The next point I want to deal with is the relaxation of excise duty on small breweries. First of all, I want to declare a very minor personal interest inasmuch as I was a Guinness agent for barley in two counties and a firm in which I now have a controlling interest is an agent. It seems extremely odd that there should be a special relaxation in excise duty in respect of two Cork breweries. Why should there not be other tax relaxations in respect of small factories? Why should large financial combines in the brewing industry which set up brewing interests here, succeeding in getting no more than 10 per cent of the market, get a reduction in excise duty? I will be very blunt. I have been here now for 23 years and I have seen this sort of thing happen many times. Is it because we have a Cork Taoiseach? Is that the reason? The Minister of State shakes his head in holy horror. How many times has an advantage been given to Cork because we have a Cork Taoiseach?
Financial Statement, 1978: Motion (Resumed).
The cork always goes into the bottle.
Is it not true that this relaxation was mooted last year and rejected by the Coalition Government?
The Coalition Government were not interested in employment. That was what was wrong with them.
Order.
I was about to mention employment.
I should hope so.
One has to look at employment in other breweries and in the wholesale distribution trade. I exclude publicans because the customer can always ask for what he wants. In respect of distributing firms and other breweries this relaxation seems to me to be an incorrect departure. It also seems to be a continuation of a situation in which there is advantage given to areas where there happens to be a very strong Government influence in the person of the Taoiseach. I shall say no more except that it does not seem to me to be right, bearing in mind, though not having any strong view for or against, that if one wants a pint of Bass or a pint of Guinness, one is entitled to one's preference. When, however, a Government and a Minister for Finance have to produce a budget they should produce a fair budget. In areas in which there is low industrial employment, with small industries doing rather badly and adversely affected by excise duties, one could, perhaps, see the necessity for the departure that has been made here. The necessity for such a departure where ownership lies in the hands of huge foreign combines does not seem to me to exist and is there-fore not correct. I venture to say that if those huge combines decided to expend relatively large sums, though small in actual fact to them, in Cork and on sale promotion all over the country then any effect produced by a reduction in excise duty will be multiplied many times in the employment of sales representatives, the purchase of more advertising and the expenditure of more capital on the breweries in the city of Cork.
I now come to tourism. By not increasing the tax on beer, wine, spirits and tobacco this budget will inevitably make the country more attractive to tourists, as will the extension of duty-free facilities on boats and planes between this country and the UK. Even though the concession may be small tourists will be happier. I sat through four-and-a-half years of Coalition Government and I saw tourism drop spectacularly in the first year as it dropped in the year before we took office. Foreigners did not advert to the fact that there was very little risk here of one being either bombed or shot. They seemed to think there was a civil war going on. There was a huge joke about the person who came in here in connection with some business enterprise who, having done business, asked to be brought to the front. There was and is, of course, no front. Foreigners did not come here because of actions by subversives and the occasional bombing and shooting that did occur.
I have known our own people in the last election give no consideration at all to the work done on security and I have also seen "localisms" in this regard. During the term of office of the previous Fianna Fáil Government I saw devastation caused by bombs in this city and the shock that was created as a result of them. I saw O'Connell Street denuded of shoppers. Over the years they have come back to some extent. In my own constituency I have seen in Dundalk two men killed by a bomb and simultaneously people killed in Monaghan by a bomb. I have seen a member of my own political branch in north Dundalk, Seamus Loudon, shot on his way home from his usual couple of bottles of beer in a publichouse in Dundalk. There were six bullets in his body. I have seen the shock and amazement. For a month after that people just would not go near the areas where these things happened. Two nights after the bomb in Dundalk the Garda band played to a literally empty hall because no one would go out to any place of amusement. Now we have all forgotten about that.
I want to put on the record now the fact that the advantage that has been given in this budget to tourism will be completely wiped out if the tightest rein is not kept on subversives. I have been shocked by my experience holding the portfolio of Defence during the long period in office of the Coalition Government and I want to warn the Government now that any advantage given—the two advantages here are good—will not be of benefit unless the Government stick by security and, more than that, be seen to stick by security. They have a problem in regard to loose talk, events over which they have little control. Security must be tightened so that the person in England, Scotland or Wales who is considering coming here for a holiday will not say "We will not go there because a bomb exploded there last week", or "The Government of the day are not as good at security as their predecessors".
