When the House adjourned last night, I was dealing with the size of the figure recorded on the Book of Estimates for this year. By coincidence, I referred to the fact that there was every indication that this figure would not include all the charges which would be levied on the community in these months. We read in our papers this morning of a little budget that has been imposed by the Government upon an extremely wide section of the community by way of increased postal charges and telephone rentals.
Committee on Finance. - Motion by Minister for Finance (Resumed).
Not to talk of Deputies.
Not to talk of Deputies. It is a good thing that Deputies have not free postal facilities because Deputies supporting the Government will be reminded when they purchase stamps in order to reply to their constituents that the policy for which they are responsible has imposed a similar increase on people outside the House. If Deputies were relieved of that charge, they might not realise the implications of the increases announced in this morning's Press.
Deputy Booth, in smug complacency, quoted almost in extenso the reports of bank directors. He did not once refer to any statement made by the head of his Government or by any Minister. He was completely absorbed in the opinions of leaders of finance. It is regrettable that the Deputy has not an opportunity of speaking again this morning and giving his views on behalf of the business community of Dublin on the increased postal and telephone charges which were announced after he had spoken yesterday. I wonder if the Deputy had any inkling that this announcement would be made this morning when he spoke yesterday and was so satisfied with conditions as they existed?
The charges the Minister for Posts and Telegraphs proposes to inflict upon the business community will mean in many cases an increase in the cost of living to the consumer. In the past few years, businesses have had to face rounds of wage increases. In many cases, these resulted in reduction of staff. That is very apparent in the town in which I live, where, in the past month, three firms have laid off some 20 employees, following the increases in wages caused by the deliberate policy of the Government in inflating the cost of living and failing to maintain control over increasing costs. Now this large section of our business community are to be called on to pay more for their overheads, due to deliberate action by the Government. How many of them will pay these increases out of their own pockets? It will be easy for some and not so easy for others to pass the burden over their counters on to the shoulders of the consumers. And so the vicious circle goes round and round.
On previous occasions, we warned the House that the Government should have learned their lesson when they partially removed the subsidies from foodstuffs some years before and there was an intimation from them after this partial withdrawal that they would not touch them again because they had seen the effect on the cost of State administration. Then, completely in defiance of their election promises that they would not touch them, they removed the remaining subsidies in one fell blow. Every trouble that exists in this country today has stemmed from the Government's financial policy, both in the manner in which they boosted the cost of living upwards and in their failure to exercise any control over rising prices.
The Government who preceded this Government embarked on an intensive savings campaign, bringing it home to the community that in their own little budgets, they should set some small sum aside as savings to help themselves and to help the community. What can these people think, now that the Government have set this example of spendthrift expenditure? We had criticisms at one time by the Deputies who now occupy the Government benches that the Government who preceded Fianna Fáil had too many Ministries. Events proved that criticism to be hypocritical because one of the actions of this Government was to create a new Ministry which was used to remove facilities that existed before it was set up.
The experience of those of us who were affected by the closure of railway lines has been that it has meant the passing on to local authorities of charges that were previously borne by the Exchequer. The alternative services are far more costly than the services formerly provided by the railway. Unfortunately, there are more of these closures to come and many more Deputies will be affected by them.
Deputies will want to ensure that any assurances given in the event of these closures will be honoured, because unfortunately this House accepted assurances in the past, assurances given at the time of the passage of the Transport Bill, that there would be consultations before any lines were closed down, which were not honoured. The Government have completely reneged on them and I would warn Deputies to be very careful that any promises or word given in relation to Transport will be backed up more firmly than was our sad experience in the past.
The action of the Minister for Transport and Power has been to save the Exchequer a considerable amount of subsidies. The people were told that they would have to suffer somewhat, that they would have to pay a little more to send their children to school, that they would have to pay a little more for their own transport and for the transport of their goods, but that it was a sacrifice to save cost to the country generally. They were told that even if they had to pay more, the relief would be reflected in the Book of Estimates. Now, after passing back these increased charges for transport to the ratepayers, we are presented with a Book of Estimates which shows increased charges all round, in defiance of the assurance given by the Government that the moment they got into office, there would be retrenchment in State expenditure.
The Government have passed back on to the shoulders of the ratepayers a very heavy burden which was formerly borne by the Exchequer. When the Minister for Finance, as Minister for Health, introduced the health scheme, he promised the Cork County Council that the scheme would not cost more than 2/- in the £.
I did not.
The Minister said that the Act would not cost more than 2/- in the £.
And I was right.
Is it not costing more than 2/- in the £ now?
That Act did not cost any more.
Are all the Deputies sitting behind the Minister listening?
I will prove it to you.
Instead of not costing more than 2/- in the £, it is now costing not less than 10/-.
I will prove it to you that it did not cost any more than 2/-.
Will the Minister prove it to the farmers, some of them his own supporters, who are parading in front of the courthouses all over the country in protest against the increases in the rates? They are marching in protest outside the courthouses against the increases in rates consequential on the Health Act.
It is not the Health Act. Remember the increases in the mental hospital charges.
Not alone has the Minister succeeded, through the operation of the Health Act, in passing on to the ratepayers charges formerly borne by the Exchequer, but he has succeeded in passing on increased charges to the individual in relation to hospital treatment under the Health Act. These charges have been raised from 6/- to 10/- and none of that is reflected in this Book of Estimates.
It would take the entire day to go through the full litany of what the Government have succeeded in imposing on the people. How is it that having had to meet the increases in their own homes in the form of the increased cost of living of £9 million caused by the withdrawal of food subsidies, the people have also had to meet the charges passed on to the local authorities by the Exchequer? The greatest impact in the Book of Estimates is caused by the increases which had to be given to State servants consequential on the increased cost of living. No relief whatever is indicated for the people who have to pay the piper.
In my concluding remarks last night, I referred to the fact that that figure is to provide for far fewer people than had to be catered for before this Government assumed office. We have unloaded on the shores of Britain people who had been a burden on the Exchequer seven or eight years ago. Is it not to be expected that it would be possible to run this country at a lower cost? But no; completely in defiance of solemn assurances given, the Government have lost control of the proper management of the nation's affairs.
It was amusing to hear Deputy Booth go into some detail in regard to the happy situation here in relation to emigration and quote figures which the former Parliamentary Secretary to the Taoiseach told him were completely unreliable. But neither Deputy adverted to the fact that census returns are certainly to be relied on and they prove conclusively that any easement in the unemployment figures has been achieved by increased emigration. Furthermore, figures that have emanated from the Taoiseach's Department prove conclusively that, far from implementing the Government's promise to give 100,000 new jobs, there are now fewer people in employment here than before they assumed office.
In his statement on the Budget shortly after he first assumed that Ministry, the Minister for Finance expressed the belief that after close examination of the situation, the number of civil servants could be reduced. The promise he gave at that time won tributes in editorials, comment from chambers of commerce and from people of standing throughout the country. But the situation as recorded in the Book of Estimates this year again shows an inflated number of civil servants to cater for a lesser population. Again, this is a complete reversal of the solemn assurance given by the Minister in that Budget statement.
Lip service was paid at that time to the improvement of our primary industry, agriculture. We were told that the farming community responded to the call for increased production but that the difficulty was in relation to marketing. It was implied to the agricultural community that here was something on which a strong Government were going to take immediate action. In that Budget, they asked for a sum of £250,000 for the marketing of agricultural produce. In reply to a question this week, the fact was elicited that, of that £250,000, less than £25,000 had been spent in trying to secure the market which the people engaged in agricultural production are seeking. That again was far short of the promises made at the time the House was asked to vote the money.
It is ridiculous for anyone to assert that, following the eighth round of wage increases, every section of the community has now been cushioned against increased costs. Anybody familiar with conditions in rural Ireland and the smaller towns is only too familiar with the fact that, far from having had an increase in their incomes, these people have suffered a reduction and have had to bear all the increased cost of central and local taxation. The Taoiseach expressed concern that the agricultural community had not marched forward in their increase in income like the industrial sector; but having expressed his appreciation at least on one occasion of that state of affairs among the farming community, where have there been any indications of concern for correcting the situation in any action since or in the Book of Estimates we are now considering? Absolutely none. There is no doubt, particularly in the smaller towns, that the fact that so many people have emigrated and that agricultural incomes have been drastically reduced has resulted in lower profits for the business houses in those towns. Perhaps the effects were late in coming, but they are now being felt. I contend they will become more evident in the months to come.
After this eighth round of wage increases, the Taoiseach and some of his Cabinet colleagues have expressed concern about its occurrence and the effect it may have on the cost structure of the community. Yet it should have been completely apparent to them that that would have been the consequence. Having deliberately increased the cost of living, it was as clear as noonday that such consequences would follow that action by the Government and their failure since then to exercise any control whatever over living costs to every section of the community.
In relation to the expenditure on the encouragement of industry, we are at one with the Government in any action they may take to foster industry throughout the country. We are happy in the knowledge that they have adopted a policy which was initiated by the Government before them, a policy that was completely contradictory to the views so firmly held by the Taoiseach and his colleagues for too many years. That was the policy initiated by Deputy Sweetman as Minister for Finance in that Government of providing incentives to encourage foreign industrialists to set up here.
Today the remission of taxation on exports constitutes a very valuable incentive to such people. But where large concerns come from abroad and set up here, my opinion is that, before the State should give them what are tantamount to colossal sums of money in grants and other incentives, they should require substantial investment by these concerns in that industry. It is not good enough that they, as we know them to be, extremely affluent in their countries of origin, should regard this country as a place where they could come and in many instances seek to take as much of the cream as they possibly can. It is of vital interest to the workers concerned in these industries and the community in which they are sited that they be given a sufficient interest by way of investment by the parent company to ensure that the moment a cross breeze blows, these people would not pull up their stakes and fly away.
This matter is causing some concern throughout the country. It is one to which the Government should give careful attention. I welcome particularly the establishment of any industries based on our own raw materials. Facing into the international situation before us, the transport of the basic requirements for industry constitutes such an important factor in the ultimate costs of production that it is on the native resources of the country the emphasis must lie more and more, as time goes on. We welcome particularly the establishment in the Munster region of any concerns, particularly those with big international markets, that can assist in the absorption of the produce of our farms. We particularly welcome one such concern that has been established in Mallow as one which will make a considerable contribution towards the provision of employment and assist the people to dispose of the products they are prepared to produce in ever-increasing amounts, once they are assured that, having produced them, they will not suffer any diminution in their incomes.
It may also be remarked that the Minister for Agriculture should be rewarded by his Government for the contribution he made by easing the burden on his colleague, the Minister for Finance, in passing back on to the shoulders of the farmers, by way of the levies on wheat and milk, charges that would normally appear to be made by way of inclusion in the Book of Estimates. Therefore, when we consider all those developments, where Ministers have co-operated with each other in ensuring that as much as possible of the burden on the Minister for Finance will be eased by passing all these increased charges and levies on to the people, the least one would expect is a dramatic reduction in the figure presented to the House for the cost of running the country for the coming 12 months.
Far from that having developed, we have had the situation in which Budgets are presented by Ministers which are nothing but a litany of burdens for the taxpayer. That has been our experience since this Government got their hands on the helm of State.
The figure on the cover of the Book of Estimates which has now been presented to Deputies shows once again that the expansion in the scope and in the cost of the services provided by the Government is continuing—services which are designed to stimulate further economic expansion, to improve social welfare arrangements, to provide needed public facilities and amenities and for other necessary and desirable purposes.
The expansion of these services of Government for the benefit of the community is a good thing. I think it is desirable that we should approach consideration of this situation with our feet on the ground. There is, throughout the whole of our community and among all Deputies in this House, irrespective of Party, a desire to push ahead with the development and expansion of these services in all directions and as rapidly as possible, so long as their cost can be kept within the limits of what the country can afford.
The key question which the Government and the Dáil have to consider is not whether these extensions in Government services are desirable—there is no question of their desirability—but whether we can afford them. Because of the economic expansion which we have experienced in recent years, we can now afford a higher level of Government services than we could have afforded previously, and as long as that economic growth continues, so also will the scope of these services expand in line with the rate of growth.
Deputies opposite have been expressing concern about the rising cost of Government. No doubt they are doing so as a normal exercise of their functions as an Opposition, but they know they are doing it also with their tongues in their cheeks. There are on the Order Paper of the Dáil today more than a dozen motions in the names of Opposition Deputies, some of them Fine Gael Deputies, all demanding further increases in Government expenditure.
In view of the declarations we have heard from the Fine Gael Deputies yesterday and today, expressing their concern about the increase in the total cost of Government, will these motions be withdrawn? Of course they will not be, because the Deputies know as we know that the pressure of public opinion is always for the improvement and the extension of services and never for their curtailment. It is a function of the Government, and sometimes not a very popular function, to try to keep the rate of expansion of the services provided by the Government in line with the expansion of national resources, as well as to use the machinery of taxation to level out inequalities and to ensure the equitable distribution of the benefits of economic expansion among all elements comprising our national community.
