I did. My argument is that it is only an extension of the Com munity's present policy that can save the common agricultural policy.

The parliament was worried that, in spite of the fact that there is an energy crisis, the Council of Members reduced the amount of money in the budget provided by the Parliament for research and development of our own energy resources. This is an attitude which can only prevent funds from being devoted by the European Community for the development of energy resources in Ireland; similarly with the regional fund; similarly with the social policies, with which I do not want to bore this House. As I said at the start of this debate, for the past few years, Irish farmers have not gained any increase in prices. This is being done to prevent the expansion of the dairy industry in the community. In the last 12 months, the British Government have been allowed, by our Ministers, to give their farmers three 5 per cent increases, designed by the British Government to encourage the production of more dairy produce on bigger and much more efficient farms than we have. They, in turn, will contribute to surpluses within the community.

In fact, due to Government policy and interference, Irish farmers have taken a drop in prices. I am completely convinced that, contrary to our own confidence in our dairy industry, this will create a situation in which we will have a disappearance of 50 per cent of the people involved in dairying. The people whom we profess to want to keep in the industry are the very people who cannot understand the situation where we could not get price increases for them for the last two years; they are the people who are being slowly squeezed out. The people who can survive the freeze in prices are the big factory farms, the big mechanised, financed farms, whether they be owned by individuals, companies, co-operatives, or whatever. The people who will be pushed out of the dairy industry by the policies being pursued at present are the small farmers throughout Ireland and, particularly, in the west.

Our Ministers representing Ireland should not be worried about the attitude of the Parliament, which is not seeking to take power. In so far as the European Economic Community in its budget, wishes to concern itself with the redistribution of wealth within the Community, the Parliament wishes to have a say in how this should be done. The policy of the Parliament, which is to increase the regional fund, is a policy which dovetails into everything that we wanted and expected when we joined the Community. This redistribution of wealth can only come from a strong regional policy and this has been rejected by the Council of Ministers because they have not the courage to expand the budget of the Community. As long as the common agricultural policy is forced to compete for its financing within a small restricted budget, there will be difficulty. I suggest to our Ministers that they adopt a new and a bold approach—a rapid expansion of the present budget. It is not worth while having all the institutions of the community sitting down to discuss the present insignificant little budget. There are other areas I could touch on but there are other speakers.

This debate is drawing to a conclusion. I have had the opportunity, during the day, of listening to most of the contributions. I should like to add a few observations to what has been said here. Before I do, I join with other Senators in congratulating the Minister who is present with us and wishing him well in his office. The Minister, in his speech last evening, pointed out that this Bill would provide an opportunity for a general discussion on the Government's expenditure and financial policies. My assumption of what that would entail is precisely covered by these words; consequently, I was rather surprised to find Senator Brennan advancing the view, in reply to certain points raised by Senator Cooney, that it should be the Fine Gael economic policy that should be under discussion here. I do not believe that that is correct and if I want authority for it, it is in the Minister's statement.

In my view, at least, there is a clear role in this House for the main Opposition party. The occasions on which we have an opportunity here of discussing the economic policies of the Government are rare enough. When the opportunity is available to us, as an Opposition party, our first obligation is to discuss these Government policies and to highlight any visible deficiencies, and perhaps, suggest improvements. In addition we should analyse the policies which have been wrongly directed or mismanaged and the possible undesirable consequences.

Prompted by certain observations made earlier by other Senators, I believe that the policies that have been pursued—and well pursued by the Government during the past year, and during the previous year, but we are only concerned with the past one—have their inspiration and source in the election manifesto of 1977. I should have hoped, in view of recent changes in Government personnel, for an indication from the Minister, or some of the Government speakers, as to whether or not the economic policies that are based on and inspired by that manifesto are to be continued, to be altered to some degree, or dispensed with entirely and replaced by a new policy aimed in a somewhat different direction.

There is an obligation on us on this side of the House to examine how successful or otherwise these policies based on the manifesto may have been.

The economy is not in a healthy state at present, there are certain factors which indicate that. I list them as follows: the balance of payments situation which is quite out of line; the sharp reductions in our external reserves which was dealt with very thoroughly by Senator Whitaker earlier today; the huge gap that exists between Exchequer income and Exchequer expenditure, the high deficit in the current account, soaring interest rates tied in with a credit squeeze, discontent amongst many sections of our people and inflation now back to a level of 16 per cent.