It is true that it is a gambler's budget. I would not criticise it for that but I would criticise the spending of millions of pounds in non-productive areas. I have shown, particularly in relation to employment in the public service with the exception of guards and teachers, that such employment is totally non-productive. The best advice given to us when we were in office was that there was no case for an increase in the numbers employed in the public service, that there was a ban on such. I admit that the ban was too strict. The Coalition Government created the need for 1,000 extra guards, not the present Government, but we may have been too strict in relation to Garda overtime, and there was a need for extra teachers.
Apart from that it is true that the work of the Government could be done by the same number of people with the advent of modern aids. Are we to reach on for 40,000, 50,000 or 60,000 and find ourselves in the situation where everybody is eating everybody else's tail? As you are walking down the street the fifth fellow you meet might be productive and the other four might include a civil servant, a guard, a teacher, a politician, and so on. A budget cannot relate to one year. If that trend is established in one year and we find that we have gone too far, that there is a greater demand for employment in the public service, it will be hard to stop it. I do not know when the advice changed between the time we left office and this budget——
The Deputy has five minutes.
To gamble is legitimate. To be judged on your gamble is also legitimate, but it is not legitimate to borrow money for non-productive purposes. That is what this budget has unashamedly done.
The test will be seen in next year's budget or the one following that. The rise from the recession does not lie at the door of this Government, but if it is so spectacular that we can reduce our borrowing from 13 per cent to 8 per cent then this budget will have succeeded and I will be the first to say to them, "Yes, you have succeeded". If the Government, having produced this budget with a 13 per cent borrowing as a percentage of GNP, have included therein at the same time many non-productive items, they will have failed completely. They will have tried to link this whole procedure to their manifesto. Their adherence to the manifesto would be good if it were possible to have at the same time a reasonable level of taxation, if employment were not interfered with, if houses were available, if education were available. If the gamble does not come off, these things will not be available and the manifesto will not be adhered to and I believe that that will happen.
Deputy Moore.
I believed that I was next.
Deputy Horgan will be called in his turn. We have already called five from the Opposition and two from the Government.
When the Minister for Finance finished his budget speech yesterday I noticed that the people in the House realised what an excellent budget it was. Even the Opposition were impressed by it. Had music been allowed in the House yesterday the tune would have been "Happy Days Are Here Again". The people who elected this Government last June wanted good news. They had four years of bad news and they wanted a change. In fairness to the previous Government I must say that they had their difficulties. Their basic mistake was that they accepted their difficulties without doing anything about them. We did not accept them because we believed that things could be improved. The manifesto convinced the people that we could do a good job and they returned 84 of us to the House. Judging by the general reception the manifesto has received from the people and the media, it has certainly justified itself from the preparation work to the enactment of the new budget.
Yesterday I read in the Cork Examiner that the budget was designed specifically to deal with unemployment and inflation; that income tax reliefs were given to substantially boost take-home pay. The article also referred to wide-ranging increases in social welfare and health benefits, a package of tax changes to encourage business expansion and measures to create thousands of new jobs in the public service, construction and youth sectors.
That sums up the reaction to the budget. We realise that one document like the budget cannot do all these things without a massive national effort, but the Government must be credited with laying the foundations on which we can go forward to rebuild the economy. This time next year people will be in a better position to judge how the budget worked, but by that time we will have made great strides in rejuvenating the economy. We can go on expanding until we have a society in which there is equality of opportunity, good prospects for school leavers, and in which the recipients of social welfare will have been given another boost. We believe that we can provide the basics which people want, such as good housing, employment and education. If we have faith in ourselves we can do these things. We cannot do anything without the co-operation of all sectors, particularly the trade unions.
I know it is wrong to segregate people in trade unions, in employers' organisations or other groups because generally speaking the same people are involved, but I hope the budget will play a big part in helping those who are endeavouring to produce a national pay agreement. Last year we suffered greatly from industrial strife and in one instance we were taught a very cruel lesson. If we care for the man or woman without a job or the young boy or girl leaving school who does not have much prospect of a job there is an onus on us to use this basic instrument laid down by the Government to expand production. That is our great need.
If we got those involved in pay negotiations to realise that unless we create more wealth we cannot distribute it and that this must be created through our industrial arm and in the agricultural sector, we would be making great progress. We must make those people aware that we have a duty towards the unemployed, the old age pensioners and the young couples who cannot get a dwelling. There are thousands of young couples in Dublin who cannot find proper accommodation.
Tell them to read the White Paper.