In this year, we have a special problem. We have to try to serve the purpose of improving and extending these services in circumstances in which wage and salary increases to public officials have raised the cost of the existing services and in that way limited the scope of the expansion. Deputy O'Sullivan has just been talking about the increase in the postal charges which were announced yesterday. It has, I believe, always been the policy in this State, supported by all Governments, that the postal services should pay for themselves and should not be subsidised by the general taxpayer.
The Government face a situation in which, because of increases in wages and salaries, the cost of providing these services this year will be about £1 million more than last year and we have decided that the adjustments in charges will recover about £700,000 of that increase. We expect to be able to bridge the gap between the higher revenue to be secured through these increases and the actual increases in outlay by other methods.
I am prepared to defend here, if necessary, the decision of the Government to permit State employees of all grades, both wage and salary earners, from the highest to the lowest, to obtain income increases in line with those being secured in private employment. I do not think I will have to defend it. I doubt if there is one Deputy who will stand up and in clear terms say the Government should not have permitted these increases to take place.
I accept that the Government have the obligation—the same obligation as rests upon all private employers—to endeavour to offset the higher costs resulting from these wage and salary increases by revising and improving the working methods of all Departments of Government to the extent that is possible, even if it means some curtailment in the recruitment of staffs to these Departments. Deputy O'Sullivan said this eighth round of wage increases was a consequence of an increase in the cost of living. There is no trade union leader who would concede that. In fact, they have been making it clear that these wage demands which they are now putting forward have no connection with the cost of living. They are sought to improve the living standards of the wage earners.
Indeed, in so far as this eighth round began in the last quarter of 1961, the consumer price index number for that quarter showed no increase on the previous quarter, and an increase over the same quarter of the previous year which has no relationship with the scale of wage increases being sought and obtained. What is true is that there will be a rise in the cost of living as a consequence of wage increases.
It seems clear that the increase in the total of private incomes this year will exceed what we can hope to realise on the most optimistic assumptions in higher output. As it is a practical impossibility for a nation, as it is for a private individual, to spend more upon day-to-day consumption than it earns, except temporarily by calling upon reserves or running into debt, the consequence of this situation, of this expansion in the total of private incomes over and above the expansion of what the nation is earning by higher outputs, is some increases in the cost of living and also some increases in State and local taxation. So far as taxation is concerned increases can be avoided only by curtailing the services provided by means of it. That is something, I assert, nobody wants. It is certainly something which nobody has proposed, or will propose, in this House.
As a general proposition, it is better to use any improvement in national resources consequent upon economic expansion to induce, or to assist still further, expansion in the future rather than absorb it in higher living standards in the present. Indeed, the percentage of our total national income which is saved for investment in future development is one of the lowest in Europe. I realise that what I have said is a counsel of perfection and is not practical politics. We are here concerned with practical politics. Nevertheless, it is the basic idea that underlies the policy of the Government and one which will influence their decisions in all matters. Because, however, there are large sections of our community which have a power of decision in these matters independently of the Government, the Government can make that idea effective only by trying to promote understanding and secure agreement, agreement to be accepted and applied voluntarily, and to a very limited extent, and—and there should be no exaggeration of possibilities in this regard—by the adjustment of State expenditure and taxation arrangements. Deputy O'Sullivan spoke, I thought disparagingly, of the idea of encouraging a higher level of savings amongst our community.
Oh, no; I did not.
It would, indeed, be a great help to the country at this time if all the wage and salary earners who have secured, or who may yet secure, increases in their remuneration decide to expand their savings rather than expand their normal weekly or monthly expenditure on consumption. That would be a prudent course even from the point of view of individual interest, but much more so from the point of view of the country.
Deputies are, I am sure, aware that the Government received some time ago from the National Farmers Association a memorandum which purported to show that the total of farmers' incomes needed to be increased by £83,000,000 per year to give them what they would regard as their due share of the national income. I can say straightway that the calculations in that memorandum did not stand up to serious examination. In fact, I doubt if responsible N.F.A. leaders would now attempt to stand over them. I think it is a pity that that memorandum was prepared and certainly that it was given the type of publicity it got.
The National Farmers Association had over the years built up for itself a reputation for responsibility, for not making extravagant claims or statements, and for a willingness to discuss all problems relating to agriculture within the limits of practicability. Indeed, since I became Taoiseach, I must say I have had many meetings with the leaders of that organisation and with representative groups from different sections of it, and I always found them to be, heretofore, both reasonable and practicable in their approach to problems. The publication of these tendentious statistics and this impracticable claim and the use which was made of them by irresponsible spokesmen amongst the members of the organisation has, I think, damaged the organisation's reputation; it has not damaged it beyond repair, but it has certainly done so to the extent that it now needs repair.
It has often been said that you can prove anything by statistics. It is certainly true in relation to agriculture that by contrasting the out-turn of one single year with another single year, when the years are carefully selected for the particular purpose in view, one can get almost any result one desires. That is a tactic with which Deputy Dillon is familiar.
I did not interrupt the Taoiseach to attribute that art to him. However, I propose to speak immediately after him.
It is, of course, well known to everybody that farm outputs and farm incomes fluctuate from year to year according to a great variety of conditions and statistical records of outputs, costs and prices can only disclose in a reliable way trends over fairly long periods, but not by contrasting single years. It is a fact, disclosed by all the available statistical and other records, that over the whole decade since the end of the war time scarcities, from the year 1947-48 to the year 1957-58, income per head of persons occupied in agriculture improved more rapidly than incomes per head of persons occupied outside agriculture. To some extent it is true that that increase in the income per head of persons occupied in agriculture was attributable to the decline in the total numbers so occupied.
Hear, hear!
Since 1958, that position has changed and agriculture has lost the lead it had previously built up in that respect, due to, in some years, adverse weather conditions, due over the whole period to difficulties in international markets, and due also to some extent to the——
Change of Government.
Did the Deputy say something?
Due also to the change of Government.
If the Deputy wants to develop that, I am prepared to contrast the position of farmers today with the deplorable position they were in in 1956 as a result of which there was a change of Government.
Is that why Fianna Fáil lost seats at the last election?
It is not done to interrupt the Taoiseach.
There is also another factor which operates to some extent in relation to certain crops upon which farmers are dependent on the home market, wheat and sugar beet being perhaps the outstanding examples. We have now reached the limits of self-sufficiency. The general pattern revealed by our records is, however, that from the period from 1948 to 1961, farm incomes per head improved more rapidly during the first half of that period and non-farm incomes caught up in the second half.
There is something that must be said, in fairness, in this regard. I have said it already at a recent function but it is no harm to repeat it here: over the whole period from the end of the war up to the eighth round of wage increases, the improvement in wages was not out of line with what was justified by rising productivity. It is true that many of these rounds of wage increases during that period were badly timed in relation to the prevailing economic circumstances, but over the whole period the improvement in the individual output of workers justified the higher wages they were getting. In that connection, I might digress a little to deal with a statement made by Deputy Corish commenting upon that earlier speech of mine.
Deputy Corish has the habit of attributing to Ministers statements that they did not make and then proceeding to demolish them. Higher productivity is the answer to rising wages. It is the only means by which increases in wages can be made possible, without consequences in prices or in employment, but improving productivity is a function of management; it is largely a matter of giving workers better machines, organising their work more efficiently or securing the maximum utilisation of capital equipment. It can be helped by workers through their co-operation, through the formulation of ideas and their discussion with management, but the responsibility for ensuring that productivity in industry and agriculture improves in line with rising costs rests primarily upon those who have managerial responsibility.
Deputy Corish attributed to me the statement that the answer to this problem was that workers should work harder. That is probably good advice in any circumstances. But, the objects of productivity arrangements should be to make sure that, without working harder, workers can still achieve higher individual outputs.
It is the eighth round of wage increases which has been out of pattern with those that preceded it. It involved mortgaging the benefits which it is hoped to secure in productivity and total output in the years ahead, as well as absorbing for the benefit of workers the improvements that were achieved last year and that, I urge, is a dangerous course because we cannot try to secure in our living standards today the benefits of the production we hope to achieve tomorrow without getting into difficulty. But, because that attempt has been made, the need to give attention to efficiency in every sector of our national economy is now more urgent than ever and, indeed, I said to a gathering of employers—it was then I made the speech—that this eighth round of wage increases could in the long run prove to be beneficial to the national economy, provided it has the effect of forcing employers to consider, as a matter of greater urgency, the changes they can make in their equipment or their working methods in order to offset the higher costs upon the prices of their commodities. That is something which it is desirable they should do, in any event, in face of the pending changes in international trading arrangements.
Coming back to agriculture, I know that in the situation that now exists, it is not desirable that we should try to play around with statistics in order to relieve the feelings which are undoubtedly developing amongst persons employed in agriculture, and indeed statistics relating to the past are not very relevant to our present situation. It is very easy to understand and to sympathise with the feelings of farmers who have seen in recent months many classes of urban workers securing quite considerable increases of their incomes without too much apparent difficulty, knowing that these recent increases in urban incomes will be reflected in some of the prices they will have to pay and certainly in the cost of the public services which are affected by them and particularly when they do not see any immediate prospect of equivalent improvements in their own circumstances.
Understanding and sympathising with these sentiments does not, however, solve any problems, nor, indeed, does it help much to prove, as I think could be done easily from available statistical records, that farmers have not been doing quite as badly as they have been told by some of their spokesmen. Average figures relating to farming, of course, can always be misleading and, indeed, I am not sure that we have not got a task on our hands, in order to present really comprehensible statistical information to our people, to make some revision in regard to agricultural records. Certainly, it has always seemed to me to be impossible to produce meaningful estimates of outputs and costs per acre when one included in the same calculation the results of operations upon western farms with less than good land and larger eastern farms with quite good land.
It is also, I think, necessary to recognise that when one talks about the number of persons engaged in agriculture, one is including quite a considerable number of elderly farmers and elderly relatives assisting farmers, whose earning capacity in other occupations would not be very high anyway. It is necessary also to keep in mind that urban wage rates expressed in terms of earnings per day or per week do not necessarily disclose actual annual income because of interruptions of employment of a seasonal character or due to other causes.
This problem of the growing disparity between urban and rural incomes is world-wide in its incidence and has been the subject of a great deal of study in international organisations. It was, indeed, a chief subject of a recent Papal Encyclical. But I think it is true to say, and I think it is no harm to say, that up to 1961 this country has done better than most in that regard and the average income of farmers in relation to other workers in this country compares favourably with the position in most other countries. The final figures for 1961 are not yet available and what may happen in 1962 is largely a matter of guesswork, but in 1961 the total cash income of farmers increased by £15,000,000 or £16,000,000. Of that increase, the Government contributed directly one-third, by means of the £5.1 millions that was provided on an ad hoc temporary basis in export guarantee payments for cattle and beef.
It is not true to say that farming costs have been rising uniformly. Indeed, in respect of some of the materials used by farmers in the course of production, there has been over the past ten years or so a fall in prices, due to a considerable extent to Government subsidies which have been provided for fertilisers and otherwise.
There is a more particular aspect of the matter to which I want to refer. The N.F.A., in that memorandum to which I have referred, based their calculations on a comparison of the outcome of agricultural activities in 1953 with those of 1960. Since 1953, the year they took as the base for their calculations, the assistance provided to farmers through the Exchequer by the general taxpayer has all but trebled. It has gone up from £13,000,000 approximately to just £36,000,000 in the present financial year. At the present time, 75 per cent of the sales off farms of farm products are assisted one way or another by Government subsidies and price supports. No less than 20 per cent. of the returns received by farmers for their exports of these products come from Government subsidies.
In the light of these facts, I refute most emphatically any suggestion that the Government have not contributed very substantially to the growth of farm incomes. Indeed, the aid given by the Government of Ireland to Irish farmers in relation to our resources is very high compared with the aid given by other Governments. We often have contrasts made in this connection between the aid given to farmers here and to those in Great Britain. The total of all the subsidies and other grants-in-aid given in Britain to British farmers represents one and a quarter per cent. of the British national income. The aids given here represent six and a half per cent. of out national income.
It is in these circumstances and having regard to these facts that we find it very disconcerting that the N.F.A. memorandum made no reference to it, much less contained any acknowledgment of these substantial aids given to Irish agriculture and the increases in these aids of recent years. For amateurs in the business of indiscriminate propaganda, that may appear to be somewhat clever, but for an organisation which wishes to have its views taken seriously and which wishes to have constructive discussions with the Government on behalf of those it represents it is just plain foolishness. It seems that, as a Government, we may have to reconcile ourselves to the fact that no matter what is done for the farmers, no matter how deeply we ask the general taxpayer to dig into his pocket to provide these aids, these same organisations will express no appreciation of it.
That, perhaps, is not important. The Government did not effect these improvements in order to secure the commendation of these organisations but because we believed them to be justified in our national circumstances. It does not help, however, to induce sympathetic consideration of further demands for further aid from those organisations, although I wish here to give an undertaking now that no feeling of irritation on that score will be allowed to influence the Government's decisions in any degree.
