Deputy McCreevy may use 29 minutes.
Financial Resolutions, 1979. - Financial Resolution No. 8: General (Resumed).
Debate resumed on the following motion:
That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.
—(Minister for Economic Planning and Development.)
On Thursday last I was referring to the importance of the Department of Economic Planning and Development in the role of this Government and in the plans we had brought forward. I had said that the budget should be seen as part of our overall plan. I am afraid discussion on that aspect of the budget has tended to be overshadowed by another aspect that revolves around the question of farmer taxation. If that has done one good thing it is that it has brought into the open a discussion among all sectors as to what people should be paying in income tax, who should be paying and what amount. The question also revolves around what is a fair share of taxation for all sections of the community. If discussion on farmer taxation or the farming levy has brought about a greater awareness of the taxation system, then it will have done some good.
In 1974, when farming taxation was introduced, anybody could be forgiven for not visualising that in 1979 farmers would be asking to pay their fair share of tax. I did not hold much brief for the previous Minister for Finance but he must be complimented in some way on the fact that, since the outcry there was at the time he brought in farmer taxation, five years later farmers would wish to pay income tax like everybody else. The level of acceptability among farmers about what they should pay in income tax has increased in that time. They have come to accept that they must pay income tax like everybody else. If any section of the community can be seen not to be paying income tax like everybody else, then there will be a recurring budgetary problem such as has been experienced in the past couple of years. Each time a budget is introduced there are headlines in the papers to the effect that farmers contributed only X million in income tax and that their contribution does not bear any relationship to that paid by other sections of the community. The solution now proposed will take this problem out of the arena at budget time.
When we speak about farmer taxation and whether or not one includes rates, or whether or not one excludes farmers with a rateable valuation of £20, the fact of the matter is that farmers are not seen to be contributing the same share as other sections of the community. Last year farmers contributed 2 per cent of their income as compared with other people who paid approximately 16 per cent of their income. If one excludes farmers with valuations below £20 that figure goes up by 5.5 per cent. It is a long way short of what other sections of the community are contributing. So long as that situation exists the masses of people who have to pay under the PAYE system will complain that farmers are not paying their fair share.
If farmers have been paying so little in income tax there must be some reason for it. Even with the lowering of the threshold each year bringing in more and more farmers, the contributions from farmers have not lived up to what is estimated by the Revenue Commissioners at the start of each year. In that regard there has only been progress in farming in Ireland in the past five or six years. Farmers have been reinvesting the little extra money they made in their farms. Any farmer on accounts is allowed, like all other sections of the self-employed community, to claim that as a deduction against his income tax.
There are some myths about farming profits. Some farmers are doing very well and some are doing very poorly. To say that all farmers are millionaires and making a fortune is just not taking account of reality. The reason people expect farmers to do excessively well is that since we joined the EEC farmers' incomes have shot up dramatically. People see the amount of money that has gone into farming as a result of our membership of the EEC and they say, "look at all the money the farmers got out of the EEC". The fact of the matter is that it is the same as the case of a man who is earning £10 per week and gets an increase of 100 per cent in his wages and so earns £20 per week; but £20 per week is a lot short of what most other people are earning. If farmers' incomes have increased dramatically they were starting from a very low base and account has to be taken of that. They have not got a taxable income and that is the reason. They made enormous strides in the past five or six years but they were starting from a very low base and that is one of the reasons that the profits people think they were making are not there.
Having said that, I believe we cannot have a situation continuing where the PAYE sector contribute so much and the farmers contribute relatively little. There must be a solution. Publicly, and within the structures of the Fianna Fáil party, I opposed the idea of the levy. I was opposed to it on the principle that it bears no relation to income or ability to pay. That is the only argument that a person need have against the 2 per cent levy. But if we accept that argument which the farming organisations also put forward then we must accept that we must have a taxation system which makes one pay on one's income. That is exactly what is being proposed now. The solution to the problem of farmer taxation is first of all to abolish the notional system. According to the Revenue Commissioners there is only approximately 16 per cent of all farmers still on the notional system. I am prepared to say from experience that the notional system, even if the multiplier is increased to 300, will still prove impracticable for most people.
I am sure each one of us here would like to have a taxation system where we could multiply some figure by our age or something and pay tax on that basis; if we all had the option of taking some figure then we would all opt for it. But the rest of the community do not have that way out. As long as any section of the community has a different basis of calculating taxable income then there are going to be problems. I am in favour, and always have been, in favour of the abolition of the notional system no matter what the multiplier is. All farmers should pay income tax on their accounts. There is a great myth in regard to accounts. The answer to that is that if one does not have an income one does not pay income tax. If one's valuation is at a very low figure and one is making a profit then one pays income tax. Farmers need not be afraid that if an accounts system comes in for all farmers they are then going to have to pay income tax. The same applies to them as applies to everybody else; if they make money they pay income tax and if they do not they should not be paying income tax anyway and the only system which can accurately reflect that is the accounts system. For administrative purposes there would not be much point in going below the £15 poor law valuation. I am not saying that I am against the principle of bringing all farmers of all valuations into the income tax net on accounts but administrative problems aligned with the amount of income tax that might be collected would mean that, for the next couple of years, it would not be worth while to collect the tax. Therefore it might not be feasible to go below that figure for the time being. But I am not against the principle of going down to £10 valuation because I think everyone should be on the same system. That is a system which I believe the PAYE worker and the trade unions will accept because the trade unions opposed the idea of the levy; the farming organisations opposed the idea of the levy; the small farmers and the Land League opposed it. It was opposed on the grounds that it was a disincentive to productivity and bore no relation to income. It must be accepted that we must have a taxation system based on ability to pay.
The idea in regard to the accounts system that, on the one hand, farmers will not be able to do it and, on the other hand the Revenue Commissioners will not get any money from them or will not be able to police the system is no excuse. We do not allow people to go around driving cars while drunk just because there are not enough policemen to catch them. We say that it is against the law and if someone is in contravention of the law and is caught he will be fined or imprisoned. The machinery is there to collect tax on accounts.
The amount of bookkeeping that farmers will have to do is very small. When people think of bookkeeping they think of the small shopkeeper or different professions or business they might be in and, with the present regulations and VAT and so on, there is an enormous amount of bookkeeping for even the smallest shop. But for farmers there is nothing like the same amount of bookkeeping. If they wish to keep books for income tax then it is a very minute set of records they have to keep. Any good farmer will keep a more elaborate set of books in order to show what kind of enterprise he is making money on and so on. But to comply with the income tax regulations for the Revenue Commissioners the amount of bookkeeping is very small. If a farmer uses his cheque book for doing business and lodges all his money the amount of bookkeeping is minimal. There is no comparison with the amount of bookkeeping that other sections of the self-employed community have to do. The argument goes on that farmers will not produce accounts. Every other section of the self-employed community is given an estimated assessment of tax at the start of the year and if they do not wish to contradict that estimated assesment then the amount of tax estimated is collected. If they do not pay up immediately the sheriff will eventually come around and collect it. The reason self-employed people do their accounts and produce their books is usually to show that their real profit is less than what is estimated by the Revenue Commissioners. But for administrative purposes the tax inspectors in the Revenue Commissioners would be quite glad not to have the problem of people sending in their accounts and to collect on the estimated assessments. It will be no different with the farmers. Is anyone going to tell me if a farmer's income tax is assessed at £5,000 and he should be paying only about £1,000 that he is not going to keep records to show that he should only be paying £1,000. Farmers are as cute as any other section of the community. A farmer will not pay £4,000 just because he does not keep a few records. The machinery exists within the Revenue Commissioners to collect the money irrespective of whether the farmers keep accounts. It is no excuse to say it cannot be done like that.
Since the budget the newspapers, in particular one newspaper, seem to be deliberately trying to highlight a confrontation between two sections of the community. Newspapers are in the business of selling their papers and making a profit but they must work in the interest of the community and not just themselves. They should not bring about a situation where one section is fighting the other section. The media in general, both TV and newspapers, seem to be more interested in confrontation among politicians or sections of the community than in any constructive debate. Perhaps it is a sign of the times that generally people do not read articles in the papers very thoroughly; they tend to look at the headlines and form their opinions from such headlines. This may be due to the increased pace of life and the fact that people do not have so much time.
I have never said that the income tax system is sacrosanct. It is not like the Ten Commandments. The system is a device thought of by man to collect money to run public services. If there is a better system, I am prepared to discuss changing our present methods. In an income tax system all people should pay the same rate. I am prepared to look at other forms of collecting revenue so long as they are applied across the board.
The PAYE sector has been contributing approximately 85 per cent of the total income tax collected. Those people have been saying that this is more than their fair share of taxation and they maintain the self-employed are not paying enough. The problem here is that PAYE is an exact system of collecting tax and I think there are one or two reasons why there is a sense of grievance about it. Workers in a factory know that basically they are all paying the same rate. Some may have more allowances but they know that the tax is collected at source, that they are paying the right amount and that there is no fiddling. However, we do not know when we pay cash across the counter in a shop or a pub, to a doctor, dentist, solicitor or accountant that he is paying his fair share of tax. The tax of the self-employed is computed on a different basis. These people have to wait until the end of the year before they do their accounts. The PAYE person is not sure that people who are self-employed are paying their fair share because of the different method of calculation. I am prepared to say that the vast majority of self-employed are paying their fair share but, like the 10 per cent of social welfare recipients who abuse the system, it is the 10 per cent of self-employed who evade taxes that give that sector a bad name. It is like a county football team that has one or two over-robust or dirty players who give the team a bad name.
The question of tax evasion is much over-estimated. I think the complaints of the PAYE people are due to a kind of social philosophy. When that sector say it is paying too much and the self-employed are paying too little, these people are really saying to one another that if they had the chance they would fiddle their taxes, that if they had the opportunity they would not give the correct returns. They are imputing motives to others and that is their underlying philosophy in this whole argument.
What is the reason for that? The PAYE people do not see where their taxes go. Income tax is disincentive to greater productivity and to overtime. The question of income tax raises queries regarding social conditions. People want to have more money in their pockets to spend as they wish. They want more disposable income, whether to spend on an extension to their house or on drinking. Politicians may make noises and talk about the public conscience. The people we represent may subscribe to this in public but they are also saying that, while they want to pay less tax, at the same time they want more services. That cannot be done. If we want more services and more social equality, the people in employment must pay tax. However, the underlying philosophy of the self-employed and the PAYE sector is that they want more disposable income and less money going to the Exchequer. This matter could be discussed at a later date.
There are certain anomalies in the income tax system which could be corrected. These would help the PAYE people. I do not see why travelling expenses to and from work should not be allowed to the PAYE sector. People who carry on their own business are allowed such expenses. There are different schedules within the Income Tax Acts that allow this. A self-employed person can get the benefit of travel expenses, depreciation on a car and so on, but this does not apply to the PAYE people. I see no reason why the Minister, in talks with the interested parties should not give this concession.