I read that White Paper impartially and not with a biased eye. I heard one of the Deputy's party members at a public meeting trying to distort the contents of it. The CIF yesterday welcomed the budget.
They are the best friends of the Deputy's party.
At least we will maintain the housing figures. I do not wish to criticise the last Government because they were delivered a knock-out punch last June, but while they were in office there were 25,000 building operatives unemployed in spite of the fact that thousands were looking for houses. That is an example of the crazy society we had. I am not an economist but it should be a simple matter when we need houses, and when we have the skilled craftsmen and the money available, to build them. As a result of the budget the public and private sector will get the boost they need. Deputy Horgan need not have any fears about a cutback in housing because we feel strongly about the need for more houses. Many of us joined this party because it always had a good housing programme. The party was always in earnest about housing.
We must put more emphasis into increasing production. Many of our partners in the EEC rebuilt out of the shambles of the last war their economies and their cities and we must stress the need to increase production until we reach the same standards as those countries. That will not be an easy task, but it can be achieved. One of the ways of doing that is to support the Buy Irish Campaign. We live in a more materialistic age than existed ten years ago. We have cynical people who say they will buy Irish goods if they are equal in quality and in price to imported goods. I appeal to those people to buy Irish made goods, but the Government should look at certain aspects of the sale of foreign made goods. For instance, are some foreign manufacturers allowing retailers here a bigger profit margin on the imported product? As well as examining the price of foreign-made goods, we should examine the profit margin on them.
I understand that a bigger profit is given in respect of one beverage than that given in respect of the home product. Irish goods should be given an equal chance. I am aware that the Government are serious about this new campaign. It is essential if we are to make a success of the terms of the budget that we get people to buy more home-produced articles. I pride myself on the fact that I buy nothing but Irish made goods, but in order to buy a shirt or a pair of socks I must go to many shops. Very often the article is unbranded and one must take the word of the assistant that it is Irish made. We are in free trade now and it will become more difficult for our manufacturers.
I am very interested in the construction industry because I believe it is the catalyst which will fire the whole economy. If that industry were doing well all the ancillary industries would prosper. We have skilled operatives and good building firms. We have the will and the central drive to build more houses. For some reason or other the centre has fallen out of our city, like what happened in New York and London. There are a lot of obsolete buildings in the centre of our city. It will take a lot of money to rebuild the inner city. I believe that people want this and that it is good for the economy. In the budget we have the instrument to do all those things and to ensure that the weaker sections of our society are not left out.
We would all like to see a greater increase given to social welfare recipients than the 10 per cent given in the budget. I am sure the Minister would like to be able to give more. We would all like to give the blind pensioner, the widow and the old age pensioner greater allowances. The Taoiseach this morning commented on the possible abuses of our social welfare system. I hope his remarks will be a warning to any people who are abusing it. It is very hard to find out the extent of the abuses taking place. Any abuses in the social welfare payments deprive more worthy people of pensions.
I believe the vast number of people who are unemployed want to work. They would like to have full employment. The Government and Opposition are on trial by the people. I believe that democracy may well be on trial in the next few years. The people will not be satisfied unless we can deliver the goods and build the economy so that school leavers and other people who are unemployed have the prospect of full employment. We should have the determination to say that we have grown tired of so much emigration and are tired of so high an unemployment figure. Many of the remedies are in our hands. There is no use deploring the state of the economy unless we back the Government's efforts to improve it.
There is a lot of work to be done and many people to be employed in productive work. If we have the will to lead the people, they will respond. We want more teachers for the over-crowded classes in our schools. The Minister for Education has shown how extra jobs can be provided in the teaching profession. People living in bad housing and itinerants on the roadside present social problems we have to solve. The budget has given us the opportunity to do a great many things.
Last June when the people voted so overwhelmingly for the Fianna Fáil Party to come back into power they left us in no doubt that they would any longer tolerate the system where there were almost 150,000 unemployed and many social grievances and abuses. It is not a question now of whether or not the previous Government could have done anything about some of those abuses. It is fair to say that they had their problems. The people will judge the Fianna Fáil Government from now on. They will say "We gave you the majority. You are now in power and you have to do all those things". The Government have done the first part of their job. The manifesto of last year was accepted by the people as an instrument for making a better country. The Government since then have worked out their economic plan to give us the opportunity of making it a better country. They have spelt out in every sector how it can be done, how the money will be found, how it will be spent and what we hope to achieve. We now need the backing of the people and we will then go forward. I believe the Government have restored the confidence of the people in our democratic institutions.
