Deputy Enright was in possession and he has 50 minutes left.
Financial Resolutions, 1980. - Financial Resolution No. 19: 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 Finance.)
I wish to draw the attention of the House to the fact that when Fianna Fáil took office in 1977 the economic outlook for this country was never better. In 1977 we had achieved the highest growth rate in the EEC. In fact we had achieved the second highest growth rate in the OECD countries. It was an exceptional performance for us. I would point out to the House and to the country that the basic groundwork for this performance was laid by the strategy and the work of the National Coalition during their period in office. Confirmation of this situation is to be found in the words of the then Minister for Finance, Deputy Colley, in his budget speech in 1978. Referring to 1977 he said:
Last year, we achieved the highest growth rate in the EEC and the second highest in the OECD. The economy expanded by over 5 per cent—twice the EEC average and well above the OECD average of 3½ per cent.
The Economic Background to the Budget, which was published on 24 January, gives a detailed review of the economy in 1977.... Growth apart, the most notable development in 1977 was the dramatic fall in inflation.
The healthy state of the economy at that time can be attributed in large measure to the strategy and the management of the Coalition Government. Now, just two and a half years later, under the present Government, we have an economy that is in a serious state of disarray. This is evidenced by Government borrowings which have exceeded £1,000 million in 1979. Inflation is rapidly approaching 20 per cent. Bank interest rates which, even prior to the last increase were exceptionally high are, following this latest increase, at an unprecedented level. This has in turn led to major social unrest which is obvious at present in the agricultural, industrial and commercial sectors of our community. I am sorry to say that the major blame for this situation rests fairly and squarely on the shoulders of the Government who, with their election manifesto of 1977, raised the expectations of the people here far beyond what our economy could sustain. I do not need to emphasise that because it has been pointed out often enough, but an example would be the abolition of rates; a further example which has been quoted often is the abolition of car tax. The net result of this situation is a frank admission by the new Minister for Finance, Deputy O'Kennedy, in his budget speech this year:
The farming community met serious difficulties during the year resulting in an unexpected fall in their incomes. The pattern of industrial disputes and, in particular, the industrial dispute in the Post Office, which commenced in February and was to last until June, caused disruption of services and interference with private, commercial and industrial life. A recently published EEC report indicated that, relatively we lost more man-days through industrial stoppages in 1978 than any other EEC country. Our experience in 1979 can hardly have improved the record.
The Minister goes on to state then:
So what started off as a year with great economic opportunities, eventually deteriorated to the point of serious setback to the targets for growth and financial stability which the Government had set for the year as a whole.
From the situation in 1977 to that admission by the Minister for Finance at the commencement of this year it is obvious that the management of the country in the hands of the present Government has been of a very poor quality. Unhappily the country has been badly mismanaged and now faces a serious situation.
Now, with the permission of the Ceann Comhairle, I propose to deal with some of the proposals that affect my area of responsibility in this House, consumer affairs. I will deal with the increases in taxation on petrol, road diesel and heating oil. These increases are based on a premise by the Minister that the public are wasteful in their use of petrol, road diesel and heating oil. I believe that the Minister's premise is incorrect and inaccurate, The Minister himself must surely be aware that in some parts of rural Ireland there are no alternative forms of transport other than private motor cars for people who have to travel a distance to work. Increased costs in the public service in urban areas has resulted, in many instances, in people going back to using private cars. I doubt if people have been wasteful in their use of energy since the increases in 1973 and 1974. They have been endeavouring to cut down in their use of it. However, the result following the budget increases is that a person travelling to work now finds that his petrol bill has increased by £1 or in excess of that. Diesel and petrol increases will lead to rising industrial costs which affect the price of all goods. These increases will have a significant effect on the consumer price index which will also be affected by the increased taxation on beer and spirits.
In speeches made by various Ministers external factors have been blamed for the increase in our inflation rate whereas in fact the tax hikes in petrol, diesel, oil, VAT, drink, post office charges and so on will drive up the inflation rate. As a result of the budget this will be somewhere in excess of 4 per cent. That increase in the inflation rate is being directly fuelled by the Government's own policies. All these increases are bound to encourage strong demands from the trade union movement for increases in wages. The Minister should also bear in mind the fact that the increases will lead to increased costs for the public services. The situation would appear to be that we will be faced with a supplementary budget in the autumn of this year which will further increase taxation. This is all the responsibility of the Government. If there is a supplementary budget it will lead to price increases and will drive up inflation even further.
I should like to ask the Minister to ask himself exactly what type of scenario he is helping to paint for the economy. It presents an unhappy picture for the economy to see our inflation rate heading rapidly towards 20 per cent. When the mid-May figures are produced we will have an inflation rate of 19½ per cent to 20 per cent. It is only right that somebody should shout "stop" to the Government in regard to this situation. With inflation of that magnitude every working man who is married with a family is bound to suffer. His standard of living and that of his wife and children will suffer. Inflation of that magnitude is forcing up prices and, as food becomes more expensive, it will be more difficult for a working man to feed his family. Clothes and shoes will become more expensive as will all basic household goods. It will affect the standard of living of old age penisoners, widows and one-income families.
A further alarming point is that with costs and inflation rising by that amount our competitiveness abroad will be affected. There is a serious danger that this will lead to a reduction in demand for our products and exports with the consequent danger of rising unemployment at home. Since 1980 dawned we have witnessed an increase in ESB charges of 20.5 per cent and an increase in CIE fares of 20 per cent. In the budget the Minister announced that post office charges would be increased, some from 1 May and some from 1 July. The increases will be in the region of 20 per cent to 25 per cent, with 25 per cent being the more likely figure. Coal, milk, bread, baby food, bottled gas and countless other items have risen rapidly in price since the beginning of the year.
Price increases of this size present a danger to the whole fabric of our society. They appear to be getting seriously out of control and instead of the Government trying to do something about the position they are helping to worsen it. They are largely to blame for what is happening to our inflation rate. I should like to warn them seriously to consider where they are leading the country at this time and to take action to curb inflation and price increases before it is too late. If not, there will be runaway inflation in the not too distant future. The people cannot take further price increases of this magnitude. If such price increases continue they will cause unrest of a serious nature. Our economy cannot take inflation of this kind. If it continues it will place a serious strain on the punt to retain its place within the EMS. The Government must act immediately before it is too late to stop runaway inflation.
In his budget speech the Minister dealt with food subsidies at length. He stated that:
It continues to be the Government's belief that food subsidies applying as they do irrespective of individual needs do not sufficiently discriminate in favour of the less well-off sections of the community. We gave very full consideration, therefore, to the question of further reducing them in line with our declared intentions.
It appears as if it is still Government policy, in line with their declared intentions, to dismantle food subsidies further. When food subsidies were introduced by the Coalition in 1975-76 inflation at that stage on the consumer price index was in the region of 20 per cent. Once food subsidies were introduced inflation dropped from about 20 per cent to about 10.8 per cent in 1976-77 and 1977-78 it dropped to 7.9 per cent. One of the major blunders this Government made was the dismantling of food subsidies in 1978. This led to an increase in the rate of inflation from 7.9 per cent to 16 per cent. The dismantling of food subsidies directly increased the cost of foodstuffs, triggered off dissatisfaction among the trade unions and created unrest among the workers which resulted in very big wage increases—far higher than would have been sought if food subsidies had been retained.
There is an obvious lesson to be learned from just one look at the consumer price index but the Government are considering a further dismantling of food subsidies. I want to warn them against taking such a step. I again call on them to restore in full the food subsidies which existed when the Coalition were in power. This would help to break the upward spiral of inflation and moderate wage demands. Most important, it will have the effect of helping large families, working families, one income families, old age pensioners and widows to get food at reduced prices. A present the majority of these people find food prices excessive. I do not want to make a political point about this. The Minister should bring this message to the Government who would immediately set about restoring food subsidies. This would be for the betterment of all our people.
