We were having a very civil debate until the Parliamentary Secretary arrived. Everything is an on-going situation; it is so on-going that the Minister for Finance does not know what will happen tomorrow, next week or next year. He does not know whether or not he will have to bring in another budget. Of course he will have to bring in another budget. There was not one line in the Minister's opening statement about any development of our own natural resources. There was not one suggestion about the development of our mines or our off-shore oil and gas. If these were developed and if there were a policy these developments could make a major inroad into the figure of 100,000 unemployed because some would be employed directly in these developments and others would be employed indirectly in servicing these developments. What have we had?
We have had Press conference after Press conference telling us a policy would be prepared before the summer, in the autumn, and definitely ready by Christmas. We are nearly into February now and our unemployment figures are increasing every week. In this area in which we could make an immediate cut in the number of unemployed what have we got? We have a lack of decision. This typifies the record of this regime. They are incapable of making decisions as can be seen in the budget speech. If they were capable of making a decision something concrete would have been included in the budget speech. There would have been some concrete proposals to help to get our economy going again. There would have been some encouragement for private enterprise. The only encouragement given was some minor tax concession when what was needed was to look at the economy in a big way, to be big about it, to make major decisions.
The Government are incapable of making major decisions. I am not saying individual Ministers cannot see the problems but, because of the composition of the regime, it is impossible for them collectively to make decisions. I am sure that, as individuals, many of them want to go forward and encourage private industry to develop and expand, rather than to have contraction which is the order of the day. Because of the semi-socialist, half-socialist, half-private enterprise type of mentality in the Government, there is no definite philosophy. At a time of serious crisis, when we need big men to make big decisions we have collectively a group who are incapable of crossing the road without assistance.
Many general criticisms have been made of the budget, or lack of budget by speakers on this side of the House. Some of the speakers on the other side of the House were not too complimentary either. I want to speak about two specific proposals or lack of proposals in the budget. One is the question of the oil subsidy for horticulture. In his budget speech the Minister said:
The Government have decided to continue to give an oil subsidy for horticulture up to 30th June, 1975. The purpose of the subsidy, which was introduced in July, 1974, is to help growers to adjust to higher costs for heating oil. The rate of subsidy for the period 1st January to 30th June, 1975, will be 2p per gallon...
This typifies the point I was attempting to make about big men making big decisions, instead of the trying to go a bit of the road with everybody mentality in this regime.
In the constituency I represent, Dublin North County, the horticulture industry produces £12 million worth of tomatoes and mushrooms of which over £2½ million worth is exported. In the last six months of last year the Government gave an oil subsidy of 5p per gallon to help growers compete against the highly subsidised Dutch growers and other growers on the Continent, to help them to continue the expansion in the export markets they had found, and to help them to compete on the home market against the highly subsidised Dutch producers. It would be wrong if I did not make the point that the six months during which the 5p per gallon was given, was the time when the horticulture industry used about 10 per cent of their annual consumption of oil. It is obvious to anybody who thinks about the problem that the oil is needed when they are trying to get the early crop in. During the first six months of the year about 90 per cent of the oil is used.
When the Dáil reassembled in October I asked the Minister for Agriculture and Fisheries was he prepared to continue the oil subsidy for the first six months of this year. It was essential in October that the Minister should make a decision on the oil subsidy because it is in the October-November period that the growers have to decide whether they will grow a single or a dual crop in the coming season. At that time they have to work out the economics of the situation and decide what is the most viable crop for them. The answer I got was that no provision was made in the Estimates for it. In January the harm was done, but some assistance could have been given similar to the 1974 figure of 5p.
What was given? Twopence. Although the cost of oil to the producer had gone up after Christmas. Dr. Woods, chairman of the association of producer groups is reported in the Fingal Independent of Friday, 17th January, as saying that the net effect of the Government's proposal, on top of the oil companies' decision to increase the price of fuel oil to £3.85p per gallon, represented an overall increase of 70 per cent to the growers since Christmas. He said it would also have an effect on early tomatoes, and that growers cutting down on heat would mean an increase in imported Dutch tomatoes and have an adverse effect on employment.
