Deputy Desmond has made a determined attempt to earn his money this afternoon. Both he and Deputy Dowling have engaged in marathon contributions. I do not expect to imitate their performance. I think Deputy Desmond, not just in his final remarks, raised some important questions.
The first thing I should like to say derives from a statement in the Minister's budget speech. He said quite clearly and precisely:
Every citizen will benefit from this budget.
This is where this budget has failed. It has set out to convey the impression that there is something in it for everybody. Deputy Desmond is a little disappointed by the reaction of the public that we are all called upon to pay—he has interpreted the public reaction in this way—particularly the middle income group. It is reasonable enough that they should have reacted in that way because of the clear statement in, and the whole trend and tone of, the Minister's speech and the impression which he tried to create. The Minister's speech on many occasions confirmed that this budget represented the fulfilment of the National Coalition Government's commitments. This reference returns again and again in the budget speech.
It is important to recognise that a budget should not necessarily be looked upon as the fulfilment of any party's commitments but when a party or parties take it upon themselves to make commitments beyond their reach, indeed, beyond the reach of any nation, one can understand that when they present a budget of this type there will be disappointment. It is all very well for Deputy Desmond to say that it is a good budget but that it was badly presented. I do not mean he was referring to the actual presentation by the Minister, through there seemed to be some implication of that type there too, but he meant that the "goodies" are there but for the same reason the Minister did not present the "goodies" to the public. That is all very well but in fact a budget is not just about "goodies" and this is where this Coalition have made a mistake. They have assumed that the public are looking for "goodies" and in their endeavour to provide those "goodies" to every citizen they have fallen between all the stools. The consequence is that they have not satisfied any section of the community.
Deputy Dowling pointed out many sections of the community who were dissatisfied. The significant thing is that they are so widely representative of diverse groups within our community. There was the Confederation of Irish Industry saying that a major opportunity was lost. There was the president of the Irish Farmers Association expressing strong disapproval of what he termed a broken promise. There were the trade union representatives wondering where the benefits were. Every section of the community have been looking at this budget and saying: "Where is there in this budget what all of us had been led to expect would be in it?" When you try to please all the people you succeed in pleasing nobody. It is impossible and I on the Opposition side say now what we would say and have said in Government, to provide "goodies" for all the public on the basis on which the Coalition attempted to imply that they would. It is wrong morally, socially and economically to give the impression that a budget will be something entirely new, entirely different, something that will create a great new element of social awareness which hitherto has not existed.
Here I should like to point to another aspect in this budget. Apparently the Minister and the Government were absolutely obsessed with the nation—and this has been a characteristic of this Government since they have come in—of conveying the impression that what was being done here was, in their own words, a total transformation, that they were leaving behind the bad years, years of lack of social awareness, years of, shall we say, Fianna Fáil concern for the rich and lack of concern for the poor? The last sentence of the Minister's speech reads, and I quote:
In sum, I feel that the proposals in today's budget will contribute to the transformation of our country into a progressive society based on social justice.
Those are strong words and their implications are very clear. According to the Minister's statement our country needed a total transformation; it was anything but a progressive society and was not based on social justice. When a Minister sets out to achieve that overnight in any budget he is being untrue to the past and he is creating an impossible target for himself in the present. Towards the end of his speech the Minister said also and I quote from column 1285 of the Dáil Debates for the 16th May:
In the social welfare field, it provides the impressive improvements I have described which represent a major move towards creating the socially-just State which the National Coalition Government is determined to build.
Was there no such thing as any awareness of a socially-just State before the coming into office of the National Coalition Government? Had Fianna Fáil no such concern? Had we to wait for this budget to effect the transformation that will bring about this new era of social justice and reform? Is it not surprising that the level of public disappointment has been so great when a Minister endeavours to convey that this budget is such a strikingly effective and single agency of a total change in our society and when he has misled so many people—I am not saying he misled them internationally—by this implication? Of course, he has failed to live up to his own expectations.
To borrow a phrase from Deputy Desmond, the budget is supposed to have set out to have "some sauce for every goose". From the reactions that have been expressed, not by the Fianna Fáil, but by the representative organisations, it seems that the budget has not provided sauce for any goose. It is futile for the Government to say now that it is unreasonable of these various representative groups to have such reaction to a budget that benefits every one of them. It is significant particularly that the Minister for Education should have said that the result of the Presidential Election was a stunning blow in that it seemed to represent an unwillingness on the part of the public to have social reform implemented. I question the right of any Minister to imply that before the introduction of this budget there was no awareness of social reform and, secondly, I consider the Minister's remark to have been a rather peevish reaction to the people's decision in the Presidential Election.