The total sum in the budget is quite staggering, but we already see the fall in inflation. This is one of the biggest factors which will help us to achieve a successful policy. This year, for the first time for many years, the widow who is in receipt of a social welfare pension knows that what she is receiving will not be eroded by inflation. The manufacturer producing the goods will be able to keep his prices competitive so that not alone can he sell his goods at home but he can export them. It is very difficult exporting goods at the moment. We will not solve the problem by appointing Ministers to different countries or making trade deals. I saw in relation to one country that, even though we appointed a Minister over there and they appointed one here, their exports to us were four times what our exports to them were. We could reduce our deficit if people bought more home-produced goods. We hope, as a result of the budget and the money laid aside for different things, that we will have an expansion in the construction industry, in our mercantile fleet, in our airline fleet and that there will be a boost in tourism. When one reads about the bad weather in some parts of Britain and in many European countries one appreciates the mild climate we have here for which neither the Government nor the Opposition can claim much credit.
Deputy Donegan referred to the bombing we have had here, which we all hope is finished. I believe that people have come to realise that there are bombings in every city in the world. A bomb exploded among a vast crowd in a country I visited recently. I noticed there was very little reaction from the crowd. Admittedly, there was such a jam that one could not move. I hope that we will not have any more bombing and that tourists will come here. The Government by not increasing taxation on drink and cigarettes are making this country more attractive. Tourism can be a very effective way of helping to increase our exports, especially of clothes. Most people when they go on holidays like to buy clothes in the countries they visit. Our clothing trade is a competitive unit of the economy.
Tourism will offer a tremendous fillip to our economy. The abolition of wealth tax may attract some people back again but probably not many. It is dead and let us bury it. There was never much enthusiasm for it from us and even the hearts of the Fine Gael Party were not in it. A Government should not try to keep promises made at an election if it is realised that such promises are not for the common good. However, the budget is totally in line with the Fianna Fáil manifesto of last year and therefore will increase the confidence of the people in us. The people can say "Here is a Government who brought out a plan and who are keeping their promises".
Having examined the budget I feel we are now going forward on sound economic and humanitarian principles. Social justice is the end we strive for and everything else is subject to that aim. It may be sheer pragmatism to speak all the time of economic issues but we have to produce the wealth first of all. If we do not produce it we cannot distribute it. In the distribution of wealth we will be judged ultimately on our attitude towards those who cannot keep up with the rest in the competitive race, to disabled people and so forth. This is the test of our sincerity. We want to build not an affluent society but a good society where there is equality of opportunity. For too long in our history the boy or girl who left primary school at 14 or 15 years of age did not have a great chance of advancement and even today there are far too many children who receive no higher education. This must and will be altered as our economy expands. We want to create a situation where these young people will be sure of employment when they leave school or where they can go on to second and third level education if they have the desire and ability for it.
These things cannot be achieved easily unless we have the economy which will bear their cost and this is what the budget and our policy are about. Economists will examine the budget critically; some have already condemned it. How often have economists been wrong? They have been wrong about many budgets, but the people know this time that the Government are right. This budget was carefully drafted and it is doing the things that the people want, and the people will support it. The Minister would like to see an increase in social welfare benefits. Apart from giving the 10 per cent increase we have now a falling rate of inflation and the pensioner drawing his increased pension will know with certainty that it is not going to be eroded by higher costs and that he is getting a real increase in the pension.
The Minister and the Government must be congratulated on the very good job they have done. This morning people, even those who are not supporters or admirers of this Government, have said that this is a good budget. However, it is not going to work unless we have the backing of all the people in their own sectors. We owe it to the nation to give a lead in whatever sector we belong to, whether as members of an employers' organisation, of a trade union or of any organisation, and thus pave the way to a better life for all of us. The Government should use the resources of the country so that the people will have the opportunity of living their lives out in their own country if they wish to. Never again will we see so many people unemployed and having to emigrate. It has been said that we have no emigration now, but even last year I detected the trend starting off again. Many people working on the oil pipes in Europe are Irish, and one can hope that the expertise they gain there will be put to use in our own country if and when we have more oil finds off our coasts.