In his budget speech the Minister gave a subsidy of 2p; during the last six months of last year, when it was not of great assistance to the growers, it was 5p; and the price of oil went up by 3p. Instead of helping them he is pushing them further and further into the background, despite their efforts to keep up employment and their efforts on the export market. He is destroying our balance of payments situation by making them incapable of competing on equal terms with their competitor growers in the remainder of the EEC countries.
When M. Lardinois was here he said that the Government could increase the oil subsidy because other countries were doing so. In typical fashion our Government went a little bit of the way. They did not solve the problem. I would appeal to them even at this late stage to make a decision to increase the subsidy to the growers to at least 7p or 8p to counteract the increase in the cost of oil.
To bring in the human element, over 600 families are directly or indirectly engaged in the horticulture industry in my constituency. That is a large number of people. If their markets are ruined, as I foresee them being ruined because of the unfair competition they will face from the Dutch, they and their sons and daughters will be thrown out of employment and this will further exacerbate the unemployment problem. I appeal to the Minister to take some action which will help those growers.
The other sphere in which the Minister failed miserably was in the sphere of housing. In a 52-page speech the Minister could find room for only eight lines on investment in housing. Everybody knows that the great criterion of the state of the economy is the health of the housing industry. Using that criterion now, the economy is on the rocks. The need for decision is obvious to everybody except the Government.
The Minister for Local Government spoke in the budget debate about the marvellous record in housebuilding and quoted statistics about the number of houses being built and the great progress being made. To typify the type of contribution made by the Minister I quote from The Irish Times of 22nd January, 1975, reporting the Minister's speech:
The larger, more expensive houses had not been selling well since last summer and this had led to a reduction of employment in the brick-making industry. He had now asked local authorities to use more bricks in local authority houses, and this, it was hoped, would relieve the unemployment problem.
The Construction Industry Federation on 24th January, 1975, in the same paper said—and nobody could say it better:
We note the repetition of the statement, previously made, that the reduction of employment in the brick-making industry had been caused by the `larger, more expensive houses not selling well.' In common with the other statements referred to above, we can, at best, classify this statement as extraordinary.
Bricks are used for any type of houses, whether low-priced or expensive, a fact which is plainly visible.
The Minister for Local Government is apparently unaware that bricks are used in all types of houses. This is similar to the logic used by his colleague, the Minister for Industry and Commerce when I questioned him a fortnight ago about the unemployment being created in a company in my constituency, Wavin Pipes of Balbriggan. Over 60 men were laid off on one Friday and 14 had previously been let go, making a total of 74, and there was the possibility of more becoming unemployed; the situation is being reviewed monthly.
I was told by the Minister for Industry and Commerce that he was unaware of any crisis in the building industry despite the fact that this is a company manufacturing sewerage and water pipes needed in all development work on private and other building sites. The Minister could not understand why the products of this company were not being purchased. I can tell him: any houses at present being built are being built on sites developed 12 months, 18 months or two years ago. Very little development work is taking place at present and we shall rapidly reach a situation where the Minister's much-vaunted figures—much questioned by the building industry—will not continue rolling out. Not even the Minister with all his juggling of statistics will be able to keep them up because no development work is taking place. And the situation is reaching crisis proportions. Without the infrastructure of sewerage and water mains and roads it is impossible to build houses. This is the situation we are facing and this is why the company I mention are in their present predicament. However, two Ministers seem to be completely unaware that before you can build houses you must provide the necessary infrastructure.