There has been much talk about evasion of taxes. I read in the papers recently that the Revenue Commissioners have given rewards to people who have informed on others. Perhaps I am old-fashioned. I come from a rural background where the word "informer" has not happy memories for many peo-ple. Perhaps the social climate has changed. For reasons of social conscience and so on, perhaps people are prepared to point the finger at those who evade their taxes or abuse the social welfare system or are in contravention of the law. Perhaps that is the way to think, but personally I do not advocate anybody being part of a system of spying or informing on other people. Perhaps I could be accused of telling people not to uphold their public duty but my personal feeling is against such a system.
Within the framework of the budget the increase in the interest allowable against income tax from £2,000 to £2,400 is worthwhile. This £2,000 has remained since 1973 and it was only in this budget that it was increased by 20 per cent. If it had been increased in line with other allowances since 1973 the figure would be far greater than £2,400. Prior to 1973 you could have your total interest allowed against income tax. There were reasons then for saying you should get only £2,000. Part of the reason related to the fact that there was no capital gains tax. Since then we have capital gains tax and I ask the Minister for Finance to increase the allowable interest figure further because the amount of interest payable on a mortgage on any reasonable house quickly accumulates. If somebody has a bank overdraft and perhaps a car loan, his interest payments will pretty quickly reach £2,000 or £2,400. The figure is far too low.
Much trouble, particularly for small business people, could be overcome if the thresholds for exemption for value-added tax were increased substantially. I happened to be on the committee which examined the VAT Bill and it did in-crease the thresholds by roughly 50 per cent which means that if a shop-keeper now has a turnover less than £18,000 he does not have to register. Registering for VAT for people under £50,000 turnover creates enormous difficulties and involves an inordinate amount of bookkeeping. These thresholds should be greatly increased. The amount of VAT collected from the small shopkeeper with a mixed business is very low. I believe statistics would bear me out; in grocery shops where I think the majority of goods are nought per cent the amount of VAT collected is very low and does not warrant the bookeeping involved.
The Deputy has a couple of minutes left.
Since he is hammering the Government I would be glad to let him go on.
It is the democracy of our party.
I respect the Deputy very much for it. I have heard him before speaking the truth.
There were other matters I wished to speak on but since my time has run out I shall conclude by saying that I should not like this budget to be remembered, as it is going to be remembered, whether we like it or not, as the budget that brought about this continued confrontation between the PAYE sector and the farmers. The overall strategy of the budget for good or evil — people may have different viewpoints about whether the strategy is right or wrong — has been forgotten and we are going down this side road. I see the budget as part of the overall plan enunciated in the manifesto of June 1977 which we have lived up to in the budgets of 1978 and 1979. Whether people agree with our strategy or not we have been consistent in what we have done and our plan has been as outlined in the Green Paper and in the White Paper.
Perhaps the 1977 election raised people's expectations. If any political party promises X, Y or Z at an election, ex-pectations are raised to such a level that whatever party comes into power in any future election will have trouble unless people realise that it is only hard work by themselves and the community that will increase the cake and that individual standards of living will be improved. No Government can do more than administer and cut up the cake in a better way, give an impetus here or a reduction there. I fear people are beginning to think that the State owes them a living. People must realise that it is they themselves who will make or break the country. Naturally politicians like to be elected, and we may have contributed to a state of euphoria so that expectations keep on going up and nobody wants to make sacrifices or take a cutback, whether PAYE worker or farmer; everybody wants more; but if, as politicians, we can make people realise that the Government of whatever party can only help and that it is the people themselves who must make the grade in the long run and that nobody owes them a living except themselves, we will have done a good day's work.
This budget will surely go down in history as one of the greatest political blunders. I can easily sympathise with the Fianna Fáil backbenchers trying to justify the budget or convince themselves that it is a good budget. It is easy to convince oneself when one wants to believe. If one wants to go down a dark tunnel wearing dark glasses there is no problem in poking in the dark. Convincing oneself about the budget is not what is important; it is to convince the electorate that we represent here. I can say that if there was an election this year some young new Members who are trying to justify this budget have had their chances seriously jeopardised by the way in which this budget was presented.
On budget day when I observed some of the potential aspiring Euro politicians I could see beautiful smiles on their faces as the Minister laboured for two hours with his budget statement. They seemed very happy then but as the days passed and as people analysed what was in the budget for them, one now sees some of these aspiring Euro parliamentarians are not so happy with the outcome of the budget. They are very disappointed. I believe they will have an opportunity later in the year when the Minister for Finance is certain to introduce a mini-budget of coming across to the respectable side of the House, this side, and give the Minister for Finance his answer by voting with us against the budgetary proposals.
At the time of the last general election Fianna Fáil campaigned on the basis of massive taxation concessions such as the removal of car tax, the removal of rates on domestic dwellings and substantial cuts for the PAYE group. But this year's budget has almost nullified these concessions. The ICTU sought concessions for the PAYE sector to the extent of £100 million. Estimates of Government receipts published prior to the budget showed that income tax will yield more than £800 million this year but we all know that 87 per cent of the income tax returns are from the PAYE group. The increase in PAYE receipts is estimated to be more than one-third this year compared with last year. In these circumstances the demand of the ICTU was reasonable and realistic. The amount of the concessions sought represented less than the total amount of the tax concessions in last year's budget but the Minister for Finance showed his total lack of concern for the PAYE people by disregarding the ICTU demand and by offering concessions in this regard to the extent of £27 million or only a little more than a quarter of the amount sought. Naturally there was a reaction from the workers and many impartial commentators expressed the view that the budget had eliminated the possibility of a national wage agreement this year because of the failure to give reliefs to the PAYE group.
In last year's budget the Minister proposed the abolition of wealth tax and substantial concessions in respect of capital gains tax. These concessions benefited the 5,000 wealthiest people in the community. We were told that this move would stimulate employment but the unemployment figure remains at more than 100,000. Obviously, then, that policy failed. If the wealth tax had not been abolished and if the capital gains tax had been retained at its previous level the Minister would have been in a position to concede another £25 million or so by way of income tax concessions to those in the PAYE band. At least that would have gone half way to meeting the ICTU demand and it might have resulted in the creation of the economic climate necessary for agreement on pay and incomes this year.
Having regard to the circumstances I have outlined we can see the budget only as a conservative and anti-social device designed to antagonise rather than to appease people. Whatever may have been said about the budget in the days after it was announced public reaction to the taxation measures have become stronger with each passing day. We opposed the proposal to impose a 2 per cent levy on farmers in respect of sales because we regarded such a tax as regressive, a tax that hit the small farmer as much as it hit the rancher. This party have been opposed always to regressive taxes. However, one of the reasons for the furious reaction of the farmers was that prior to the general election Fianna Fáil had led them to believe that if returned to office they would virtually abolish farmer taxation. This year's budget represents a reneging on that promise but it was a promise that should not have been given in the first place because farmers must pay their fair share of taxation just like anybody else.
Whatever about the Government antagonising the farmers they have succeeded in antagonising every section of the community by the way in which they have handled the 2 per cent levy question since then. There was some merit in the concession announced by the Minister for Finance at the Fianna Fáil Ard-Fheis in so far as that concession was designed to help the small farmer but there was no merit in the total capitulation of the Government to the farmers in abandoning the proposal. Regardless of what the Taoiseach or the Tánaiste may say about their meetings with the leaders of the farming organisations the people beleive that the Government gave in under pressure from the farmers. The PAYE group have been antagonised to a point that is unprecedented in our history. Throughout the country workers are protesting in the strongest terms and are threatening to engage in various forms of demonstration against other sectors of the economy who are refusing to pay their fair share of taxation or who have succeeded in avoiding tax.
The Government must act quickly and decisively to ensure that farmers pay taxation in proportion to the amount contributed by the other sectors. Farmers, like everyone else, should be taxed on the basis of income. The accounts system should apply to them and, of course, they should be allowed the same concessions as other income tax payers. The principle in this whole area should be that people pay their fair share of tax irrespective of which line of economic activity they are engaged in. So far the Government have been free to apply this principle to farm incomes but, judging by their behaviour since the budget, we have no reason to believe that they will apply this principle in future.
In my opinion, the Minister for Finance has achieved the impossible, antagonising every sector of the economy by his taxation proposals. In doing so he has threatened our economic future. The public outcry about taxation has rightly focused attention on those in our community who evade paying taxes. The Minister for Finance is undoubtedly aware of a recent statement by an official of the Revenue Commissioners that £50 million is being evaded in income tax annually. The evasion has been carried out by the professional classes in the main, people who are amongst the most highly paid here. They have all secured substantial incomes. At the same time it is impossible for anybody on PAYE to evade even one penny of taxation. Many old age pensioners pay taxes on the pension they receive from the State and even on the pension they receive from their former employers. That is a social scandal particularly when viewed against the fact that £1 million is being evaded in income tax weekly, according to an official of the Revenue Commissioners. Regrettably, this pattern seems to be socially acceptable. What a scandal and a shame that such people go unapprehended evading paying their fair share of taxes.
The Minister for Finance should substantially increase the staff in the office of the Revenue Commissioners so that they can tackle this great social evil of tax evasion. It should be made clear that tax evasion is a crime which is punishable by law. Those found guilty of it should be brought before the courts so that the maximum publicity can be given to their case. It is only by doing that that we have a chance of ever getting the money which justly belongs to the State. It is a disgrace that there is not sufficient staff in the Revenue Commissioners to tackle this crime in the way it should be tackled. In effect, we have one law operating for one set of taxpayers and another for another set. Tax evasion is also a crime against the rest of society because some people are literally robbing their neighbours while at the same time they enjoy all the services provided by the State. One good thing that could come out of the Minister's mishandling of the taxation measures in the budget would be a demand for an end to tax evasion of such strength that he would have to act and provide extra staff at the office of the Revenue Commissioners.
The increases granted to social welfare recipients are welcome even though they fall short of what is required to help those unfortunate categories. We must question a policy which gives social welfare recipients increases in the budget when just a month before budget day the Government commenced their policy of dismantling the food subsidies. By removing those food subsidies the Government took back what they gave away in the budget. The budget will make a mockery of the Government's claim to be interested in social justice. The Minister knows better than anybody that the poorer sections of the community spend a greater proportion of their income on food than those in the upper income bracket. The removal of the food subsidies was a deliberate blow to the standard of living of those in receipt of social welfare benefits and allowances. If the social welfare recipients were to be kept in line with the rest of the community they should have been given an increase of at least 25 per cent to compensate them for the loss of food subsidies. The increases fell far short of that and not even the Government's well-oiled publicity machine would convince old age pensioners that they are better off now than they were 12 months ago.
We were all shocked last weekend to read the figures produced by Dr. Brendan Walsh about emigration. Dr. Walsh is to be congratulated on bringing to the attention of the public the reappearance of emigration which for so long was a national scourge. The Government boasted that their economic policies would reduce unemployment and end emigration but, according to Dr. Walsh, some 20,000 people emigrated over the last three years. The rate of emigration in 1978 amounted to 10,000 of our best young people. I doubt if the Minister could contest the accuracy of Dr. Walsh's fears. We are all aware that emigration, which was eliminated in the mid-seventies, has reappeared. Emigration has always been a traditional Fianna Fáil way of solving our unemployment problems and, obviously, it is being used again. That is ample proof that the Government's economic policies have not worked and are not working. It is frightening to think of what will happen if those economic policies do not work in the future. If that happens there will be two consequences, massive unemployment coupled with renewed emigration.