I wish to turn my attention to interest rates—bank interest rates, mortgage rates, post office saving rates and all other interest rates. Even before the latest bank rate increases, interest rates were excessive. The latest increases are a major blunder by the associated banks because people in industry, agriculture or borrowing to build houses will find it is beyond their capacity to repay loans at such high interest rates. Interest rates are at a dangerously high and unprecedented level and will have frightening consequences for the economy.
After the announcement by the associated banks I warned of the danger that would follow from the increases in bank interest rates. In a statement I warned the Minister for Industry, Commerce and Tourism and the Government that these increases could have disastrous effects on many sensitive industries and on agriculture. I pointed out that in some cases they could mean the difference between survival and closure. I was gratified to note that at least one Minister—Deputy O'Malley—heard what I had to say and appeared to be about to take some action to remedy the situation. Unfortunately at the Fianna Fáil Youth Conference what he had to say he said too late and, in my view, it was a case of shadow boxing. There was a lot of huffing and puffing by the Minister.
That Minister and the Government must be concerned that they did not call on the banks before the increases were granted or instruct the Central Bank not to grant those increases. I knew, and everybody who read a newspaper knew two or three weeks before the interest rates were announced that they were to be increased. I do not know if the Government knew about that but everybody else did. They should have told the associated banks not to apply for the increases and the Central Bank should have been instructed not to allow the increases.
This day last week in this House I said that throughout the world bank interest rates appeared to have reached a peak and to be on a downward trend. I am not an economist; I read newspapers, booklets and other printed matter. I read in a newspaper the following day that interest rates had reached their peak and in America they appeared to be on the downward trend. The banks should have been aware of this. The Central Bank should not have allowed the increase when it was sought by the associated banks because we are now presented with a dangerous situation.
I understand the Agricultural Credit Corporation are meeting today to consider increasing the rate they will charge to farmers who are now in danger of an imposition of 20 per cent for moneys borrowed from the ACC. There is not the kind of money in any sector of farming, be it dairying, beef cattle production, cereal or vegetable production, to enable farmers to pay 20 per cent on moneys borrowed either from the banks or the ACC. Therefore, even a small increase in interest rates will have a detrimental effect on farming.
Recently, the Minister for Industry, Commerce and Tourism said that high interest rates would have a serious effect on many firms, some of whom would be faced with closure. Was he huffing and puffing, or was he serious? In a report in The Irish Times on 17 April he is reported as having said that he regretted more companies had not availed of the lower interest rates available in other EEC countries. He said that despite the facilities of the ICC and the ACC, small firms were still running into problems but were unwilling to take the risk of borrowing abroad because of currency fluctuations.
Let us suppose that an Irish firm borrows abroad and that the currency in which it got the loan increased in value. Will the Minister for Industry, Commerce and Tourism provide the money for that firm to bridge the gap between what it paid for the loan and its repayments in the appreciated currency? Will he urge the Minister for Finance in the Finance Bill to make arrangements to safeguard such a firm for borrowings in the EMS? If not, he is not serious in expressing concern for Irish industry or agriculture. He should make arrangements with the Central Bank, through the Minister for Finance, to give the type of protection I have been asking for. If he does so I will congratulate him, even shake his hand. Of course, he may have been bluffing, he may not be as serious as he appeared to be when he spoke about survival or closure for small firms.
Interest rates throughout the EEC are far lower than ours. We have one of the highest if not the highest rates in the EMS. In Germany the rate is less than 10 per cent. The Minister for Industry, Commerce and Tourism must make some arrangement with the building societies to keep their interest rates at their present level.
Regularly, I meet young married couples who at the moment are living in dread of further increases in mortgage repayment rates. Already they are put to the pins of their collars to try to buy and furnish their houses. Many of them on the outskirts of Dublin have to drive to work and they are alarmed at the prospect of mortgage rates being increased by another two to two and a half per cent on top of the increased price of petrol. Are the Government aware of the stress these people are living under? Already they are barely able to meet monthly mortgage repayments.
Therefore, it is vital that the Government, by subsidy, should keep the building society rates at their present level. If they do not do so the Government will be guilty of a serious dereliction of duty because there is a solemn obligation on them to act as we did when in Government to provide a subsidy in respect of mortgage repayments. I call on them urgently to do so. Young married couples on the outskirts of this city are living in dread and fear of an announcement by the building societies in the next few days. I know young wives who have to attend doctors for nervous complaints and young married men are seriously concerned because their entire lives are occupied not only trying to meet mortgage repayments but increased ESB bills, doctors' bills and food prices. As I said, the Government have a bounden duty to ensure that building society rates will not be increased. The Minister for Finance announced an increase to £2,400 in the allowance for income tax. That suits the better off people very well but it does not make any difference and is not of any advantage to the one income household.
Reverting to agriculture, I ask the Minister for Finance and the Government to have a further look at the resource tax. In my view it was misconceived and it will be looked on as the two per cent levy was last year. Many rural Fianna Fáil Deputies know the situation in agriculture as well as I do. The Minister has admitted that in the year 1979 farm incomes fell by 4 per cent. In some cases I believe those incomes fell by as much as 15 to 20 per cent. However the Minister's admission is important—that farm incomes fell by 4 per cent. That drop in income of farmers was matched by an inflation rate on average of approximately 15½ per cent, presenting a gloomy picture for Irish agriculture.
The livestock figures published for December 1979 should be thought about, discussed and dwelt on by the Government. Those figures show a serious drop in cow numbers, a drop in the number of heifers-in-calf by as much as 17,500, with a drop in under-two-year-old cattle of almost 10,000, again presenting a serious picture. I admit that there was an increase, I think of .6 per cent, in the overall numbers of cattle. But the figures carrying longer-term effects are those in regard to cows and heifers-in-calf. Somebody on the Government benches may maintain that the numbers are dropping because of disease eradication. I would rebut any such contention by saying that the numbers for sheep and pigs are down also, sheep by 58,000 and pigs by 29,000. Therefore, we are faced with a situation in which the numbers of cows, heifers-in-calf, sheep and pigs have dropped seriously.
I am sure the Minister is aware of these figures. Yet his only response is that he will increase taxation on farmers, that he will introduce a brand new resource tax—I do not know where he dreamt that one up—but anyway he will introduce it. It must be remembered that agricultural exports are of vital importance to our economy and to the general prosperity of the country as a whole. Yet there is this suggestion of the introduction of a resource tax. In 1979 when the 2 per cent levy was being introduced I warned that it could have the effect of reducing livestock numbers, that a levy of that nature could have serious reprecussions. I am again warning the Government—as I and my party issued a warning when the 2 per cent levy was being introduced—that there is the danger of serious repercussions in regard to this resource tax also.
Irish agriculture has gone through a very difficult period. The obvious investment throughout rural areas—dairy buildings, piggeries, sheds and fences being erected and lands being manured—is continuing but I regret to say on a drastically reduced scale. A thriving agricultural community and industry are of great importance to this country. I would hope that the Minister and the Taoiseach, who have had discussions with the IFA, will see fit to withdraw this resource tax before it is too late.