There is an utter lack of confidence in the present Government in the building industry—and for very good reason. As a typical example of the present situation, take an average three-bedroom house in the Dublin region costing about £7,500 or £8,000. The maximum SDA loan available from the corporation or county council is £4,500, leaving a difference of £3,000 or £3,500. To be eligible for the loan, the applicant must be earning less than £2,350. How a young couple are supposed to save £3,000 or £3,500—the difference between the loan and the price of the house—and at the same time earn less than £2,350, beats me. The Minister should accept the proposals made by Fianna Fáil, by the Construction Industry Federation and many other persons to increase the maximum loan available to £6,000. The need for this is obvious; without it, the number of houses purchased is falling rapidly. Here, I can speak from personal experience. The Minister should increase the new loan limit to £6,000 and increase the income limit from £2,350 to £3,000. We need at least a 50 per cent increase in new house grants, supplementary and other grants.
There are other sources of house purchase finance and again they need Government encouragement and decisions. The proposal made by Fianna Fáil before the last local election, on which a decision was requested by many sectors but which has not been made, was to abolish liability to income tax on interest paid by building societies on deposits up to £5,000. This would increase the flow of money to the building societies and money would be available to lend to prospective home-buyers. Promised but not yet introduced is the granting of trustee status to building societies. This, again, would increase income to building societies and provide money that could be reinvested and given to prospective house purchasers.
We have also the suggestion of the charging of fixed interest rates by building societies on mortgages, something which is crying out to heaven to be done. Again we have not a whisper from the Government, a Government which is comprised of some Members of the Labour Party who when in Opposition were loud in their pleas for such assistance to be given to the building societies. We also have as a potential source of house purchase finance, the banks, who according to their accounts figures, have been making massive profits. In my view they have a social commitment to reinvest a substantial percentage of their profits and revenue in the house finance sector.
In my view it is wrong that they, unlike their counterparts in other countries, should be excluded from giving long-term money which young couples need to buy a home. This Government should decide—they are incapable of making any decisions and this call is really a cry to the wind—to bring in regulations that would make it mandatory on banks to invest a percentage of their profits in housing. Such a decision would be a substantial help to the housing market and to the building industry.
We also have the situation of insurance companies. Some of them have been making a contribution, small though it is, but many who have licences to operate here invest very little in the provision of money for private homes. The Government have the power to change this situation, if they have the courage to do so, because they issue the licences to these companies to operate here. If the Government were to make a decision about increases in SDA loans, assistance to the building societies and mandatory regulations on banks and insurance companies to invest their money in housing, it would go a long way towards getting the building industry going again.
Everybody knows, with the exception of the Government, that building has almost come to a stop. Building has always been a great barometer of how the economy is doing and it is doing very badly at present. The building industry is a great male intensive labour sector and directly there are many people involved in the actual construction of houses. However, indirectly there are many factories engaged in the manufacture of materials for houses. There are factories producing pipes, bricks, joinery works, glass, felt and bathroom equipment. When activity in the building industry drops these other units are in trouble as far as employment is concerned. That is what is happening at present.
Builders' providers and hauliers of building materials to sites are also affected. Even shopkeepers are in serious trouble as a result of the situation in the building industry. This has risen because of the lack of decision on behalf of and by this Government. The Minister who made the comment that because the more expensive houses were not selling there was unemployment in the brick making industry typifies the type of mentality of this present regime.
It would be wrong not to mention during the course of a debate on the budget the benefits given to the social welfare sector. I welcome the increases in the various allowances but, without intending to make a carping criticism of the increases, it was too little too late. Inflation had eaten into the allowances given to the people prior to the budget. On the Saturday morning following the introduction of the budget the various newspapers carried advertisements from the National Prices Commission announcing a number of increases. The list of price increases then announced more than eliminated the promised social welfare increases.
I suggest that one way of reducing inflation would have been an across the board reduction in the VAT intake. This could have caused some minor financial problems but the Government were budgeting for a massive deficit anyway and it would have given the people a lead. It would have shown them that the Government were serious about trying to cut down the rate of inflation. What has happened here is that the people, the housewives in particular, have become punch drunk from continuous price increases. There is no such a thing as hunting for bargains or shopping around to get the best price anymore. People are aware that the money in their pocket is worth nothing. The article they wish to purchase today will have increased in price tomorrow. It used to be X plus but it is reaching the stage of multiplication now. The Government should have been big about it, but of course they were not. They should have taken a decision to reduce the level of VAT across the board. I am afraid, with the spiral in prices right across the board, the stage of diminishing returns will be reached because people will be unable to purchase goods.
