I am sure he must realise that good progressives, as he has termed us in the Labour Party, have never, at any time in the past, been against the extension of credit in the raising of our employment level. He is incorrect in saying that our approach to a modern Government's task is no more than the traditional liberal's approach. We do not regard a modern Government's task as being that of a caretaker authority which does not take real action to assert its own economic ideas.
A modern Government must take a meaningful approach to employment, investment and the other problems with which the economy is faced. The Minister for Justice knows as well as I do that the Labour Party are prepared to go behind any Government who will energetically tackle these necessary jobs. Our fundamental accusation of the Government transcends Party politics because we think that should be the approach at this time. The root and the bone of this accusation is that the economy, which all of us agree is still inherently sound, is at the moment hindered by the Government in power. The Government have made such a mess of their own bookkeeping, we say, that they are hindering the necessary advance of the economy.
The Government in 1965-66 produced a new version of politics as the economic situation began progressively to worsen. They said: "Do not, for God's sake, as an Opposition attack us as reactionary as we in the past attacked." No longer must Opposition Parties say what is wrong. They should rather address themselves to the underlying problems and say the Government in power are doing their best. We, as a responsible Opposition Party, refuse to confine our attack on this Government merely to the choice of taxes they have taken at this time. The Government would seek to confine the debate to where we would get the taxes necessary, to the alternatives we would adopt as an Opposition.
We must ask how this state of affairs came about which put the Government in this straitjacket. The answer is that the Government landed themselves in this position, put themselves into this straitjacket by their choice of extra taxation. It is all the more regrettable because this Fianna Fáil Government find themselves in a more fortunate position than previous Governments because they have more sophisticated economic instruments at their disposal than ever before. From all quarters there are experts' reports on all phases of the economy. There have been economic committees and reports from experts and indeed if one were to judge the economic health of the nation by the numbers of attending economic doctors and surgeons, the patient should be well on the way to recovery. Yet, in spite of all these assessments of what is wrong, the Government came out with this hoary conservative Budget, and despite the energetic apologies of the Minister and his colleagues for it, it is in no way a different Budget from what we got in the 'thirties or earlier in the century.
It is foolish to suggest that this Budget can be tacked on lightly to the economic problems with which we are faced because of the nature of the economic problems with which we are faced. In the nature of these problems, this is a Cabinet of chancers because they preside over a situation to which by their action in this Budget they have no answer. They say the situation is now so bad that they will have to bring in a mini-Budget in the autumn. They have not in this House during this debate come down honestly to admit where the mistakes were made in their approach to the problems this year, where they were made last year. Their intervention in the year before has become highly suspect. It was the by-election year, 1964, when we were deciding on the 12 per cent increase.
The Government then made several doubtful interventions in this area. Their motives were not dominated by the kind of consensus politics that they so earnestly desire to operate at present. At that time, it was a time for mean Party politics. Their pronouncements at that time, the results of which we are reaping now, were motivated by election advantages. The position has now arisen in which the problems being faced in 1966 allow of no mean political advantages any longer.
We have pointed out that this Budget will not solve our present economic problems because the main portion of the revenue raised in this Budget will be eaten up in further servicing charges and this will necessitate a fresh look at the whole area of Government accounting in the autumn. Therefore, the debate on these taxation proposals will not bring the Government or the country any nearer to economic sanity or to the stability we are looking for. I had hoped that in the course of the debate, in view of this crippling increase in income tax, opportunity would be taken by some spokesman of the Government to try to help the current wage negotiations and the current impasse in industrial disputes.
Since there has been this massive onslaught on the living standards of employees through this increase in income tax, I had hoped the Government would give an authoritative guide line in pounds, shillings and pence for the benefit of wage discussions that are going on. They and we realise that the present rash of industrial disputes will spread and they must realise that the determination of the people involved in these disputes will be made all the stronger as a result of the onslaught on their real living standards by the increase in income tax. I hope that before the end of the debate opportunity will be taken by some member of the Government on this matter.
One of the acid tests of a Government's success in the State's economy, in the management of the Government's economic affairs, lies in that most sensitive of all registers, the field of employment. For 1966, OECD have had occasion to draw attention to the Government's failure in this area. Though there has been an increase in industrial employment, the fact is that the fall-away in agricultural employment has more than offset that increase and indeed in the foreseeable future, according to this survey, we cannot hope for any signs of the increase in employment which the Government, in their own political version of the economic future of this country, forecast a few years ago.