The Minister seemed to imply that the Government, an enlightened social Government who wish to implement many social reforms, have been told that maybe the people are a little too conservative for the time being and that the Government should not be so socially conscious. The decision of the people in the Presidential Election represented no such view on their part. Indeed, the people have a strong sense of social awareness and not one that was discovered during the week that the budget was introduced nor, indeed, that was discovered at the time of the introduction of any budget in the past.
It is wrong for a member of the Government to suggest that because of a decision taken by the people at an election that awareness is not in existence. What is plain is that the people were rejecting the Coalition proposals in the manner in which they were put to them but, of course, at the same time the people were acknowledging the worth of the man whom they elected. They were being asked by the Coalition Government to effect the culmination of the Coalition success by electing their candidate to the Presidency. In the people's view the proposals presented to them in the budget attempted to benefit those who did not require benefit while others were being asked to pay, perhaps, a little too much.
I would have thought that a budget speech should not be concerned with political propaganda. Each of us is as vulnerable as the other in this regard but no Government should have to justify themselves in their budget speech. No Minister for Finance should have to say that this is the Fine Gael plus Labour policy which is now defined clearly in one speech. That is not the function of a budget because policy is determined over a number of years and is not something that emerges only at the time of the introduction of any budget. When financial analysts both here and elsewhere consider this budget I wonder what will be their reaction to it. What will be their reaction when, for instance, they read that in accordance with the National Coalition's announced intentions, substantial increase are being provided in this budget as a first step towards implementing their comprehensive programme. I wonder what will be their reaction when they read, as reported at column 1253 of the Dáil Debates of the 16th May, that:
The pre-election statements of the National Coalition Government made it clear that financial provision would be made in this budget for improving and extending the social welfare and health services. I am happy to say that the steps which we are taking in fulfilment of this commitment exceed anything ever before done in this field in a single budget.
Nobody would dispute the statement that what is being provided by way of increases in social welfare allowances is in excess of anything given in any previous budget but is this a matter over which the Government are to gloat? Are the Coalition to say, because of the extra money available as a result of our membership of the EEC, that these increases are an indication of a social awareness which did not exist in Fianna Fáil policy? If that is so, the Government underestimate the intelligence of the people. All of us know, and perhaps the Labour Party will admit reluctantly, that the money was there from the beginning of this year in so far as there was a saving in our marketing aids, particularly to agriculture. The money was not there before and could only become available after membership because it was not necessary to apply marketing aids in EEC conditions. Page 104 of the Estimates, with particular reference to subheads E. 1 to E. 7, indicates clearly that that sum which, in one part of his speech, the Minister acknowledges as having been saved, is saved to the present Government. That is a sum in excess of £30 million. It is clear, too, from this publication of the Minister's that the sum did not arise until we were members of the EEC. That being so how could the money have been spent by Fianna Fáil before the 1st January, or did we spent it in a mad rush, apparently, between the 1st January and the date of the announcement of the general election? That sort of announcement has done little service to the Minister and shows a lack of awareness by the Government of the intelligence of the people.
Some of his quasi-partners from the Labour Party, in a fit of enthusiasm during the Presidential Election campaign, went further and said we had spent the money. It was not there anyway; we spent it last year, in the view of some of them. The Minister for Industry and Commerce said that what was achieved in the budget in relation to social welfare was something that if nothing else was done in his lifetime would give him satisfaction as a Deputy, that he was a member of the Government that introduced this vast increase. Are we not listening to the greatest prattling of all time when a Minister of a government would say that when all of us know that, despite the best efforts of the Labour Party, that money was committed, probably over-committed, by all parties before the last election. We all knew that money was there to be spent, and it was just a question of how we would spend it. The great difference is what Fianna Fáil would have done with that money if in government and what the Coalition Government have done. This is the only issue between us. Let us not hear from any other Government speaker, Minister or Deputy, any plaudits for themselves for spending money that some of them worked so hard to ensure would not be there.
To come back to the point I am making, it is not right to look to a budget for too much. The business of the Government goes on, the education policy, the provision of buildings for education. The semi-State bodies will continue to operate irrespective of who is in government. Much of the money provided for in this budget and in the Estimates is committed in any event. The vast proportion of it will require to be found irrespective of who is in government, irrespective of what budget is introduced. Therefore, when Deputy B. Desmond, for instance, says he is glad a certain amount is being provided for buildings and education, for pensions in CIE and so on, what, in fact, he is saying is that he is glad to know the business of government is continueing in this country. Otherwise we would stop every year at budget time and say: "Now we are going to review our total policy on education. We may not build any buildings. We may not provide any salaries. We may not do anything. We will have a good look at this budget and start all over again". Of course, it is not like that.