There have been warnings that petrol and oil resources may be exhausted in the next ten years or so and we must now consider alternative fuels. Our very energetic Minister for Industry, Commerce and Energy is paying a lot of attention to that. We will try to ensure that we have our share of fuels as the USA have. I appeal to the Government to use all our possible resources of turf, coal and Kinsale oil. If oil is found off our east coast it will be a big boost to our economy because most of our industry is on the east coast. I hope the Government will press the various oil concerns for more drilling off all our coasts. If we have another oil find off Kinsale this will boost our economy further. In the event of our not finding it we realise that we must find the money somewhere for the development of our coal and peat resources. Some other discovery may be made which will help us. The late Deputy Seán Lemass was asked what would happen when our peat resources ran out. The people have given us the opportunity to revamp the entire economy and I hope we will be all here next year to put on record that 1978 was the greatest year of progress since the State was founded.
Deputy Moore referred to this as a good budget and he said many of the people he had spoken to, not necessarily members of his party, had so described it. It is not enough to say it is a good budget. Good for whom? Good for what? Without being too cynical about it, it is obvious that anybody who stands to benefit financially from this budget will describe it as a good budget because it is good for him or her. Quite a few people stand to benefit from the budget in the short term despite the fact that these benefits will have to be paid for in the long term and may ultimately have to be paid for with interest.
It could be described as a hand-out budget. Various hand-outs have been made by the Government to various groups of people. There is an interesting variety in the categories of people to whom hand-outs have been made. On the one hand, there are comparatively large groups, PAYE payers and so on who, especially if they do not happen to have children, will do comparatively well in the short term. There are also other groups, the owners of heritage houses and the parents of thalidomide children, who also do well. The second category have one common characteristic: they are small in number and the total amount of money being made over to them by the Government by way of reliefs, concessions or payments, is extremely small, but the peculiar nature of their needs enables the Government to extract more political mileage out of these relatively insignificant gifts than from a real distribution of the country's resources in a radical fashion.
One of the biggest gifts the Government have made is the one which they least intended or expected to give. It is a gift to the party of which I am a member, because this budget has given to the Labour Party enough adrenalin and indignation to fuel them for about six elections to come. I have no doubt this was not part of the Government's intention, just as I am sure they will suffer in due course from the result of the impetus which the cynicism and savagery of the policies laid out in the budget have given not just to the representatives in Dáil Éireann of the Labour Party but throughout the country. "Cynicism" and "savagery" are words I do not use lightly.
This is a budget which has taken the wind out of the sails of even Deputy Donegan. By his own admission he is not a man interested in the radical redistribution of wealth in our society, and yet we heard him go on at considerable length, with accuracy and indignation, about the paltry nature of the token gesture in the social services for the neediest members of our society. If it gets to Deputy Donegan one can imagine what it does to the Labour Party.
In that sense the budget is a gift to us because it provides confirmation, if confirmation were needed, in regard to a process that has been going on for some time in the Fianna Fáil Party. When we were in Government we watched Fianna Fáil almost alone among political Oppositions in Europe during that period drift steadily to the political right. We have now seen them in this budget with one mad lurch firmly ensconse themselves in the position of one of the most conservative political parties in Europe to-day.
There was a time when the wellknown pragmatism of Fianna Fáil took other forms and I was amused to hear the Minister for Finance setting such store by Fianna Fáil pragmatism and contrasting it favourably with ideologies. Of course pragmatism is also in ideology. Another word for it is self-interest. This Fianna Fáil policy, this self-interest, has at different times taken different forms. In the early days of that party they had mildly re-distributive overtones that actually were concerned from time to time to redress some of the more obvious imbalances in society and to redistribute some of the resources from the top to the bottom.
Fianna Fáil then entered another stage, what I may call the de Valera-Lemass era, in which their economic policy was characterised by taking money out of one of your pockets, putting it into another and charging you for the process. That left things largely as they were. In this budget, however, we are being taken in one bound into a totally more naked economic policy in which there is redistribution but not from the top to the bottom or even from the top to the middle but from the bottom to the middle and the top. This is a reverse Robin Hood budget. It has deliberately taken resources that should legitimately be considered to be the preserve of the old, the poor and the weak, and transferred them in a cavalier way into the pockets of many people who simply did not need them and will not necessarily make the best use of them.
We are entitled to ask the reasons for this extraordinary budget. We are entitled to go into the genesis of it and try to ascertain its parenthood. The most obvious progenitor of this budget is, of course, the manifesto on the basis of which the Government won the last election. We said at the time that the manifesto was socially, economically and even, perhaps, nationally suicidal. After the election, the new Government came into this House, sat down on those benches and declared their intention to implement the terms of that manifesto. We wished them well with our tongues somewhat firmly in our cheeks, because we did not believe the manifesto could be implemented, or we believed that if it was implemented the damage to the long-term prospects of the country would be very serious indeed.