As in the past it is the young who emigrate and Dr. Walsh estimated that the vast majority of those who emigrated last year were in the 15-to 20-year-old category. Once again, we are losing our best young people. The so-called Fianna Fáil economic miracle is turning into an economic nightmare. My party say: let Fianna Fáil get away from their blind commitment to private enterprise and instead use the State sector as a means of providing badly-needed employment. If they do not, they will be providing employment only for the air and shipping lines in exporting our young people in ever-increasing numbers.
We all know that next June there will be local and European elections. This budget highlights another danger of the continuation of the Government in power. Because of all the money they gave away last year and because there is now very little left in the kitty, they have to cut back on expenditure. The main cutback will occur in the area of local authority expenditure, particularly with regard to housing and health services as well as roads and sanitary services. I want to warn the Government that they will not be allowed to get away with this policy of sacrificing local authority expenditure at the expense of giving money to the wealthy classes.
The Taoiseach in his Ard Fhéis speech made it perfectly clear that his objective in the local elections was to secure Fianna Fáil control of local authorities so that they will keep quiet while their services are cut back. The Labour Party will not let that happen, because those who will suffer most from this policy are those who need the greatest help from society. The housing shortage is still a scandal. Many areas of the health services are still a disgrace. Unless local authorities are given the money to do the job, this budget will have caused even greater public suffering than has been realised up to now. We have in our own city 900 people on our waiting list for new homes. Our policy of house building has been cut back because money is not being made available.
We had a money cutback where it was most badly needed, that is, for the maintenance of local authority houses. In Limeick we have three large housing areas which were built in the mid-thirties and forties. At that time they were considered up to standard but in modern society can be classified as not only substandard but, I suggest, unfit for human habitation. Yet these houses belong to the local authority. We in that authority cannot get adequate funds to carry out the necessary repairs to modernise them. By modernising I mean the installation of bathrooms, which everybody is entitled to.
That is the policy of this Government. That is what the budget has meant to the people of Limerick city and to all those people living in local authority houses throughout the country. We cannot get adequate funds to carry out repairs to local authority houses, yet these people are expected, and are continuing, to pay high rent. I appeal to the Minister for the Environment to make the money available to us because he has a moral duty to get the money so that the people can be given what they are justly entitled to—a decent home to live in.
There is another ludicrous situation. Every day we hear of houses fetching completely inflated prices. I read in this morning's paper that there is a flat available in Dublin for £60,000. There is no control over the house price situation. If people are prepared to pay these prices and have the money to do so, that is their business. Local authorities have tenant purchase schemes and the people are expected to pay inflated prices. Four or five years ago fortunate tenants purchased their local authority houses for £500 while other unfortunate tenants, because of economic reasons, were unable to purchase at that time. They are now expected to pay an inflated price for those same houses—£5,000 or £6,000. When will the Minister set an example and give leadership by trying to stabilise the price of house purchase? He is allowing local authorities to charge unrealistic inflated prices which are beyond the means of those living in those houses.
The Minister should seriously take a look at the tenant purchase scheme, review it and the local authorities should sell these houses at a fair price. After all, these people have been paying the local authorities rents for a considerable number of years. Some of those houses now being sold to those occupiers have been more than paid for on the rental system. Yet we have the farcical situation that the Minister of a Government trying to control prices is aiding and abetting the local authorities at an inflated rate. That is a scandal. The Minister should immediately set about reviewing the tenant purchase scheme.
There is another matter which will affect seriously the local authorities. Heretofore the Road Fund grant was given to local authorities without recoupment of VAT by the Minister for Finance. This year, for the first time, the Minister for Finance will be taking back VAT from these grants. This will have very serious repercussions for local authorities. It is going to get people off jobs much sooner, because money to keep them there will not be available. The Minister for Finance is taking back a lot from the Minister for the Environment who was given those grants for the purpose of maintaining our roads at a reasonable standard. The roads in our country at the moment are surely the worst in Europe. If they are allowed to deteriorate as they are doing, the roads in primitive countries will be as good as ours. We are failing to live up to our responsibilities. The money was given to the local authorities to enable them to do the job they are expected to do. Only the Minister for the Environment is in a position to allocate that money. Surely he should see to it that maximum value is got for the money he allocates to local authorities and should immediately seek to prevent the Minister for Finance recouping a lot of it on the VAT policy.
A matter of high priority for workers is the medical card. A man with a family on a low income may not now qualify for a medical card. Such people have already suffered severely because of the abolition of food subsidies, and they are now suffering further because of the withdrawal of medical cards. The income limits are now unrealistically low. How can a Minister, chief executive officer or anybody else suggest that the husband and wife with £40.55 per week—and that would be 5p over the limit—are financially capable of meeting the cost of hospitalisation or doctor's care at home? How can these people afford the terrible expense of hospital or to buy drugs when it is more than difficult for them to provide food for a week on such a small income? Food prices are increasing on a daily basis, and we have a deafening silence about all this. The Minister responsible appears to be lost, or else he does not care. Of course, when the Minister was in Opposition he reminded the people of any increase in food prices that took place, and rightly so, because that was his duty. But we were also told that if Fianna Fáil were returned to power they would not only control price increases but they promised in their manifesto to stabilise prices and bring down the cost of living. How false these promises seem now.
We, the people of the country, have to endure and listen to announcements by the ESB of a frightening increase of 20 per cent in their charges. I wonder if the Minister will come on television to announce this crippling blow that will have a resounding effect on the Irish economy. It is unlikely that he will, and the social ills that are continuing to emerge and grow will be attributed to the problems of the Middle East. We have been told that there are to be increases in the prices of oil and petrol. We are told that this is a new system. But the people were reminded daily, if not hourly, when the present Government were in Opposition, that if they were given the opportunity and power world economic prices would not make a difference—they would wave the magic wand to give all the people the living to which they are entitled. In Government, Fianna Fáil knew that this was not possible because of world economic prices. Now that they are in power what is happening? They have beaten the Opposition in telling about increases. They are so arrogant that they are not leaving it to the Opposition to tell about the increases. They are telling us of the anticipated increases. That is how good they are at stabilising and controlling prices and keeping down the cost of living. They are a complete failure.
In an Adjournment debate last week a Deputy of the Labour Party recommended that in view of the abolition of food subsidies the eligibility limit for medical cards should be raised. He was informed by the Minister that he, the Minister, had had discussions with the chief executive officers and that these officers had decided that there was no need to increase the income limits. Surely this constitutes an abrogation of responsibility. The chief executive officers are far removed from the realities of life, as indeed is the Minister, if they consider that the working-class family with four or five children do not need their income limit raised in every respect. Assessment of the increase in costs brought about by the abolition of food subsidies reveals that on milk alone the bill has increased by something like £1.50 or £2 per week for that type of family. Of course, that is not taking into consideration butter, bread and other essential foods. The Minister should not leave a decision such as this to the chief executive officers, who have enough power as it is. In a matter of such social content as the income eligibility for medical cards the onus is on one person only, and that is the Minister, to ensure that persons in that category reap the benefits of the health services to which they are justly entitled.
The Post Office workers who are on strike at the moment and their trade union have agreed to allow the Department of Social Welfare to implement an emergency service to ensure that little distress or hardship will be caused to people on disability benefit or in receipt of benefit for long-term illnesses. We are thankful to the Post Office strikers and to their union for permitting this emergency service to take place.
How concerned is the Minister for Social Welfare about the people throughout the country who are in receipt of sickness benefit and disability benefit? How concerned is he about the people who have to go to the local employment exchanges so that they can get their cheques? What are they confronted with? There is no provision whatever made by the Department of Social Welfare to improve this service? There are many thousands of people in the country in receipt of those benefits.
It is in order to discuss social welfare and social welfare benefits on the budget, but we cannot go into the administration of any Department. That is for the Estimate. We can discuss social welfare benefits but the administration of a Department is for the Estimate.
I am talking about the hardship caused to people who are in receipt of social welfare benefits.
The Deputy is discussing how they are paid and the administration of a Department. He is not entitled to do that on the budget. He can do that on the Estimate. He can discuss the amount of social welfare benefits and so forth on the budget.
I am only discussing the facilities available or not available.
I am telling the Deputy he cannot do that on the budget. Facilities are administrative matters and they do not arise on the budget. We discuss taxation matters on the budget.
Surely you will not deny me the right to bring to the notice of the Minister the hardship suffered by those people.
The Chair is not denying the Deputy any right. The Deputy has no right on the budget to raise administrative matters.
With all due respect to you, Sir, this is supposed to be a place of democracy where there is freedom of speech. I have an opportunity this morning of raising something which is of great importance because of the Post Office strike.
The Chair has its duty. The Deputy cannot discuss administration on the budget. The Deputy can deal with it on the Estimate. He will have several opportunities to raise this matter. It does not arise on the budget and we cannot let any Deputy discuss how payments are made or facilities or anything else. These are matters for the Estimate. I am sorry, Deputy, but that has been the ruling down the years.
This is a national problem and I am speaking about lack of facilities in the Department of Social Welfare.
I am telling the Deputy that he cannot discuss facilities or the lack of them on the budget.
I feel I am entitled to discuss those matters here. I was sent by the people of East Limerick to look after their needs. I do not think you are being fair.
I am being fair to every Deputy. The Chair must point out to the Deputy that it is not in order to raise matters of administration on the budget. The Deputy knows that. He can discuss the amounts being paid and all that sort of thing on the budget but facilities and administration come under the Estimate. That is not my ruling. That is the ruling down the years from every Ceann Comhairle or Leas-Cheann Comhairle who has sat here.
With your permission, Sir, I propose to raise on the Adjournment the rates of annuity under the farm retirement scheme.
I will ask the Ceann Comhairle to communicate with the Deputy. Sorry, Deputy Lipper.
You are not half as sorry as I am, because as far as I am concerned there is great hardship throughout the country, and particularly in my area, because people have not got facilities from the Department of Social Welfare to deal with an emergency.
The Deputy has now got it in. Would he please move to some other matter?
If that is your attitude and your approach, thank you very much. I feel I am being denied democracy. Good luck to you, thank you very much.
If the Deputy wanted to continue he could.
Unfortunately, there is no protection from you.
That sort of statement should not be made and the Deputy should not be making statements outside the Chamber of the House. Will the Deputy leave the House?
I want to compliment the Government on the budget package, which embraces every aspect of Irish life. I believe that the Government's philosophy since they took office in 1977, is being continued in this budget, despite what Opposition speakers may say. The manifesto announced by Fianna Fáil was clear and decisive. While a lot of people may call it euphoria, I believe it is reality and has dealt with the problems which held the country back during the previous four years of Coalition Government.