These events have taken place, these situations have arisen, because promises that were made raised the expectations of so many people. I recall two and a half years and even a year and a half ago, our message being propagated, that for rapid economic expansion all that was needed was to prime the economic pump. That phrase was used time and again. We were told that if the economic pump was primed, if we got more money into circulation and boosted the private sector the economy would take off and there would be substantial benefits for all our people. I do not know which pump was primed, but we know that additional money was injected into circulation. The spending power of people was substantially increased but that additional money would appear to have gone towards the purchase of imported goods. In other words we over-borrowed and over-spent and as a nation and as a people we were encouraged to do so. The brakes were applied a few weeks ago within the Government party and we now have a new situation. That is the reason why I am expressing my disappointment that we have not got so far, either last evening or today, a firm indication as to whether the economic policies that have been pursued are to be continued or whether they are to be replaced in part or replaced entirely.

The economic policies that have been pursued, for the reasons I stated, have not been the right ones. That opinion is shared by many others on this side of the House and on the Government side. The question is, where do we go from here? What will the Government do now? If they are to continue with the policies that have existed up to now, with the results I outlined, that implies that we are to continue public borrowing at a high rate. If that is to be the policy how does it tie in with the commitments we entered into when we joined the EMS? If we continue on those lines all that will happen is that the problems that already exist will be greatly increased and we will be taking a serious gamble with the future of our economy. There is another option open. I would have thought that at this stage of the debate I would have had some firm indication if that option is being considered. The option is that the Government may well decide that it is time to attempt to rectify the situation, to correct the balance of payments situation and improve Exchequer income. If they decide to do that—I must in all honesty express these fears—it will inevitably mean that hardship will be caused to certain sections of our people, particularly the poorer sections.

I share the views expressed by people on both sides of the House that there is an urgent need if we are to pull through for all sections of our people to realise that they have a commitment, perhaps even a sacrifice, to make. That has been suggested to them. It is necessary but I am concerned if the Government, in view of the lavish promises of a few years ago, can generate the type of commitment and response from our people that is necessary to see us through the difficulties that confront us. The prospects for extra tax income of the size that is required are remote. There are a number of categories from which extra tax income can be obtained. The one section that has been referred to most often in this debate has been the PAYE sector. Those people are already on the streets, they are already protesting at what they consider to be a savage burden. The intensity of their protest and feelings are so great that we are almost sitting on a time bomb. They feel that they have a genuine grievance and they expect to see positive signs of what they regard as an unfair burden being relieved in the not too distant future.

Therefore, as far as additional taxation or additional revenue from that taxpaying section of our people is concerned the end of the road has been almost reached. The prospects for additional moneys from that sector are remote if not entirely non-existent. Unfortunately, for some time past—certainly for the past year—there was an undesirable and, in my view, an unnecessary friction between our urban and rural communities. There is a feeling that the farming community are not making their fair contribution to the Exchequer. In my view and I come from a rural county, the farming sector are in a state of uncertainty at present. This year, as has been confirmed by independent sources, we have seen a reduction in farm income. The confidence of the farming community has been rattled. They feel threatened with a multiplicity of duties, levies, income tax, rates and a possible resource tax on land. Because of this uncertainty, allied to the uncertainty of markets, confidence is rattled in the farming community, and production and output are down. If that is the case and if incomes are reduced, I fail to see that there is a substantial reservoir of potential tax income amongst the farming community. Perhaps, the Minister would indicate in his reply if the policy of the former Minister for Finance to extract £100 million in taxation from the farming community during 1980 still stands.

I believe that the farming community will pay a just and a fair tax, an income tax that is based on true income and where the normal offsets and allowances that are available to industrial and business concerns are also available to them. It is necessary to handle this situation with caution because I am convinced that if the farming community feel that an unjust taxation is being imposed upon them their reaction will be as vehement as that which we have seen from the PAYE sector. The farmers showed a decade ago that they were prepared, where they felt they were the victims of injustice, to go to jail and take other drastic measures. Unless the Government can show them that a taxation system being imposed upon them is a fair one, unless that can be made abundantly clear, their attitudes and their reactions will be similar to what they were in the 1960s. I do not believe that in the farming community there exists today anything like a substantial potential return to the Exchequer through taxation.