When we come to the task of deciding how best to utilise the very large sums of money which the general tax-payer is now contributing to the assistance of agriculture, it is necessary to keep certain facts in mind, if we are to avoid both immediate and long-term difficulties. No amount of goodwill will help to get rid of these facts. They are hard, if unpalatable, realities that we have to deal with. Some of our farm products, and I mention milk and bacon for the purpose of illustration, can be exported only at a loss, in prevailing international marketing conditions. There have been allegations made against us of dumping these products in international markets and, as Deputies are aware, in one instance, action was taken against us on this allegation of dumping. We do not deny that we are selling these products below their economic cost. We are not doing that because we want to do it but because we cannot get better prices than those now prevailing. We are selling our products in every market at the highest price we can procure. So is everybody else dumping in that sense no matter how they may disguise the fact. There is no country selling at the prevailing international prices without assistance in one form or another.
I doubt if that is true in connection with barley.
I did not mention barley. The current definition of dumping, which is the selling abroad at prices less than the price on the home market, is not a very logical one, in my view, and could be contested on theoretical grounds, but it is the one accepted in international discussions and there is nothing we can do to change it. It would not appear to be wise for us to provoke further action against our exports by extending our system of price supports in a way that might have that result. The repercussions could be very quick as well as very serious.
In the European Economic Community, to which we have applied for membership, aids to farming or any other forms of production which are decided to be of a character that distorts competition will be ruled out. But, of course, they will be ruled out in circumstances in which open market prices will be higher and in which they will be secured by support measures of a different kind. While the extent of the aid the Community can give to agriculture is necessarily limited by financial considerations, the form of the aid to be given is, I think, restricted and limited by these considerations.
That it is the policy of the Government to provide aid to the maximum extent that the community can be reasonably asked to support is evidenced by the substantial increases in the scale of these aids effected in recent years. But, in my view, the National Farmers Association will do the farmers of Ireland a very real disservice if they continue to propagate the view that there is only one way of improving their incomes, that is, by a further and considerable extension in Government subsidies. It would be foolish to arrange new subsidies which in the circumstances of our membership of the Common Market would have to be withdrawn again. The aid which we can afford to give can be better directed towards devising support measures which will induce farmers to improve their methods of production in a way which will enable them to get the maximum benefit from E.E.C. conditions when we experience them. I believe, and I have some justification for this belief from personal contacts with a number of individual farmers all over the country, that all efficient and hard working farmers would prefer to have it in that way.
In the past the Government have given the National Farmers Association every possible encouragement and, indeed, every degree of recognition that they required or desired. We believe that the circumstances of this country require the existence of a broadly based farmers' organisation which will stand apart from Party politics and be concerned only with the practical business of agricultural development. It is true, as the Minister for Agriculture has frequently said, there are too many farmers' organisations and that it would be desirable to see them starting some process of amalgamation amongst themselves. That is not something we can enforce, but only advise. We are certainly prepared to work with the N.F.A. or any other responsible farmers' organisation in seeking solutions to the many real problems we are now facing in a sensible and practical way. It is my hope, because of my past relations with that organisation, that no irresponsible elements in it will create difficulties in the way of so doing.
Deputies are aware from many recent parades and meetings that farmers are objecting to increases in the local rates, and so, of course, is everybody else. Nobody likes paying either higher rates or higher taxes. That is human nature. Even when they are recognised to be necessary, we are not expected to like them. The most direct way of reducing local charges is to reduce the services which are given under local authorities. That is possible by cutting down on supplementary housing grants, reconstruction grants, curtailing the building of new cottages and other measures of that kind. At none of these meetings I have seen reported in the Press has anybody had the frankness to propose the avoidance of rates increases by these means. Indeed, in my personal experience from discussions with individuals, the only people I found willing to propose the curtailment and abandonment of these services provided by local authorities were individuals who had already drawn for themselves the maximum benefit they could get in that way.
There have been proposals of a vague kind put forward at these meeting that the local rates should be reduced by transferring to the Exchequer the total cost of the health services and all the cost of road maintenance and construction. These proposals, it seems to me, illustrate the mentality that is prevailing: the desire not to have any curtailment of services; indeed, if possible, to have an expansion of these services with somebody else paying for them.
This problem of the continuing upward movement of local rates has been giving us in the Government very great concern and for quite a long time. Indeed, last year I announced that I had asked the newly-established Economic Research Institute to carry out a comprehensive review of local authority financing to provide us with the facts and information upon which policy decisions could be based. The problem of rate rises does not affect farmers alone; it is general and widespread, and it is certainly complicated. Because it is complicated, slick solutions are not likely to be sound solutions. Most of the persons who are making these suggestions of dealing with the problem by transferring the whole of the health services and all road costs to the Exchequer appear to have given very little, if any, thought to the implications of their suggestions. Indeed, they are usually put forward by people who have little knowledge of local authority administration and none at all of local authority financing. Whatever the Government may decide to do either in redirecting the very substantial financial aid now allocated to farmers or in redistributing the cost of providing essential or desirable public services must be decided within the sharply definable limits of what is financially feasible without destroying the country's prospects of future development or of what will secure the most economic use of our resources and efficient methods of administration.
I believe that the great majority of our people, both farmers and towns-people, understand this to be so and expect the Government to act intelligently and while, human nature being as it is, they will not in any way discourage irresponsible people from making impossible claims, they are relying on the Dáil and the Government to evaluate them properly.
It would be a grand thing if we could say to the people: "You can have better, improved local services and lower rates at the same time." It would be grand if we could say to the Dáil: "You can have better Government services and lower taxation at the same time; you can have more subsidies and aids to all forms of production with no cost falling upon anybody to provide them." Of course that is not possible and anybody who tries to lead the people into believing it is possible is either a knave or a fool.
Our economy is expanding at the rate of five per cent. a year. That is the highest rate of expansion we have ever achieved. It is comparable with the rate of expansion of other countries in Europe which are far more fully developed than we are, far longer established in the business of self-Government. If we can keep up that rate of expansion, then our people will become better off year after year at that rate. It is the aim of the Government of course to endeavour to speed up that rate of progress but that is not going to be easy. I am not even going to suggest that it is possible. Indeed I believe we will be doing fairly well if we can continue expansion at the rate which has now been established and which has been maintained over the past three years.
Some of the economic forecasts appear to suggest that will be possible. They are generally encouraging. In most respects, this country is better off than it ever was before. Deputy O'Sullivan spoke about emigration and I feel sure we all rejoice in the fact that there has been a quite spectacular improvement in that respect recorded during the past year. The rate of emigration in the past year —we have not yet got the figures for the period ending in February—was less than half of what it was a short number of years ago. That cut in the rate of emigration took place in circumstances in which the rate of unemployment was also falling. During last year the unemployment rate fell below five per cent. and was the lowest recorded in this country since the end of the war. To date in 1962, as Deputies will see from the figures sent to them each week, the number of people registered at employment exchanges has each week been lower than in the corresponding week last year.
Mr. Donnellan
They are all gone.
There was a slight increase in the adverse balance of visible trade last year. That gap was partly closed through higher receipts from invisible sources and it can be said that no serious problem emerged. External financial reserves in fact increased, reflecting an improvement on Capital Account. The expectation is—it is quite a reasonable expectation in the circumstances —that the gap in external trade this year will widen but it is not yet possible to gauge how serious it may be. I would be the last to deny that our economic progress in the past three years was helped by a number of favourable factors outside our control and it is possible that fresh problems of considerable magnitude will arise in the future. However, I believe we can face it with confidence. If nothing happens either internally or externally to rock the boat, our progress will continue.
The basis for continued growth has already been laid. Last year our industrial output increased by nine per cent. That was as high as was achieved by any other country in Europe and was better than was achieved in most European countries. The new employment created outside agriculture exceeded considerably the fall in the agricultural population which was also much lower last year than in any year for a long time past. We can now look forward, assuming the existing conditions can be maintained, to a rising population, and apart from achieving that national aim which we all share, to end that long story of continuing decline in the Irish population——
The population went up in 1951, you know.
The figures in the years before and after the war are somewhere out of pattern but I do not argue with the Deputy. The Government are very well aware that the point I am making is that a rising population is itself an economic stimulus. The Government are very well aware that taxation increases can have a retarding effect upon economic growth unless the revenue proceeds from these taxes are directed with increasing force to purposes which will stimulate greater future economic activity. This business of government, and particularly at the time of the Budget, is very largely a matter of determining priorities. In every direction there are new things we want to do, new things we intend some time to do, but the possibilities in each year have to be decided in relation to the circumstances of that year and, within the limits of what is possible, preference must be given to the measures which are most likely to open up still greater possibilities in the future.
It is certain that in this financial year now facing us, because of this expansion in the cost of existing services following upon wage and salary increases, we will be forced to postpone various steps and measures which we had hoped would be feasible and to say "not yet" to people who have been urging these measures upon us. This country lives by its external trade. This must determine not merely the policy of the Government but the thinking of every element in our community. The external trade of Ireland is equivalent to 75 per cent. of our total national output and that figure of 75 per cent. in the case of Ireland, is to be contrasted with an average figure of 45 per cent. in respect of all the countries who are members of OECD, and will serve to emphasise how much this country lives by its external trade and that anything that happens, whether in the international field or from developments at home, which might operate to limit our external trade can be detrimental to our national progress and consequently to the standard of living of our people.
We export a higher percentage of our industrial production than does Great Britain. That is another fact that brings home to all concerned how essential it is that we should secure the maximum efficiency, the lowest achievable level of cost in our industrial concerns if our industrial employment is to be maintained, much less increased. Our national progress in any direction requires further expansion of our export business. A rising standard of living among our people, and a rising population if we can maintain it, will tend to ensure that home consumption of our products will increase also. But, by and large, the expansion we desire in national income can be achieved only if we can raise the level of our exports. I think the main achievement of Government policy over the past five years has been the promotion of this higher level of productive activity and the realisation of higher living standards amongst our community, without any difficulty in respect of external payments, without any depletion of the financial reserves of the country, and solely by reason of the expansion of our exports.
The Government will soon be deciding on the Budget for 1962/63. It certainly will not be easy to reconcile our aims of affording further stimuli to increased production and to a realisation of a higher level of economic activity, to adjusting social and economic inequalities, and avoiding undue tax increases at the same time. Nevertheless, I will guarantee that the Budget which the Minister for Finance will produce next month will be a sound one because we believe a sound Budget is one of the essential conditions for future economic progress. Others are the realisation of a higher level of savings and of investment, and the development of some means by which we still secure an orderly relationship between incomes and national productivity. But it is on these foundations, with a sound Budget as the central pillar of our system, that we can hope to achieve the target which was set by the Organisation of European Development and Co-operation, a target which we have accepted as being practicable and which we have pledged ourselves to try to realise; that is a fifty per cent. increase in national production by the year 1970. Notwithstanding the difficulties to which I have referred, notwithstanding the character and the extent of the problems with which we are confronted, we still believe that the realisation of that target is possible.
Mr. Donnellan
That was a nice lecture.
One cannot help admiring the brazen faced audacity of the Taoiseach. I have rarely listened to a more accomplished pastmaster of statistical prevarication than the Taoiseach when he, wisely, introduced his remarks by saying that, to him, statistics are a sacred thing, and that is something he cannot say about all his political opponents. He then proceeds to demonstrate by these statistics that the farming community of this country have secured a higher percentage increase in their incomes than any other section of the community, certainly for the first half of the last decade, that really they are not doing so badly at all, and it is only recently that the industrial entrepreneurs and workers in this country have even caught up on the percentage rate; and all the agricultural heads in Fianna Fáil bobbed obediently to this wisdom. They ought to be ashamed of themselves to allow their leader to get up and make such propositions in this House without recalling to him that the point of departure for agriculture was a weekly wage of 21/-. That was the starting point from which their percentage increase is measured. Here is a statistic now that will, perhaps, convince the Taoiseach as more inescapable than any of those on which he has been playing variations for the last hour: the agricultural wage in this country today is in the order of £6 5s. per week for a 54-hour week. Now let the Fianna Fáil Deputies stand up and cheer at what their leader describes as a disproportionate advantage enjoyed by the agricultural community.
This speech today follows a very old political technique. The Taoiseach knows that he has his own back pretty well to the wall and he comes out fighting to attack the N.F.A. I do not propose to follow him down that path. My job today is to attack the Taoiseach and his Government. They are the people responsible for the state of this country, and not the N.F.A. Attack is a good method of defence. Let us concede that at once. When the Taoiseach enters this House with a volume of Estimates with the figure of £148,373,960 inscribed thereon, it is not a bad thing to begin by saying that that is a most desirable development and the higher that figure grows the better off we are. That is the highroad to inflation. You can put three noughts on to the end of that figure quite easily and, if you measure the prosperity of this country by this device, we can all be as rich as we like in terms of money that will not buy anything.
That figure that appears on the cover of that book is only the beginning of the story. This morning we were told that there has to be £700,000 more collected through postage stamps and postal and telephone charges. But that figure of £148,000,000 does not include the £9,000,000 that was included in the Estimates for 1957 for food subsidies. Let us take the figure the Minister for Finance puts upon this Book of £148,000,000. That represents a change since 1957, an increase of £48,000,000 sterling. If the food subsidies had been withdrawn from the Estimates of 1957 the total demand would then have been £100,000,000. Today the total demand is £148,000,000.