I have here the budget speeches of the respective Ministers for Finance for the years 1978 to 1980 inclusive. I would point out that I live in the heart of rural Ireland where we have a river called the Shannon. I regret to say that in any of the budget speeches I have read rarely if ever does the Shannon surface. Indeed, I had reason only last week to visit the Minister of State, Deputy McEllistrim, in his Department in regard to a river adjoining the Shannon. In the near future some Minister for Finance will have to incorporate some reference to the river Shannon in his budget speech. Some Government Department will have to take a serious look to ascertain what can be done regarding its drainage. Some Government will have to present a fully documented file to be brought to Brussels outlining our budgetary policy and strategy in an endeavour to prepare plans for the drainage of the Shannon. In the Shannon basin there are 250,000 acres of land being flooded annually, to which we seem to have no answer. Rather we allow the situation to jog along and do nothing about it. Many Deputies have longer memories of elections than I but something churned out in the past by all sides of this House was the drainage of the River Shannon——
Would the Deputy for God's sake stop? We have an election ahead of us.
In a country of this size that amount of land cannot be left flooded each year. I led a deputation from the Midland Regional Development Organisation to the then Minister for Economic Planning and Development last autumn——
Where is he now?
——when we handed him a document requesting the final stages of investigation to be carried out. As the House is probably aware, Ridell, the Office of Public Works and the ESB carried out an investigation in the period from 1956 to 1960 which led nowhere. It is vital that the Government now provide funds to have a final and thorough investigation carried out into this most important matter. If such were properly undertaken then we could obtain the necessary moneys from the EEC to have this drainage carried out. This matter affects the counties of Cavan, Westmeath, Longford, Offaly, Galway, Tipperary and Clare where the lands are all flooded and where in many cases farmers are paying rates on lands flooded for eight months of the year. This country cannot afford the loss of all of these lands. The Shannon's potential in regard to tourism, industry and so on could be fully developed, whereas at present it is proving to be more of a liability that an asset. Indeed, people tend to turn their eyes to heaven when the drainage of the Shannon is talked about because of the way this matter has been allowed to drag on in the past.
I urge that the preparatory work be carried out for a proper case to be brought across to Brussels for EEC aid for this most important work. I ask the Minister to consider seriously some of the thoughts that I and others on this side of the House have put before him in regard to this budget of 1980.
I did not think that I was going to get in so fast. I thought I was going to hear my colleague from Kerry, the Minister of State at the Department of Finance, Deputy McEllistrim, saying a few words but as he resigned from Kerry County Council yesterday and he has not much more money for them, I suppose a shut mouth catches no flies.
Mar sin féin caithfidh mé cúpla focal a rá i dtaobh na cáinaisnéise, Ní mór dom a rá go bhfuil beagnach sé bhliain imithe ó chuaigh Fianna Fáil isteach i gcumhacht agus caithfidh gach duine a admháil gur ag dul in olcas atá staid na Gaeltachta. Seachtain i ndiaidh seachtain tareis na cáinaisnéise tá buille tubaisteach á thabhairt ag an Rialtas do ansan gur chuir an Rialtas dallamullóg ar na daoine sin. Cúpla seachtain ó shin chur mé ceist go dtí Aire na Gaeltachta i ansan go chuir an Rialtas dallamullóg ar na daoine sin. Cúpla seachtain ó shin chur mé ceist go dtí Aire na Gaeltachta i dtaobh an méid ardú airgid a thug an tAire dos na mná tí i gcóir na coláistí samhraidh atá ar siúl sna Gaeltachtaí gach bliain. Is mór an trua anois go bhfuil scanradh ar chuid des na mná sin nach bhfuil an spriod acu a n-ainm féin a chur go dtí na litreacha atá siad ag seoladh go dtí na Teachtaí Dála atá ag maireachtain san Ghaeltacht. Níl a fhios agam cén fáth go bhfuil an scanradh sin ar na mná céanna, mar an chéad rud a thagann isteach sa cheann agam i leith na daoine atá ag rith na colaistí samhraidh, na daoine atá i gceannas orthu, an bhfuil eagla ar na mná tí gearán poiblí a dhéanamh. A Leas-Cheann Comhairle, seo ceann des na litreacha a fuair mise, agus fuair mé morán acu ó mnátithe. Ar dtús tá sean aithne agat ar mo scríobhneoir. Tá an litir anseo agam.
"Márta 22
Corca Dhúine.
A Mhichíl a chara,
Ba mhaith liom ár gcás a chur in úil duit, go bhfuilimíd ana-mhí-shásta mar gheall ar an 10p sa ló árdú as gach scoláire a choimeádaimíd i rith trí mí an tsamhraidh ó Roinn na Gaeltachta. Bhuail cuid againn le Aire na Gaeltachta nuair a tháinig sí go dtí Liospóil agus cheapamar go ndéanfadh sí i bhfad níos fearr dúinn. Is trua scaoileadh léi cho bog san ach ní haon chabhair sinne a bheith ag caint. Ba gheall le magadh é nuair a fuaramar litir uaithe ag cur in úil duinn go deich bpingin sa ló as gach scoláire a bhí le fáil againn.
Tá i bhfad níos mó sa litir ach an prionsabal atá ag cur isteach orm ná, an bhfuil sort brú ar chuid des na mná siúd. Tá an litir seo sínithe ag mná tí Chorca Dhuíne. Tá sé le fáil ag gach aoinne atá á lorg. An rud atá ag cur isteach orm —an bhfuil brú de shaghas éigin á chur ar na mná tí sin nach bhfuil siad abalta labhairt amach go poiblí. B'fhéidir an t-aon chúis atá mé féin ábalta cur suas ná go bhfuil cuid des na daoine atá i mo cheann des na colaistí samhraidh i Corca Dhúine b'fhéidir gur muintir Fhianna Fáil iad, agus tá na mná ag cur gearán poiblí nach bhfaighidh siad aon scoláire. Sin é an chúis atá agam féin ar sin. Tá a fhios ag gach aoinne cén mhaith 10p sa ló chun páiste a choimead san Ghaeltacht. Tá im, bainne, feoil arán, gach rud imithe suas, agus tá sé de dhánaíocht ag an Aire 10p a thabhairt i dtaobh na gcostas sin. Nil bun ná barr leis an scéal.
Tháinig Aire na Gaeltachta isteach anseo cúpla seachtain agus labhair sí ar feadh uair a chloig ar Udarás na Gaeltachta. An tUdarás céanna, tá sé i gcumhacht anois le beagnach cúig mhí. Níl tada le féachaint ag muintir na Gaeltachta go bhfuil sé ann in aonchur. Nuair a bhí an Bille ag rith tríd an Dáil, rinne mé féin agus Páirti an Lucht Oibre agus Páirtí Fhine Gael roinnt leasúchán a chur síos chun cumhacht a thabhairt don Údarás céanna, cumhacht a bheadh le feiscint ag gnáth daoine na Gaeltachta. Níl an tAire céanna ann anois agus caithfidh mé a rá ag an bpointe seo go rabhtas ana-cheanúil ar an Aire sin mar fear a thug cothrom na Féinne agus a rinne a dhóthain an son muintir na Gaeltachta.
Ag dul thar n-ais go dtí an tÚdarás, níl aon chumhacht ag an Udarás faoi bhóithre, iascaireacht, phleanáil nó aon ní ach an t-aon chumhacht atá aige, cumhacht i dtaobh tionsclaíochta. Ach tá cumhacht aige faoi thionsclaíocht, tá i bhfad níos mó cumhachta ag SFADCo agus ag an IDA atá ag obair, measaim féir anois, i gcoinne Udarás na Gaeltachta. Is mór an trua é sin freisin go bhfuil an IDA, SFADCo agus Udarás na Gaeltachta ag troid laistiar de na dóirse i dtaobh monarchana éagsúla atá ag dul isteach sna háiteanna iargcúlta go mór mhór sa Ghaeltacht.