There is another sector, namely, the self-employed. Quite honestly I deplore attacks that have been made on the people within that sector in recent times. They have been identified by some Government spokesmen and by others in the community and in organisations as being almost criminals. They have been accused of engaging in avoidance and in evasion of income tax. The self-employed sector comprises a substantial number of people. Those who have launched on them the attacks I referred to would appear to regard the very top bracket, professional people and businessmen with large incomes, as representative of the entire self-employed sector. That, of course, is not correct. You are looking at the very top tier there. The self-employed sector represents a substantial body of people who have made a very worthwhile contribution over the years to the building of this nation. They have reinvested any profits they have made. They have created jobs and they have supplied essential services effectively for the community. They are now threatened with harassment by hordes of tax inspectors and if that should materialise their reaction will be predictable. It will be to reduce their activity, to retreat into their shell, and if that happens the effect will not be to generate substantial sums of additional taxation but to reduce the level of services to the public and create additional unemployment.

Details of taxation are appropriate for the Finance Bill. Only discussion of a general nature of the incidence of taxation may be allowed on this Bill.

I am sorry. I do not see any great potential for additional tax revenue. I do not know if you will allow me to refer to the potential of the old reliables as a source of tax revenue?

I do not think it is appropriate here.

I thought it would come under the financial policy of the Government. I do not propose to argue with you but the old reliables would appear to be relevant——

You will have an opportunity to talk about it fairly soon, but not on this occasion.

Then it would appear that I may express my views on other aspects of the general economic situation. I feel that there is another option which the new Government may have to consider in view of the lack of opportunities for additional taxation from the sources to which I have referred. This lack of opportunity may force them to consider another option, namely, a reduction not alone in capital expenditure but in general public expenditure. I believe that there may well be a tendency for the Government to adopt a policy closely allied, as it were, or somewhat in line with the policy of the present Tory Government in the UK.

The Senator appreciates on this Bill we may not deal in detail with taxation in the future.

I wished to point out the risks again for certain sections of our people that would be involved in a move in that direction but in view of your ruling I will not pursue these in detail. Finally, I want to comment on the effect of the present policies in relation to local authority finance. The situation is that the amount of additional finance made available to local authorities for the year just ending was in the region of 10 per cent. Inflation has already reached 16 per cent. Therefore, the effect has been a reduced volume of work, reduced activity at local authority level and inevitably that means the loss of employment to local authority workers. There is yet no indication as to whether the situation will be improved in 1980. In view of the experience of last year the effect of all that is that local authorities are unable to complete plans for their works and for the necessary activities within counties for the coming year.

I will conclude by saying this. I am concerned with the results of the policies that have been pursued by the Government. I am disappointed that we did not have an indication whether these policies are to be continued or altered. I accept the seriousness and the difficulties of the current economic situation. To come through this period successfully we would need the support and the co-operation of many sections of our people. On their present performance I doubt if the Government can generate that co-operation and that help. Perhaps events in the coming days may provide a new initiative and encourage that type of co-operation. For the sake of the future of our country and its economic well-being I hope that will happen.

Ar an gcéad dul síos fáltim roimh an Aire Stáit nua. Is maith ann é ach is dócha go bhfuil sé antuirseach taréis an lae, agus ní choimeadfaidh mé ró-fhada é.

If brevity be the soul of wit then I shall be very witty tonight. We listened to some very interesting speeches here today. Senators did their best to identify the root causes of the many problems facing the people of this State and they suggested various means of dealing with these problems. I go along with many of the things that were suggested. The metaphor of priming the pump was referred to. It is always necessary if a pump is out of action to have it primed first but it was also stated quite clearly and explicitly that when the pump was primed we should catch the handle and then work it ourselves.

Reference was made to the unprecedented majority obtained by the present Government in the last general election. That was bandied around a lot during the recent by-elections and it led people to think that there was a connection between the size of the majority and the willingness of the people to co-operate. It does not work that way. We are dealing with human beings and human beings are extraordinary, particularly in the times we are living in.