Therefore, when we look at the budget for indications of the Government's thinking on social welfare, we are looking at the additional taxation and the additional benefits required. We are not looking at the bulk of the expenditure or benefits, and it is a credit neither to the Government nor to the Opposition when they were in government that certain moneys were being provided for any particular development in excess of anything provided previously. In most cases these moneys have to be provided.
However, it is in the areas of change that one can clearly see what a budget is achieving or is failing to achieve. There is a definite difference between what the Minister for Finance has done in this budget and what would have been done if a Fianna Fáil Minister had been presenting the budget. In the first instance, the Coalition Government committed themselves to certain changes which they presented after fairly rushed meetings together here in this House when the general election had been announced. It was then it was decided, irrespective of what the consequences would be, to offer to the Irish people the carrot of VAT off food. It was then it was decided to provide the rates relief in the form in which it is provided, as distinct from what Fianna Fáil would have done. It was then, incidentally, it was decided to abolish death duties. Here let me remind Deputy B. Desmond, who is now absent, that there is a great difference between abolishing death duties and abolishing the stamp duty payable on the transfer of a holding from one person to another.
It was then these things were decided for a particular purpose. That was fair enough, but it seems even clearer now than it did then that the effect of what was being decided was not considered. I am not blaming the Coalition parties that they did not have the benefit of much research in this matter. What I am blaming them for is, first, that they made these extravagant promises; secondly, that now they are endeavouring to introduce a budget which has a little of everything and nothing of significance. As a result, a pattern has been set in the budget which will not be of benefit to the community and will not benefit the country economically or socially.
Take the proposal to remove VAT off food. When that was first suggested we were told it would be replaced on luxury items. In the course of a general election campaign it will not do to say: "We will take it off food and put it on cloths." You have to say you will take it off food and put it on luxury items. You talk in terms of introducing a wealth tax, because that means you tax the people who are very wealthy—and we all agree with that—and you do not tax the rest of us. Therefore, talking in terms of a wealth tax is trying to appeal to everybody without having the courage to tell anybody: "You may be included, too, to some extent." When the VAT proposal was put forward the people were not told except by the present Opposition, that the tax would have to be put on something else, and it has been proved now that it must be put on the something else. I shall come back to that again.
What has not been proved to the Government yet is that by taking VAT off food they may allow to escape from the tax net some of the people that the Government, and the Opposition, are concerned should pay their full share, some of the big shopkeepers, the supermarket people, those who, with VAT on food, have no way of evading paying their just share of their income tax, and there are many such around the country. With VAT gone off food, I wonder how the Revenue Commissioners will get the same clear, precise information of what the income of these gentlemen is. They can always go back to 1972-73 when they had information and assess these shopkeepers on that basis. I am not saying that supermarket owners or shopkeepers are any different from the rest of us, but many of the people who rushed to the Revenue Commissioners—and the Minister's advisers can confirm this—to settle their claims over the past few years as a result of the fact that they were found out in this last year, will not be rushing this year or the year after, and maybe what is being lost in removing VAT from food will only be part of the total loss to the Exchequer.
The buoyancy which the Minister hopes for in 1973-74 may, to some extent, be affected by the fact that a number of these fish will not now have to swim because there is no net there for them. I hope the Minister has some way of ensuring that they, like the rest of us, will have the opportunity of paying their just share of income tax which was guaranteed under a VAT system. When this system was removed from food there was no such guarantee.
Deputy Desmond asked in relation to children's allowance, what Fianna Fáil would have done in this regard. I would have thought that it has been said so often that it was not necessary to repeat it. We would have left VAT on food and not transferred it to other items thereby making a considerable saving. We would not have applied children's allowance as it has been applied. We announced before how we would have applied it. We would not have applied it right across the board. With regard to rates relief we would have applied this in a different way.
I would have thought that our proposals were clearly stated in this House, and prior to the election, and are known to the Minister for Finance and the members of the present Government. When one talks in terms of taxation and the application of benefits one is talking only in terms of certain elements of the budget. It is the policy of a Government throughout the year that determines basically what the expenditure in that budget will be, what the sums required in the Estimates will be. I can give one example of where a Government can themselves create an impetus towards inflation by referring to the Estimates for the Department of Foreign Affairs which was introduced in this House recently. The Minister for Foregin Affairs, in the course of his speech, went into some detail to indicate that he thought it was appropriate that we should open up new embassies in various areas. Apparently, as I understood him, this was to be done for political reasons, though it would be no harm if trade benefits were to be derived also.
