I had come to the point in my contribution where I was talking of the necessity for planning and also for the creation of a new environment in which enterprise should prosper. Now that we have the proper environment, might it not help if the various paraphernalia and the PR drama normally associated with budget day should not be scrapped? I made the point at the beginning of this contribution that the budget was a 19th century administrative arrangement which has been made do a 20th century social and economic job and I think that has given rise to certain anomalies and has also given rise to the creation of an atmosphere immediately prior to budget day which is really hostile to the creation of a proper environment for investment.
Over the last three weeks we have been subjected to various interpretations of different pieces of budgetary documentation, to prognostications and forecasts of what the budget will contain and, in very many instances we had groups making representations to the Government and making them public. Since any budget having been finally passed by this House contains three different elements, it is very difficult until budget day to compare, for example, what was in the Estimates with what was in the budget out-turn the previous year.
There are three elements in budgetary expenditure. First, there are the Estimates as published in the Book of Estimates. Then, as in recent years, provision has been made for the national pay agreement which is usually filled in on budget day and which is excluded from the Estimates. In addition, there are any budgetary increases in social welfare or other areas of current expenditure and also as we discovered yesterday, increases in the public capital programme. Until all those figures are aggregated, what anybody is doing is comparing an out-turn which contains all those elements mainly with the Estimates for capital and non-capital services as published prior to budget day. One is not comparing like with like. Therefore, you can have people running scare headlines, as The Evening Press did, about massive cutbacks in various services which, in the case of the health services, we now know to be increasing in the current year by 19.2 per cent which is running far ahead of any estimate of inflation for 1977 which I have had.
There is false theatre about budget day and this introduces an element of uncertainty and public confusion at the beginning of the year which is not conducive to proper economic management. A lot of the paraphernalia and PR drama associated with budget day could conveniently be dropped with many other British treatments which we have incorporated into our public life. We should move more in the direction of continental practice; for instance, in the case of the recent general election in Austria the budget was published prior to that and was in itself the subject of public debate during the campaign and was only given legislative effect when the new Government was elected, I am glad to say a socialist one, as was the outgoing one. I think it is a far more sensible and less hysterical way of dealing with short-term economic management because the drama of cuts, increases and concessions distracts attention from longterm management problems with which the budget is necessarily concerned.
In yesterday's budget statement, for example, there is only one passing reference to planning and that came at the very end. Personally, I am not surprised at this or disappointed because I understand the very brief reference made at the end of the speech because the focus of attention was necessarily on the increases, cuts and concessions and so on, with the media standing by waiting for the Minister's speech page by page, live coverage on radio and television, special editions of newspapers and special programmes that evening on radio and television— a very big event indeed. So, the question of planning and of generating sufficient jobs in the future is buried and lost in the immediacy of comments and people evaluating how they individually will be affected by the various changes in the budget.
Yet, in a way, the most important elements in the budget yesterday were the Minister's references, brief and all as they were, to planning because if we are to get the jobs we require to give everybody a job without being forced to emigrate we must have a massive expansion in job creation and for that we must have planning with all the administrative changes it involves and with the change which is involved in terms of the alleged shift between private enterprise and the State, and the change in the environment in which difficult decisions will be made. Planning, if it is to be done properly and in a way which will give the employment we require, needs in my view pretty fundamental changes, for example, in the public service, an issue which has not been debated in this House or in public anywhere. To think one can get proper planning without reforming the public service is just hoping for the impossible. From the point of view of propaganda it may be convenient to say that one is committed to planning when practically all are committed to planning now, even those firmly in a right wing approach to society, but we shall not have it in any meaningful sense unless we change the public service and change the relationship of private enterprise to the State.
We must have a new role for the State sector. It must be released from the shackles which have confined it to the cinderella areas of the economy in the past. We must release it from the simple criterion of profit and loss as being the measure of success or failure and we must build in sophisticated cost benefit approaches to State investment. All of the State sectors must be brought within the umbrella of a State development corporation which was referred to in the speech of our Party Leader, the Tánaiste, at our conference last November because while we have had a phenomenal economic performance last year by international standards it is not enough in terms of job requirements.
Output went up, as the Minister for Finance said yesterday, by 10 per cent in 1976 and it is now at levels equal to or greater than the levels of 1974 which were the highest levels of output ever achieved in this country. We are now at an historic high point in terms of output and yet employment is not falling. Exports were up last year by 20 per cent in volume and there were massive increases in productivity. Still we cannot get down towards the level of unemployment which was there at the beginning of the crisis in 1974 because the truth is that we are a demographic oddity in European terms and, no matter how well we do, it will not show up in terms of jobs unless we do substantially better. We have got to do far better than any of our European neighbours if we are to make an impact on unemployment. We have this unique demographic problem, the dimensions of which we now know because of the studies of Professor Brendan Walsh and published by the NESC. We have the fastest growing population in the EEC. There has been a social revolution here because of the ending of emigration. The last inter-censal period shows that for the first time in this century we have had net inflow of population. The Green Paper said the figure of 12,000 from 1971 to 1976 compared to 135,000 who emigrated in the previous ten years.
As the Minister for Finance said last year, we now have the necessity of creating over 30,000 jobs each year between now and 1980 if we are to get close to full employment. In other words, we require to create twice the number of jobs every year that we created in the best year, 1973, when we generated 12,000 to 13,000 jobs. Otherwise there will be social chaos in a situation where emigration is no longer a safety valve, a mechanism for exporting unwanted population.
For that reason I believe we must have resort to proper economic planning and to a considerable extension of the State sector; because private enterprise on its own, no matter how much it is helped by the State, is not going to do the job. The Minister himself said in his speech that, despite massive investment by the State in the private sector, private enterprise had not expanded at the rate he had hoped for and that the total employment between 1971-72 compared with last year was still the same. It is against this background that one must evaluate the recent Fianna Fáil proposal to create 20,000 jobs out of the air, relying only on private enterprise, while the best ever done in the past was the creation of 12,000 jobs in 1973.
This budget gives private enterprise opportunity and incentive. It provides it with practically everything that has been demanded of the State during the past three years. I hope that advantage will be taken of these opportunities. But, no matter how well private enterprise does, it will not be sufficient to provide everyone currently on the unemployed register with a job or those about to leave school or university with the prospect of employment. It is as simple as that. So we need a huge expansion in job creation and that can only come from a release of the energies in the State sector.
Lastly, I refer to an item not mentioned in the Minister's speech yesterday. I was disappointed at his failure to make any reference to the link with sterling. I believe it is firmly established in economic theory that a small open economy such as ours with a fixed exchange rate with its largest trading partner has no independent price level in the long run. I am not saying that short run deviations are not possible but I am saying that independence in the long run is simply not possible. For example, between February, 1973, and last August the United Kingdom CPI went up by 78½ per cent whereas the CPI in Ireland went up by 76 per cent. That is a correlation so strong that it cannot be contested. We have had a period of devaluation since the £ was floated and we were told by the Minister, and indeed by Deputy Colley, that it was good for us and a stimulus to employment because it made us competitive.