Measaim go mba cheart d'Aire na Gaeltachta dul isteach arís san argóint atá ar siúl agus an cumhacht céanna atá ag SFADCo agus an IDA a thabhairt do Údarás na Gaeltachta. Nuair a bhí an tAire ag caint faoi dhíospóireacht na cáinaisnéise cheapfá go raibh the sun, moon and stars ag muintir na Gaeltachta toisc go raibh an tÚdarás ann, ach brathann aon chumhacht atá ag an Údarás sin ar ordú an Aire, agus caithfidh an tAire cead a fháil ón Rialtas an t-ordú sin a dhéanamh. Mar sin, níl san Údarás ach sop in áit na scuaibe.
B'fhéidir go mba cheart féachaint géar a dhéanamh go mór mhór ar iarthar na tíre, chun SFADCo, an IDA agus Údarás na Gaeltachta, a thabhairt le chéile faoi bhrat amháin. Faoi láthair níl aon dul as ag an Údarás ach bheith ina "poor relation" ag an IDA agus SFADCo.
I have spoken at length on the state of the Gaeltachts. The Minister for the Gaeltacht spoke in this House a few weeks ago and one would think from the tone of her remarks that the people of the Gaeltacht were living in Utopia since the coming into existence of the new údarás. Nothing could be further from the truth. The stark, naked reality of the situation is that the Gaeltachts will be non-existent by the end of the eighties unless something drastic is done. If the people of the Gaeltacht are to survive and have their own identity, culture, language and music, the Government of the day will have to take care of the needs and anxieties of these people.
There have been so many reports on the Irish language and the Gaeltacht that they would fill the National Library. We have had surveys, censuses of population and intellectuals from abroad, even an American expert, to tell us how the Gaeltachts should survive.
The budget provision of £100,000 is not much use to the people of the Gaeltacht. There was a failure to recognise that Údarás na Gaeltachta is now in direct competition with SFADCo and the IDA. The Government must realise that these three bodies should be under one umbrella. There is no point in three State companies fighting one another to attract an industry to a particular area. Everybody knows that the big boy will win and the údarás will be relegated to third place.
In terms of the budget, the Government must consider the whole west of Ireland as a unit. Local authorities in the west and throughout the whole country no longer have much relevance because they have not the finance to carry out improvements or begin new schemes suggested by local councillors. The Government have a golden opportunity to do something positive if they have the willpower to change the whole infrastructure of the depressed areas. An industrialist will not go to the west or the south when the telephone and road systems are in such an appalling condition. In the competition to attract industry the east and midland counties will win.
The Minister for the Environment has been very mean to the local authorities and has tied their hands completely. No money has been given to Kerry County Council or to any other county council to start building more houses. We are now nearly at 1 May and you have no money to start. Surely the months of November and December are not the time to start? I take this opportunity to appeal to the Minister of State, if he has any influence at all, to get the Department of the Environment to release immediately block grants to start houses—whether in the counties of Kerry, Cork, Galway, Donegal or Mayo.
I am sure that the Deputy knows that there was £500,000 of an increase.
The Minister got a golden opportunity to speak here about eight or nine minutes ago. I reluctantly sat here, hoping the Minister would come in with a contribution, but he shied away like a scalded cat because he is embarrassed at the situation.
The Deputy knows that there is a commitment of £500,000 of an increase.
If the Minister keeps interrupting me I shall have no alternative but to call for a House to hear his contribution, and I do not want to do that.
We shall have to leave this subject.
The Deputy is only shamming.
No, no. The Minister did, say, when appointed, that he would pour millions of pounds into County Kerry— buckets of money, to use his own words. We could do with some of those buckets now. Kerry County Council have not even the money now to buy the buckets, let alone millions of pounds. Things are as bad as that.
Deputy Begley will continue on the budget, without interruption.
I was doing all right until I was rudely interrupted by my colleague from Kerry.
The two colleagues from Kerry should leave County Kerry alone for the moment. Deputy Begley on the budget.
I am going along on my train of thought and suddenly I get a rude interruption. The Minister of State had an opportunity to make a positive contribution and he declined to do so. So much for that.
If this situation continues as it is we shall have massive redundancies in local authorities. The personnel of local authorities have been built up for years to carry out certain projects. If the money for the projects is not there, there is no point in keeping on these officials and we shall have massive redundancies. We had last month a local authority meeting to discuss water schemes, to be told that there was no money for water schemes. The situation is so bad that Ireland has come to a standstill under the Fianna Fáil Government and under the Taoiseach, Deputy Haughey. This reminds me of the old phrase of the Blasket islandman. I shall give it in English because the Deputy certainly would not understand the Irish.
It is a long time since the Blaskets were inhabited.
This is not an Inishvickillane islandman. This is one of the old true blues rehoused in Dún Chaoin. I will translate his saying as best I can. He said that the Government at the present time is like a tinker's mule, one leg up today, the other leg up tomorrow, depending on the boreen they went over. That is very true; this Government is certainly like the tinker's mule. Nobody knows, particularly from the budget, what crisis is around the corner. To tell the House how much the Government are out of touch I shall refer to a few items in the 1977 Fianna Fáil manifesto. I am told that this document is no longer available. This copy could be a museum item, so I shall have to watch it very closely.
They are still available. I shall send one to the Deputy, if he wants it.
Someone was looking for a copy lately and could not obtain one. I am quoting from page 11 of the manifesto:
We will abolish the seven day rule arising out of the outer UK zone, in respect of fuel price increases, as there is no price control at all under the present system.
That sounds very hollow today. I am still quoting.
The accounting procedures of the ESB will be examined and brought up to date with a view to reducing the price of electricity.
It is no wonder that the man who wrote this was thrown out of his job by the Fianna Fáil Party. I understand why the Taoiseach does not want to hear high up or low down about the manifesto.
On the local authority issue, if money is not made available to the local authorities the Government should have the necessary courage to tell them that they are no longer relevant as far as the structures of local government are concerned and would be advised to liquidate slowly and get out of business. That is what it amounts to. The local authorities have not enough money to put up a public light outside a church gate. A couple of years ago the Deputy's party were able to put a light outside public houses. It just goes to show how the position has deteriorated.
There is a light outside every church gate in County Kerry.
If the Minister had been at the meeting he would have been told about one particular church. The Minister should check that out with his colleague, Councillor Mrs. O'Donovan.
There is a light outside every church in County Kerry and the Deputy knows that.
Stop the lights.
I think the Government have stopped the lights for me, anyhow.
The Deputies should stay on the budget and not get down to such minor items as lights outside church gates. That would be more appropriate for debate on the Estimates.
The lights are well stopped in County Kerry. I can tell the House that much. I want to bring home to the ordinary man the amount of money made available by the budget for allocation to local authorities, if the Minister can understand that.
My second point on the budget is in relation to agriculture. Being brought into the income tax net will be very hard, especially on people with £40 valuation. It will be exceedingly difficult for them to pay rates and income tax. £40 valuation in County Kerry and £40 valuation in other parts of Ireland are two different things altogether. Some of the £40 valuations in County Kerry were in regard to old estates which were divided up. Because they were divided up recently, the valuation was extra high. If they had been divided up 15 to 20 years ago—and the Minister would possibly agree with this—the valuation would have been no more than £15 or £20. The valuation now being put on land which is being divided is excessive in the extreme. It will be very difficult for farmers to make ends meet. As long as I am in public life, and I am in it a good many years now, I have never had as many farmers coming to me as I have at the moment, asking for their grants to be expedited, whether it is for farm modernisation, the milk premium scheme, machinery grants scheme or milk products scheme—no matter what scheme it is. The situation is becoming chaotic and I do not know the reason for it. I appeal to the Minister for Agriculture to take particular note of my comments. When he spoke on the budget, he did not refer to the delay in payment of grants. These farmers are now so hard pressed for money that they have to take every bob, no matter where it comes from, because the bank managers are pressing them for the loans that have been given. I hope that, following on my remarks here today, payment of all outstanding grants due to people—no matter what part of Ireland they live in—under the farm modernisation schemes in their various categories will be expedited immediately.