If it is true—this is becoming increasingly evident—that the aims of the Second Programme were over-optimistic—my Party criticised the Programme for being too optimistic in its estimates in regard to employment—then the Government must take the House into their confidence and begin a more realistic assessment of where this Programme is leading us, because there is no use in having this country committed officially to an economic plan by consent, by exhortations to the interests involved, if the targets which these groups are supposed to reach are now becoming increasingly unattainable. Definitely, in the area of employment, we see the targets of the Second Programme as becoming a little Utopian in our situation. This is a pretty sad position for a Government who are now approaching their tenth year in office, as the present Government are. It is understandable that any Cabinet after ten years in office should be a little tired. All the signs of the present Cabinet's approach to our economic problems indicate a Government who are tired, bereft of ideas, whose grip on the real economic situation is becoming progressivly more feeble, a Government who very soon, unless they try a new and more honest approach to their problems, must go the way of all Governments losing their grip on real events.
Although the Government have not said so as yet—the Taoiseach denied it early last year—the position now facing us is becoming increasingly serious. I think nobody can deny that now. The Government should tell us, in this debate, if it is their intention if the situation continues as at present, if it does not change for the better, authoritatively whether they intend to devalue the pound. Drastic as this devaluation of the pound is, it is one way of answering our problems. In any case speculation on this matter will increase unless the Government tell us what is intended. They have bungled credit in the last year or two. They did not intervene because of narrow political considerations in time to stop the credit bonanza which swept the country at that time. This was the land of plenty; there was no real cloud on the economic horizon. The situation has changed and last July, I think, the Taoiseach for the first time gave a comprehensive assessment of the situation and its serious implications.
This year and at the end of last year this Dáil has been more dominated than ever by the economic situation. This must be about the fourth economic debate we have had in the 18th Dáil. During the discussion on the Free Trade Agreement, our Party based their opposition to that Agreement on the fact that we did not consider that Agreement as any real substitute for a realistic policy on our economic situation. Stripped of all the ballyhoo surrounding the negotiation of that agreement, it emerges as merely one other leap in the dark by this Government.
I agree with the Minister that this is not a time for panic but a time to look seriously at the situation. I do not think the macabre suggestion of Deputy Burke about a sixpence a head save-the-country fund is a realistic answer to our situation. Flag days will not help the country better its present economic position but certainly the Cabinet must make a drastic reappraisal of the programme under which it is working, the Second Programme. It must tell us whether these targets are unrealisable and have become so, in fact, and what changes we must make in our investment programme in the years ahead if we are to survive this particularly difficult period.
The OECD Report to which I have already referred has posed questions as to whether our growth target should be reduced and I think the Government should consider the three possibilities posed by the OECD at this time. We could consider whether further external borrowing should be made to foot the present capital bill before the Government. We have had a rather unhappy experience in the past year in regard to our trips abroad to raise foreign capital and certainly we could not long afford that line of activity if the interest rates which, unfortunately we were forced to pay in the case of the recent German loan, were repeated. In any case it is a pretty doubtful proposition to say that a Government's continuing hope of influencing investment in the country must depend on such short-term considerations as the borrowing of foreign funds to finance capital industry.
The 1965 OECD Survey Report spoke about the necessity for an incomes policy. Our Party have always been in favour in principle of an incomes policy and we are glad to see that the Government last year came round to this view, but what we must emphasise even more now is that in an incomes policy, time is the all-important factor. It is no use calling for an incomes policy when inroads have been made on the living standard of the workers. As far as possible some kind of equilibrium in incomes must be reached before we can consider an incomes policy as a realistic possibility. Such equilibrium is not in sight at present. If anything, incomes appear to be swinging further away from equilibrium and unjustifiable differentials exist even on the wages front and appear to be increasing.
We have consistently said that the criterion for one's sincerity in the application of an incomes policy must be the amount of thought given to its applicability to all types of income groups. It is no use to be aware of the difficulties in the introduction of an incomes policy merely for the lowerpaid groups, the trade union employees, the hewers of wood and drawers of water. We must understand how it can apply to managing directors, Cabinet Ministers and property owners. If we do not prove consistent in showing how it can be applied to all groups, we show clearly that our talk of an incomes policy is no more than another short-term expedient to ward off economic ills.
Imports have risen. As we can see from the OECD Report and its assessment of these rises in imports, we cannot really blame as the major cause of this, the usual culprit, a working force with too much consuming power which demands more goods and many of them foreign imports. In this case it is shown that a large proportion of the imports was capital equipment for different industries. If we are to cut down on this import figure, and reduce our balance of payments problem, we must be selective as regards the kind of capital equipment we import and how we go about this particular angle of imports.