I have seen during the past few months an effort by the Opposition, the Press and the media to try to bring about polarisation between the different sections of the community. I believe that the media are acting as the Opposition, because to all intents and purposes we have no Opposition in this House. Banner headlines over the last few months have created that feeling throughout the community between urban and rural dwellers. That attitude has been there since 1973. The previous Minister and previous Coalition tried to create this polarisation. This attitude has been resurrected in recent months.
Great strides have been made in the budget in relation to the Departments of Health and Social Welfare. There has been taxation on cigarettes and alcohol. I am a compulsive smoker and the efforts of the Department of Health have made me more aware of the dangers to health so that I at least try to break the habit. Perhaps next year or in 10 years' time if I'm still alive I will break the habit altogether. The increased taxation on cigarettes has also made me more aware of the effects of smoking.
There was no great outcry about the increase of taxation on drink. I am also a drinker but not a heavy one although I once was.
Not compulsive.
The increased price of alcoholic beverages plus the campaign by the Minister for Health to make people aware of the dangers of alcohol abuse are having their effect. Ale and "Guinness" contribute to a social way of life and I would not consider them a health hazard. The price of those have been increased enough and perhaps too much but the price of whiskey and other hard alcoholic drinks has not been increased enough. An increase of 3p in the price of a half one is not enough, because we are getting into a situation where the problem of alcoholism is on the increase. In any public house or licensed premises on any night of the week the youth of the country are soddenly drinking hard alcohol. The price of hard alcohol should be further increased and perhaps people would revert back to the social pint of stout or ale. I know there will be reaction against that from the multi-nationals or semi-multinationals who produce hard alcohol but something must be done to protect the people from the results of overindulgence in hard alcohol.
Despite what the Opposition may say, the issuing of medical cards under the health scheme is operating more fairly than ever before, although there will be reviews and we as politicians must help our constituents when making applications. Because of the new eligibility limit in relation to the contributory health scheme more people can come into the scheme.
The increased old age pension is welcome. Perhaps the Government should have another look at the means test in the light of the circumstances of 1979. The method of operation of the means test should be clear to people. Between the savings in the bank, house valuations and so on, a lot of confusion has been created among old age pension applicants in relation to the means test. A more simple system would help a lot of these people. Social welfare benefits have also been increased to benefit the weaker sections. The new programme of farmers' dole as it is commonly known will benefit those in most need. The scheme where we are taking £2 million on the one hand and giving £2 million on the other is a scheme well handled where there is no loss to the Department.
The substantially increased children's allowance may not be as much as we would like but it is a recognised increase. Perhaps the Minister would give some thought to changing the system of monthly payments so that people would have a choice of weekly payments. This would not entail a lot of change and would benefit housewives in their weekly budgeting.
In relation to PAYE I will refer to the philosophy of Fianna Fáil as set out in our manifesto where it is clearly stated that in two budgets we would double the income tax allowance. That has now been achieved. No matter what efforts are made at polarisation, Fianna Fáil's promises to the PAYE sector in the manifesto are being implemented totally and completely. We have increased the income tax allowance. Yet front bench Opposition spokesmen point the finger at us as if they did not know that happened at a time when the Government brought down inflation from around 22 per cent in 1975 to 7½ or 8 per cent last year.
What reliefs may be given in the future to the PAYE sector? We must provide benefits for those in our society who most need them. Workers on PAYE who want to build a new house make an application for a loan from a county council or a corporation whose guidelines state that £3,500 is the maximum they can earn and still qualify for a loan. We could make a major concession to PAYE workers in this area. In my capacity as a TD, I often find that young married couples cannot qualify for a loan because of the application of the figure of £3,500. Income tax paid under the PAYE code should be taken into account when they make an application for a loan. Applicants for loans make a big input themselves both in the physical erection of the house and in their savings. There is one outstanding feature in county council or corporation loans, that is, the interest rate. This is another area where we could give relief to the PAYE sector.
On the question of education grants, PAYE workers have to work long hours to enable their children to take advantage of third-level education. Sometimes they find themselves above the guidelines because they have worked overtime. Income tax paid should be taken into account in the allocation of those grants. The Government are aware of this problem. Real money in his pocket matters to the person in our society who is making a tremendous effort. PAYE workers should also be considered in the allocation of medical cards. I do not know how much that would cost. I am sure that in the coming year the Government will look at this aspect of loans, education grants, and medical cards if possible.
It was timely and constructive that in the budget the Government considered the problem of the single parent. The income tax relief granted in the budget is appreciated by people in that bracket. The relief in the interest rate on loans for houses is also welcomed by them. Another move in the proper direction was giving permission to savings banks to grant house mortgage loans. It helps those who want to help themselves. That is what good Government is about.
In the matter of local government we have heard loud cries from the Fine Gael Party who failed to be re-elected in 1977 when they said our programme of rates relief was not on and could not be financed. That programme was financed and is being financed. They talk about county councils, corporations and town commissioners losing authority but that is not seen or felt by such bodies, and I say that categorically as a member of Galway County Council. If we were to apply the same system of collecting money for the administration of local government and to give the services the Government are giving, we would have to have an increase in the rate of about £10 in the £. That is an undeniable fact. If we had asked for an increase in the rate of £10 in the £ in the past two years, local government and the local elections in June would be the greatest joke of all time. We never hear from the Opposition that rates have been abolished. But when it is pointed out to the people in this manner they will judge the performance of Fine Gael and Labour, they will be clear about that decision of this Government and also in regard to the implementation of that part of their manifesto.
I want to welcome in particular the reappearance of increased amounts from the Department of the Environment to local authorities for the local improvements scheme, which money was curtailed in the years 1974, 1975 and 1976. Indeed we look forward to the proposal for the new roads plans, in which I am sure our European partners will be lending a hand. Now that the European Monetary System is on a solid road it is here the Government of the day will turn their attention. Indeed it is clear that they have done so already.
I want now to turn my attention to the agricultural proposals in the budget. This year the Department are spending £160 million on agriculture; in fact it is somewhere between £160 million and £170 million. Bearing that fact in mind let us consider all the propaganda that has been issued and all the talk that has taken place in the past three weeks concerning farm taxation. I shall not dwell too long on the subject except to point out the following facts and, in so doing, turn my attention to Fine Gael and Labour Members and ask them: what is their policy on taxation of agriculture? Today, and indeed last week, Deputy Cluskey said that the modified farm levy was unconstitutional; he may not have used those words but that is what he meant. Today Deputy Lipper says: why did the Government—in the way in which he put it—drop the levy? Therefore, we have one section of the Labour Party contending it is wrong and the other section asking why it is wrong. The same applies to Fine Gael. We have had the front bench of Fine Gael, for the sake of opposition only, crying as though they did not know exactly what were its implications.
I want to give a few facts concerning a statement I made about the larger farmers who, through their organisations, appeared on the national network and who had stated they wanted to pay income tax. There are 11,000 farmers in this country over £100 valuation. There are a further 24,000 farmers with valuations between £60 and £100. In all there are approximately 36,000 farmers over £50 valuation whose contribution last year, through the accounts system, was £36 million. That clarifies the whole position. There are 11,000 farmers with valuations in excess of £100 standing on what I consider to be approximately £20 billion worth of property, who contributed to the State £36 million, and they said they want accounts.
The statistics are not up to date. We know what happened the old ones—Deputy Kelly's party decided they had not £5 million to spend on taking a census. Out of 26,000 farmers in County Galway there are 23,500 with valuations of less than £30 and out of 26,000 there are some 25,500 with valuations under £20. Could one credit that in the county of Galway the latest statistics show that there are 23,500 farmers out of a total 26,000 with valuations under £30 and 25,500 out of 26,000 with valuations under £20. I listened on national television to every one of the farming organisations talking about the abolition of the modified levy and bringing farm accounts down to valuations of £15, as though they were the people who would administer the taxation proposals for the farming community this year. I saw red—that the farming organisations wanted an accounts system; because such suited the larger farmers the smaller farmers should pay for them. I am reassured that this Government would never allow such to happen. Until such time as the large farmers of this country, over £50 valuation, are prepared to pay income tax, this Government will not renege on that proposal. The accounts system is beneficial to the larger farmer because, in depreciation alone, he can write off thousands of pounds.
I should like to ask the Fine Gael Deputies of Counties Galway, Mayo, Clare, Kerry, Sligo, Donegal, Cavan, Monaghan, Longford, Offaly—indeed I could continue to go around the country——
The Deputy has forgotten County Roscommon.
——to come here and tell us that they are prepared to back the IFA in their attempt to command the Government to drop the threshold for taxation purposes from £50 to £15. Does Deputy Kelly, who is in the House today, agree with that, since he is a philosopher of one description or another? Can he justify the big farmers demand that the threshold be dropped to £15. It cannot be justified.
The modified levy which I believe may yet be advocated is a good one for all the counties that I mentioned. Lambs are now being sold on the hard-won French markets which this Government recently got from Paris and which were unable to be found by the previous Government. When the Government came into office lambs were being sold at prices from £8 to £16 and are today being sold at £40 to £45. They are free from the levy. Sugar beet in all the western counties is free from the levy. Because of the hinterland problems surrounding the Tuam factory, the profit from an acre of beet in County Galway or County Mayo is not comparable to an acre of wheat in Mallow or Carlow. This concession was given because it was checked and found to be genuine. I thought that the levy on milk up to 5,000 gallons which is equivalent to approximately £2,500 in terms of PAYE tax allowances was fair and equitable but this was modified. All pigs were excluded from the levy, and rightly so, because the levy was being paid already on the resultant manufactured food stuffs. Barley and cereals going into the local depots were not included in the levy because that is not a point of manufacture. The ranchers and the dealing men of the country who bring the cattle from the marts to the point of export—the men who are the multi-millionaires of this country today and who, I am sure, have never paid an iota of tax yet—were caught by the levy. In a supply and demand trade did anyone think that they could pass the levy down? That cannot be done. We know what was passed down previously. We remember it quite clearly in 1974 when Deputy Clinton and the IFA had very little to say concerning the price of livestock at that time. The dealers had very little sympathy with them when livestock were being given away, literally stolen, by the vested interests. There is no passing down of the levy now. I think I have made my point clear. I would like to see how the IFA and the farm organisations, and particularly the Land League who represent the small farmers, would react to the dropping of the threshold from £50 to £15. Fianna Fáil philosophy down the years has been very clear. When we see the people with valuations of £50 and upwards paying their fair share of tax, then we can consider who else can make a contribution. But no effort can be made until such time as that is done. I trust the Government to see to it that an equitable share will be collected from them.
The fact that in this budget the Government are investing £165 million in Irish agriculture is surely a unique performance. In the Irish Independent today we see the cost to the farmer of the eradication of brucellosis and TB. We know how rampant this disease is in the country. Some of us remember who is responsible for the situation that we now find ourselves in. Deputy Mark Clinton, Minister for Agriculture, could not get a few shillings out of the coffers of the Coalition Government to continue to implement the policy of the Fianna Fáil Government for the eradication of disease in our herds. Today the farmers are paying the price for it. The Government's policy is to give help to those farmers who, through no fault of their own, find themselves in this terrible mess. The grant aid scheme for the eradication of these diseases is certainly welcome. While every effort is being made by the Department of Agriculture to help those farmers to speed up payments to them, perhaps the Department and the Minister would have another look at the problem to see if they could move faster on it.