The resource tax is just not on and the Taoiseach knows that it is not on. I would prefer him to come out openly and boldly say that it is finished, that the Government thought about it and decided it was a non-runner, not accepted by the farming organisations and that it is finished. They should not be creating "aggro" and friction in the farming community because of that tax. It is a bad tax and the Minister of State knows that. I hope that the Taoiseach will immediately put a stop to the "aggro" which is going on.
Another point about agriculture is the question of the EEC grants under the drainage scheme in the west of Ireland. The Minister for Agriculture in his speech on the budget made a passing reference to this. This scheme has been a non-runner from the word "go" because the Government are not prepared to put up £ for £ with the people in Brussels to implement the scheme. This is certainly not good enough. There was no point in raising the hopes of farmers in the west of Ireland from Donegal down to west Cork and north and south Kerry that this scheme would be the answer to all the drainage and flooding problems that the west of Ireland has suffered from down the centuries. The Minister for Agriculture and the Government have given no block allocation whatsoever in the budget to get this scheme off the ground. It is a crazy and ridiculous situation.
It is significant that the Minister for Agriculture in his contribution to the budget debate did not mention the disadvantaged areas. I should like to remind the Minister of State present in the House of what he said outside church gates in County Kerry some two-and-a-half years ago. He told the people that, if he were elected and if Fianna Fáil were returned to office, not alone would the parishes of Milltown and Ballymacel-ligott qualify for EEC grants but all of County Kerry would qualify for such grants. Now the Minister is strangely silent.
I never said that.
The Minister met deputations from many parts of County Kerry.
If the Minister states he did not say something, it must be accepted by the House.
I was at the meeting.
The ruling of the House during the years is that if a Minister says something it is accepted.
The Chair does not know the Minister as I know him.
I know the ruling of the House. The Deputy should continue his speech on the budget. If the Minister says he did not say something that must be accepted.
I was at the meeting. We have a famous Minister here who does not see or hear things.
The Deputy should speak on the budget.
I know what the Minister said.
Prove it.
Deputy Begley is only asking for the Minister to interrupt him. The Deputy should continue on the budget.
Seeing I am getting so close to the bone and scoring well off the Minister——
Not one bit.
The Deputy in possession should speak on the budget, not make a speech on the Minister.
The Minister for Agriculture spoke at length on the budget but there were some glaring omissions in his speech. Fianna Fáil have not given any increases to the disadvantaged areas in County Kerry, they are not paying grants in respect of the farm modernisation scheme and they are threatening a resource tax on farmers in addition to income tax. In addition, the unfortunate farmers have to pay higher interest rates on money that the Government encouraged them to borrow. I hope the Minister for Agriculture will allocate extra staff to the grants section of the Department of Agriculture. Speedy payments of grants would help the farmers to repay money that they owe to the banks.
It is significant that the Minister for Industry, Commerce and Tourism, Deputy O'Malley, has not said much about the budget. That same Minister at the 1977 Fianna Fáil Ard Fheis spoke at length about the unemployed. As a result of measures in the budget we will have more unemployed in this country at the end of the year than ever before. I am told a conservative forecast of unemployed at the end of December is 125,000. This will happen because the abnormally high interest rates will affect small industries. Many of them will go into liquidation. This is a sad state of affairs. I hope the Minister for Finance or the Taoiseach will give some relief to small industrialists, especially to those who depend on an overdraft to carry on their business. There is no doubt that something will be done for mortgage holders. The Taoiseach is shrewd. He is a good public relations man and, so far as the ordinary business of this House is concerned, he is a good Taoiseach. Everyone knows he would not have put his head on the block meeting the building societies unless something positive was going to come out of it. No Taoiseach would risk his reputation by failing in his discussions with the building societies. It was strongly rumoured in financial circles that an increase of 2 per cent was contemplated by the building societies but this has not been announced. It is not for me to speculate whether that is true or false. I hope mortgage holders get some relief; otherwise we will all be in trouble because the national understanding will be as good as finished and there will be no new wage agreement. Mortgage holders need some cushioning because they cannot afford to carry another increase. I wish the Taoiseach and his Ministers well in their dealings with the building societies. If they do not come up with something all of us will be in trouble.
It is regrettable that the Land Commission are purchasing very little land, either by acquiring it voluntarily or compulsorily. Also, it is regrettable that high financiers are moving in and buying tracts of land in the west of Ireland. Some of these people are not Irish. They may have an Irish front but the majority of shareholders are from a European country. I do not want to be misinterpreted on this issue. There is a welcome for some European people. Some of them buy a plot of land for a holiday home and, provided they comply with local planning conditions, they are welcome. The money they pay to the landowner is of tremendous help to him in educating his family or in improving his way of life. I have no objection to such people buying land here; but I have an objection to others who come here, who have an Irish front and who buy tracts of land that should be divided among smallholders. Money can be made, water can be got from the lakes, but God made land only once. Once it is gone it is gone forever.
The Minister for Agriculture should keep an eye on this situation because it could blow up. It can blow up in an old way. The Irish people got rid of the landlord and they will also get rid of these people, possibly not in a democratic manner. I am told that some factions of Irish society who have no respect for the institutions of the State are moving in in some areas and are creating the necessary strife and aggression which will affect all of us in the long run. This could be an explosive situation and democracy will not survive because these people will not take it lying down if the landlord is brought back in another shape. I appeal to the Minister for Agriculture and to the Minister for Fisheries and Forestry to look at the situation again and ask the Cabinet to give them some money to acquire land especially if the land is offered to the Land Commission in the first instance.
Our fishermen are widely scattered in Donegal, Mayo, Galway, Clare, Kerry, Cork, Waterford, Wicklow, Louth and Dublin. They will not have much of an effect on a general election and therefore they have not a strong lobby. They are being treated scandalously at the moment. When the cost of fuel oil went up it hit the fishermen harder than other sections. The 90-foot trawlers used in fishing use about £1,000 worth of fuel oil a week and it is not beyond reason to ask the Government to give a substantial relief to those fishermen by way of a subsidy or tax rebate on fuel oil. The 50-mile limit which we sought for the fishermen and which was mentioned in the famous manifesto of 1977 was abandoned. When the 50-mile limit was in operation the catches of fishermen increased substantially. Now the catches have decreased and the overheads on these boats mean that hundreds of trawler owners have a noose around their necks. I appeal to the Minister for Finance, even at this late stage to instruct BIM not to confiscate those boats from skippers who cannot meet their repayments because they cannot catch enough fish. Their overheads are so excessive that they have have no hope of making a profit so the Minister should subsidise fuel oil to help them out of that situation.
There are so many defects in this budget that one could go on for hours pointing them out. It is very significant that on the Order of Business this morning Deputy Peter Barry raised the point that the Government are now giving only three days to discuss the Finance Bill which is the follow-up to the budget. The Finance Bill must be passed by 15 May and yet only three days have been given to discuss it although the Bill is not yet published and we do not know when we will get it. Many sections of the community who will be affected by this Bill will wish to make representations either to the Government or to Opposition Deputies to have amendments made to the Bill. The indecent haste in relation to the Finance Bill and the way it is being put before us seems to indicate that there is something else at the back of the Taoiseach's mind, that he will guillotine the Bill especially during Committee Stage, at an early stage. It is not for me to say, but I would appeal to the new Minister, whom I wish well in his appointment, to carry my remarks to the Minister for Finance and to tell him that we are very suspicious of his motives in relation to the Finance Bill.