We have got into the habit of describing as voted capital services a growing part of the annual charge that falls upon the Exchequer. It is now becoming extremely difficult to tell what part of these services are truly of a capital nature and what are not. In fact on the total figure for the capital services and the supply services, the effective change since 1957 is £48,000,000. But that is by no means the end of the story because, over and above that, we have the Central Fund Charge to meet, which I reckon in this year will amount to a sum of approximately £29,000,000.
On top of that the taxpayers of this country have been called upon to meet —note well that it is not the high-bracket taxpayers who have been called upon to meet the charges I will now describe; it is those who are in the lowest bracket on whom these charges will bear most heavily— increases in the price of bread that have followed since the adjustment consequent on the removal of the food subsidies; and, though bread has been twice or three times increased in price, and so has flour, since 1957 the farmers are this year to get approximately 2/6d. per barrel less for their wheat. In addition to that, there are the increases in bus fares and rail fares, increases that everyone that has to travel in this city or country has to pay. Practically every working man and woman has to take a bus to work and back every day in the city of Dublin and the city of Cork. That increase has been steep and frequent.
Electricity charges on the humblest homes in Ireland have been steeply increased during the last four or five years. Every person paying social insurance contributions has had something like 2/6d. put upon his stamp. Every person who has had to go to hospital under the health scheme has found now that, unless he is in the most straitened possible circumstances, he is required to pay 10/- a day for his accommodation in hospital. In rural Ireland, the rates are soaring steadily to levels which people simply cannot afford to pay and which bear no relation at all to the profitability of the agricultural operations carried on on the land.
I concede that it is possible, temporarily at least, to meet that kind of situation by simply screwing up wages and, as the Taoiseach says today, if wages go up generally, he, as head of the Government, is going to see they go up throughout the whole public services and then they turn up on the cover of the Book of Estimates and the whole cycle begins again. So long as the cycle can be maintained of rising cost of living, rising wages, rising salaries, rising cost of living again, rising wages, rising salaries, everybody is happy. No country in the world ever started on a tornado of inflation without having a grand time for those who take part in it, but it is those who do not enjoy their share of the spiral who meet with disaster and they are very often unvocal and have no one to represent them. They are the people who are on fixed incomes and pensions.
The Taoiseach is indignant because, he says, Fine Gael has covered the Order Paper with motions demanding more payments for everybody. That is not true. If this Party has any fault, it is the fault of excessive moderation and excessive sense of responsibility in the conduct of the Opposition of this House. The principal motion standing on this Order Paper in the name of members of this Party reads:
That Dáil Éireann is of the opinion that, in view of the steep rise in the cost of living and the difficulties created thereby for all pensioners, the whole question of pensions should be reviewed as a matter of urgency.
Is that not true? The cost of living has gone up 17 points in the past five years and the result of that on people living on fixed incomes has been catastrophic. That increase in the cost of living, plus the increase in the cost of rates on farmers whose income has remained virtually static, has brought them out parading in the streets because they find it is practically impossible to live. The Taoiseach says to the House today that one of the remarkable facts of it is that the income per head of people engaged in agriculture has increased more than any other category. I cannot believe that he does not know——
I did not say that.
I beg pardon.
I said it was true during the first half of the decade.
I know; but I do not believe the Taoiseach himself believes that that is an honest statistic to present to this House or to anybody else because one of the explanations of that alleged statistic is that the population is sweeping out of the country. There are 250,000 gone and they are mostly men from the small farms of Ireland. We have bought this happy state to which the Taoiseach referred of rising prices and rising wages at a great price. We have bought it at the price of exiling 250,000 of our people and, remember, it is 250,000 people, boys and girls, who were the most productive elements in our society. Let us not lose sight of that bitter cost when we look at the Book of Estimates and the other costs to which I have referred, and let us realise that it now has to be borne by a reduced population and a population which has suffered a reduction in its vulnerable element because, of the 250,000 that are gone, 99 per cent. were in the highly productive categories and they have left behind them the old and the young.
I have spoken of the people with pensions who are suffering but the other section of the community that are suffering and suffering acutely are the small property-owning farmers. I am quite satisfied that the man with the large acreage at the present time is having a bad time but I have always distinguished between the large farmer with substantial capital who meets a bad year and a good year and a bad year and a good year and has some resources on which to fall back and the small farmer. I think a great many substantial farmers are in a bad way at the present time. They have had two very bad years and have heavy financial commitments and, with the rising rates, are finding it extremely difficult to keep their heads above water.
Theirs is one problem, but there is another problem, that is, the problem of the small farmer and I mean the man with less than 50 acres who owns and operates his own holding without hired labour or perhaps with one man for part of the year. That man is being wiped out and the result of the process of wiping him out is that the population of rural Ireland is declining because a great many of these homes are being abandoned.
That is bad in itself, in my judgment, but it is bringing in its train a further very serious consequence, that is, that it is wiping out the small towns of Ireland. There are many people in this country who entertain the illusion that the only form of respectable employment available to our people is employment in industry. That is all a cod. Employment in distributional services is just as respectable and just as essential. The traditional pattern of society in rural Ireland is a populous countryside with towns and villages scattered through it, with a proportion of people largely drawn from these farming homesteads engaged in services of one kind or another to the population surrounding the town. As those populations are decreasing, so these towns are decreasing and poverty is creeping in as the introduction to ultimate dissolution.
I do not want to name particular towns but I know of one town in north-west Monaghan and I know towns in my own part of Connacht where the process is there for anyone to see. I know of one town—I admit it is a bad case and I think the Taoiseach knows the name of it— where one house in three is closed, but I know other towns where my intimate knowledge enables me to say there are business people who were comfortable ten years ago who are now poor and who will surely go because they can no longer exist. That is entirely due to the gradual grinding between the upper and nether millstones of rising costs and declining prices of the small farmers.
Statistics are very strange instruments. The Taoiseach speaks of the increase in our gross national production of five per cent. per annum or something of that kind. I have listened to these statistical abstracts all my life and I often think that a great many of the figures contained in them are drawn out of the air to meet a particular situation. When you study them, you find that many of the elements contained in them are of a very conjectural character but there is one statistic that can be measured with precision, that is, the figure for our annual exports and imports.
In the first nine months of this year, our exports increased by £23.5 million. But when we come to examine that figure, we find that of that increase, £19.6 million was contributed by livestock and food exports. The total increase of manufactured goods was represented by only £600,000. Those statistics are certain. They are measured closely and carefully at the ports. They are clear. The lesson they have for me is, that when the Taoiseach says, and rightly says, that this country lives by its external trade—I may paraphrase that by saying its exports—he ought to realise that it is on the successful exploitation of the land that those exports almost entirely depend.
I do not know what our record is so far as industrial exports are concerned. I hope they will expand and grow but we cannot divorce from our minds the fact that no matter how they grow, a very high proportion of their total yield must be spent on the import of raw materials for them. Our export of live animals and foodstuffs is the only thing that really matters in the context to which the Taoiseach refers when he states that this country lives by its external trade. I have been saying that for over 30 years and the people on the opposite benches have been saying otherwise. I welcome Fianna Fáil's conversion. I am quite prepared to forget the past if they have learned the lesson.
But the great danger in this country at the present time is that the land, which is the principal natural asset we have, and the people who are living on it and exploiting it, are being ground into the dirt and wiped out. It is also true to say that our position in discussing the Vote on Account is not made easier by the fact that we have not got all the facts. I do not know what the yield of revenue for the year will be. I do not know how the Budget will turn out or whether it will fall out that there is sufficient buoyancy in revenue to take the increases that may come. All I know is that the people living on the land cannot make ends meet. They are working harder and longer hours for less money than any other section of the community. It does not do any good to tell them that they are better off because they are not. There is no use quoting statistics at them. They know what their circumstances are. Any of us who are in intimate daily contact with them in our businesses are only too conscious of the difficulties with which they are at present contending.
I heard the Taoiseach say today that, when he comes to consider the Budget, one of his concerns will be to see what retrenchment would be justified in Government Departments by the introduction of greater efficiency. That promise was made before but the hard fact is it now transpires that we have more civil servants in this country than ever before. I deplore the fact that the Taoiseach chose this day to stage an attack on the agricultural community because I do not think that is fair or that it serves any useful purpose. I heard him say that 70 per cent. of our farm output is assisted by Government subsidies. That is a very nice thing to be able to say but it makes people engaged in agriculture furious because it is so unjust and unreasonable and so untrue in the absolute sense.
What percentage of industrial production in this country receives public support? The difference is this, every penny contributed to support agricultural exports appears in the Appropriation Accounts but nobody ever knows what is the yield of a tariff or what the cost of it is to the farmers who are paying that tariff.
I can tell a story which may throw some light on it. In 1956, I persuaded the Government to take the tariff off superphosphate of lime. There was an outcry by the manufacturers that they could not meet the competition of the foreign phosphate manufacturers. I told them that if they could tell me the differential between the cost of superphosphate produced in Ireland and the cost of foreign superphosphate delivered at an Irish port I would ask the Government to give them an annual subsidy to close the gap. After a long calculation, it was worked out that an annual subsidy of £350,000 would be necessary and that was paid to the superphosphate manufacturers of this country to enable them to meet the competition. That subsidy was paid in 1957, 1958, 1959 and 1960.
Did anybody read the remarks of the Comptroller and Auditor General on the matter last year? The accounts have been under examination and as a result of that examination it transpires that an overpayment had been collected of about £90,000 on the first year, which on review the fertiliser companies refunded to the Treasury. Suppose that had been collected behind tariff protection from the consumers of this country, would there have been any refund made? Would anyone have ever found out? If I had said before that calculation was made that the superphosphate industry of this country was costing an annual levy of £360,000, would anyone have believed me? I would have been told by the Taoiseach that fertilisers were just as cheap here as anywhere else. The point I want to make is that the farmers are paying out every day on everything they buy for the cost of industrial activity through the tariffs which protect them.
If you want to refer to the subsidies payable on agricultural exports do not forget the unmeasured subsidies the agricultural community is paying to industry every day of the year. Do not forget, when you say this country lives by its external trade, that for the first nine months of this year 80 per cent. of the increase in our exports was attributable to agriculture. In that connection, I want to sound a note of warning. I see in this year's Estimates there is no reference to any provision for assisting the export of fat cattle and meat. Rightly or wrongly, the Government decided this year to subsidise the export of fat cattle and meat to the tune of £5,000,000 in order to bring the level of price here to something approximating the level of price in Great Britain. That has operated to reduce our cattle stocks considerably.
What is going to happen if that subsidy is suddenly completely withdrawn as of the 31st March? It is changed every fortnight to correspond with the changes in Great Britain. At a certain stage in Great Britain it practically disappears but at other stages it rises. During this past year our rate of subsidy has fluctuated accordingly. What is going to happen next year if that disappears altogether? Nobody has told us. I do not know, but one thing is certain: it will very materially change the picture of cattle and meat exports referred to in the computation of the first nine months of exports from this country. It is true our exports of frozen beef to the United States will continue unaffected, but our exports of beef and fat cattle to Great Britain will be very radically affected and a new pattern altogether will emerge. I do not know what effect that will have on our total exports, bearing in mind that next year we will be exporting from a very much smaller total headage of cattle. It may have a considerable effect on our exports.
Everything would be lovely in the garden if all we had to do was to pay one another higher wages and profits and meet every increase in the cost of living by simply distributing more money. A great many people will say: "Why not, that is the solution to the whole problem." But, of course, ultimately that will come home to roost in the form of an adverse balance of payments between this country and external countries. That will not happen for 12 or 18 months after the evil course has been embarked upon. The great and standing menace of inflation is that the first 18 months or two years of it are a highly delightful experience, except for the restricted classes who do not participate in it. I foresee a very alarming trend for the balance of payments here to widen and to become a very genuine menace to our future, both by a decline in the volume of our agricultural exports and by an increase in the importation of consumer goods.
The Taoiseach, speaking to-day, said that he recorded as of this year a change in the astonishing history of a steady population decline which had characterised this country for the past century. I do not know how he gets this figure. He tells me if I ask him to give me day-to-day figures for emigration that they are quite unreliable and undependable and that he could not give them in any way under Government authority. Yet, when it suits himself to produce figures of that kind, he produces them with the utmost confidence and panache.
I do not know what the current figure for emigration is, but this I can tell him without reference to any statistics at all: when you have put out of the country 250,000 boys and girls between the ages of 18 and 25 over the last five years, you cannot go on forever doing that. Our people do not have children fast enough to make it possible to go on doing that. There is bound to be some decline. When the Taoiseach puts his hand on his heart and says the number of persons registered as unemployed has declined to the lowest figure he ever remembered, the answer is they have not registered at Castlebar, Dunloe, Swinford, Monaghan and Castleblaney, but they have registered at Birmingham, London and Liverpool and they have got jobs there.
I was emphasising the significance of the fact that the two things happened together: a sharp reduction in emigration and a sharp reduction in unemployment at the same time.
Does that impress the Taoiseach?
Yes.
It impresses me too as a tragic symbol of the disappearance of a quarter of a million of our people.
It means there are more jobs.
