(Cavan): The private sector no longer finds it possible to get credit from the joint stock banks. The country as a nation is not acceptable as creditworthy on the international money market. This litany which I have recited is the tale of woe which was told to us from the far side of the House, and is the reason for the introduction of this Budget. Well may Deputy Moore say that there is a wave of pessimism. Again, those are not my words; they are the words of a Fianna Fáil Deputy. Therefore I say that if that is the position—and it would appear to be the position—no one has a better right to tackle it than the Fianna Fáil Government and the Fianna Fáil Minister for Finance.
This Government have been in office continuously since 1957. I accept as a fact that we had a financial crisis in 1956, but that crisis was brought about by factors over which the then Government had no control. It was brought about by the Korean War, the Suez crisis, and a glut of cattle from the Argentine on the British market. The Government of the day took drastic measures at the end of 1956 to tackle that situation and to correct the then state of the economy. The Fianna Fáil Party exploited it to the full in this House and in every county council chamber in the country.
We hear now about a responsible Opposition, but we know the sort of Opposition we had then. They obstructed all along the line and they put the Party all the way before the country. As a result, they came into power in 1957. Fianna Fáil came into power then on the basis that what happened in 1956, as a result of the factors to which I have referred, could never happen under a Fianna Fáil Government, and that they would see that it did not happen in the future. They assured us that they would see to it that a financial situation could never develop again which would give trouble to the country and to the economy. One would think that a Government coming into power on that note would keep a close eye on the economy, and a close eye on the financial position; yet we have now this tale of woe of an adverse balance of payments, that we are importing more than we are exporting, that our credit has gone wrong, that we are producing too little and spending too much. That is the tale of woe which this Government who came into power in 1957 have presented to us today.
That situation did not develop overnight and it did not develop in a year. The Fianna Fáil Government have been in office since 1957 and during that time they had at their disposal the best brains in the Civil Service to advise them, and they had all the statistics and information available to the Civil Service at their disposal. Not alone did this situation which the Minister for Finance tells us he is trying to cure not happen overnight, but it did not happen accidentally. I say it was brought about by Government action. It was brought about by a reckless and dishonest approach by the Government for selfish and dishonest political motives.
Let us go briefly through the years during which this Government have been in office. In 1962, they told the people that the economy was buoyant, that the national cake had grown to enormous proportions, and that everyone in the country was entitled to a fair share of the cake. They put a Bill through this House increasing the salaries of individuals by as much as £600 a year. They justified that on the basis that the economy was such that they were entitled to do that, and that it would be unfair to this well paid section of the community to deprive them of their share of the national cake.
They introduced the status increases in 1962. We finished up here before Christmas of 1962 with the Taoiseach telling us that the economy was never better. Immediately after Christmas he introduced the White Paper Closing the Gap which would suggest that despite all the buoyancy we heard about in 1962, things were not so good. That White Paper was introduced, inviting the ordinary people to tighten their belts after the status increases of 1962. That was at the beginning of 1963, and in the 1963 Budget, the turnover tax was introduced for the first time. This Party and the Labour Party warned the Government that the effect of the turnover tax would be to increase the cost of living enormously, and at the same time involve wage increase demands to enable wages to catch up with prices, while prices were outstripping wages. The then Minister for Finance sitting over there I think on the day the turnover tax was introduced made little of what the implications of the turnover tax were because on the day the Budget was introduced he was told so by Deputy Dillon and other members from this side of the House but he displayed a total ignorance of the implications of the turnover tax and what the results of it would be. He assured us that it would not increase the cost of living. That is on the record of this House.
We know since that it has increased the cost of living enormously. We know how little thought was given to the turnover tax introduced in 1963 when we hear the Minister for Finance, in this Budget, say that one of the alternatives open to him to raise revenue was the turnover tax. He said he could not touch it, having considered it, because of the effect it would have on the cost of living and on wages et cetera. That is what we told the former Minister for Finance in 1963 when he introduced the turnover tax. He told us then we were talking rubbish. He said it would in some way be absorbed in prices and by some magic or other would not project itself into an increase in the cost of the necessaries of life.