A strong Government could have phased in some of the more expensive elements in the manifesto. No doubt they would have been criticised both outside and inside this House for doing so. It might conceivably be argued that it would have been more in the interests of the country if they had done so. Instead, they have gone baldheaded for the manifesto in an action of such political and economic unwisdom that one really gasps at it. They have used the budgetary mechanism to add a stimulus, in their words, to the economy, heedless of the fact that this kind of stimulus—if, indeed, they had the mix right which, of course, they have not—is the kind of stimulus one applies not half-way through a recovery as we are now but perhaps at the very beginning of it.
They are applying it now. They are borrowing heavily to do it. They will have no leeway when the economy will really need help perhaps in a couple of years' time. I have already suggested that one of the main reasons we have this budget at this time is that the Government are implementing the manifesto to the best of their ability. There is another reason, and we can find the bones of this other reason in the details of the way in which they are implementing it. That detail and the relative importance being given to various aspects of the economy, and the relative importance being given to various Departments of the Government, can be traced not to the objective needs of the country, not to the objective needs of this Department or that Department, but quite simply to the on-going and now rapidly becoming more intense struggle within that party for the leadership when the Taoiseach steps down.
It is not naive to say this because we all know that politics are about power. Anybody who looks at this budget and fails to see in it reflected the internal power struggle in the Fianna Fáil Party really needs his eyesight corrected. We have had auctions before in this country. An attempt was made principally by this Government to turn the last election into a Dutch auction. I am glad the previous Government stayed out of that auction. We are now witnessing an auction more sordid in all its details than any which has taken place for a long time.
The auction is between the Tánaiste and the Minister for Health for the very valuable plum, the Taoiseach's chair. We can see that some extra-ordinary process of bidding and counter-bidding and out-bidding must have gone on. On the face of it, it looks as if the Tánaiste has won. The Minister for Health and Social Welfare has not done very well out of the budget although, to give him credit, he makes £100 go further in newsprint than many other Ministers do with £1 million. In the difficult and dangerous process of undercutting the Minister for Health and Social Welfare, the Minister for Finance may find himself hoist with his own petard because the auction has gone very high. The tragedy is, of course, that the bidders are bidding with other people's money. It is our money. The taxpayers' money is being used to fuel this sordid contest. It would be amusing if it were not so tragic. It is very serious. Basically what is at stake here is not just the leadership of the Fianna Fáil Party, but the good of the country as a whole.
I do not deny that, during the period of office of the previous Government, there were intense rivalries. There were intense political arguments about the wisdom of taking one kind of political decision rather than another, of spending money in one area rather than another. Those arguments were based on firmly and honestly held political convictions on the part of each of the protagonists. Those arguments were resolved, I believe, very much more frequently for the good of the country than otherwise. They were not arguments which were carried out about the spending of public money simply related to the advancement of personal ambition.
I should now like to turn to some of the more detailed aspects of the budget and to discuss some of its economic and social implications. I have already spent some time analysing what I believe to be the political implications, and they are terrifying implications indeed. The economic and social implications are no less serious. The major economic question we have to ask about this budget is in relation to the financing of it. This is a question which has not been answered by the Minister for Finance in his speech and which, I suspect, will not be answered for at least 12 months, unless we have an earlier interim budget to make up for the budget we did not have yesterday.
It might be described as a Kathleen budget, not a Kathleen Ní Houlihan budget but a Kathleen Mavourneen budget. It may be for years and it may be forever that the people of Ireland will be paying for these rash promises, and paying in hard cash and in problematic standards of living and economic and social uncertainty.
The Minister was honest at least about one thing: that the money to pay for the various aspects of the budget is to be found by borrowing. He said he hoped he would not have to borrow abroad. It may well be that he will have to borrow abroad. If he does have to go abroad again, one cannot escape the obvious conclusion that a major effect of this budget will be to make to the international lending institutions a gift of any growth which takes places in this economy in the next 12 months.