That is all very fine, but when one looks at the cost to this nation of maintaining these embassies and providing salaries for those we already have in the foreign service, one sees immediately that it is grandiose nations such as that which create the pressure on a Government which in turn creates the inflation by which we are all so imprisoned. The total cost of our representatives abroad, for salaries, wages and allowances alone, is something short of £2 million. This means that, before any Government comes to a decision to open up a new embassy in a country, they should have a long, cold look at it. Once they open it they cannot close it because it is taken as a diplomatic affront. The Government should look to see what expenditure is involved before deciding upon any new embassies.
Wages and salaries in our embassy in London—I am not saying but that this money was well earned, well spent and well applied was almost £125,000. The European Communities in Brussels cost between £256,000 and £257,000. In Paris, the cost was £63,500. In this regard a Government must be consistent. We cannot have the Minister for Foreign Affairs, on the one hand, saying that we should consider opening up relations with various countries with whom we have not had political association without recognising, at the same time, that it is going to mean more money in the Book of Estimates, more taxes to be levied and, possibly, another spur to the rapid inflation we have in this country.
Government policy in every area— in education, agriculture and social services—is what determines the bulk of what happens in the budget. The budget proposals deal with the tip of the iceberg only, the peripheral matters that we regard as being characteristic of the annual budget. The Minister for Education—and we have not heard very much from him in this area—has not produced any overall policy in regard to education. We have heard a lot of brave new ventures in regard to the reopening of Dún Chaoin and his reaction to popular suggestions but nothing of the Government's overall policy in regard to education. Somebody will have to make decisions from time to time.
I should like to know, for instance, where we stand in relation to community schools. If this policy is not to be implemented what will the alternative cost? Have the Government informed the Irish people that, if their policy in relation to education is to cost more, the people will have to pay more for it in the next budget? These are the things about which we will have to hear from the Government and which will be the test of the Government's policies.
Apart from being a regulator on the direction of our economy and a control on spending and on the trends of our economy, the budget has become in recent years an indication of the social awareness and the imagination of the Government in office. This is as it should be because in providing certain types of services the Government can give an indication as to how it is developing—I do not say transforming—the social services that all of us recognise to be so important. Because of the pattern established in the past five years one looks for new ideas and a realistic human awareness in a budget of this sort. Budgets in recent years introduced new ideas which did not cost all that much but which created an awareness in the Irish community of the need to provide certain services and also activated a sense of social awareness.
There was a change some years ago from the pattern of simply increasing pensions to introducing free services. This was a marked change in our approach to social welfare benefits. Free electricity was granted to certain people and this provided a basic domestic social comfort for many people who might not otherwise have it. Free travel, which was laughed at at the time, has also benefited the old people and enabled them to move about from their own sheltered environment. Pensioners who were catered for by prescribed relatives were also granted an increase. This was something simple but effective in that it encouraged daughters or other relatives to return home to look after old age pensioners. The granting of free television licences to old age pensioners, although some might consider that it was of little significance, proved to be of great help to this section of the community.
All these little things stirred the imagination of the public when those budgets were introduced by the Fianna Fáil Government. In this budget there are a number of similar ideas but I think the Government Party will have to recognise that they have not stirred the imagination of the public to say "Here is something new; here is something imaginative".
We all tend to become a little hidebound by what has happened in previous budgets and so what is introduced in one budget is often an improvement on what was in the previous budget. We talk particularly —and rightly so—of widows, orphans and old age pensioners. We have a proper concern for widows. There are widows aged 55 or 60 living on their own but we also have—and this is sometimes forgotten because there was not the tragedy of a death involved— spinsters aged 55 or 60 living alone whose social condition is precisely the same in many ways as that of widows whose husbands died 25 or 30 years before. Do we, therefore, conclude that before you qualify for special benefit you must be able to point to some tragedy, that your husband died ten, 20 or 30 years ago, before we can assist you at the age of 55? I know we have not looked on it in this way but that is how it is if one is to be completely logical about it. I have been struck since the budget was introduced—possibly again an indication of my own lack of awareness— by the fact that some very practical women have said to me: "Why is it that nobody ever thinks of spinsters?" They mentioned names and suddenly I realised that these people aged 55 or 60 were not really capable of working and were as much entitled to concern from the State as widows who are also rightly entitled to consideration and who might be some years younger.