I spoke at length on local authorities, land reform, fisheries and agricultural structures and I will wind up with prices. In 1977 anybody who listened to the political broadcasts before the election would have heard Deputy Eileen Lemass say that there would be no more rises in prices. That was her song, her motto, her manifesto and the Fianna Fáil manifesto. Everybody knows that the cost of living has escalated out of all proportion. The time has come for the Government seriously to reconsider major food subsidies. Even though there are substantial welcome increases in old age and widows pensions the cost of living has also increased substantially. These people must be cushioned in some form or another.
In my county the local authority no longer collect rates on private houses as promised in the manifesto, but lo and behold what did the county manager do? He increased the water rate from £15 to £40 a year. These old age pensioners cannot afford to pay that kind of money. Commonsense should come to the rescue. This is rates by stealth. I put a question to the Minister for Industry, Commerce and Energy in relation to the Prices Commission authorising these increases and I was told it was not the function of the Prices Commission. Yet in 1977 it was said about the Prices Commission that it would be carefully and thoroughly examined and restructured and brought up to date as it was widely believed to be inadvertently protecting inefficient firms and in itself was incapable of proper investigation of many applications made to it which were frequently for far more than the firm needed and the increases granted were often more than the firm expected. I could go on at length but that summarises the gimmicks that were presented to the people in 1977. But what has been done about the Prices Commission since? It was also stated that there would be full dissemination at least once a week to radio, television and newspapers of comparative prices of the most frequently purchased goods in supermarkets and so on in different parts of the country. Has that happened? I do not know how the Minister and the Taoiseach can ever again go before the people when this was posted into their houses. Prices have gone out of all proportion and something must be done to halt the spiral. Otherwise there will be no hope of wage agreements and there will be no hope of the Government having any credibility.
Finally I hope that the Government will stop harassing many old age pensioners, widows, poor farmers receiving a bit of farmer's dole, by means of the horde of pension officers who seem to be in every county. These social welfare officers come into houses and put the fear of God into the old people. Surely it would not be too much to ask the Minister for Social Welfare, who came in here and waxed lyrically about the budget but never said that he was going to send a squad of wasps from the Department of Social Welfare——
That phrase should not be used.
I withdraw the phrase.
This is on administration and does not arise on the budget debate.
The Chair is very sensitive this morning.
I am not. I am simply giving a ruling that it is an administrative matter and does not arise on the budget.
The Minister for Social Welfare came in here and he went on television and he went on radio and he was the nice man who gave all the increases but he did not say at the same time that he had a number of officers from his Department hounding the people.
The Deputy is fully in order to discuss the increases given but not the administration, at this stage.
I am discussing the money that is being taken away from the people and the fear of God that is being put into these people. It might not be happening in the Chair's constituency but it is certainly happening in mine. I hope that the Minister for Finance in his next budget will give a certain allocation of money to the Department of Social Welfare with one thing in view, that all those social welfare officers will be taken up here to Dublin, or to Limerick or to Cork, and given a little course on good manners when they meet people.
The Deputy is dealing with administration and he could raise it at another time. It does not arise now.
Will the Chair tell me how much time I have left?
The Deputy has about four minutes left.
If I have only four minutes left surely the Chair could give me a clear run.
The Chair cannot because the Deputy cannot speak on administration.
I will wind up on education. The cutbacks in education are going to be very serious this year. Rural Deputies cannot speak so much about the national side but we can speak on it as it affects our own constituencies. It is significant that at the last meeting of the Kerry Vocational Educational Committee on which, incidentally, every seat is held by Fianna Fáil, a new vocational school for Killorglin was mentioned. It was with the Department for a long time and it still was not sanctioned and yet £40,000 went in fees to architects, quantity surveyors, civil engineers, construction engineers and so on. Yet the Department of Education were not in a position to build the school this year.
There is no extra money given in the budget for school buses. This is a decrease because costs have gone up by about 25 per cent and the money is the same as last year. That means there will be a shortfall in school bus services in the coming months. It is a question of whether we are going to have dangerous buses on the roads. Is there any money to maintain those buses? If there is a serious accident as a result of some mechanical defect the Minister for Education and the Minister for Finance will be responsible.
I will not say any more. I thank the Leas-Cheann Comhairle for the patience he had with me. My final remark is that this Government is like a tinker's mule, one leg up today, the other leg up tomorrow, depending on the boreen that the tinker is to go.
I can assure the House that my flow of oratory will not be such as to delay it very long. The debate on the budget has gone on so long that every conceivable argument for and against has already been put. At the same time perhaps there is always room for a little emphasis on some points raised in the budget. It is fair to say that in framing the budget the Minister for Finance was faced with perhaps the most difficult situation that any Minister for Finance has had to face in modern times. The rate of inflation in 1978 had increased from 7.6 per cent to about 13.2 per cent in 1979. The trade balance had disimproved substantially resulting in a considerable widening of the balance of payments deficit on the current account. Also the current budget deficit of the Exchequer borrowing requirement had increased as a percentage of GNP.
It is generally accepted by everyone that the level of borrowing here could not go ahead as it had been doing. In no way could we be expected to borrow over £500 million, a figure in excess of the total amount paid by the PAYE sector for ordinary services in the country. Should the Government allow that situation to continue, in a very short time the country would be in economic ruins. So, the Minister presented the House with a package designed to correct the situation. In the PAYE sector alone he was faced with an enormous and yet just demand, a demand which in no way was discovered overnight but was built on the frustration of that sector over many years, especially the past six or seven years. During the term of office of the Coalition Government very little, if anything, was done. In fact, the demand was scarcely recognised. The Government set about rectifying the situation first by ensuring that a fair amount of income tax relief was afforded to this sector. The Minister responded very generously to the dissatisfaction expressed by the PAYE sector at the level of taxation imposed on that sector. In this regard he has exempted from tax more low income workers and he has widened the income bands so that taxpayers pay tax at a lower rate. This a real increase in PAYE incomes. That is not generally accepted perhaps but it has been widely accepted by certain people, especially by the trade union movement who have recognised the Minister's efforts to ensure real, substantial relief for the workers.
For every married couple whether the wife is earning or not the Minister's proposals mean a substantial increase in take home pay. These are concrete and worth-while reliefs, reliefs acknowledged by everybody concerned.
Much play has been made about farm taxation and as a rural Deputy I concede that the farmers now as always, and especially in good farming times, are willing to pay their just share of taxation. It is a matter of what is a fair share, what is meant by that. It is as regards the assessment of what a fair share of taxation is that we differ. What is a fair amount for one can be an unbearable burden upon another. The Minister has made strong efforts to meet the farmers' requirements. If a farmer makes no profit why should he be taxed? If he makes profit why should he not be taxed to a fair extent?
In this context of taxation there is a commission sitting at present on the whole question of taxation and I hope this commission will within a reasonable time present a report that will ensure that every sector of the community will pay a fair share, no more and no less.
In this connection also we must look at what happens to the money collected in taxation. How do we spend it? First, as regards local authorities a situation has now developed in which it appears that no longer, or only for a very short time, will this country be in a position to finance our road network. Not only have roads been neglected over many years but especially from 1973 through 1974, 1975, 1976 and 1977 the amount of money allocated for roadwork was consistently cut down. This is where the real damage was done and this was followed by two very severe winters. Members of the House who are in the European Parliament must look to the regional fund for an arrangement whereby special moneys will be made available to the Government so that our roads can at least be brought into line with and kept up to the standard of other European countries.
For the third year running in this budget the Fianna Fáil Government have effected a substantial improvement in the position of the social welfare recipients. This has been decried or ignored but it cannot be denied that the real income of social welfare recipients has been increased to a point never before reached in this country under any Government. Whether we like it or not, we have under this heading certain uses or abuses of the social welfare system and no amount of argument of oratory in this House will rectify that situation. Millions of pounds are being absorbed by abuse of social welfare and it is quite right for the Government and the Ministers to come to grips with this vicious problem.