One part of the Minister's speech in which he referred to our foreign reserves was a classic example of skating on very thin ice. He made light of our present indebtedness. He argued that our external reserves were strong. In fact, we are in a position in which a considerable proportion, perhaps as much as 70 per cent, of our foreign borrowing is maturing over the next few years for repayment in full. That is money that has to be repaid in foreign currency and it is probably as much as our present foreign reserves. We can pay those debts by exhausting our foreign reserves, but if we do that we put ourselves right down at the bottom of the international league when it comes to borrowing again.
This responsibility which we have— and which the Government should have taken more seriously—of repaying our foreign debts in the context of the budget will involve us in a major balance of payments crisis perhaps within the next two years. Deputy Moore expressed the hope that we might find oil. Indeed we may, and certainly if we found oil it would go a substantial way towards solving this balance of payments problem; but we have not found oil and there is no guarantee that we will. Consequently, there is no guarantee that in two years' time this Government will not be going cap in hand for money and advice to the International Monetary Fund— and they will get a lot more of the second item than the first—and they will be told by the IMF how to run the economy. It gives us small satisfaction that we believe that the advice the IMF would give in such a situation would be very close to the kind of advice we would be giving from this side of the House.
(Dublin South-Central): They gave advice to the Coalition before.
I am sure if it was good advice it was taken. We are talking at this time of a possible balance of payments problem which exceeds anything we have seen recently. Part of the danger is that the consumption boom which the Government hope to unleash with this budget is just as likely to increase our balance of payments problem as to decrease it. I do not believe it was entirely cynically that an economist writing in The Irish Times of today's date described the budget as the greatest possible help to solve the Japanese unemployment problem. There is a tendency in this country and in all countries whose industrial base is not very well developed for increased spending power to go disproportionately towards imported goods, especially luxury goods. This is a huge danger in this budget and it is one that has not been adequately protected against, least of all by the Buy Irish campaign.
Another major problem in regard to the financing of this expansion is in relation to the investment that will be needed. Here again the Minister for Finance came very close to commiting what is almost the ultimate crime in accounting, namely, double counting. That is counting the same amount of money twice. By the Minister's reckoning the increase in economic activity which this budget is alleged to produce will produce profits that will be available for reinvestment and producing further jobs. The Minister says that on the one hand but, on the other hand, he says that in order to avoid borrowing abroad the Government will have to borrow at home and will have to offer an attractive interest rate so that investors will buy Government bonds and thus enable the Government to meet current account bills.
The danger here is that we are talking about the same lot of money. It cannot be used at the same time to help the Government to pay their current account bills and equally to help industry to re-invest and provide more jobs. There is precious little evidence that we are not just talking about the one lump of money here and that the Minister for Finance is talking about it in two different contexts, as if it were twice as large as what it will be in fact. He will find himself ultimately in the position of being forced to go to the Central Bank and ask them to print more money as the only way out of his difficulty. There is one ground on which I would welcome such a move, that is, that the place where they print the money is in my constituency and I imagine there would be quite some overtime involved. As the Minister for Finance knows, nothing is more inflationary than increasing the money supply in this fashion. If he were to take this last desperate route out of his economic difficulties he would find the ultimate economic price very difficult to pay.
With regard to the question of employment, which after the question of financing and money is the central one in the budget, I must confess I listened to that part of the Minister's speech with a mixture of bewilderment and disbelief. I was not the only one who listened with bewilderment and disbelief. These emotions are shared to an increasing extent by large sections of the population. They have been fed figures until their back teeth are awash in them. They have been fed figures in the manifesto, in the White Paper and now in the budget. Are they all the same? They do not quite seem to be. Are they all different? It is difficult to see quite where are the differences.
There are rows and arguments about how to define unemployment, about whether a person is unemployed when he is doing this or that. This bewilderment and confusion is indicative of one sure thing: that the public generally are not interested in sleight-o'-hand. They are not interested in juggling with figures, they are not interested in juggling of any kind. If they were interested in that they would go to see the three-card trick man at Dingle races. They are interested in two things. They are interested in the weekly live register figure published on Fridays and they are interested in the social and economic reality of living in a house or neighbourhood where there is long-term and serious unemployment. They know what are the realities. They know what the live register figure means and they know their own social and economic situation if there is unemployment in the house or in the neighbourhood. No amount of redefinition, of changing this and that, of talking about jobs created, jobs filled, new jobs, old jobs or any kind of jobs will alter their perception of the problem if the underlying reality is not altered also.