I wish it did, but I think there are actually fewer people working in industrial employment to-day than there were in 1955. The Taoiseach was rejoicing that, on the basis of this astonishing statistic he furnished us today about current emigration the trend of the population to decline had been arrested. I want to direct his attention to the fact that he must be living under a complete delusion. If he looks at Table 7 of the Statistical Abstract for 1961 with any kind of a deliberative eye, he will find that since 1926 the population of the country has been virtually staple. It declined by .1 per thousand of the population in the first half of that decade, by .4 in the second half and from 1946 to 1951 it went up by .4. It went up very largely as a result of the first three years of inter-Party Government. That is true. It went up because we actually called people home and they came home.
And went back again?
Yes, you drove them back. Here are the figures to show it. You cannot get away from them. They came home and, when you were Minister for Finance, they went back again.
On the same boat?
No. Look; here are the Minister's own statistics. Here was the population going up, and then, as the Minister for Finance says, in the following quinquennial, the population went down by 4.3 per cent. and in the quinquennial after that, by 5.9 per cent.—the highest figure ever reached since the Famine. Well may the Minister for Finance say: "Then they went back again."
I put it to the Taoiseach that the charge now proposed is not indicative, as he would suggest, of a desirable development. I put it to him that no one less brazen-faced than he would dare to get up in this House and claim that an appreciated appropriation in respect of a people reduced in number by a quarter of a million represented a desirable development. I do think that both the Taoiseach and the Minister should admit that it does not represent in great part an expansion in services but merely an increase in our costs of existing services. Somebody will have to pay it, if not, in this year, then in the years that lie ahead.
I want to see this country prosperous as much as the Taoiseach does. At no time was it more necessary for the economy to be founded on a rock than it is at this moment. We shall need strong evidence of economic viability in this country to make our way into the European Economic Community, which, I agree with the Taoiseach, is a most desirable thing to do if Great Britain becomes a member. I believe we want to become a full member of that Community if the best advantage of this country is to be served. I do not believe the statement here produced is calculated to reassure anybody in Ireland or outside it of the economic security of this country. Of course, I cannot pass final judgment on developments until the Minister for Finance has opened his Budget and communicated the knowledge that none of the rest of us can hope to have to this House on that occasion, but I want to warn the Taoiseach and his Government that they are labouring under a complete illusion, if they believe the demonstrations of the farmers are actuated by nothing but mischievous intent on the part of their leaders. People do not march up and down——
I certainly did not suggest any such thing.
It appeared to me that the Taoiseach represented that this was an irresponsible agitation precipitating violent and organised demonstrations by the farmers. I think the Taoiseach is very much mistaken in that. Knowing the farmers, as anyone who lives among them will do, they are not easily moved to that kind of activity. If you get that kind of activity, there is a widespread sense of grievance. I believe that sense of grievance is justified. I believe that to allow it to grow unremedied will gravely prejudice the output of one of the principal sources of our national wealth. Without that output, I do not think this country could be economically viable.
I do not believe the proposals revealed by the Book of Estimates submitted to us carry on their face any evidence that the Government are conscious of where this country is drifting. The Estimates seem to present two dangers: one is the danger from asking the agricultural community to work longer hours and harder for less reward than any other section of the community; the second danger is that I see in that expanding outlay, plus the other categories of outlay to which I have referred, the possibility of a runaway inflation in this country. I do not think we can afford to play with these dangers at the present time.
I want to say quite deliberately that I am convinced that trend towards inflation was touched off by the Government's action in reversing the policy which we had operated, designed to maintain stability in the cost of living. It may be true, as the Taoiseach said, that none of the demands for increases in wages is related to the cost of living. However, no one will doubt that the zest and the urge for these claims rose from the increase of 17 points in the cost of living. If it were true that none of the claims in the eighth round of increases was associated even approximately with the cost of living, how do the Minister and the Government justify the over-all increases in rates of salaries and wages paid to the entire Civil Service?
Wages have certainly increased much more than in proportion to the rise in the cost of living.
Is it not true that if the Government decided, without resorting to arbitration, to increase the whole range of Civil Service salaries and wages, there must have been some increase in the cost of living, or was it done out of goodwill in the belief that the country could afford it? It is going to cost £5 million this year.
It was to keep on a level with comparable rates outside.
There must have been some reason for the increase in these rates. I do not think it can reasonably be argued that if standards outside the Civil Service had exceeded what was equitable and just, the Government would have felt themselves constrained to follow. Was it done in order to retain in the Civil Servce the kind of men they wanted and who, because of the increase in the cost of living, might have left? The Government have embarked on that course instead of adopting the measures we had provided for stability in the cost of living. I cannot forbear from reminding the Taoiseach that when the food subsidies were removed, they were taken away by his predecessor who said the country could not afford them. The subsidies meant £9 million to the economy. Today the Estimates are £48 million higher than they were when the food subsidies were removed, and a very large part of that increase is due to the increased cost of the public services which can be directly attributed to the rises in salaries and wages which, in my submission, are indissolubly associated with the rise in the cost of living. I do not believe the Minister for Finance gives a damn because I think he is going to get out.
He was nearly out the last time.
He is going to get out of public life and he does not give a damn. I think he is planning to get out, and he just does not give a damn. He is not prepared any longer to take the long view or to accept responsibility for the long-term consequences of the policy for which he is at present responsible. I think, in his early stages as Minister for Finance, he let somebody else run the Department, with a considerable measure of success. That was evidenced by more than his Budget statement. He was sustained in his policy quite openly by publications which did not bear his name. The effects of these documents are now wearing thin, and he is now becoming the "Genial Dr. Jim", with a little for everybody, including the judges.
It is a good thing to be genial, anyway.
It all depends at whose expense.
And when they retire.
Nothing is more embarrassing than a genial friend who has a treat from everybody but stands treat to nobody but himself. It is very nice to be generous and genial with the public purse, particularly when it is posterity that must suffer the sore head. My apprehension is that we will pay very dearly for much of the geniality of the present Minister for Finance, not the morning after the night before but in the future very great danger into which the consequences of his policy may put the important policy of this country in in its relations to the European Economic Community in the negotiations that lie ahead.
Deputy Donnellan rose.
No Government Deputies to speak.
Not a word.
Not interested.
Mr. Donnellan
It is no wonder there is no Fianna Fáil Deputy offering to speak considering the attack by the Taoiseach to which we listened this morning on the agricultural community. I have never known such brazen effrontery. It used to be the policy of Fianna Fáil not so long ago, when they had something unpopular to say, to get a backbencher, or some of their less responsible members, to make a speech. It is a big change to find the Taoiseach himself coming in here and launching the attack he did this morning. He talks about what has been given to the farmers—given, he says, by the Government. Where did the Government get it to give? I am reminded of a speech to which I listened in Ballygar, a speech delivered by the Parliamentary Secretary to the Minister for Lands, during the last general election. He talked about Fianna Fáil money. One would imagine Fianna Fáil owned a mint and were producing money. Of course, the Parliamentary Secretary was just trying to gull the people.
Today the Taoiseach tells us that the general taxpayers have contributed nearly £36,000,000 to the farmers. Who are the general taxpayers? He said the Government cannot afford to give the farmers any more. Who gives the money to the Government? Who are the general taxpayers of this country? They are the people who live on the land and who work the land of this country. Every other section of the community lives on the people who live on and work the land and produce the food from the land. It is the farmer, and the farmer alone, who produces the beet, the wheat, and every other crop. He produces in blood and sweat, and he is the man who pays the taxes. It is the farmers who pay every increase in wages to other sections of the community. It is the farmers, and the farmers alone, who produce the wealth of this country. And it is the farmers who have to bear all the increases.
The Taoiseach said today that the Government have given £36,000,000 to the farmers. He appeals to them: "Let them not rock the boat." It is like the tinker woman who appeals: "Don't hit me now with the child in me arms." If the farmers rocked the boat whom would they injure? It would not be the civil servants. It would not be the politicians in this House. It would be on themselves the repercussions would fall. It is the farmers who are paying the Taoiseach's salary, the Ministers' salaries, the allowances to every Deputy here, to the Daddy up in the park, to the roadworkers——
The Deputy should not refer to the President of this country in that fashion.
Mr. Donnellan
We will call him the President of this country then, if that suits. It is the man who lives and works on the land who is paying the increases to every other section of the community. What is causing all the trouble today? Why are the farmers marching? Because they can no longer exist on the land. Over 250,000 agricultural workers and farmers have left the country. The little shops all over the country are closing up because those who bought from them are no longer there to purchase. That is what has rocked the boat. That is the reaction.
We have had the eighth round increase for other workers, but nothing for the farmer. There will be £6,000 for the judge, but nothing for the farmer. But it is the farmer who will pay no matter what the Taoiseach may say about manufacturing industry. I wish manufacturing industry well. I wish industry were ten times better. But industry is only a drop in the ocean from the point of view of the national income. It is the farmer who bears the main responsibility for the income of this country. The Taoiseach said emigration has decreased. He says there are fewer people unemployed. Of course there are. They are employed in Birmingham and London. Houses are closed up all over the country. He says the farmers are rocking the boat and the Government cannot afford to give them any more. If that is not brazen-faced effrontery I do not know what it is. Apparently it is the thickness of the neck that counts. If the Taoiseach or any other politician in this House thinks he can dictate to the people on the land, he is making one hell of a mistake. They will not take it from him or from anybody else. They will not have it from him or anyone else. They are quite right. They are quite entitled to look for their rights. They are looking for their rights today.
I warn the Taoiseach, I warn the Government and any Government that may come in their place, the day is at hand when the man on the land has decided that he must do those things himself. For too long he has received promises from this House, from other places, from politicians. He has decided that he must fight his own case in his own way. He is right in doing so. The Government must realise the cause of all this trouble. They were not long in office on the last occasion when they removed the food subsidies. I was one of those who warned them at that time that it would lead to the increases in the cost of living that are now becoming unbearable, not to the Government, not to the Opposition, not to any politician in this House, but to the producer, the man on the land, the only man who makes new money. Today he is attacked by the Taoiseach and told that we are giving him £36 million. The Taoiseach is not able to give the man on the land anything. He cannot give anything until he gets it from the man on the land. Any increase given to any section of the community derives from the producer. It is the land which creates the new money. The other sections are like jobbers who might invest £1 in order to make £1 5s. of it. The man who makes the new money is the man on the land.
I warn the Taoiseach, the Government and every politician in this House. I stand here as one of the people on the land; I stand here as their representative. It is not what somebody told me; it is what I know from experience. The burden is now too heavy, has become impossible. They have to run away from it. Homes have to be closed up. A quarter of a million people have left. Is it for fun that they left? Do the Government think it is for fun that 250,000 people between 18 and 23 years of age have left this country? Is it for fun that they are in the slums of England, in Birmingham, London? In many cases, the fathers and mothers have gone with them and the homes are closed up. That is the situation that Fianna Fáil have created here.
I am afraid the farmers are going out when it is late. It is 20 years since I tried to organise them and advised them in that direction but it was no good. They are doing it now themselves, 20 years late, but better late than never. They are taking matters into their own hands. They are right in doing so. They will have no dictation from any Government or any Taoiseach, no matter who he is.
The debate was crowned last night by the speech made by Deputy Oliver Flanagan. Deputy Flanagan was talking about gloom and depression and suggested that everybody was worse off today than heretofore, that the picture painted here and supported by facts was not a true picture. Nevertheless, we read in the papers recently that the same Deputy has found it possible to buy himself a new and better car. Deputy Flanagan must realise that he is also participating in the improved economic conditions of the country.
It is all very well to talk about the policies pursued by the last Coalition Government but I recollect very well the situation that existed at that time. There was a depression. Dublin Corporation were receiving over 1,000 houses a year from families who were emigrating. That figure is now down to about 200.
Probably one of the major immediate social problems in Dublin city is the lack of housing facilities. I am aware that Dublin Corporation this year are doubling their house production of last year. Nevertheless, it is obvious that a year or two will elapse before the Corporation will catch up on the State in ability to house people. It is a very good sign that this problem should arise. It is a firm indication that conditions are improving and that the people are better off, generally speaking.
It is well known that skilled workers are in extremely short supply, particularly in the building industry. If there were more skilled workers available, more unskilled workers would find employment. I spoke to a carpenter who was here on holidays from England and who was more than anxious to return to this country, but was afraid of a recurrence of the position that obtained in 1956-57, when house building fell off and there was no permanency in the building trade for either skilled or unskilled men. Many workers are afraid to take the chance of a recurrence of that position. I tried to reassure the man I met. I am perfectly satisfied that all the indications are that there is no likelihood of a recurrence of such conditions for some considerable time.
The Government can be well satisfied that the economy has expanded to an extent where the individual lot of the worker has been improved. The recent wage increases which, I understand, are working out at an average of about 12½ per cent. on existing wages, were not inspired by any rise in the cost of living. It is the worker insisting on having his share in the improved national position. The same thing applies to the State servants. They are getting the increase so that their wages may be comparable with those in private industry. I think that the State here can be proud that its servants are paid wages and have conditions of employment comparable with private enterprise and that it has never fallen behind in its responsibilities in this regard.