I wish to turn now to the job-creation programme of the Government. We have the small industries section of the IDA. The efforts and the policies of this Government are helping every entrepreneur in the country to develop in whatever way he sees fit. I wish to pay a tribute to the county development officers and the county development teams, particularly in my own county and in the neighbouring counties, for the way in which they are now co-operating with the smaller people to help create jobs and create a firm foundation for small family firms. It is money well spent because, no matter what people say about the big industry that may change the whole life style of a town, the small family firms now being aided liberally by this Government are most certainly the best type of firm to have because in these responsibility, reliability and continuity are almost guaranteed.
We have seen the strides that have been made in the building and construction industry, which is also being helped by the Government, and correctly so. The building industry is a broadly-based industry giving great employment. The environmental schemes for youth are again enshrined in the budget after the experience of last year, which proved to be a very fruitful exercise. Here we have £20 million being made available to our youth to give them employment here, and that also is money well spent. The work experience programme is one of the finest schemes ever put into operation, because we have industry, business and every establishment of Irish life taking the untrained youth and giving it appropriate experience. The six-month programme could be extended for another six because it is a good apprenticeship and it is money well spent. I suggest to the Government that they might be able to bring it to the point where the student or apprentice could obtain a certificate after passing an examination.
Another point that must be made is the situation regarding oil and petrol. It is a small thing to ask the Irish people to resurrect a national spirit. This will be necessary if we are to continue the progress the Government have made. Individuals should cut their petrol consumption by at least 10 per cent. It should be done immediately. It would give a lead and this much-needed energy could be diverted into new industries. By making that small cut only our leisure activities would be slightly affected. The national spirit should be rekindled.
People in employment should remember the unemployed. In the EMS we have a golden opportunity given to us by our partners in Europe and achieved as a result of sound negotiation by our Ministers. We can attain full employment in the early 1980s if we play our part. Those in employment must remember that there are many who are not so lucky. When they are making demands people in employment should know the facts of the situation. Eventually the employed will have to pay for those out of work. There must be a new division of the national cake. If we can attain full employment by the early 1980s we will be remembered as a nation of Irish people as good if not better than those idealistic people in the past.
I will start by admitting that there are some positive elements in the budget and I will list them. It will not take me long to do so, but I will list them for what they are worth. Fine Gael welcomed the continuance of stock relief and the continuance of the employment maintenance scheme. For myself I welcomed the idea of allowing premiums paid on permanent sickness and accident policies to be deductible for income tax purposes. Perhaps I should declare an interest in this, in that I have such a policy.
Of course there were the routine social welfare increases that scarcely deserve a mention. There was nothing spectacular about them. They were absolutely predictable and no Government of any colour can expect to be particularly highly praised for not departing from such a routine.
I shall speak later about the broader purpose of a budget. Within the budget there are at least two highly negative elements which must be emphasised and which have not attracted enough attention so far. First, there is the ending of the gross cost allowance in regard to new plant and equipment which the Minister announced in his speech and which will have the effect of increasing substantially the burden on industry, particularly industry that is in the process of re-equipping itself. It is true that there was a certain anomaly in the way the allowance was calculated, as the Minister pointed out. Its effect was that the Exchequer gave tax relief in respect of a considerable element of expenditure which the Exchequer itself had borne. That is undeniable, and I suppose when looked at in that light it was an anomaly. However, the world is full of anomalies; and a Government who are professedly anxious to make life as easy as possible for industry, and particularly for manufacturing industry, should avoid the removal even of an anomaly where no serious social purpose will be achieved by its removal, where all that will be achieved is a relatively marginal saving in the context of a national budget.
Another highly negative element in the budget is the disposition whereby the Minister decided "that the relief ordinarily allowable in respect of bank interest should be scaled down appropriately in cases where an employee enjoys a preferential rate of interest." He stated that the reduced relief in such cases will be computed by reference to the proportion that the actual rate of interest paid bears to a specific rate. He has not said what is the specified rate, but if we take it to the average rate on a mortgage—say, 14 per cent—and compare that with the preferential rate that is common among employees of banks, insurance companies, building societies and service enterprises of that kind, which account for many thousands of households in the city and in other towns, the difference is in the region of 10 or 11 per cent. Depending on the size of the person's income and the level at which the allowance will make a difference to the tax incidence, it will deprive him of from £3 to £6 a week in cash.
I am all in favour of people being dealt with equitably and I shall return to this theme later. But a Government must realise that an executive wage claim even in a non-producing category—in other words, in a service category or one that does not mean that wage cost inflation will make Irish products uncompetitive—means that large wage claims there will spill over into every other sector. To produce a measure of this kind purely for the purpose of saving a relatively small amount of money for the revenue is a directly inflationary move. I am surprised to find that in the budget of a Minister who professedly, like all his colleagues, is trying or says he is trying to contain inflationary wage demands. That particular measure, once the realisation of it has sunk in, is certain to fuel wage demands even further—it infallibly will. Those are the two negative elements I select from the actual Budget Statement. Others have already been dealt with, but I think these two have not yet attracted sufficient attention and I felt I ought to emphasise them.
Regarding the figures on which the budget is based, leaving aside the dispute between the leader of my party and the Minister for Finance—I am surprised the Minister has not yet entered the debate in order to vindicate this point of view—the very least that could be said is that the Budget Statement is based on an estimate of revenue for the year pitched at the optimistic extreme. The Budget Statement and its accompanying literature, the Economic Background to the Budget, are at least insufficiently frank in regard to the likely inflation rate in 1979. I can imagine the Government's political reasons, some not by any means dishonourable, for trying to conceal its estimate of what the inflation rate is going to be; but we must establish some standards of frankness or candour in important economic statements such as a Budget Statement, and the least that can be said about the Minister's performance in his Budget Statement is that it fails the frankness and candour test in both regards. He might at least have said that his revenue projection far exceeded estimates made by other people; and his inflation estimate, or the implicit inflation estimate, was something which should have been expressed in words, or the Dáil should have been given adequate reasons why it was not so expressed.
We are beginning to enter a period in which conflicts about figures are occurring every other day. Not very long ago people did not fight about figures; they were accepted, particularly official figures, and if they were available one did not fight about them. But every other week now there is a row about cooked figures, or unavailable or opaque figures that one cannot understand or get a grip on. That is a bad way for a Government to act that has not yet been in office for two years. It is setting a precedent which the National Coalition never set. It is bad if from now on we are to have regular conflicts about percentages in regard to inflation, in regard to revenue, figures in regard to unemployment and production.
I honestly feel that in spite of all the denials about not cooking the books and no falsification the Minister began his task by saying to himself: "I have to produce figures which will make it appear that the politically dictated targets of 1977 have been achieved, or are in course of achievement, and everything else must be made to fit that".
There was a mythical Greek figure called Procrustes who had a bed in which he placed his victims. When he could not make the victim fit the bed, he chopped off the victim's feet to accommodate him more comfortably within the alloted space. The Minister for Finance and the other members of the Government are involved, whenever they now produce figures, in what I have to call a Procrastean operation. They know that they are confined by the parameters, if you do not mind—a Merrion Street word—of their political targets; and everything else is cut down or inflated or trimmed or pumped up in order to fit those parameters. That is a bad habit for a Government to get into. It tends to devalue the language of Budget Statements and the credibility of Ministers for Finance. It tends to alert us to the strong likelihood—if this Government is still in office—that we shall be given the same type of figures next year. It alerts the public generally to the increasing unreliability and contentiousness and questionableness of official figures. That is completely apart from the fact that it is possible for estimates to differ. I make no special reference to the fact that the Central Bank, which is also an arm of the State, has produced an estimate of 1978 economic growth which is very substantially below the estimate which the Government produced, naturally again in consequence of the Procrustean operation of trying to get the figure to suit what it said two years ago the figure would be.
The confidence one might have in the Government's accuracy in regard to figures is from the beginning undermined by the experience we have had over the past couple of years when we discovered in consequence of the EEC Labour Force Survey taken up in April and May 1977, that at a time when the Fianna Fáil Party were telling the people that there were 160,000 unemployed, there were in fact just a shade over 100,000. The EEC survey, made up in those very months when the manifesto was being printed, or at least when the finishing touches were being put to it, in April and May, showed that there were 85,000 people out of work who had previously held jobs, plus about 15,600 school leavers or people in a similar category who had not yet had a job, who were looking for jobs. That gave a total of 100,600. That is less than 101,000. That did not prevent the present Minister for Economic Planning and Development producing the figure of 160,000 and standing over that figure in the House subsequent to his election.
To me that is the thirteenth stroke of the clock. A Government that can produce figures like that, so wildly out, and not by a mistake but because it politically suited them to be wrong, because it was to their political advantage to make a howler of that magnitude, are digging away the ground from under themselves as regards their credibility where figures are concerned.
That is all I want to say regarding the actual provisions which the budget contained and the figures on which it is based. The figures cannot be trusted; and some of the measures which I have just mentioned are positively detrimental. I leave out the farm levy to which I shall return later.
The Budget is more than just a parcel of fiscal adjustments. Ever since Keynes it has been acknowledged that it is more than that. It is the major instrument of social adjustment, and the major implement of Government; perhaps to the extent that the implement may need fine tuning it is perhaps a good thing that it ought be employed more than once a year though not necessarily always to impose taxation. As the major weapon of government it is a good thing that the budget should be related to a strategy—I had better not say philosophy. That word was booted about this morning by Deputy Killilea, and I note that he has the distinguished example of the Taoiseach in this regard, who said at column 802 of the Official Report of 8 February that he wanted to emphasise the "basic philosophy" of Fianna Fáil policy. Can you beat it? This is more devaluation of ordinary language. We were brought up in school to think of philosophers, so far as we had any clear picture in mind at all, as beings who were detached, had no personal axe to grind, who sought truth wherever it could be found, who followed wherever the path of logic might lead, not people who wanted to get into office and stay there by any means. That is not a philosopher and the periodical statements put out by people of that kind is not philosophy.
My understanding of a philosopher was of someone like Diogenes, the man who lived in a barrel, who was self-sufficient. He was a kind of Grecian de Valera. He believed that man should be satisfied with the most frugal existence possible. That was why he lived in a barrel. When Alexander the Great asked if he could do anything for Diogenes, Diogenes replied that the emperor could do something, that he could stand out of the light. That was the type of ancient philosopher about whom we learned at school; and strangely enough that philosophy was not too far removed from the only thinking that could ever be regarded as philosophy on the part of Fianna Fáil, that was, the philosophy articulated by de Valera and which in turn was very similar to the philosophy articulated by Arthur Griffith.