We are living in an age when, unfortunately, few people, as compared with what obtained when I was a young man, have the will to do a full day's work. Instead of earning their living by the sweat of their brow, many people at the present time wish to earn their living and a little beyond it on the sweat of other people's brows. We have dreadful abuses that were unknown some years ago. People fiddle this, that and the other, they draw dole money and work at the same time, there is tax evasion, go-slows, unofficial strikes and all these things. Until such time as we get the people back on the rails again to live as Christians should live, all the plans that could ever be made, even if the 12 Apostles came down and were installed in the Cabinet, will not work unless the people were willing to co-operate.

Something will have to be done to get people to realise the state we are in. We should launch a campaign involving all the branches of the Department of Education, RTE radio and television, which is controlled by the State, and ourselves as public representatives. We should try to coax the people back to the straight and narrow path again and try to get them to understand that we are a small country. We have no natural resources comparable with those of other States. We may have oil but so far we have not found it. We have missed many of the things which are necessary for the promotion of industry and the growth of the economy. We have no old wealth, as we say in the country. Countries like Britain have old wealth. We have the brains but, unfortunately, at the moment we have not got the will to work.

All our public representatives should exhort people to get back to the straight and narrow, to do their work and to cut out this viciousness, jealousy and irresponsibility which is putting people through dreadful hardship with unofficial strikes. We could welcome the help of the media to do that. That is not the concern of this Bill but that help would be very welcome.

On occasions like this I always think of the exhortation of the esteemed founder of our party, Eamon de Valera. His objective was a happy country where people could live in what he called frugal comfort. If we were living in frugal comfort we would be far happier than we are now. Times will be tough so let us prepare for the hairshirt. It might do all of us quite a lot of good.

I thank the Senators for a lively and interesting debate. A very large number of points have been raised covering a wide area and it will not be possible for me to deal with all of them in my reply. However, I can assure Senators that all their points will be brought to the attention of the Ministers concerned.

First of all, I would like to convey the regrets of the Minister for Finance for not being able to attend the debate. As you will appreciate, any Minister for Finance has a great number of commitments in the lead-up to the budget and this is added to by the present Minister's appointment being so recent. The Minister will be fully briefed on the points made in the debate and will give them full consideration in framing his forthcoming budget.

The fact that the budget is so near limits the reply which I can make to many points raised by Senators Cooney, Whitaker and others about the contents desired in the budget. We are all aware of the need to reduce the Exchequer borrowing requirement, but this must be done in a way which has regard to the state of the economy and to the prospects for employment.

Senator Cooney rightly pointed out that the room for manoeuvre is not great. Increasing taxation or reducing expenditure can create its own problems. Senator Cooney said that the Taoiseach had indicated that it was not intended to increase the tax burden. I feel obliged to put the record straight by saying that the Taoiseach has not made such a statement. What he stated in the Dáil on 13 December was that taxation must not weigh so heavily that extra effort is penalised to the point that it is not worthwhile, a quite separate proposition. Neither can the Taoiseach's reference to the price effects of possible taxation changes be construed as Senator Cooney has done.

One point on taxation which I must respond to is reference made by Senator Cooney to tax evasion in which he virtually condoned tax evasion and spoke of the efforts to curb tax evasion as being oppressive and having a disincentive effect on the economy. I think that this is a very dangerous attitude. Government services have to be paid for if they are to be maintained. If tax evasion is allowed to continue unchecked, it will be difficult to expect the honest citizens who do not evade tax to continue to pay their fair share when they know that others are not doing so. Tax evasion is illegal and cannot be condoned. The Government are committed to making every effort to stamp out tax evasion as strongly as possible and it is only in this way that we can ensure that every taxpayer pays his or her fair share of taxation.

Senator Cooney referred back to controversy about the 1979 budget figures and said that the outturn has proved that the budget figures were wrong. It is clear that the Exchequer borrowing requirement will turn out to be higher than expected at budget time. However, there are a number of factors which have arisen during the year which have caused this and there is no question of the original budget figures having been invalid. For example, the costs involved in the national understanding were higher than had been allowed for in the budget in terms both of additional expenditure on pay, social welfare and other items and of the PAYE tax concession which was given as part of the understanding. Other factors such as the shortage of hydrocarbon oils and the fall in sales of motor vehicles also affected tax revenue during the year. The post office dispute disrupted the collection of revenue during the year and will result in some revenue being carried over into 1980 which would normally have been collected in the current year. Again, general trends in growth and prices during the year have had different effects on revenue and expenditure. It is a combination of these developments that has resulted in the increase in Exchequer borrowing.