There are many questions that could be raised in this debate but I should like to reserve some of my remarks for the individual Estimates. I should like, however, to counter the false picture that has been painted to the effect that there is rising unemployment, fewer people at work and increased emigration. The facts do not bear this out. The general all-round position is good. The firm foundation has been laid. The trend of expansion has become clear and industrialists abroad have recognised this. They have recognised our stability and our sound budgetary policy. All these things have attracted them to participate in our industrial drive.
The air of confidence that has grown up in the past few years should be encouraged and supported in this House by everybody, no matter what side he is on, because it has encouraged more industrialists to invest their money in new enterprises. As long as that spirit of confidence is there, the economy will continue to expand, more employment will be found and the problem of emigration, which has been with us so long, will become a matter of no real concern. It is with these things in mind that I think the Opposition should be very careful in their criticisms. Certainly, every Government expects to be criticised but to try to paint a completely false picture for political Party purposes is completely wrong. Whether in Opposition or in Government, we are sent here to do our best for the country as a whole and the Opposition should bear that in mind all the time.
(South Tipperary): I miss Deputy Booth from the House. I rather enjoyed listening to him last night. He is rather misplaced in this assembly. He gave us a dissertation which was mostly a banker's dissertation. I think his place is in a bank and not here. I can assure Deputy Booth that things are not as happy up and down the country as he would like this House to believe.
Deputy Noel Lemass has told us of the improved conditions in Dublin Corporation and the improvement as regards building. As far as I know, building in the country as a whole has fallen off over the past five or six years. He was quite happy about a wage increase of twelve and a half per cent. and said that all the talk about unemployment and emigration was hooey. He wants to inspire us with an air of confidence. He thinks we ought to face the future with an air of confidence and that the Government ought not to be criticised, that such an attitude is good for trade and foreign investment and public confidence.
The Taoiseach gave us a long dissertation on our economic problems. He thought that improved expenditure could be a good thing. He states that in view of our economic expansion, we are entitled to increased social amenities. That would be so if the economic expansion were soundly based but it is the opinion of many people in this House that it is not so based.
It would also be justified if the improved income accruing from economic expansion were evenly distributed, but it is not evenly distributed so far as rural Ireland and the agricultural community are concerned. The Taoiseach also pointed out to us that public employees of all grades have a right to have their wages adjusted. Public employees have a right to wage adjustments if the primary producers of the country have a similar right to adjustment in the prices of the commodities they produce. In this country, that has not happened so far.
The Taoiseach also pointed out that where savings are concerned, we are the lowest in Europe. Perhaps we are an improvident people. Sometimes I think we may be but what is the inducement for our people to put money aside, even if they are in a position to do so? The Taoiseach also makes the point that the eighth round of wage increases might be welcome if it served as an incentive to reluctant employers to increase efficiency. He proceeded to give us some figures about the various subventions given to farmers down through the years and mentioned that the amount of these subventions had risen from £13 million in 1953 to £36 million at the present time.
The Parliamentary Secretary to the Minister for Lands, speaking yesterday, gave a figure of £8 million, if I heard him correctly, for 1956-57 and £26½ million plus £6 million for rates relief in 1961-62. I find it difficult to reconcile these figures. One hears so many figures in Dáil debates and one sees so many different figures in statistical tables that one finds it difficult to reconcile figures anyway. He mentioned, for instance, that 1½ per cent. of the national income in Britain is devoted to the subsidisation of farmers against 6½ per cent. of the national income here. The farming community in Britain represents only about 5 per cent. of the population and that 5 per cent. represents about £250 million per year. Finally, he tells us that any further aids to farming would be dangerous in this Community, to quote his own words: "Aids to farming, as indeed to other commodities, would be calculated to distort competition and would be ruled out on our entry into the Common Market." Yet every day we take up our newspapers and we read about new industries and the millions of pounds floating into them.
If he is sincere in what he says in that regard, should we not proceed now to dismantle the elaborate protective tariff machinery around the industrial sector of our activities in order to prepare ourselves for entry into the Common Market? If it is wrong at this stage to object to giving any further subsidies or increase in subsidies to the farming community in view of our entry into the Common Market and the limitations placed on any form of subsidisation or artificial help calculated to increase prices, does it not equally apply to the industrial arm of our activities?
Speaking about rates, the Taoiseach adverted again to some experienced select committee set up to inquire into the question of rates. He told us the only way to reduce rates was to reduce services. He told us our economy is expanding at the rate of 5 per cent. per year, the highest ever; but he gave us no solution whatever, no lead, as to how the increasing trend of local rates is to be faced. He decried any suggestion of making charges now imposed on the local rates national charges, either on the question of roads or health services. All he was able to tell us was that if we wanted to reduce rates, we must cut down services; and he was not prepared to do that. Again, we have trotted out the old statistical trouble: emigration. Our emigration and our unemployment are going down, according to Fianna Fáil. They are going down because our people are gone. That is the simple answer.
We were told that our industrial output had increased by nine per cent. I am always a bit sceptical about these figures showing an increase in industrial output. I would always like to know how much of that output is primary and how much is merely secondary, the reassembly of things already manufactured. I do not know whether any tables are published here to show one against the other. I do know that as regards primary exports here we can only speak, broadly and largely, of the agricultural industry.
Figures were given yesterday and today about the amount of extra money injected into the economy as a result of this Vote on Account and as a result of the increased Public Services demand. Deputy Dillon adverted to the fact that there has been roughly a 50 per cent. increase in half a decade in certain taxation. Deputy Sweetman mentioned a 35 per cent. increase in five years. Two million pounds were mentioned as the extra charge because of Civil Service awards. I think the Minister himself mentioned a figure of £12¾ million for increased remuneration. If you look at the Public Services Account, you will see that the non-capital Supply Services have jumped with a three-fold sharpness as against the past two or three years. The net result of injecting a large increased amount of capital through Government services is an impending inflation.
The Leader of the Labour Party used the word "inflation". He seemed to think it was a nasty word and he affected not to know exactly what it meant, but I am sure he does. It means too much money chasing too little goods and services. Any economist will agree that one of the fundamental causes of inflation is increased State expenditure. He recognises that any form of increased expenditure tends towards inflation, whether through the spending by private people on luxury goods or through State expenditure. The State, however, sets the headline, and in so far as so much State expenditure is, of necessity, of a non-productive kind or of a purely service kind, it tends more than most other expenditure towards inflation.
The expenditure in this House is not the end of the story. We have approximately 50 semi-State bodies here spending £25,000,000 per annum. About half of those, the lesser spending ones, I admit, are engaged in non-productive effort.
Finally, we have the rates. Now what is the effect of injecting all this money into the body corporate? It means for those who are capable of organising pressure groups in the community that they can, by agitation if they have political powers and if they are sufficiently important in the ballot box, demand increased incomes to meet the decreased purchasing power of money. A Government will be inclined on all occasions, particularly in the initial stages of their term of office, to yield to these pressure groups.
In the community there are also sections who cannot organise. With increasing inflation people who are depending upon pensions, be they old age pensions or Civil Service pensions, and people on fixed incomes, be they privately employed or working in any other way, find themselves in trouble as the purchasing power of money becomes progressively lower and lower. Certain other sections of the community—for instance bank depositors who put a few pounds away for the rainy day or, perhaps, to educate their families—find that with the decreasing purchasing power of money they are unable to meet their demands. Even people who have invested their money in our own national loan find that the value of these loans, when they come to sell them, has depreciated. In fact, the very activity of investment in the stock exchange is dictated by this very question of inflation and that type of investment is used as a hedge against inflation.
There is a fourth section of the community affected by the decrease in the purchasing power of money—the farming community. The farmer has no hedge. He cannot, in the ordinary way, ask for increased prices for his produce because he must export to a market over which he has no control. People in business can, to a certain extent, throw back in some measure upon their customers any increases that may occur, but the farmer sells his agricultural produce abroad and a very small proportion here. With our small population, the farmer's price is largely dependent upon what he can secure in a market over which, as I have said, he has no control. He is, therefore, not insulated against a drop in the purchasing power of money.
I am entitled to ask the Minister for Lands what steps he intends to take to provide against this danger of a spiralling inflation. Does he not realise that, even apart from the sections I have mentioned, he is also facing an increasing prospect of a difficulty in the balance of payments? These difficulties have occurred here before. They occur quite frequently in Britain. We are entitled to ask him, therefore, if he intends to take steps before he goes out of office— Deputy Dillon said he was going—to control impending inflation and the decreased purchasing power of our money.
I do not want him to reveal any Budget secrets. I merely want some assurance, because we on this side of the House feel perturbed about the social injustice caused by the decrease in the purchasing power of money. It is certain non-privileged sections of our community—those sections who are unable to fight back or recompense themselves by any form of agitation—who will bear the full brunt. Some people ask why the farmers are pursuing a negative policy. They are merely seeking to have taxation reduced. The farmer, of necessity, must pursue a negative policy because, unlike other members of the community, he cannot go to John Bull and say: "Give me more for this."
In South Tipperary, our rates this year rose by 4/- in the £—the demand was for 5/11d. but it was cut ultimately by the council. That was last Monday week. Yesterday, there was a meeting of the county council there and a supplementary estimate was submitted for £50,000 for general purposes and materials. That supplementary estimate was brought in within ten days of the estimates meeting and it added another 2/6d. in the £ to rates which had already risen by 4/-. Surely, in the name of all that is reasonable, nobody can say the farmers are wrong when they march, and surely it is not unreasonable to ask that the full demand of that county council for the ensuing year would have been laid before the estimates meeting ten days ago.
These are the difficulties that confront our rural population. I am surprised at the Minister for Finance who has a rural background, who lives in the country, who understands farming, for the negative attitude he appears to be adopting on this issue. I would ask him two questions. First of all, what does he intend to do to prevent depreciation of the value of pensions, fixed incomes and the incomes of the farmers? Finally, I would ask the Minister what steps he intends to take to prevent further inflation and a further decrease in the purchasing power of the £?
We are faced here with the consideration of the general policy of the Government, particularly in its reflection in the Estimates which have been furnished. It is accepted, I think, by all that in approaching this matter, Deputies of every Party have as their aim the advancement of the prosperity of the country. They differ merely in the emphasis they place upon certain aspects. By and large, the variation in emphasis represents the choice which the electorate has when an election comes.
Listening to the speeches this morning, it would seem as though speakers on opposite sides were speaking about two different countries. On this side, speakers told us that, while we want to see very considerably increased prosperity, the position is that we are at present away ahead of anything experienced in the past. Listening to speakers on the Opposition benches, it would seem as if things have never been so bad since the Famine. Even allowing for the natural emphasis one puts on these things, depending on the side on which one sits, there must be certain basic misconceptions on the part of Opposition speakers.
I remember the Taoiseach on one occasion referring to national economic progress and stating that this can be measured objectively. That is true. The objective tests which can be applied have been referred to here, but I have been intrigued by the approach of some of the members of the Fine Gael Party to the problem. They can quote statistics which show, they allege, that the country is in a very bad state. On the other hand, if statistics do not support that contention, then they allege that the statistics are misleading and unreliable.
Great play has been made on the Fine Gael benches with the increase in the cost of living. Some listed the various items which have increased since the Government took office. They have made some rather eloquent speeches on the evils of inflation. It seems to me these Deputies are possibly missing the whole point of what has been happening in this country. What has happened is that for the first time—I will not say for the first time since the foundation of the State, because I do not know, but certainly for the first time since the War—the workers under this Government have obtained a real increase in wages. The first six rounds of wage increases were merely trying to catch up on the cost of living, and they did not do so. The seventh was the first in which the workers—that does not mean the people in the cities and towns only— obtained a real increase in that the value of their wage packet went up in relation to the goods they could buy. That was possible only because of the economic progress made under this Government.
There is no virtue in trying to deny progress. We do not claim that that progress is solely due to the efforts of this Government. We claim some credit for it. We claim we adopted the right policy at the right time. The Taoiseach said this morning he would be the first to admit there have been factors which have influenced this increased prosperity, factors over which the Government had no control whatever. I do not think any purpose is served, nationally or otherwise, by Deputies on the opposite benches pretending this progress has not taken place. It is fair to say the Government should get no credit for it, but it is not in the national interest to say it has not taken place.
I mentioned objective tests. One of the tests is the fact that, for the first time since the war, workers obtained a real increase in wages as distinct from the earlier relative increases trying to catch up on the cost of living. It is true that the eighth round has been unfortunate in one sense from the point of view of the economy, not because it was a round of wage increases but because of the magnitude of the increases and the manner in which they took place. They appear to have occurred rather haphazardly. Deputies will agree that it is a bad thing for the economy if increases in wages take place more or less by accident or chance. Deputies will also agree that all our efforts should be bent towards ensuring that such a situation will not arise again.
I had hoped when the seventh round took place that we could continue with the workers getting a real increase in wages each year within the increase in the national income. In other words, I had hoped that the economy could stand such an increase and that it would be a method of distributing increased prosperity all around. I feel the interests of the workers would have been better served if that pattern had been followed, but what has occurred is not disastrous. The Taoiseach referred some time ago to the eighth round as mortgaging future productivity. That is what has occurred, but I think the economy will stand it. It will, of course, make things more difficult than they need have been.