In his budget the Minister increased the price of beer, spirits, and so on. Beer, in pre-decimal money, has now reached the price of 6s a pint. Who would have believed that a few years ago? The stage is being reached where people will be unable to consume the same number of drinks or smoke the same number of cigarettes with a consequent diminution of tax revenue therefrom. Of course I will be told from a certain lobby that that is a very good thing; we will reach a situation in which the amount of alcohol being consumed will be reduced and the amount of cigarettes being smoked correspondingly reduced. But let us face the facts of the situation: without the old reliables the social welfare system would grind to a halt because the tax on those items is the great provider of revenue for social welfare, whether or not we like to admit it.
In his budget statement the Minister called for restraint in wage and salary demands and at the same time increased the very items on which the ordinary working man gauges his income. Most men, having given X amount of pounds to their wives for household needs, will have something left in their pockets for a pint after their work. They gauge, from the amount of pocket money left in their pockets how many pints they can buy and how many packets of cigarettes. But they are now reaching the situation where that will be X minus, minus number of pints and packets of cigarettes. There will be an increase in demand for wages and salaries. The Minister is whistling in the wind if he thinks workers are prepared to accept his call for restraint in wage and salary demands while they have to face the prospect each week of their wives looking for extra money with which to buy the same amount of goods in the shop and while they themselves need extra money in their pockets with which to buy the same number of pints or cigarettes, while their mortgage interest rates rise, rent and rates increase and so on. With all these increases, the Minister calls for restraint.
How can the Minister call for such restraint without demonstrating his own good faith? And, in this budget, he failed miserably so to do. He has budgeted for a massive deficit, which would be all right if the money was going to be used for productive purposes. But there is no suggestion in the 52 pages of his statement that one shilling of that amount of money will be so used. If a budget is to have any meaning, it must balance one's books; it must point the way forward for the coming year; it must inject capital into an economy badly needing it. But the Minister failed miserably in that respect. His statement is comprised of 52 jumbled pages of phrases such as: "I hope, I wish; I hope it does not happen; I hope it does happen", but not one suggestion of direction or of a programme of how to get people back to work.
I might mention one other sector of the economy, the tourist industry, which is an area the Minister could have helped. Long as was his statement, the Minister could have added an extra page of constructive proposals which would have helped. As has been suggested by the Irish Hotels Federation, the Minister could have granted a concession to tourists in respect of petrol, as has been done in Italy and other countries. There could have been a form of voucher provided at the entry points. It would mean no loss of revenue because it would have been an encouragement to new business we would not have been getting anyway. The Minister could have eliminated the tax element of the price of petrol which would have encouraged more tourists at a time when that industry is going through a tough period of its history. Had the Minister done so we would have been in a unique situation in the European context, which would have placed our tourist industry and Bord Fáilte, in particular, in a position to compete on very favourable terms with their counterparts elsewhere. It is not too late for the Minister to introduce such a concession in his Finance Bill and I would appeal to him again to do so, because anything that helps to change the present trend of the unemployment figures in however small a way is to be welcomed.
I would make one last appeal to the Minister and the Government to do the honourable thing. Having made and broken so many promises, having been handed the economy in such a healthy state, having ruined and brought it to its knees in a short two years, they should resign and allow a one-party, united Government take the reins, because there is no doubt but that the economy was built up by the efforts and direction of various Fianna Fáil Governments with the assistance, efforts and energy of the workers. Basically, it is sound but before it slides too far let the Taoiseach do what is honourable—declare a general election and give the people the opportunity to change the Government, an opportunity for which they have been crying out for some time.