Never before, I would venture, have we silently paid out so much money in malicious damages. The smallest county in Ireland has a bill in the current year of well over £1 million for malicious damage. It is time that everybody took note of this fact and made some effort to ensure that the vandalism and the viciousness of those who perpetrate malicious damage are roundly and soundly condemned and that they be brought to book for it.
By way of general comment on the taxation imposed in the budget, it is a logical and inescapable fact that the income tax and social welfare improvements must be financed and the only realistic available source for the vast bulk of this finance is indirect taxation. We can argue about direct and indirect taxation but the latter is the only means available to any Government. I believe that the Minister wisely concentrated his indirect tax proposals on what we like to call discretionary expenditure in line with the general social tenor of his approach to the budget. The shift from direct taxation and PAYE taxpayers has a twofold effect; it is not only appropriate in our present economic conditions but it also helps to bring about a better and more desirable balance in the overall burden of taxation. It has the added bonus of helping to reduce, in accordance with the policy of the Minister, excessive consumption of alcohol and tobacco. I should not like it to be taken that I am against either. The emphasis must go on the word "excessive". We are inclined to be excessive in all our demands. Every sector of the community demands more, bigger and better and when they get that they will still go on and on.
There are other facets of the budget on which I should like to comment but the proposals have already been submitted to the House in such detail that it is almost futile for me to go deeper into them. I shall confine my remarks to what I see as the general strategy of the budget. The Taoiseach said that the budget is the first step in a programme designed to achieve economic and social progress based on strong public finances and firm management of the economy. Even the most bitter and irresponsible Opposition Members might agree with us. Very few of them have been in a position to deny that the budget has tried to fulfil most of these requirements. They have given scant attention to the fact that during 1979 the employment figure rose rapidly. Unemployment fell significantly and the rate of investment growth remained in double figures. They have deliberately ignored these matters. Perhaps that is their policy. It is my job and that of others on this side of the House to highlight that in case it would be lost. These are positive developments which emphasise the wisdom of Fianna Fáil policies and of designing the budget in such a way as to ensure that these positive aspects will not be eroded but maintained and enhanced in 1980.
The Government are determined to ensure that there will be a continued increase in growth, output and employment. The budget marks a significant and concrete contribution to these objectives. We have always been concerned with social progress. It is now widely accepted that the social awareness of the first Fianna Fáil Government under de Valera was imaginative and ahead of its time. We are determined to ensure that the principles of justice, equality and of cherishing all the children of the nation equally, which were an inherent part of the Government's programme, will prevail and be part and parcel of Fianna Fáil's continued success.
This budget, taken in conjunction with the Book of Estimates, can be summed up by saying that in 1980 we are being asked to contribute to the coffers of the Exchequer to the tune of £292 million in additional taxation. The people who have been asked to contribute are also being asked to be content with a lower level of Government services than they had in 1979. Indirect taxation has been substantially increased over a wide range of items. In some areas such as beer and spirits the increases have been massive and will have great repercussions.
I am engaged in the licenced trade and I have never heard as many complaints as regards a drop-off in sales from publicans as I did since the budget. There is such a discrepancy in the price of beer and spirits between the public pubs in the Border towns in my constituency and the neighbouring Border towns in Armagh, Fermanagh and Tyrone that instead of people coming from the North into the towns in my constituency the movement is in the other direction. This may be good for relations between North and South but it is not of much benefit to the publicans in my constituency.
I was told recently that on account of the big discrepancy in price the shebeen business is beginning to prosper in Border areas and can be quite lucrative for unlicensed people to purchase beer and spirits in supermarkets in Northern Ireland. They can make a fair profit by selling these in shebeens in rural areas. If one looks at the discrepancy in price one can understand why the movement should be away from Border towns in my constituency towards Border towns in Northern Ireland. Some examples of the discrepancy in price are: a half glass of spirits in Castleblayney as a result of this budget is being sold at 57p, in the village of Crossmaglen it is 50p; half glass of brandy in Castleblayney 82p, in Crossmaglen, 65p; pint of Guinness, manufactured in Dublin, in Castleblayney, 59p, in Crossmaglen, 48p; pint of lager, manufactured in Dundalk, in Castleblayney, 65p, in Crossmaglen, 48p; a bottle of club orange in Crossmaglen, 15p, in Castleblayney, 25p.
We hear a lot about encouraging people in Northern Ireland to join us in a united Ireland. People in Northern Ireland are also "fond of their jar" and the workers in the shipyard in Belfast are as fond of it as any workers here. These prices would not entice them to come in here. The carry-out business, as it is known, the off-licences, used to be substantial at certain times of the year such as at Christmas and Easter. Recently that business has been eroded because of the discrepancy in prices between the Republic and Northern Ireland. With this massive increase in the budget that business will be killed off altogether because many people in the Border areas will buy their spirits and beer in Armagh at Christmas or Easter.
The increase in the price of petrol will have serious repercussions. This is one of the most glaring examples of people being asked to pay additional taxation while being expected to be content with a lower standard of public service. The motoring public are being asked to pay huge petrol increases while there is a very big cut-back in real terms in the amounts being provided for the maintenance and improvement of roads.
The money being provided for my county leaves no room for any road reconstruction or road improvement. At a recent county council meeting the county engineer said the best he could hope to do this year would be to keep the potholes filled and to do a holding job. This does not encourage the people in the North to want to join a united Ireland. A person travelling from Belfast to Dublin drives on roads of very high standard until he reaches the Border. In the Republic he travels on roads of a much lower standard. His car cost him at least £1,000 less than it would in the Republic and his petrol cost about 20p a gallon less than here.
Last week some Deputies and councillors met their Northern Ireland counterparts at a cross-Border meeting in Dundalk. The British Minister for Northern Ireland Affairs, Mr. Giles Shaw, told us that £10 million had been earmarked for a by-pass for Newry. The only thing delaying the project was that the consultants had to make a report because there were some objections as to where it should go. He said the money was waiting to be spent as soon as the report was presented. In comparison the Minister for Defence representing the Minister for Foreign Affairs was present but he could not say that we had even £1 to spend on building a by-pass around Dundalk. When we talk about a united Ireland we should do everything we can to make it pleasing for the Northern population to join us. If we cannot have better conditions here, they should be on a par with those in the North.
I noticed that there is a cutback of £750,000 in the amount provided for local improvements schemes. There appear to be some people in the Department of Finance who do not like providing money for these schemes. When the Coalition were in power efforts were made to abolish this scheme but because of the opposition within the Coalition backbenches the scheme was retained. Last month my county council were notified that our allocation for these schemes would be £75,000, against last year's allocation of £106,000. Because of inflation and from the figures given by our county engineer, it appears that road improvements this year will cost from 20 to 25 per cent more than last year because of increases in wages and in the cost of materials. The allocation to my county is generally spent on the improvement of lanes leading to two or three houses. At the moment we have approximately 400 applications for this kind of work. With an allocation of £75,000 and at the present rate of progress the people at the lower end of the list have very little hope of getting these jobs done under this scheme in my lifetime.
In my constituency of Cavan-Monaghan we do not have a railway. We always felt we were entitled to a greater allocation from central funds for the upkeep and improvement of our roads. We pay taxes to subsidise CIE and we are entitled to better treatment by the provision of extra money for roads. When Deputy Blaney was Minister for Local Government, for five years he gave the three Border counties additional allocations to compensate for the closure of the railways. That money was quickly eaten up. As there are no railways in those counties the roads have to carry very heavy traffic. Because of the juggernauts using our roads the cost of maintaining and improving them is very high.