It seems to me a mistake that many of the Fine Gael speakers have referred to the increase in the cost of living but have neither referred nor related that increase to the increase in the national income.
Obviously, if we increase our national income year by year it would be quite unjust if the fruits of that increase were not distributed. In fact, they are being distributed. That is something which I think Deputies on all sides of the House should be pleased to see happening. It is true that there are certain sections of the community who have not benefited by these increases. If Deputies opposite had confined their complaints to that I would not quarrel with them, but, as I have said, they went further.
There are two major categories who have not benefited: first the agricultural community; and secondly the pensioners. Some Deputies spoke about people on fixed incomes but unless they meant the pensioners I do not think they were accurate, because practically everyone on fixed incomes —that is those who are working—has benefited by these wage increases. It is true to say that the agricultural community have not benefited from the increase in the national income to the extent that other sections have benefited, but it is not at all true to represent the position as being that the agricultural community are down on their knees, which is the impression one would get here.
Furthermore, it seems to me that if we get access to the Common Market the prospects for the agricultural community are vastly superior to the prospects for any other section. I would ask Deputies opposite to consider just what actually is the position of the agricultural community at the moment. The root cause of the trouble is that the main market to which we sell is a market which will purchase only at dumped prices. Anyone who has to export to that market is faced with that position. So long as that situation continues it seems to me that the agricultural community can hope to earn a reasonable living only by subsidies from the State.
In fact, the agricultural community are getting these subsidies and, therefore, it would seem logical to presume when Deputies opposite complain that the agricultural community are not benefiting by the increase in the national income—where that has been admitted—that, in effect, they are saying the subsidies to the agricultural community should be increased. I did not hear any Deputy opposite saying that. I did not hear any Deputy opposite offering any other solution in regard to the income of the agricultural community. If Deputies opposite mean that these subsidies should be increased, I should like to hear from them to what extent they think they should be increased; where they think the money should come from; should we cut down on existing services; or should we increase taxation? If they are not prepared to answer those questions it seems to me they are not entitled to make the case which they have been making.
People who are on fixed pensions are the class who invariably suffer when there is any increase in the cost of living, if it is just left like that, but the situation here, as I have pointed out, is different from what we have been accustomed to in the years since the war. We have had increases in the cost of living and we have also had substantial increases in the national income. Therefore—and I am speaking purely theoretically now; I have no inside information from the Minister —theoretically the prospects for pensioners are not as bad as they might have been some years ago because if we have an increase in the national income we can, subject to certain difficulties, find money to increase pensions and bring them up into line.
The trouble is that, with the jump which was made in the wage increases in the eighth round, which went ahead of the increase in the national income, there is grave danger that that excess has taken away the room to manoeuvre which the Minister for Finance would have had to look after the interests of pensioners. I do not know how the Minister will deal with the problem, or whether he can deal with it, but I have no doubt, knowing the history of this Government and their record in social legislation, that the interests of these people will certainly not be forgotten.
Speaking generally on pensions I should like to suggest to the Minister —he has probably considered this suggestion many times before but for what it is worth I should like to mention it —that he might explore the possibility of investing the pension funds in some kind of portfolio that would correspond roughly to the portfolio of unit trusts. I realise there would be many practical difficulties and I am just speaking of the general principle. It seems to me that the only way the pensioners can be protected against this ever-increasing cost of living is by investing the pension funds in a portfolio which will automatically increase with an increase in the cost of living, or fall in the value of money, which is more or less the same thing. If something on those lines could be done the pensioners could, to a large extent, be cushioned against the difficulties, and would not have to wait until the community got, around to finding the necessary money to pay for an increase to bring the pensioners up to date.
Deputy Michael O'Higgins, I think, referred rather vehemently to what he said was a promise made by the Taoiseach to provide 100,000 jobs as a result of a five year plan. I have heard this allegation made many times, but I was present when the Taoiseach read the paper to which Deputy O'Higgins referred, and I heard what he said. I also saw it reported in the newspapers. The Taoiseach did not promise to produce 100,000 jobs as a result of a five year plan. Furthermore, the calculations on which he relied in that paper were quite clearly made by him subject to certain provisos. One was that due to the fact that he was not then in office he had not got access to many of the figures. He also said at that time, with a certain amount of prescience, that he did not know in what condition the finances of the country would be when the then Government went out of office, but he rather feared what he would find and events, I think, justified him in this. I should like, for what it is worth, to reiterate that the Taoiseach made no such promise.
I wish also to comment on some of the references that have been made to the subject of emigration. Deputy Dillon said that we lost a quarter of a million people in the period covered by the last census, but he did not say in what portion of that period we lost most or least of those people. It is futile for Deputies opposite to go on pretending that that loss was occasioned by this Government and that that loss was spread evenly over the whole period. It is well known statistically and to anybody who has his eyes open in this country that the bulk of that loss was at the beginning of the period and that, in fact, the position is, as the Taoiseach said this morning, better than it has ever been and we have this position which we have never had before that we have the lowest unemployment and the lowest emigration at the one time.
I have been surprised on occasions to note the degree to which the element of chance apparently governs the fortune of the Governments of this country. It would appear from what we have been told to-day and from time to time that the misfortunes which befell this country during the terms of the two Coalition Governments were due to circumstances entirely outside the control of those Governments, while, on the other hand, any misfortunes— and they were small—which befell the country during the period of a Fianna Fáil Government were due entirely to the action or inaction of the Fianna Fáil Government. You can have it one way or the other, but you cannot have it both ways.
One of the really significant features of the results the Government have achieved has been that, contrary to the established pattern, we have succeeded in reducing emigration at a time when the opportunities for employment in Britain were very considerable. In the past the pattern has been that if circumstances improved here and disimproved in Britain, there was a flow of people back; in other words there was a reduction in emigration, but if the opportunities for employment in Britain increased then our emigration rate went up. Under this Government, however, for the first time employment opportunities in Britain have been as good as ever, if not better, and at the same time there has been a reduction in the amount of our emigration. I ask Deputies: is it possible that all these circumstances have occurred by chance? I suggest that that is just not possible and that we should accept as common ground that an increase in national income and national prosperity has taken place. As to the causes of that we can differ but our efforts should be devoted to trying to ensure that the money which is collected by the Minister for Finance from the people is expended in the most productive manner possible.
I know that some Deputies may regard the increased provision in the Estimates in respect of increases in wages as a non-productive investment. However, I would remind them of what I said earlier that this is a process of distributing as equitably as possible amongst the people the fruits of the increase in national income and that our aim should be to see that equitable distribution takes place. I would pay a tribute to the Deputies opposite in so far as they have drawn attention to some of the injustices which have taken place and which are inevitable in any such situation, inasmuch as there are certain sections which have not benefited. Nevertheless, it is totally wrong and gives a completely false impression for Deputies to speak of the present situation as being a grossly inflationary one or as being the prelude to catastrophe. It is no such thing. As long as we keep these increases in wages within the bounds of the increase in national income we are not creating an inflationary situation.
I would urge that we should co-operate in trying to see that the money which is raised by the Minister is devoted to the most productive methods possible, that we should accept the fact that an increase in national production has taken place and try to accelerate it as much as possible. Apart from the obvious reason for doing so, it is a matter of great importance that that acceleration should take place now, this year and next year. It may be much more important that it should take place now than in five years' time if we get into the Common Market because if we enter the Common Market we shall need every ounce of strength and stability in our economy in order to stand up to the test involved. If we do not succeed in reaching the necessary strength we may lose all we have gained in recent years when we go into the Common Market.
I believe we can gain very considerably and I also believe that the agricultural community not alone stands to gain enormously if we enter the Common Market but will for a considerable period be carrying the rest of the country on its back in the Common Market.
I deprecate any suggestion that city or town people are paying for the farmers or carrying them on their backs or vice versa. On the other hand, when it was pointed out that the farmers were receiving subsidies, I think Deputy Dillon resented this very much and, to me, he seemed to imply that, in fact, they were carrying the rest of the country on their back. This attitude is wrong. I represent a city constituency and I have no doubt that the vast majority of my constuents are only too anxious to see the farmers as prosperous as they can be. It is really enlightened self-interest. I should like to be just as sure that the people in rural Ireland want to see those in the towns and cities as prosperous as they can be and that there is no jealousy because one section gets an increase and the other does not. Obviously, if the country is to make progress all sections must progress and I would urge Deputies to do all they can to foster that idea and to kill the idea of town versus country. It is something that I think would ruin the country.
In concluding, may I take the opportunity of congratulating our present Minister for Finance who, as can be shown from the events which have taken place during his period of office, has been the most successful Minister for Finance the country has ever had.
As a farmer from Sligo-Leitrim, I should very much like the Deputy who has just spoken to spend just one week in my constituency and I would very soon show him the destruction and the havoc caused there by emigration and the great difficulty there is in finding employment for so many who are trying to hold out on small holdings and who very much need employment as a sideline. I should also have no difficulty in showing him—and it would not take me too long to do it—the low incomes and the difficulties which the small farmers of the West, in particular, have to suffer.
I live among those people and I have first-hand information. I can assure the House it is neither for the sake of propaganda nor talking politics that I am here. I am really speaking the truth. Homes are closed every day because the small holding is uneconomic and it is impossible for the young man who is married and has a family to hope to make a living on that holding. About five or six months ago a lorry driver in my area died— and this will give an instance of what the situation is—and if there is one application for that job there are well over 100 and the appointment is not yet made. Among the applicants are farmers and all types of persons anxious to remain at home and not emigrate. Those are the type of people I represent, honest-to-God people who certainly need more assistance than they are getting. They want better prices for milk. They want artificial manure at a cheaper price and, if something is not done in that line, I can assure the Minister the homes will close. They must close. You cannot keep a wife and family with the present cost of living when you have public representatives striking rates such as the increase of 3/3d. in Carrick-on-Shannon about a fortnight ago.
In my area, we have very few industries. There are some in Sligo, but Sligo has a population of about 12,000 or 14,000 and plenty of manpower to supply the required labour but in the other towns and villages in my constituency there is no hope and no encouragement is being given to start industries. The fruits of emigration are clearly to be seen. Every day you go into the local town or village they are almost deserted. It is the population from the surrounding area that goes to fill up a town and, after that, it is the employment which puts money in circulation and then people have business in the town.
The difficulty is to get employment lasting more than a few months when the grant of a few thousand pounds is spent and only God knows when there will be another grant for a road convenient to those people again. They must go to the local Garda Station and sign on and if they do not, they will not get any benefit and when the time comes for further employment they will not get it.
The farmers who are having protest meetings are to be congratulated. Their rates and taxation go up every day but the farmer is still the backbone of the country and always will be. A cow and a calf on the farm is our mainstay and if we do not give people at home a chance to survive by keeping down the rates it will be bad for the other sections of the community. Emigration is certainly the root of all the trouble. The towns and the villages are stricken and the farmers who want men to work on the land have nowhere to get them.
Having listened to the debate yesterday and most of this morning, there is very little new to add. I was interested in the points made by the Deputy who spoke last on the opposite side and, like my colleague, I would invite him or any other city Deputy to come with me on a tour of some of the rural areas in the south of Ireland. He would soon be convinced that all is not well.
It was always generally accepted here that agriculture was the foundation of our national economy but for some time past there have been indications that that principle is no longer accepted. One cannot help concluding from the attitude of the Government, and particularly the Minister for Agriculture, that farming and agriculture now seem to be relegated to the limbo of forgotten things. I believe agriculture is, and always will be, the mainstay of our economy and that future development, when we become members of the European Common Market must be based on agriculture.
One matter about which I am particularly perturbed is the prospect for the survival of the small family farms which dot the hillsides and valleys of rural Ireland. We have been warned in the past by leaders of Church and leaders of various rural organisations that the small farmer was going out of existence. We have heard the lone cry in the wilderness of the Most Reverend Dr. Lucey, Bishop of Cork, calling attention to this problem of rural depopulation. Looking at the present position of Irish farmers, particularly the smaller farmers, I cannot see any hope for the survival of the small family farm in the highly competitive European market which we propose to enter. I believe either of two things will happen: we shall have over-consolidation, unless we adopt the alternative approach and try to develop co-operation. The word "co-operation" has been bandied about a great deal. Much lip service has been paid to the idea of co-operation but very little real progress has been made in applying the principles of co-operation to the development of Irish agriculture. There is considerable scope for improvement there.
Last night, Deputy Tully referred to the problems of the agricultural worker. As a farmer, I agree that the agricultural worker is one of the most highly skilled workers in the State and consequently is entitled to remuneration comparable with that of his counterpart in industry, but I would not agree with the suggestion made by Deputy Tully that the farmer was refusing to pay his worker a reasonable wage.
I had an example last week of a farmer with 50 cows whose worker left him to take up employment in the building industry in the city of Limerick. That worker had been with the farmer for five or six years. He was a good man. The farmer had no alternative but to put his cows up for auction. Before doing so, as a last resort, he went to the workman and said: "How much are you getting in the building industry?" He said he was getting a certain wage. The farmer said: "I will give you that" and the worker returned to the farmer. I accept that the agricultural worker is entitled to a reasonable wage, but I believe that the farmer is not in a position to pay that wage. Deputy Tully did admit that farmers under 50 acres are having a lean time but when all farmers under 50 acres are taken out, there are very few left.