The Minister, when introducing his Budget, spoke about this country being still a very comfortable place, one of the best places in the world in which to live. One of the troubles of being in Government for upwards of ten years is that it is understandable that Ministers can become a little strange to reality. By sheer inertia of power from being in Government for so long, they become unaccustomed to the ordinary facts of life and a little distant from them. The Minister is a sincere man. I am sure life is comfortable for him. It is comfortable for many of us in this House. It is not comfortable for the majority of people in this country. The present unrest in industrial relations is not a tribute to the comfort of life for the majority of the people. It is a testimony to the discomfort and hardship that many people are faced with in the increasing cost of living.
Remember, this Government and this Budget have given no answer to the predicament of these people faced with the increased cost of living. Rather, they have promised them hairshirts all the way. If this is a hairshirt Budget, there is another promised for next October. The Government have spoken in guarded terms that if the situation does not improve, a further hot bath may be necessary in the autumn. In these circumstances, to look for restraint from ordinary working people throughout the country is to expect a little too much.
The Minister also said that the Government had discarded the idea of increasing turnover tax. I do not think that we can be rid of the suspicion that this Government before their term of office expires this year or next year will not resist the temptation to increase the turnover tax. We in opposing the turnover tax element when first introduced were chiefly aware of its inflationary tendency in our economy. We thought of it, we suspected it, we opposed it on the basis that we considered that it gave the Government an inbuilt inflationary device in our economy and in the event we were proved absolutely right in our suspicion in this matter.
The Government, considering that this was an inflationary boomerang, that it pushed up retail prices, that it intensified the inevitable race between prices and wages, rejected that particular tax on this occasion, introducing it merely in the area of dances, but, as Deputy Dillon said, what is introduced in an area like dances may later on be introduced in other areas.
The fact is that some of the taxes imposed in this Budget will themselves have an inflationary tendency in our economy. Who can give us a realistic answer to where the increase in petrol will lead, what it will lead to in our economy? It is true that the Government can give an appearance of being a determined Government who are immune to criticism from all quarters and can say resolutely that petrol is a luxury commodity. Petrol is not a luxury commodity for many people at the moment. Many people depend for their livelihood in a private capacity on petrol, on fuel consumption. Indeed, the increase in petrol and other fuels in this Budget must have its inflationary effect on our economy. With a Government so determined on taxing, in their definition, luxury items in this Budget, so determined to show themselves to be a Government with the interests of the people at heart, it is extraordinary that, when faced with social welfare recipients, the Government should delay until November of this year any extra payment to persons who are now recognised, irrespective of Party affiliations, as being people deserving of some concern and care.
We have all moved to the left. This Government have gone further to the left than any Party in this House. Yet, this move to the left does not include any concern for old age pensioners and social welfare recipients. A Government who were showing themselves really concerned about those people in our population whom all consider to be unjustly treated could have given them a higher priority on their list of help cases in a Budget than this Government have done.
Indeed, the tendency to broadcast benefits in advance of their payment has become an increasing feature of this Government. We have had it already in the proposals on health. We have had television broadcasts as to their merit but no indication of implementation. There is a similar case in the area of social welfare recipients. Again, we have a fanfare: "We are the people who will introduce it but wait until later for the actual pay-out." This, in effect, is government by propaganda, not government by deed or by action. It is government by remote control, government by sooth-saying.
To sum up, we, in opposing this Budget, considered that it was important to make it quite clear that, in an economy which in the past two or three years, in a large measure due to favourable international trends, was fundamentally healthy, but which did suffer a certain tendency towards inflation last year, the Government in charge of this economy, given responsibility for the management of this economy, misjudged the signs of danger in the economy, or ignored them, for what motives we do not know. This Government, indicted of this particular neglect, come to this House with this Budget and say: "We crave the Opposition's indulgence in this serious situation facing the country. Please do not be rough on us. The situation is definitely against us. Give us your helpful constructive criticism." We will give our helpful constructive criticism but at the same time, we must indicate who are the people in the dock in the debate on this Budget which does not give any real hope of economic improvement, which is a repeat of old refrains. In a situation in which we have more economic tools in our hands today, better methods for dealing with the economic position, the Government merely repeat old tunes better forgotten. This Government brought forward a Budget that shows no imagination, no real thinking in regard to our problems and expect the support of the Opposition Parties in this debate.
We think that the country should know that the people responsible for the economic difficulties we are going through at the present time are the Fianna Fáil Government, now entering their tenth year in office, a Cabinet of chancers with no real control over the economic situation.