I merely give this as an example: there are many other areas in which, if the Government had time to sit back and look at the social welfare improvements which have now become a characteristic of every budget, they might, and indeed would have come up with proposals which, taking my example, would have aroused the awareness of us all to the fact that there are old ladies living alone who have had no husbands, perhaps some in the middle-age group and that perhaps we should think of their loneliness and their particular problems. Many of them smoke rather heavily and some drink a little or perhaps more. If they do, they have got very little joy from this budget despite the Minister's clear statement that the budget benefits every citizen. These little things require much consideration. I do not mind who introduces it or where it comes from, but perhaps next year this sort of extension of our services could be implemented. This would not only benefit those who need it but would also create an active social awareness in all of us.
In the area of taxation I want to tell Deputy Desmond, in case there is any doubt about it, that his speculation is not well-founded. He engaged in a certain amount of speculation. He had the Fianna Fáil Party already at the chapel gates saying things which they have never said. He assumed that the Leader of the Opposition, Deputy Lynch, and Deputy Colley would react in a certain way to certain taxation proposals and painted a very vivid picture of how we would use to our political advantage the introduction of taxation for new groups such as the farmers. For a moment, while I was engaged in conversation, I thought he was talking of something that had actually happened but I was not aware of any such speech being made by anybody. Then I realised that he was indulging in fantasy and perhaps hoping that this would be the Fianna Fáil reaction.
As a Member of Fianna Fáil and of these Houses since 1965 I can say that we have always taken the view that taxation should be levied on those best able to pay it. As far back as 1965 in the Seanad—and this is on the record: I have not troubled to check it—I said what I now repeat, that it is unfair and unjust and requires amendment that young boys or girls working in the Civil Service in this city—the pay was much worse then than now—are providing for their food and accommodation, transport and clothes and at the end of the week have little if anything to spend on themselves but are paying a fair amount of tax because their salaries are immediately known to the Revenue Commissioners while other people— businessmen, doctors, lawyers and farmers also—who are living in a higher standard of comfort and, in some cases, luxury, are not paying their appropriate share of tax. Obviously, this is something that anybody in public life cannot be happy or proud about. Therefore, Deputy Desmond may be sure that Fianna Fáil or, indeed any other party, would wish to ensure a fair distribution of taxation.
Again, I come back to saying that one of the consequences of lifting VAT from food will mean that one big bunch of fish will get away. Apart from that —to prove my point—we introduced a change in the taxation system some years ago, and despite strong opposition in this House, began a trend towards indirect taxation which would catch people as they spend—wholesale tax and turnover tax. We must all recognise that money must be found somewhere and we introduced this idea, pressed it to a vote in this House and encountered a good deal of opposition outside. We were apparently seeking more money, asking people to pay more tax. The fact is that, if that had not been done, the money would have to be got from direct taxation and many of those already paying too much would be paying even more. The advantage of indirect taxation is that you pay as you spend and according to your spending. That element in taxation policy was introduced by Fianna Fáil when in Government; and I shall not say we are proud of it but we are particularly satisfied about it. At least it corrects a trend. This Government should continue in that direction and go further at this time.
It is a fact that our Government were looking at the taxation structure. Deputy Desmond seemed to think that he disclosed a State secret this afternoon. It is no secret that the Fianna Fáil Government were examining the taxation structure and we would not have been shy in introducing new proposals for taxation. The sooner we see such new proposals from the Government the better we would like it. I do not know what the proposals will be but we all wish to ensure that the tax burden is fairly spread, particularly in a country where new opportunities arise for some, whether on the farm or in the factory while others, because of certain developments, may not be doing as well as ten years ago. I can, therefore, disillusion anybody who would suggest that we will take up an attitude of placing some people in a special class. We shall treat all the people as they deserve to be treated, all paying a fair share under a fair system which must be devised. All are entitled to the same return of benefits when in need.
We also introduced VAT but we do not get any particular satisfaction from that because it was a requirement of our membership of EEC. In many ways it was an extension of the wholesale and turnover taxes. I must then ask—I have already asked and got no reply: Why, then, did the Taoiseach on three occasions in the Dáil on 16th May say that it was Fianna Fáil who introduced VAT? We never suggested we did not. We were obliged to do so under EEC regulations but there seems to be an implication in what the Taoiseach has said that we should have ignored the EEC regulations on this matter, that we should have told the Community we would join with them on our conditions and not on theirs but, of course, we could not have done this. The alternative is that the Taoiseach did not know that VAT was required under EEC conditions and this is a frightening thought. In the heat of the moment none of us reacted to this comment by the Taoiseach. He seemed to imply that because we introduced VAT we cannot talk about it now——