Senator Harte stated that we had taken steps backwards on taxation in the past 2½ years and that no progress had been made towards an equitable system. I would point out to the Senator that in 1976, the Coalition Government's last year in office, the overall level of taxation in the economy represented 46 per cent of national income, having increased from 40 per cent when they took up office. As a result of the measures taken by this Government, the overall tax burden will this year have fallen to about only 41 per cent of national income, bringing it back down almost to its pre-Coalition level. Taxpayers would be paying some £300 million more in tax this year but for the tax changes made by the present Government. Apart from the abolition of rates on private dwellings and the car tax reductions, the personal income tax allowances have been increased by 68 per cent for a single person and 103 per cent for a married couple, increases which are well ahead of the rate of inflation. It is difficult to see how Senator Harte regards these developments as backward steps.

Senator Cooney forecast that public expenditure cuts are likely to be forced on the Government and expressed a fear that these cuts will be directed towards the underprivileged. The Taoiseach did say in the Dáil last week that Government borrowing, which helps to fuel inflation and the balance of payments deficit, is too high. Clearly it will be necessary to look very carefully at the 1980 Estimates in order to ensure that no unnecessary or wasteful expenditure takes place. Senator Cooney may rest assured, however, that the Government in their deliberations on the Estimates will be very conscious of the need to look after the interests of the weaker members of our community.

Senator Cooney's assertion that a general direction has been given for a slow-down in payments is without foundation. The ending of the postal dispute left a considerable accumulation of work in Departments which make payments to the public. The special measures which were taken to relieve the situation in the Department of Social Welfare, for example, were set out at length in a press release issued by the Minister for Social Welfare on 3 December. These measures include continuous overtime working by the staff since the end of June and the press release showed the great strides which were made in eliminating arrears of payments. As a result of the measures taken, the position is rapidly returning to normal.

Senator Cooney claimed that substantial increases in social welfare benefits were given when the Coalition Government took up office but that this year the increases will not keep pace with inflation. This is, of course, incorrect. Social welfare increases have on average been greater in real terms in the last two years than during the Coalition period. As regards 1979, the increases granted in the budget, as well as the £1 per week extra granted from October by virtue of the national understanding, will ensure that the real value of welfare payments is maintained.

A number of Senators referred to the economic situation and in particular to the trend in the balance of payments deficit which this year will be in the order of £650 million. There are some special factors which have caused the deficit to increase so significantly. First, on the export side. Agricultural exports are showing very little growth partly because of the difficult weather conditions in the first half of the year and also because of a build-up in cattle numbers during the year. It is encouraging to note that industrial exports are continuing to show strong growth. The other main feature of this year's increased deficit is a high rate of increase in imports. Our oil bill is a major factor here. Up to September last the cost of oil imports was up by 40 per cent compared with the same period last year. For 1979 as a whole our oil bill will be over £450 million, so oil will be contributing more than £120 million extra, compared with 1978, to this year's balance of payments deficit. This highlights the adverse impact of the 1979 oil price developments.

Recent events have made it clear that we are likely to be faced with similar pressures in 1980. The oil price increases have also contributed significantly to inflation and they are having an adverse impact on growth. Senators will be aware that the difficulties currently facing the economy, and especially the trend in the balance of payments deficit, are being given priority attention by this Government.

Senator Murphy spoke about education. I would inform him that it is expected that a White Paper on education will be published in the new year. As regards the pupil/teacher ratio, especially in the primary pupil area, progress is being made towards the objectives set out in the Government's election manifesto. The target of there being no classes having more than 40 pupils will be reached by September 1980. This represents a substantial improvement over the last five years. I was surprised to hear Senator Murphy say that the grants for higher education had not increased and that the eligibility limits to qualify for those grants had not increased. Eligibility limits for higher education grants have been dramatically improved in recent years. The upper eligibility limit in 1976 was £2,950 and it is now £6,100. The committee to study transition from primary to secondary education were established over a year ago and comprise representatives of teachers, school managements and parents. The committee have not yet reported back.