All we ever said about the turnover tax is correct and it has proved to be correct, not by what we say now, but by the fact that the Minister for Finance and the Government are terrified of this tax. They are terrified to touch it. It was a tax they introduced to do away with all other taxation, a ready system of taxation which could be adjusted, as required, and which would replace the old, hardy annuals of beer, petrol, tobacco and income tax. Now they have it and it has done the damage. They are afraid to touch it.
Later in 1963 the Government were defeated in a by-election in an important constituency in this city. They were beaten hands down. Their policy was rejected and they were threatened or challenged to contest a by-election in Cork city at the end of that year. They refused, in this House, to meet that challenge. They invoked a Parliamentary procedure never before heard of in refusing to agree to the Writ being moved for the Cork by-election by the majority in the House. With the assistance of some Deputies no longer in the House they delayed the Cork by-election until the following year when the Kildare by-election came about by the lamented death in the meantime of the late Deputy William Norton.
It was then the Fianna Fáil Party became politically dishonest, let discretion go to the winds and really decided to have a go. They could not afford to have industrial unrest in this country coinciding with a by-election in the city of Cork and in the comparatively industrialised constituency of Kildare. Negotiations were going on for a wage adjustment, necessitated to a large extent by the imposition of the turnover tax. The Taoiseach, I believe not entirely on his own, acceded to the advice of some of the bright young things in his Party, and decided that the people must be kept happy for the time being, at any rate, irrespective of the consequences.
The by-election could not be lost. The attitude was: damn the consequences. We will cross those bridges when we come to them. When the Taoiseach believed that a six per cent or a seven per cent increase in salaries and wages would have been adequate at that time, in order to buy the votes of the people of Cork and the people of Kildare, he gave the green light for a 12 per cent increase in wages and salaries all round, with only the one thought and the one consideration in mind—the winning of the by-elections in Cork and Kildare.
They won the by-elections and they damned the consequences. They said they would cross those bridges when they came to them. They have arrived at the bridges now and they are taking credit and trying to get across them. I wonder what those bright young gentlemen—they are a little older now and are certainly not regarded as so bright—have to say to the Taoiseach or what the Taoiseach has to say to them about the advice they gave him in 1964 and about their approach to the position then. They won the by-elections of 1964 and they bluffed and gambled on through 1964 and into 1965.
Between the beginning of 1964 and the spring of 1965 there was no complaint about the economy. There was no warning about the financial position although I charged the Government that they had in their possession at that time warnings from responsible heads of the Civil Service in this country. They must have had them. They have the best brains available to them in the Civil Service. It is the duty of the Civil Service to keep an eye on those things and to advise the Government of the day if things develop. I am sure they did that. We never heard a word, as I say, that anything was going wrong. We had a by-election in Cork again at the beginning of 1965 and the Government then availed of the opportunity provided by the result of that by-election, which did not materially or numerically alter their strength in this House, to have a general election.
They decided to do that because they knew the state of the economy, because they knew of the financial situation. They knew that if they did not hold a general election then and were compelled to hold by-elections later that year, they would be walloped out of office. The Taoiseach and his bright boys gambled on the general election of April, 1965, with a two-headed halfpenny: if they won the general election of 1965 well and good, they could hold on and bluff in the hope something would turn up and if they lost the general election they would hand over the mess they had created to the incoming Government, sit back and laugh. That was the attitude with which they faced the general election of 1965. They could not lose.
Let us look at the Budget. It proposes to impose approximately £12 million additional taxation. If that taxation or any appreciable part of it were being imposed to encourage production, to improve our competitiveness in the export market or to set up better conditions in which we could enter the Common Market, or if this £12 million or any worthwhile part of it were provided to improve social welfare standards, then the people might grin and bear it and say : "It is hard to have to pay additional taxation but when it is for worthwhile purposes we are prepared to do it." This taxation is not being raised for any of those purposes. It is to pay for the bungling, for the dishonest practices of the Government during the last few years in trying to hold on to office. In this Budget I cannot see any incentives to increase production. The Budget, in fact, will have the opposite effect. I see nothing in the Budget to provide improvement in the health services though it is admitted that the health services are the worst in Western Europe. There is nothing in this Budget to improve our educational facilities though the Government Party have been campaigning on the need for better education facilities.