Agriculture is the foundation of our national economy and, if we are to progress, economic development in the future should be geared along three lines. First, we should develop the resources which we have; secondly, we should develop industries based on those resources; and thirdly, we should proceed with the development of industries based on imported raw material. As I have said, agriculture is the foundation of our economy and any progress in the future will be based on the development of agriculture. Industrial development in this country should be based on the processing of agricultural raw material.
I salute and pay tribute to the man who has shown us how to approach this problem, Lieut.-General Costello. If I were asked how would I proceed with the industrialisation of this country, my answer would be that there should be set up a national industrial council under the chairmanship of Lieut-General Costello and including such men as Mr. Brendan O'Regan of the Shannon Industrial Development Authority, Dr. Andrews, and so on. Industrial development should be based on the processing of agricultural raw material. In the European Economic Community which we are about to enter, there will be a rising standard of living which will cause an increasing demand for good quality food products. We have the soil, the climate and the ability on the part of our farmers to produce from the land material which, when processed, will be able to compete with the products of more highly developed nations in Europe. I have no doubt whatever that if our farmers are given the proper incentive, they can and will compete.
Reference has been made in the course of this debate to the marching farmers. This is a situation into which our farmers have been forced. I honestly believe they are right in trying to focus attention on their problem. Deputy Corish raised a very important question, namely, what will happen to those workers who are now engaged in the building industry when the various building projects now on hand will have been completed. This is a matter which is giving rise to a considerable amount of anxiety, particularly in places like Limerick where there is a boom in building and has been for some time past.
As a dairy farmer I was rather amused last night to hear Deputy Booth referring to the eradication of bovine tuberculosis. It was a typical arm-chair approach to the matter, the arm-chair approach which has be-devilled agricultural development in this country for so long. Quite a considerable amount of money has been spent on the eradication of bovine tuberculosis. I made some inquiries in County Limerick some time ago in the matter. In that county, there are ten thousand herds and I was informed that of that number there are only 15 fully attested and these are owned by part-time farmers, British majors and colonels and the like. We have had considerable expenditure under this heading and very little progress made.
The dairy industry is the foundation of our whole agricultural economy and our farmers are now very worried as to the future prospects for milk. Shortly after the present Government was elected, the Parliamentary Secretary to the Minister for Finance stated that, when we entered the European Economic Community, dairy farmers would get 2/9d. a gallon for milk. I was hopeful that this might happen but when I put down a question just before the Christmas recess asking the Minister for Agriculture what were our prospects in the European Economic Community he said that it was very difficult to say at this stage.
On the question of rates, I honestly believe that we have reached the stage, as far as the small and medium farmer is concerned, where the rates are beyond the ability of the farmer to pay.
Deputy Corish said that there was going to be a new Programme for Economic Expansion and he suggested that all organisations connected with industrial development should be consulted in the preparation of it. I am fully in agreement with that suggestion.
Taking the debate as a whole, I would gather from what the Taoiseach said this morning that the N.F.A. had got under the skin of the Government. I think the N.F.A. are a responsible body. I think they have made a very worthwhile contribution to agricultural development and I would deplore any tendency to accuse them of political motives in their present endeavour to secure justice for the farmer.
I hope that our application for membership of the European Economic Community will be accepted and I am confident that it will. I believe that, given an enlightened and progressive government policy towards agriculture generally, we can look forward to the future but we cannot do that unless there is a complete change, unless there is a realistic and critical appraisal of the whole subject. I would conclude by repeating that agriculture is the foundation of our whole national economy.
Three things strike me about this Vote on Account. The first is that taxation is increasing with monotonous regularity in this country. The second is that by Supplementary Estimates passed through this House the Government have already borrowed a good deal of money. The third thing is that with the national income standing at a level of £550 million the State is spending practically 30 per cent. of that. Whether that is a desirable state of affairs is a matter of opinion but it is certain that the Government are not setting a good example of economy. The Government are setting an example of people living beyond their means.
The Taoiseach this morning referred to the fact that there were not sufficient savings in the country. Surely if the Government are going to increase expenditure continually, if they are going to borrow into the coming year to the tune of over £10 million, they cannot expect the private individual be he in a big, little or small way of life, to put money aside and save it?
There has been a lot of blow about the workers' wages but it is a fact that the most thrifty people were formerly the working classes. Today they are not able to save. With the overall charges that fall on them with increased prices for every commodity, increased transport charges and increased clothing charges they have nothing left to save. The middle classes were also very thrifty and they are in exactly a similar position to the working classes. They are not able to save. The cost of schools, hospitals and institutions of all kinds has gone up. Everything they use has increased in price. All that makes for a lack of saving and with a lack of saving you have a lack of stability.
As members of the Opposition Party, it is our duty to say these things but when we do so we are accused of trying to sabotage the economic progress of the country. We are supposed to agree with everything that Fianna Fáil say, that everything in the garden is rosy, that we have an expanding economy, that unemployment and emigration are falling and that national production is increasing. This morning Deputy Dillon blew that contention into smithereens when he quoted from a book. I was not sitting close enough to him to see what it was but he pointed out that out of increased exports of £9 million only £600,000 was accounted for by industrial exports.
The Taoiseach this morning talked about the great increase in industrial production. National production has gone up by five per cent. He said that was the highest rate in Europe. I do not agree with him there. However, we will let him have that if he wants it. It is easy to increase on five per cent. when you have a low production. Compared to the other European countries, our increase of five per cent. is small. Our overall income is £550,000,000. Where you have the overall income reaching astronomical figures as in other countries, an increase of five per cent. is vastly in excess of ours. We are only making up the leeway, through force of circumstance and history, as against other countries.
I think the Taoiseach was unduly hard on the farming community this morning. The fundamental argument he produced was that the farmers were getting a lot of money and support from the present Government. The figure mentioned just now of an increase of practically £9,000,000 in exports is accounted for to the extent of more than 90 per cent. by agricultural exports. Agriculture is the fundamental of this country—all employment, all retention of people here, cessation of emigration and everything else. To try to correlate, as the Taoiseach did, the amount of money given in this country to agriculture with what is given in the United Kingdom is at variance with the facts. The United Kingdom is an industrial country, powerful and wealthy, where the employment in industry is far greater than in agriculture. For them agriculture is of minor concern compared with this country, although they do not measure the supports they give it in that way. I do not suggest we should give these supports here. I do not suggest we are in a position financially to give them. One of the troubles we have to face is that agricultural production in the developed countries of the world is reaching surplus or near surplus and the industrial countries are spending big sums of money to subsidise that. Whether they do it by direct subsidy or by deficiency payments, it comes to the same thing. They are producing, and they are producing to the detriment of the agricultural countries. For that reason we are faced with a lot of difficulties. We are satisfied on this side of the House that these are difficult times for a Government and difficult times for an agricultural country. But at the same time we do not think this Government are doing their best or really taking seriously the point of view of the agricultural community. We can only judge them on the results.
The Taoiseach said this morning in regard to wheat and beet we were entirely self-sufficient and for that reason difficulties arose and they had to cut down. He did not actually say they had to cut down, but I say they had to cut down on beet contracts and that the farmers were asked to grow less wheat. In all these statements by every Government speaker the argument has been that overall production is increasing and that, although taxation is increasing and there is a heavy load on the country, we will be able to bear it because we have a boosting economy. That may be. It may be that the sales of agricultural produce have increased considerably in the past twelve months. But we must be mindful of the fact that our stocks are running down. Not only that, but due to the Bovine T.B. Eradication Scheme, the stock we are particularly dependent on, the breeding stock, has been considerably depleted. In fact, it makes complete nonsense of the Government White Paper where they aim to have a vast increase in breeding stock.
Apart from that, some of the extra assets we have secured have been secured by the export and processing of this livestock. That, in itself, is a thing that probably will not recur. Those are things we want to remember when we think of boosting the economy. We will quite possibly find ourselves, as the Taoiseach himself admitted, with an increasing deficiency in payments. If such is the case, if the Taoiseach was genuine in what he said this morning that we had a booming economy and that we were dependent in this booming economy on stabilising the balance of payments—although he warned that it was likely our balance of payments would worsen— if such is the case and if our balance of payments worsen, how are we going to maintain this heavy rate of taxation?
Are we going to find alternative markets in which to sell our produce? Have we looked for those markets? I think not. On a question asked by Deputy Lynch it transpired that of the sum of £250,000 made available to the Government five or six years ago for marketing surveys, only £23,000 has been spent. Are the Government seriously looking for markets or striving to increase our exports so that we may have a stabilised balance of payments? Everybody, no matter whether he is running a private firm or a State body, looks forward to the future, one must assume. I cannot see anything in this Book of Estimates to suggest the Government have an overall policy. To me the policy seems to be to impose all the taxes you can and they have to impose taxation if they are to carry on the administration of the country.
Is there anything in the Minister's statement to suggest that anything is going to be done in this country? Can it be summed up in a nutshell by saying: "We have a booming economy," as the Taoiseach and every other Fianna Fáil speaker has told us. "We have to impose extra taxation because we are keeping pace with production." But are we keeping pace with production? Certainly anyone who comes from rural Ireland does not accept the fact that we have a booming economy. Many Fianna Fáil Deputies themselves must find it hard to answer their constituents down the country and must find it hard to stand over the statements made by Ministers when addressing chambers of commerce and at other functions, which they must attend as public representatives and at which they have stated we have a buoyant and happy economy here. They must find it hard to get over that. When you open a paper every week you see pictures of areas marked as becoming desolate because of the emigration taking place there.
That happens to a large extent in some of the poorer counties but I can tell the House that in the constituency I represent emigration has not been so very heavy recently as it was six or eight months ago. Of course, there is no guarantee that it will not rise again when the people are there to emigrate because there are some areas in Wexford, which is supposed to be a comparatively prosperous county, in which there are very few young people left. There are areas now in the county where it is impossible to organise a hurling team because there are no young people there to answer the calls of the clubs.
I think the Minister will appreciate that, if we are to maintain the small measure of progress we have attained, if we are to retain the purchasing power of money, we must take measures to combat the present tendency. Not only are people with incomes suffering from the depreciation in purchasing power but a number of business people are finding themselves in financial difficulties and are looking for accommodation so that they may continue in business and go on employing the staffs they have heretofore paid. The difficulties every section of the community are facing are not getting any easier.
I believe that the members of this Government are not really aware of these facts. I do not know if Fianna Fáil Deputies speak out their minds, but if they do they must surely enlighten their Ministers that they are living in a fool's paradise. The greatest test of the country's economy is its ability to retain its manpower. Not very long ago I tried to encourage a firm of world wide reputation, whose production was based on horticultural raw materials, to set up an industry here. It was a question of whether they would come here or set up their industry in a South American republic. They went to the South American republic because they had information about our falling population and they felt our domestic market was, therefore, not fundamentally sound.
That, in a nutshell, describes our economy. Anybody who starts an industry always relies on a good home market. There is always the risk that overseas markets, no matter how rosy they may appear, will fail. It is not anything that we might say on this side of the House that will stop industries coming here. The very defects in our economy speak for themselves. That is why we have this falling population. It is true to say that there is no employment here today for young people leaving school. At the same time, the pattern of employment has changed considerably. In every country it is the same, due to mechanisation on the farms. Where there were three men employed on a single farm heretofore there is now room for only two. As a result, there has been a tendency to drift from the farms to the cities and thence, very often, to the emigrant ship.
That type of thing poses difficulties for any country. If we get into the Common Market as so many people feel we will, we will find this problem still with us even though we are competitive and able to sell our produce. We will still have the fundamental problem of the drift from the land. That is nobody's fault in particular. The only way in which we can indict the Government in this respect is for their lack of effort to stabilise the agricultural industry. From an unstable agricultural community you will always have a drift to the cities and, since there is unemployment in the cities, the drift will progress to the ports and out of the country. It is only by utilising to the full extent all our raw materials that we will check this drift.
There is the other defect in our economy of difficulties in our balance of payments. If we could rectify that by our ability to cease importing raw materials for the goods we produce we would be tending towards an even keel. That is a matter to which the Government should direct particular attention. If they continue to give the assistance to agriculture which is so desirable, a lot of our difficulties will be solved. Every other country has been faced with these problems. We are not the only nation of small farmers. It is true that the proportion of small farms in France is just as high as ours. The same can be said of most other continental countries.
If we work along those lines, I feel we will have greater security here than we have had so far. The Taoiseach today made a remark which I would not like to let pass. He tried to create the impression that in the agricultural community profits were in proportion to their costs. It is because the reverse is the case that we face a failure in our economy and that we face inflation around the corner. One matter which has reacted very adversely on the farmer is the increased cost of machinery. The farmers are not crying out for nothing. Every day they find their charges higher and higher. In every county the burden of rates has been increasing. You cannot expect people to stay on in small farms with a fairly low standard of living and in some cases a very low standard of living. They must have assistance from the Government and I do not consider that the proposals in this Vote on Account indicate any improvement at all for the small farmer.
Progress reported; Committee to sit again.