But that is not the philosophy that Fianna Fáil can boast of any longer. It is a philosophy that has been subverted and thrown over by them; and what they are articulating now is a Diogenes philosophy in reverse. If one can imagine the parable of Dives and Lazarus being cast into philosophic from, Dives is now the philosopher on whom the Government's approach to the world is based. As Deputy McCreevy was honest enough to say here this morning, they have wantonly and for short-term political advantage exploited people's cupidity and raised their expectations. Now they are crying about the people being selfish. How, for example, can one accuse a child of greed and selfishness if the child has been led to believe that if he cries long enough his indulgent parents who wish to have a night's sleep or, to turn the metaphor into political terms, wish to remain on the Government benches, will hand him out packets of sweets? What else could be expected from a child treated in that way but greed and selfishness?
When I hear the Government lecture the trade unions about excessive wage demands I can only ask what other example has been given to the workers. I am not trying in any way to make matters difficult nationally. I am not trying to soup up wage demands. I realise that wage cost competitiveness is vital to us, and that, to the extent to which this competitiveness is not achieved, jobs will be lost or ones that might have been created will not be created. At the same time it is an unseemly spectacle to see Ministers in dinner jackets at chartered accountants dinner functions lecturing the unions on restraint in wage demand. When has the worker ever learned restraint from those Ministers or from those well-to-do people who were so jubilant when Fianna Fáil were returned to power, who made no secret of the fact that they were returning from the Bahamas because the boys were back in office? Where is the philosophy in that?
That does not alter the fact that a State like ours, particularly a revolutionary State, and I use the word "revolutionary" in a quiet sense, founded on the idealism of men on all sides of the House, ought to have a philosophy and that philosophy ought to underlie our fiscal and budgetary measures. If instead of using the word "philosophy" we use the word "target", it may be said that we have a common target on all sides, that is, the achievement of full employment and the ending of a situation in which people cannot find jobs. But we know the factors which threaten that target. These are excessive wage claims and, associated closely with that factor, the problem of bad industrial relationships. These are the enemies. To switch for a moment from the metaphor of philosophy to the metaphor of war, if the budget contains a strategy, that strategy can be articulated in military terms. The object of a strategy in terms of war is to seek out and destroy the enemy. So far as concerns the objective of budgetary policy in a State like ours, the enemy must be excessive wage inflation and the associated bad industrial relations. I am not alone in saying that. I can produce umpteen sources where independent people have been saying this also.
Though the Government have been talking continually about their targets, I have noticed a consistent observation on the part of independent people to the effect that the Government are confusing the statement of the target with the methods needed to achieve it. They think it is sufficient to articulate a target and to add various provisos. The whole point is to realise those provisos. That is what government is about and the target will then look after itself.
During the debate on the White Paper last month I quoted Mr. Ivor Kenny, who is the managing director of the IMI. On that occasion the Chair and I had some words because of my trying so elaborately to make it clear that I was acquitting Mr. Kenny of political involvement. Maybe I am doing him too much justice, but I accept that he is an independent observer. He said that he was afraid the Government were confusing targets with the necessary preconditions for achieving those targets. Only last week the same view was expressed, but in slightly different language, by Senator Whitaker in the other House, who is a nominee of the Taoiseach's although I am not making any special point about that. I shall quote the Senator.
There is a long-standing rule whereby Deputies do not quote ordinary Members of the other House.
I shall not contradict the existence of such a rule but I am prepared to bet £1 with the Chair that it is a slavish copy of some 17th century convention of the British Parliament, and I shall not be bound by it. I do not see why a tradition such as that which probably dates back to the time of Cromwell has any bearing in a House like this. Why can I not cite something that was said by a Senator?
The present occupant of the Chair is not sure of the reason for this rule, but it is the precedent.
It may be traditional, but there is no rational explanation for it.
Apparently the reason for the precedent originally was that a Member might be challenging something said by a Member of the other House who would not have the right to defend himself.
It is not my intention to attack Senator Whitaker. I shall quote him with approval.
The Deputy may paraphrase but not quote from what the Senator said.
The Senator said that the targets set out in the White Paper were less important than are the conditions for their fulfilment. He enumerated those targets in the same way as I have enumerated them. These are pay restraint, and good industrial relations. All the talk about objectives, about the Government taking their courage in their hands, is a bottle of smoke unless the Government measures are conducive to the production of those preconditions.
Let us consider the way in which those preconditions have been aimed at in this budget and let us have regard to the kind of world in which these preconditions must be met. Perhaps I might digress here for a moment and make a few general remarks about the kind of world in which the budgetary proposals must operate. It is important that we should keep an eye on the hardening of our own mental arteries. We should make sure that we are not fighting the battles of 1979 with the unchallenged assumptions of 1939 or 1949. It is important that we should try to get a perspective on ourselves which can make us reasonably sure that we are keeping up with the way the world is moving.
I know all about leadership and how one must try to give the world a lead, but there are large incoherent and inarticulate fluctuations in the world's history which are not always initiated or controlled by politicians, but which can wash over politicians unless they see how the world is moving. In the 18th or 19th century it would have been thought beyond discussion that the death penalty was appropriate for theft. It was beyond question in the early 19th century and accepted by all classes that the defence of property was the main object of the law, the maintenance of order. That point of view has gone out the window, it has gone like last year's snow off the ditch. In the later 19th century it was an absolutely unquestioned assumption on which governments, and their subjects, operated that the State had no role in social support.
It was the assumption which directly contributed to the fact that the amount of assistance provided in Ireland during the famine was so incredibly small by comparison with what today would be thought an acceptable level of government intervention. The intervention then was by a government which was then the most prosperous and advanced government in the world; but Peel and his government in the 1840s behaved in the same way as any other government would have behaved. It was an axiom of government in those days that they did not interfere, expect in a marginal way, to stave off even the most appalling natural calamities. People were supposed to look after themselves and the State did not carry any duty beyond maintaining order and defending property.
Later in the 19th century and in the early 20th century it was an axiom again that governments were supposed to balance their budgets. It was as a result of taking that axiom seriously—at least that is part of the political folklore of the country—that the first government of the country left office, because in order to balance their tiny budget, in order to save the wretched £500,000 or £250,000 necessary to leave the State able to hold its head up and not be in debt, our first Minister for Finance removed a shilling from the old age pension. According to the political folklore which Deputies will no doubt accept, he left the party to which he belonged in the wilderness for 16 years as a result. He had not spotted that the world was moving and was changing. He did not understand that those points of view were no longer acceptable, that one could not break the ten shilling note of an old man who used it to purchase tobacco and to buy sweets for his grandchildren even to balance a budget, or that one would do so at one's peril.
I want the Government and the House to make sure that they are not ignoring the way the world is moving today and not trying to fight today's battles on yesterday's assumptions. I am afraid that just as one can still see our Army vehicles going around with ZC and ZD registrations and with equipment which is 25 or 30 years old—I recall that when I was in the FCA as a school boy in the late forties I had a rifle which had been made at the time of the Boer War—one will find all kinds of analogies in a small and not very prosperous State like ours for not being able to keep up with the times where it is only a matter of money—but there is no excuse for not keeping up with the times when it comes to trying to see the way people's minds are working.
The Minister, and the Government, are living in a society in which the handing out of another few pounds per week will not make people happy. That may be wrong, it may be deplorable and a threat to our wage cost structure, our industries and so forth but it is the truth. People will not thank us any longer for an annual rate of wage increase which will leave them at the end of their working lives no better off in any serious way than at the beginning. They want a horizon for their lives, they want to be able to look out and see some social mobility for themselves or, if not for themselves, at least for their children. If they find themselves trapped in a hopeless suburb like that which Deputy Lipper spoke of in regard to Limerick, with their children because of deprivation going back a couple of generations and not just bad schooling, they find that a complex of factors are operating against them and likely to keep on operating against them and their children.
Naturally such people want to make a great leap forward. I should like to make it clear at this stage that I am not taking sides in regard to any of the present disputes and I share the Government's view that wage-cost inflation is a deadly danger. However, a postman, a dustbin man or any of the kind of people who are in chronic dispute with the Government may say to himself that he needs one joint leap forward in order to bring him into the situation where he has a social horizon for himself and his children and, thereafter, annual wage increases of a modest kind could be discussed. Such a man may feel that they cannot do that kind of heavy work indefinitely, his wife may be getting on and on tablets, his children may not prove to be the success he hoped at school. All that builds up into a complex of worry and frustration in the mind of a man in his thirties or forties and those things are now related to what can be got from the political establishment. They are now related to what the Government can be forced to do for such people in the years they have left. They are no longer in the dark about how some people live their lives, the way their fathers or grandfathers were in the days when there was no television or press coverage of social occasions and when one could not fly off to Tenerife, the Canaries for a rest at Christmas. Those people are not in the dark any longer about how the other half live, and they do not like to be lectured by Ministers and, as a Marxist would say, the class that supports the Minister and has conspired to put him where he is.
I am not a Marxist but, unfortunately, the kind of world we live in lends an eerie colour to the Marxist contentions in this regard. People do not like being lectured to by the class I have referred to, a class of which a Minister is automatically given a membership ticket. A worker may not like 4 or 5 per cent of an increase, but he would take it from a government which is seen to be doing justice all round and is struggling, perhaps against its own nature and background as the Fine Gael Party did, and against the instincts of some of its own supporters, towards achieving some kind of equality. Fine Gael fought through a world recession but the people who were required to carry the burdens could look around and see that everybody else was carrying their share. That is the opposite of what this Government have achieved. In getting into office they abolished the wealth tax. There were loud vulgar cheers from the wealth tax class. It is unseemly that somebody in the wealth tax category—I do not care what the industrial arguments are in favour of not chasing away capital—should be seen to exult at not having to pay anything. It should be remembered that such a person was only asked to pay on whatever he had above his private house plus another £100,000. It is unseemly that he should be seen to exult and at the same time associate with an establishment which is lecturing workers on accepting 6 or 7 per cent on a weekly wage of £50, a good deal of which will be eaten up by inflation.
I am not a communist or a doctrinaire socialist or Marxist, but I can see the unseemliness of that situation. I will not lecture anybody in regard to moderation of wage increases as long as there is a government in office that does not have the courage, or that it politically does not suit, to impose burdens on everybody in the same way. I know that it cannot be done literally in the same way, but everybody should be seen to be sweating at the same rate.
The same thing could be said about the adjustments made in the capital gains tax. What would a man living in the kind of place Deputy Lipper spoke about, a worn-out corporation suburb which in its day, the 1930s or 1940s, was a great improvement on the rookeries that the wretched people had been transplanted from, but now are not fit for human habitation, think when he finds that the Government composed of the party with the Diogenes' philosophy has remitted three quarters of capital gains tax? What impact is that supposed to have on a man who will never make a capital gain, unless it is by backing a horse? What impact is it likely to have on a man who is never likely to accumulate even a fraction of what would put him in the wealth tax category? How are we to expect people of that kind to be moderate or restrained in presenting wage demands?