To illustrate this point I shall take a section of the Minister's speech and indicate just how dishonest is the approach to employment. It is a section that is of particular concern to me as spokesman for my party for education and, effectively, for young people. I am referring to the section dealing with youth employment. On pages 26 and 27 of the speech there are a couple of bland paragraphs and a few startling figures relating to youth employment. We are told that a sum of £5 million will be provided in the budget for youth employment and when we turn the page we are told this will provide 5,000 jobs. Who in their right minds would believe that in early 1978 within the space of a year it will be possible to provide 5,000 jobs at a cost of £1,000 each? If the Government can do that they should sack the IDA straightaway. I do not know what is the IDA cost per job at present but it is a damn sight more than £1,000 per job. The January sales are over; a real, permanent job cannot be got for £1,000 each or, if it can, it is a miracle that nobody thought about it before.
The reality behind this spurious passage is that what is being provided for these young people is not a job at all. A certain number of them, for a limited period, will be taken off the live register. Then, unless the economy is improving, they will be back on it again. I presume it is the hope of the Government that 5,000 of them will still be off the live register by this time next year when we come round to discussing the next budget. I wish I could be so hopeful. For example, in the section on youth employment, the Minister indicated that he expected AnCO to put 15,500 people through their training courses this year. That is about 3,000 more than they put through in 1977. Are the Government serious when they describe these 3,000 young people undergoing training courses run by AnCO as people who have been given jobs?
I am not against the work being done by AnCO, far from it; it is vital and essential for the future health of our economy. While it is true that young people leave the unemployment register—if indeed they have managed to get on it—when they are undergoing an AnCO course, by no stretch of the imagination can their presence on such a course be equated with a full-time, permanent job. When we talk about jobs we should be satisfied with nothing less. We want full-time, permanent jobs. Some of these AnCO courses last for only three weeks, few of them for more than nine months. Three thousand young people undergoing AnCO training—some of them being off the register for as little as three weeks—and the Government have the gall to chalk them up as having jobs. The young people themselves will not be fooled by this and, more to the point, nor will their parents.
When I look at the section on youth employment in the Minister's speech I see very few real jobs. I see 150 apprentices in the building industry. Those are real jobs. I see 100 or so instructors who will have to be hired by AnCO to help in the through-put to the figure of 15,500. Those are real jobs. Perhaps the 1,000 or so involved in community youth projects are borderline cases but, for the purposes of argument, I would regard them as real jobs. That is 1,200 real jobs and a couple of thousand fake ones, a couple of thousand training courses. They are splendid training courses. It is good and important that they should exist and that young people should do them but it is flying in the face of reality to describe them as jobs—even if they do take people off the live register—because of the absolute certainty, if the economy fails to improve, that these unfortunate young people, whose expectations have been aroused, will be back on it within a depressingly short space of time.
One wants much more information from the Government on this extra-ordinary creation of their youth employment policy. They have also a work experience programme and an environmental improvement scheme programme. Who is going to provide this? The Department of Labour? AnCO? Is this another example of double count? Will some of these people be included in the extra 3,000 in the AnCO throughput? Will the National Manpower Service be organising them? Who will be organising these schemes? How many real jobs, if any, do the Government expect each scheme to supply?
I have gone into considerable detail in dealing with the whole youth employment scheme because, as the Minister admitted, it is one of the most serious aspects of the unemployment problem. I think he said that even though only approximately 30 per cent of the work force were under the age of 25, they accounted for almost 44 per cent of the unemployment rate. This is tragic. I know that not all the blame for this can be laid at the door of this Government, but I am horrified that the Government should see this skimpy, publicity-conscious, inadequate programme as anything like a real response to a need which the Minister has rightly described as one of the most serious wants in the country.
I would now like to turn to a number of other matters raised by the Minister and in particular to the economic and social aspects of some of the taxation changes announced by him in his speech. The first is in relation to the Government's decision to abolish wealth tax. Deputy Donegan honestly stated that he was not personally in favour of the wealth tax and that he was not sorry to see it go. We all appreciate Deputy Donegan's honesty in this regard. It is also in order to point out that Deputy Donegan as a member of the Fine Gael political party, and as a Minister in the National Coalition Government, obeyed a majority decision of the Cabinet of which he formed a part and voted with his feet for the imposition of that wealth tax on himself, no doubt, and perhaps on some of his friends as well. That is the difference between Deputy Donegan and Deputies on the other side of the House. Deputy Donegan was prepared to vote for something he personally disliked for reason of political principle. The motivation of Deputies on the other side of the House who vote for its abolition is something quite different.