University legislation will be embarked upon when Bills dealing with the NIHE and Thomond College, Limerick, at present being prepared, have been disposed of. The University College, Cork, library complex is the subject of a contract which has been placed by the college. Any funds needed to discharge the contract will be provided. Second level teachers have received all generally applicable increases granted in the public sector.

Some Senators referred to the problem of employment creation. Senator Harte was particularly defeatist about the possibility of making any progress in this area. The Senator referred to the fact that over a long period there had been no increase in total employment. Senator Whitaker has already replied adequately on that point, but I must stress that recent years have seen quite remarkable progress in this regard. Since 1977 total employment has increased by more than 30,000 with unprecedented yearly employment increases in 1978 and again this year. Since mid-1977 the total of registered unemployed has fallen by about 25,000. This does not take account of the many not registered as unemployed who have also found employment in this period, for example, new entrants to the labour force and the substantial migration inflow we have been experiencing in recent years. This does not deny the magnitude of the task of maintaining, much less, improving on, this rate of employment growth. In circumstances where the prospects of the world economy have deteriorated significantly, success in employment calls for a unique national effort. This is generally understood and I have every confidence that we will get the required response from the community.

Senator Staunton said that many of the jobs created were in the civil service. I completely disagree with that. It is not and was never the Government's objective to engage in indiscriminate job creation in the civil service. Out of the total 22,500 jobs provided in the period July 1977 to December 1978 by direct Government action in the public sector, in the construction sector and in youth employment schemes, only 3,700 jobs, or about one-sixth of the total, were in the civil service. The Government, however, created about 12,500 new jobs in the public sector but these included more teaching posts, extra gardaí, additional posts in the health services, clerical and support posts in the education sector as well as extra civil service posts. For these extra jobs the Government concentrated on areas of urgent need. The Government's approach was both responsible and highly selective. There was no question, at any stage, of creating more jobs in the civil service simply to boost the employment numbers.

The financing of local authorities was referred to by Senator Cooney who said that local authorities got only a 10 per cent increase in resources in 1979. In fact, the increase was 13 per cent—a 10 per cent increase in the rate in the £ and a 3 per cent increase in the valuation base. As to 1980, a decision will be made shortly in the context of the public service Estimates generally. I might mention that as a result of the abolition of domestic rates the cash flow of the local authorities, particularly in the early part of the year, has never been better. Prior to domestic rates abolition, local authorities would not have a significant cash-flow from rate receipts until at least the months of May or June. Thanks to the early instalment of rates support grants local authorities now receive at least 40 per cent of their income from that source by June. So much for the local authorities having a lean time.

Senator Cooney said that the funds needed for roads are not being made available. Expenditure on road improvements has increased from £18 million in 1977 to £30 million this year, an increase of two-thirds, which is a very significant increase. Senator Cooney also said that no planning was possible because the level of funding available was not known in advance. The roads plan for the eighties, published last May, will have given the local authorities an overall strategy within which to work.

Senator Staunton mentioned the desirability of having a committee system to debate expenditure. The Dáil Committee on Procedure and Privileges are at present reviewing Estimates procedures generally. The Committee's report is expected early in the New Year.

Senator Staunton referred at length to the so-called inefficiencies in the payment of housing grants. The Senator should be aware that the inefficiencies referred to involving the Department of the Environment and local authorities have been done away with since our return to office in 1977. There is only one grant now for new houses, namely the £1,000 grant. No supplementary grant is now payable by local authorities. Also, the £1,000 grant is payable in one lump sum when the house is completed and occupied. Those factors eliminate the inspection by departmental and local authority officials which Senator Staunton referred to.