I could have said the same thing, and I believe I did say it, probably more than once and before the farmers entered the picture. My party co-operated in imposing direct taxation on farmers for the first time. Everybody knows the kind of people who support us. They are much the same as the kind of people who support the Fianna Fáil Party except that there are fewer of them. In some parts of the country we had a very substantial belt of support among middle-sized to big farmers, that is true but by no means universally so because I canvassed in by-elections like North East Cork where there are many big farmers and I can remember going along a road and I would, by no means, be welcome in every house. I admit we had a good deal of support in that category. As a result of doing what we thought was right, as a result of Deputy Richie Ryan doing his duty and allowing himself to become a hate figure, we lost a seat in Kildare where the farmers almost to a man deserted us, we lost a seat in North Tipperary, Laois, and Westmeath. We paid the penalty for that. I would not have minded if we had lost 24 seats instead of 12—I suppose if my seat went down the drain I would mind more. I would prefer to have it said of me that I belong to a party which, even at the cost of alienating old supporters, had seen the way the world was moving and was trying to move with it for the nation's sake. As I said, we paid the penalty for that.
This Government got in by pretending shamelessly to the big farmers that they were to be relieved of tax, and warning the small farmers at the same time that it would be no time at all under the Coalition before the tax threshold for farmers sank so low that it would encompass them as well. The Minister of State knows that is the line on which the campaign was run in his part of the country and everywhere else.
The farmers gave Fianna Fáil a much bigger vote in 1977 than previously and handed them a lot of seats which formerly had been Fine Gael seats. That was all right until the Revenue squeeze obliged the Minister for Finance to look at a situation two weeks ago and announce a farm levy of 2 per cent. I thought that was a bad idea. I hope nobody will think me opportunistic in trying to have things both ways because I am not. Farmers should pay the same kind of tax as everybody else. I thought the levy was a crude weapon for extracting money from them. I agree with what Deputy McCreevy said, that it did not differentiate between the man who was making money and the man who was not, that it did not differentiate between people on the basis of their ability to pay. He said that was his only objection to it and I think that a very substantial objection to any taxation system.
I have another objection. It penalised production. It was directly related not to wealth but to production and therefore to efficiency. The more efficient a farmer was and the more he produced the more this tax would hit him. At the same time, I never thought it possible that a hard-nosed party—which has developed a very soft centre if I might mix my metaphors—would be frightened by the kind of demonstration the farmers lay down against the levy once they got news of it.
In terms of newspaper stories I want to reveal to the House the tragedy of this from the national point of view, leaving aside all question of scoring points at the expense of Fianna Fáil. On 28 February there were two headlines on the front page of The Irish Times. One was a heading which I would have been very pleased with had I been in Government—“Irish Congress of Trade Unions hopes for Pay Deal by April”. The Congress issued a very positive document and I want to quote one or two lines from The Irish Times Industrial correspondent's story. He said:
The document offers co-operation with the Government on a voluntary incomes policy for the coming year in return for concessions on social welfare, taxation and, particularly, jobs. . . .
But the document's commitment to full employment is underlined by an important offer to co-operate with the Government on job-creation measures in return for a commitment by the Government to underwrite this year's job target of 25,000. . . .
On the same day, six inches from that story, The Irish Times carried the following headline: “Farm levy dropped as part of tax plan deal”.
On 1 March the following was reported under the heading "Unions angered by tax deal for farmers".
Trade Union Leaders, angry at what they see as the Government's capitulation to the farming organisations, are to step up their demands for a reduction of the tax burden on the PAYE worker.
We have seen how hard and how high those demands have been stepped up since then. What is one to say about a Government which can throw away the priceless advantage of having the ICTU tentatively on their side, which can fling it away so that within 24 hours the General Secretary of that Congress is able to express that degree of anger? Do the Government know what they are doing? The Coalition did not consist of saints. We had the same human weaknesses as everybody else, but we knew who the Government were. We took no bullying from anybody. We were willing to do things that were unpopular if they had to be done. What are this Government about?
The levy was a bad idea and I hope it will be replaced by some system of extracting a fair amount of revenue on a fair basis from farmers. This bungle is inexcusable. It has simply had the effect of bringing on to the streets sections of the society which were never seen on the streets before. I am a PAYE worker, so is the Minister. Are we going to join the march? Perhaps not, but I think this is the first time a march was organised in which I am entitled to walk along the streets.
I mention this fact because I am trying to show that the dimension of dissatisfaction and revolt, the feeling fuelled by the expectations Deputy McCreevy was referring to, are completely new. We are being lectured about not being selfish and greedy by the very people who have encouraged us to be so, who have held out the fruits of selfishness and greed in return for votes.
The situation in this regard is so bad that if the Government were to walk out today and not come back, and let the National Coalition in again unopposed, we would have a hell of a job to get things right. The Government have done terrible damage to the morale of the country. The Minister of State, Deputy Fitzpatrick, made a speech a couple of weeks ago in which he referred in the middle of this chaos to the alleged fact that the Coalition had left behind a "stagnant economy"—a "stagnant economy", in which there were record increases in industrial production in their last two years—and a "demoralised people". Where was the demoralisation under the National Coalition comparable to what there is now? At the moment the self-employed and the people with the Bermuda tans have not yet been soaked, but with the exception of that numerically small though psychologically very important category, there is no section of the people who are not now in conflict with the Government, and not just in conflict about some transient matter like the Donegan affair with us. This conflict is not going to go away. Even if the Fianna Fáil Party leave office today it will not go away, so deep and deadly has been the damage they have done to the economy and to society. They are unique.
Of course, they alone are not responsible for bad industrial relations, but the kind of fiscal policy which they have pursued since the election conduces to those relations being as bad as possible. I do not put the blame directly on the Minister or the Government; I put it on them indirectly for the chaos in the public service and particularly in the Posts and Telegraphs sphere. How are you to expect a linesman or a postman to settle for a reasonable way of doing business or wage settlement when he sees what is done for other sections of the population who are able to shout or who, because of their pocket-books, are able to subsidise a party which makes them powerful?
We were told by the Taoiseach in his budget speech two weeks ago that the Government had "social", "cultural" and "environmental" objectives apart from the economic ones. It is like being told that an army in headlong rout is going to stop and organise a few art exhibitions in villages as it passes on its way through them. What is to be said about a Taoiseach who is capable of such a degree of self-deception as to imagine that there are social and cultural objectives still being pursued, when the capital city in which he lives is knee-deep in uncollected refuse? This Government must be unique in history. If I may stick to military metaphors, the Government have succeeded in producing a state of siege simultaneously with a state of rebellion and a traffic jam. I use the traffic-jam as a figure of speech compendiously to describe the quality of life which is going steeply downhill, as the Minister opposite must know.
Not even a change of Government tomorrow morning will cure that. Unless I am overtaken by a rush of blood to the head, you will not find me outside church gates saying "Put the Coalition back. Put Fine Gael in and all will be well". It will not be well and it will be a very long time before things are well, unless the basic philosophy—I used that word sarcastically—underlying this Government's action or the actions of any other Government who may succeed this one, are aDapted to recognising that the world has changed. That change has been contributed to largely by the actions of Government in exciting expectation and in failing to provide people with the feeling that they were being treated equally. I do not believe that my party in the morning are going to be able to cure that, so bad is the damage. Only a year ago what I am about to say would have got a horse laugh, although I know that the Minister opposite would not be so ill-mannered as to give a horse laugh whether he was alone on the benches or not. I believe that he is going to have the shaming experience of seeing a positive nostalgia for the National Coalition. He is going to find that people's recollections of the recession are going to be somewhat over-clouded by the recollection that at least in those days they had a Government which ran on some kind of principle of equality for everybody, and who were not afraid to call on even their own supporters to carry burdens which they had not previously carried, and who were not afraid to face their enemies, economic, political or any other kind.
I will begin by making a few comparisons of different budgets. At the end of the life of the previous Government in 1974 the Financial Statements of the then Minister for Finance, Deputy R. Ryan, who this year is a candidate for the European Parliament, stated that the consumer price rise for the year would be not less than 14 per cent. The present Minister for Finance on 7 February 1979 indicated to this House that the consumer price rise would be 7.6 per cent. Speaking on the budget debate in 1974 the Fianna Fáil Opposition spokesman of the day made various constructive proposals which if implemented at the time would have made a radical difference to the fibre of life for everybody in this country. Unfortunately, these criticisms were not taken and we have had a series of disastrous Coalition budgets leading to the inevitable in 1977.
Another example is the difference in capital expenditure for 1975. In the Budget Statement of 3 April 1974 an amount of £384 million was the total capital expenditure. This year in our budget the total capital expenditure is £843 million. Even allowing for exaggerated claims of inflation in any direction, there is a substantially greater quantity of money being spent by this Government than was ever capable of being found or spent by any previous administration.
The previous budgets could be described very simply as budgets of desperation. They failed totally to meet the needs of the time and the necessity for a target capable of achievement by our people. They were groping blindly for solutions to problems they did not understand, and the lack of understanding is evidenced in their many contributions to the budget of this year. Subsequent Coalition budgets followed the pattern of their first.
In total contrast is the budget of this year, which is one of achievement catalogued over a very brief period of time and also an indication that the people are capable of even greater achievement with a very small change in direction of the various destructive forces operating in our society today. It is a pity that these destructive forces are being encouraged by the more irresponsible Members of the Opposition. This is in total contrast to the contributions of the various Fianna Fáil spokesmen in Opposition. We never decended to empty destructive observations. Either in Government or Opposition to be constructive was always our pattern of contribution and we came to the election of 1977 with positive ideas and proposals which were then and are now capable of realisation. It has been said in this House many times that these things are being done and are seen to be done.
The basic foundation of many of these proposals is the possibility, for the first time in our history, of full employment in this country. The notion of full employment was something which on many occasions caused front bench spokesmen on the opposite side, whether in or out of power, to throw up their hands and say that it could not be achieved. They claimed that we in Ireland were incapable of governing ourselves. At other times they said that outside forces had taken over, we had no control and that there was nothing we could do about it. They showed no grasp, no direction, no reality. The brave constructive opportunities created by the two budgets introduced by Fianna Fáil since they came back into power have given the lie to this defeatism and have enabled the people to look forward to achieving, within themselves and with the assistance of outside forces, the employment of all our people and the ending of emigration.
In my lifetime, initially because of forces outside our control due to the occupation of the country up to the early part of this century, we had a very high rate of emigration. Now, because of constructive Fianna Fáil attitudes towards stemming the haemorrhage of emigration, we have, for the first time ever, not alone stopped emigration but we can create full employment. When Fianna Fáil came to office two years ago several figures were given for the number of people unemployed. The most optimistic figure put forward then by the Opposition was 100,000. We said that the figure was closer to 160,000. In two years, whichever figure one uses, the objective fact is that the unemployment rate has dropped dramatically with no emigration whatsoever. Not alone are the jobs which were lost on our accession to Europe, because of increased competition by the freeing of the markets, being filled but we have stopped emigration. We are taking care of industries which have gone out of production and we are creating new industries and giving new jobs and hope to our people.