Before the last general election I listened to a Fianna Fáil speaker at a church gate. He said that if Fianna Fáil were returned to power they would remove motor tax from cars up to and including 16 hp. He said Fine Gael speakers were saying that if this were done by Fianna Fáil the tax on petrol would be greatly increased. He said he wanted to assure the people that that would not be so, that it was their intention to remove the tax and that they had no intention of increasing the tax on petrol. He said that Fianna Fáil had some inside information that ample funds would be provided by the EEC for the upkeep and improvement of our roads. Today there is a flat rate of £10 tax on cars of less than 16 hp, there are increased prices for petrol, but our roads are in a very bad condition. During the next election campaign that Deputy will have a hard time explaining to the people how the massive increase in taxation has taken place in the interval since he last spoke to them.
Deputy Filgate made reference to the bad condition of our roads and implied that they had go into that state since the Coalition period in office. He forgot to explain that the EEC Regional Fund was non-existent in those days and that most of the money for our roads comes from that fund nowadays.
After the Minister's budget statement many people thought they would receive large benefits by way of relief from income tax, particularly those in the PAYE bracket. However, when the figures given in the hand-out accompanying the budget statement were examined it was found that those who would benefit most are in the higher income sector, with very little for those on lower incomes. It can be seen that a married man with two children earning £5,000 a year will benefit by £200 and that the same man on £15,000 a year will get £1,750 relief. The ordinary working man earning between £80 and £100 a week will have any relief due to him eroded by the further inflation caused by the budget.
Deputy Filgate referred to the Minister's budget speech and said that any increased taxation was in regard to discretionary expenditure. I should like him to explain how a working man in rural Ireland who has to use a car to get to work can be said to have any discretion in regard to the increased price of petrol. His only discretion is whether he will stay at home and go on the dole or drive to work and pay the increased price for petrol. In fact he has not got any discretion in regard to going on the dole because when he applies for it he will be told he left the job of his own volition.
In farming it will be accepted generally that 1979 was a bad year, no matter which branch of farming one thinks of. It is accepted that profit margins last year were far less than in previous years. In my part of the country a farmer who bought store cattle in March and April, fed them early and grazed them throughout the summer was very lucky if he got his money for them in November, and all his work during the summer in feeding and grazing them went for nothing.
In recent years farmers have been changing over to milk production in which costs have increased greatly since 1978 while prices remained static with a consequent decrease in profit margins. Many people engaged in milk production had committed themselves heavily to bank loans and loans from other lending agencies. The recent increase in bank interest rates will bear heavily on them. In addition the price those people receive for their dropped calves has fallen by half in recent times. Taking all those things into consideration the profit margin of people engaged in milk production—the most profitable section of farming—has dropped considerably over the past 12 months.
There are a number of people in my constituency engaged in intensive pig production who experienced a very bad year last year. I had occasion to meet a deputation from them in recent weeks when they told me they had lost substntial money over the past 12 months and that, if something was not done quickly, they would soon be out of business. Apparently one of the reasons is that since the partial folding-up of the Pigs and Bacon Commission there has been carried on a very erratic type of sales campaign by the bacon factories who are competing with one another and cutting prices. Additionally the quality control has not been what it should be. The result of this is that on the British market—where at one time our bacon fetched almost the same price as Danish bacon—our bacon has been selling from £400 to £500 a tonne less than Danish bacon. It is claimed that this is caused by the partial folding up of the Pigs and Bacon Commission, the erratic type of sales campaign being conducted by bacon curers and the lack of quality control. I was glad to note that the Minister for Agriculture met these people last week. I only hope he will be in a position to remedy that situation.
Thirty to 40 per cent of the poultry produced in this country emanates from my constituency. These producers contend that they have been experiencing very difficult times in recent months. They say they are now facing competition on the home market of imports from Denmark, that the Danes are in a position to send in frozen poultry here more cheaply because their costs of production are much lower. Additionally it is claimed that the water content of the packed Danish chicken is higher than that of the home-produced counterpart. These producers have said—I do not know how true it is—that certain distributors have received grants from the IDA with which to build stores and provide refrigeration and accommodation for these imports from Denmark. That is the allegation they have made and I have not had an opportunity of checking on it. While realising that it is difficult, under EEC regulations, to prevent the importation of frozen chickens and, indeed, turkeys from Denmark at least I would hope the IDA would not provide grants to people to set up distribution centres here, thereby robbing our producers of their livelihood on the home market.
This was a very bad year to choose to impose further taxation on the farming community, following the bad year they experienced last year. The reduction of the threshold of £40 PLV on land for income tax liability effected in this year's budget is to be deplored because the income of the farming community was much reduced last year and this constitutes a further hardship on them. As I see it very few medium-sized farmers with valuations between, say, £40 and £60, will be liable to income tax when allowances are taken into account. The worst blow to them has been the withdrawal of the agricultural grant which means that those people not liable to income tax will have to pay the full rate in the £ which in turn means a doubling of their rates. This constitutes an additional unfair tax on these people while it can be shown that they are not liable to income tax.
Of all the carrots dangled by Fianna Fáil at the last general election the withdrawal of the agricultural grant was the most deceitful. In their manifesto they promised to allow the payment of rates as an instalment of income tax due. However, people did not anticipate the withdrawal of the agricultural grant and that any benefit the farmer would derive from the payment of rates as an instalment of income tax would be negatived completely by its withdrawal. The Minister said that the cut-off point for rates relief would remain at £40 PLV for a period of three years. Having regard to previous commitments by this Government one cannot place very much credence in that. The poor law valuation was a most unfair and inequitable yardstick by which to measure farmers' incomes particularly the more one sees of the discrepancies between valuations of land in different parts of the country, say, as between land in Cork, Monaghan, Cavan and Tipperary.
One wonders how the Griffith Commission arrived at their valuation of agricultural land. In many counties where the land is of the poorest quality valuations seem to be high. In some cases 50 statute acres of good land might not have a valuation of £40 and in other cases a lesser acreage of inferior land might have a valuation of much more than £40. This was brought home to me very forcibly in recent weeks when a woman who lost her husband last November and was left with two small children came to see me. She had a rate demand which showed that her acreage of 36 statute acres of very poor land in County Monaghan had £41.50 valuation. By no stretch of imagination could that woman make an income from that farm which would render her liable for income tax. Because of the withdrawal of the agricultural grant she will have to pay over twice the amount she paid last year since when she has lost her husband and is much worse off than she was.
We all agree that farmers should pay their fair share of income tax. However, a look at what this budget has done reveals that a farmer whose income is similar to that of a person paying tax on the PAYE system is now paying much more than the PAYE taxpayer in rates and income tax. The resource tax is another unjust and unfair imposition and it has to be paid irrespective of whether a farmer makes a profit. While it does not affect many farmers in my constituency, it does in effect hit a certain type of farmer very hard. It hits the young, progressive farmer who possibly had a valuation of £50 and who set out to increase the size of his holding, his productivity and his income. He went to the bank and borrowed heavily to purchase another 20 or 25 acres and this has put him over the £70 valuation. That man will be asked to pay the resource tax on a farm for part of which he is indebted deeply to the lending agency and has to pay heavy repayments and interest on his loan.
Listening to the speakers on the opposite side one would get the impression that the Government have been overgenerous in their treatment of people under social welfare. Any increases which have been given will soon be eaten up by the increased costs of what these people will have to purchase. The cost of living has been increasing so rapidly in recent times that any increase which these people have got does not go very far to compensate them for the increase in the cost of living. In January 1978 the old age pension was at the rate of £10.75 and the 2 lb. loaf was quoted as worth 19.5p. In January of this year the 2 lb. loaf was worth 37.5p and the old age pension was £16.80. Between January 1978 and January 1980 the price of the loaf went up far more than did the increase which the old age pensioner got.
Debate adjourned.
Business suspended at 1.30 p.m. and resumed at 2.30 p.m.