We also have a three years programme in the "Buy Irish" campaign. Senator Cooney raised the question about the "Buy Irish" campaign. The programme for the promotion of Irish goods in a three year programme is being tackled in different phases. In the first phase the main emphasis in 1978 was aimed at the consumers. In the second phase the main emphasis in 1979 was aimed at the retailers and the third and final phase in 1980 will give priority to the manufacturers while still maintaining the momentum generated in the first two years. A review was carried out on the operations of the programme during the first year by independent consultants. MLH Consultants Limited, and the results of this review indicated that the programme was progressing satisfactorily. In 1979 the programme entered its second phase which involved capitalising on the awareness which has been created by persuading retailers to stock more Irish products to meet the consumer demand. The council has recently launched a "Guaranteed Irish" stockist scheme under which shops and larger stores who, because of their policy commitment to stock, display and sell a reasonable proportion of Irish made goods, were nominated as "Guaranteed Irish" stockists. The Irish Goods Council have confirmed that this scheme, which was initially introduced in Dublin and is to be expanded to other areas, has received strong support from the retail trade. On the manufacturing side, there are now almost 1,000 companies in the "Guaranteed Irish" scheme involving approximately 90 per cent of all manufacturing companies and representing 10,000 different products.

In relation to imported components and sub-assembly items, the council have identified items to a value of over £40 million which could be sourced locally and orders valued at £12.75 million were secured for Irish suppliers. At a recent council-ESB exhibition, it is understood that orders to the value of £1 million may ensue from this venture. The council are considering the extension of this kind of exhibition to other large similar bodies.

The Irish Goods Council have also adopted a long term plan of greater community involvement in support of Irish products embracing business, trade unions, voluntary and community organisations and schools. In specific cases it is not possible to say whether the desired effect had been achieved or not. At present, an analysis of the competing imports of manufactured products for the years 1977, 1978 and 1979 is being carried out by the Department of Industry, Commerce and Energy in conjunction with the Central Statistics Office in order to assess the results. Some results of this exercise are expected to be available early in 1980. As the programme covers the period 1978-1980 the final assessment of the effectiveness of the programme cannot be made until some time after the completion of that period. It is not intended that the three year programme should be shortened.

Senator Whitaker expressed a fear that cattle disease eradication measures might be relaxed somewhat. There is no intention whatsoever of relaxing present measures, although I should like to tell the Senator that people in the south of Ireland who had to blood-test heifers in the past had to wait 22 days for the results of the blood test which meant that they had only eight days to sell their cattle. The Department of Agriculture have rectified that and the 30-day test is satisfactory now.

The updating of consumer protection legislation is being carried out by the Department of Industry, Commerce and Energy in two stages. The first stage has already gone into legislation in the form of the Consumer Information Act, 1978. This Act covers among other things misleading advertising and trade descriptions, both in the area of sale of goods and supply of services. The second stage is the Sale of Goods and Supply of Services Bill, 1978, which has been introduced in the Oireachtas and will be before the Seanad shortly. This is a more comprehensive piece of legislation which involves the updating of an Act that goes back to 1893. The Bill deals with the right to redress of a consumer if he purchases defective goods; it also covers services for the first time. The Consumer Information Act, 1978, also provided for the appointment of a Director of Consumer Affairs who took up duties early in 1979. His functions under this Act include complaints about misleading advertising. He will have a new range of functions when the Sale of Goods and Supply of Services Bill becomes law. Those functions include ensuring that guarantees are enforced and that consumers are not misled as to their rights in this regard. In addition to national legislation there are proposals being discussed at EEC level concerning misleading advertising.

Senator Conroy asked whether the information in the Appropriations Accounts could be extended to cover a longer period, perhaps a ten-year summary under the main headings. I will see to it that this suggestion is considered for future years. This is the end of the year and, as has been pointed out by Senator Brennan, it is the end of a decade. It has not been such a bad year and with a new Taoiseach and Government we look forward to a prosperous and a fruitful 1980. I should like to take this opportunity of wishing Members a happy Christmas.

Question put and agreed to.
Agree to take remaining Stages today.
Bill put through Committee, reported without recommendation, received for final consideration and ordered to be returned to the Dáil.

Ba mhaith liom, thar ceann an tSeanaid, ár mbuíochas a ghabháil leis na hoifigigh agus leis na foirne sa Teach seo a chuidigh linn i rith na bliana. Ba mhaith liom freisin ár mbuíochas a ghabháil le lucht an media thall ansin a tháinig ag éisteacht linn i rith na bliana. Guím beannachtaí na Nollag ar gach duine.

May I on behalf of the Seanad thank the officers and staff of all grades who have served us during the year? I include the media who have listened to our deliberations during the year. I should like to conclude by wishing everybody a very happy Christmas. Slán agus beannacht.

The Seanad adjourned at 8.15 p.m. sine die.

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