The industrial promotion agencies are being allocated £135 million in the current budget. This figure is almost half the total budget introduced in 1974 by the Coalition Government. This figure of £135 million in relation to the £835 million is quite a small figure, but we must contrast that with the figure for 1974. If we take inflation into account this is still a very substantial commitment to the programme for creating employment. It gives a chance to the individual who wants to progress within an expanding industry to create a larger business out of a small one. It gives an impetus to creating new industries. It gives the fisherman the chance, for the first time, to buy a large fishing boat. It gives a chance to the shore industries to expand the processing end of the industry. It gives the export agencies a chance to go abroad and display our goods at trade fairs all over the world. It is indicative of the outward look and the forward thinking that this budget and last year's budget have brought back into the country.
Under previous Coalition Governments we tended to look inwards. There was no awareness of the world outside. There was a throwing up of hands and saying that something was not possible. The figure of £135 million is a spur for further investment. Great opportunities have been given to small industries such as small welding plants and repair of various farm machinery in the country. It gives an opportunity to the small man in a city back street, doing wrought iron work, for instance, to take on an extra apprentice or an extra helper. It gives an opportunity to a man who is making window frames or who has a small plastics industry to expand his business and to ensure further employment on a small scale. It gives large businesses the opportunity to expand different departments, to expand their product ranges and to sell those products in foreign countries.
It is heartening to see the ability of people to go abroad, find new technology, bring it home, use it to manufacture in Ireland and to export again. A typical case is provided by some of the new electronic factories which have sprung up under Fianna Fáil guidance in North County Dublin and various other places. Those factories are encouraged through budgets of this type to send people all over the world in search of products which can be manufactured by our young men and women after training. New industries are starting because of this attitude. The micro-processing industry in the electronics field is a new concept of job creation which budgets of this type have enabled forward-thinking Irish men to indulge in.
It is seldom realised that we are well on the way to being the largest exporter of electronic components to Europe. We are creating new wealth and new conditions of employment which did not exist a decade ago and which certainly were undreamed of 20 years ago. Successive Coalition Governments had no imagination in regard to this type of advancement for our people. Fianna Fáil are continually looking for this type of advancement. We know that our young people have the ability to avail of educational facilities and research facilities at home and abroad to find the type of products which we can with profit use for the development of the country.
During the previous Coalition Government, the building trade was on its knees. There is no doubt that over those years housing slowed down. Various figures have been trotted out by Deputy Tully as showing new and revolutionary thinking in relation to local authority housing, but the objective fact is that not one local authority house was built during his term of office on one rood of ground that he bought. If the land for those houses had not been made available because of the constructive and forward-thinking of previous Fianna Fáil budgets, Deputy Tully would not have been able to perpetrate the illusion he created. This type of forward-thinking has always characterised Fianna Fáil, as it still does today. We are engaged in rebuilding the country from the shambles it was almost brought to during the period of office of the Coalition Government. We are well on the way to becoming self-generating because the building industry, for instance, has again shown its resilience by expanding far outside our shores. There are Irish building firms throughout the EEC and around the world. They have used the prosperity they built at home to establish themselves throughout Africa, as far as Australia and even into the US. This type of advance is only possible when we have a sympathetic Government. This is shown by Fianna Fáil budgets. This section of our industry is now on an international rather than on a national basis.
In relation to the city of Dublin we must be concerned about the lack of development of the inner city region north of the Liffey. Dublin was fortunately spared the ravages of two World Wars and we have retained a lot of the character of the inner city. But north of the Liffey the decay which set in because of people moving from the inner city to the new suburbs, is evident in the many half-developed building sites and in the areas which need rejuvenating. The progressive thinking of the Fianna Fáil Members of Dublin Corporation in relation to Wood Quay is shown, where they made sure that the use of budgetary money for development would be constructive. They could only be questioned on one point. If the regressive elements succeed in stopping developments at Wood Quay——
Sorry, Deputy, we cannot discuss Wood Quay on the budget. There was already a ruling this morning by the Ceann Comhairle. I would ask the Deputy to get away from Wood Quay as quickly as possible.
That is what most of them are trying to do.
My apologies. The north city being in such need of rejuvenation would certainly benefit from an imaginative scheme like the Irish Life development near Amiens Street station. This type of development must be encouraged because it is within walking distance of major arterial transport access, in the scheme of the railway which serves the whole of the north county. Schemes of this type would benefit enormously from budgetary consideration, in that people naturally want to stay in the centre of the city, they want to see the inner city living again and they want to see places like Mountjoy Square getting a new lease of life. The south side of the city has several very lovely open squares and perhaps the provision of imaginative new inner city open space areas or new squares could be a major contributor to the rejuvenation of that part of the city.
The £4.28 million that this Budget has given to local government for the improvement of the environment could be used with effect to give a new lease of life to the northern city areas. When one travels from this House to the north end of the county one must pass through the most dilapidated part of the city. It is unfortunate that when one goes to that very fine modern airport in Collinstown one must travel through areas which are in desperate need of rejuvenation. Some of the £4.28 million in the budget for environmental use could be used in that area. This would help to stop the rush to create new suburbs with growing demands for expensive services which already exist in the inner city area. I am referring to water and sewerage facilities and electricity lines and so on.
The Continental attitude in relation to the inner city of Dublin will be useful in this context. In many Continental cities there is an attitude that a village can and will be created in the centre if there is a situation where people living in a small area are proud of that area which has all facilities within walking distance. In this context one can think of areas like the North Strand, Ballybough, Marino and Capel Street, all of which are areas capable of having their own identity. This has happened in many other cities in Europe and there is no reason why it should not happen in Dublin. It is happening to a small extent in the Liberties and the Coombe. Serious attempts have been made to give pride to the localities and the people are proud to live in these areas. This idea should be considered for other areas north of the river Liffey.
In this context, there is a special place for EEC funding because Dublin as an old city did not suffer the ravages of the last war. That means that ours is a different kind of problem to that which obtained throughout the Continent. I would point to the publicly acknowledged failure of some public representatives in the last few years to get special places of this type recognised by the EEC.
In future budgets we will have to give close scrutiny to what is happening in Europe. The attitude of the expenditure of the European budgets in relation to national budgets must be fought, to ensure the maximum result for places like the inner city of Dublin. EEC funding in relation to us has been quite good but special places need special treatment. The rejuvenation of the northern end of the city is such a special case. We will need to fight hard to make sure that a scheme can be devised to help future budgets in this area. The EEC budget in relation to national budgets will in future be more controlled by the elected representatives. At the moment only five per cent of the Regional Fund can be controlled by the Parliament, but in future it seems that the elected representatives will have a much stronger case for altering that. Officials have indicated that this may be the case. In future, elected representatives will be able to initiate schemes for the expenditure of these funds. That is a radical departure which could be of enormous benefit to future budgets. For the first time elected representatives in Parliament will be able to contribute to specific portions of the budget. Fianna Fáil recognise that this has got to be done.
Fianna Fáil budgets have always been very detailed. Objectives of this type would be welcome to enable us to attain the goal of full employment which can only be achieved by bringing together the details necessary in preparing the nitty-gritty of a national budget and whatever can be obtained from the European Community. We are fortunate in that we have been benefiting from that source in the ratio of 10:1. In other words, for every £1 we have put into the EEC budget we have been able to take back £10. In certain areas we might be able to improve on that, and we might be able to change dramatically the face of the inner city and the northern end of the county.
The remarks of some Opposition speakers about this budget were confusing, to say the best of them, and totally without foundation, to say the worst of them. The distinguished leaders of the Opposition parties challenged the veracity of the figures presented. There were wild statements about morale and a demoralised people which showed a total lack of appreciation of the budget. The Leader of the Fine Gael Party seemed to be going around in circles. He started off on one tack by attacking the integrity of the Civil Service and the veracity of the figures presented in the House without substantiating any of those claims. The Leader of the Labour Party also seemed to be going around in circles at a slower rate. If people in such high places are capable of nothing else but going around in circles, God help us if those circles ever start to diminish.
We heard various other protagonists on the far side of the House making wild claims that problems will not go away, that the budgets presented by Fianna Fáil were smokescreens, that they contained wild ideas and raised hopes which cannot be achieved. It is interesting to look back on other budgets. I remember three series of budgets very vividly. I was a very young man when the Coalition Government introduced their first series of budgets which effectively destroyed the capacity of Aer Lingus to expand. Fianna Fáil always gave people an opportunity to make use of their abilities and to carry out their mission.
In the first period of Coalition Government, Aer Lingus had the capability of flying the Atlantic. They had landing rights across to Los Angeles. These were thrown away and nothing was got in return. Today Aer Lingus cannot take advantage of the opportunities given to them in previous Fianna Fáil budgets because they cannot fly legally to the west coast of America. They were emasculated for many years. The job creation capacity which they had achieved under Fianna Fáil Governments was very nearly destroyed in the period of the first Coalition Government.
This exemplifies the inward thinking of every Coalition Government who have sat in this House. They never had the ability to look outwards. They always looked inwards. They never had the imagination shown in various Fianna Fáil budgets to raise the hopes of the people of our little island. This year's budget points out how the people's hopes can be raised. In the period of office of the second Coalition Government exactly the same thing happened. New suburbs had been created by the Fianna Fáil Administration with progressive budgetary policies. The very fine development at Ballyfermot had just been completed and was beginning to be occupied.
Under the second Coalition Government in various budget statements it was claimed that there was no unemployment problem and no housing problem. They were quite right because the houses Fianna Fáil had built were left idle and boarded up. There were streets of houses in Ballyfermot with galvanised iron across the windows and the doors. People had to go elsewhere for work. There was no hope, no forward thinking, no forward planning. There was nothing to keep our people at home. That is in total contrast to the budget we are debating today which provides people with the opportunity to stay at home and fulfil their personal ambitions. That ambition may be to rent a house at a reasonable rent, or to buy their house at an economic price, or to have a job which will provide them with a reasonable standard of living. This budget makes that possibility a reality for many tens of thousands of our people. This is in total contrast to the second Coalition Government who were a disaster for the working man. They created vast labour forces for England, America, Australia and New Zealand. The unfortunate people had no hope because there was no forward thinking.
When the National Coalition Government took office there was no emigration. Fianna Fáil Administrations had successfully stopped that horrible haemorrhage and, for the first time in our history under any Administration, our people could stay at home and find work. At that time the unemployment figure was approximately 65,000, a most unacceptable figure from our point of view and a figure we were battling to lower. Within a few short years there was a total reversal and an inward looking attitude. The attitude was that we could not do anything because outside forces were beating us. Unemployment shot up to 140,000 or 160,000. The most persuasive of the Opposition speakers now claim that the figure was 100,000. Whatever it was, it was certainly much higher than the figure Fianna Fáil left behind them. When Fianna Fáil took office they had to reverse that inward looking attitude again. This year's budget has afforded our people a chance to go out and do something for this little country again; a chance to look objectively, creatively and constructively to the future, one they have not had in the last four years and never experienced under any Coalition Government.
Debate adjourned.