The Government have told us that because we have overspent we will have to tighten our belts, take cuts in services and pay more. When I spoke on this debate on the last occasion I asked the question who had overspent? I said it was not those who are now being asked to pay higher taxes and who are being asked to take cuts in the educational and health services. I said it was those who had control of the financial and capital institutions who had overspent, that it was they who had borrowed from banks and who had contributed to the erosion of our financial stability in the past few years. Those were the people who had bought villas in Spain, who had liquidated companies and established other companies and who refused to pay over the contributions they deducted from their workers. The ordinary PAYE worker is now being asked to bear the burden but he did not cause the financial chaos in the first place. This budget is imposing higher taxes on people who will have to take cuts in services for which they have already paid. The social welfare benefits will be reduced considerably and people will have lower incomes generally because of higher prices.
The budget did not take into account in any way the people who are really hit by the financial crisis facing us. It did not take into account the class structures in society. Budgets never take into account whether there is any difference in the class structures in society. I have heard Ministers of various governments frequently make the point that there are no class differences here. They say we are all the same and that we do not divide on class lines. This is the type of propaganda that is spread abroad. A former Minister for Industry made the point some months ago that the IDA are very proud to go to America and elsewhere and to say that when we decide on our tax structure in any year the laws will remain the same irrespective of what government are in power. The IDA can tell people abroad that we do not change our laws because of a change of government because there are no class differences in Ireland. This is not the case in England: if a Labour Government come to power after a Tory Government they change the law. We are able to tell people abroad our political structures are such that there will be no change in the law irrespective of the government in power. Unfortunately this has been the case since the foundation of the State. One Government after another have retained the same type of taxation and financial structures; they have paid out the same hand-outs to the same people and have taken money from the same people. Thus, year after year the differences grow between those who have and those who have not. The differences between the owners of property and those who have no property are getting wider with each year and this budget has contributed greatly to widening that gap.
Many people wonder why there has been such an increase in crime and vandalism, why there has been such a rejection of society by young people in the past eight or ten years. Anyone who studies the class structure of our society can see the real deprivation in some areas, can see the differences in the incomes of people and the environment in which they live. They can see the differences in housing, in schools and in health services. Any sociologist who sees such extraordinary differences in society will understand what has happened to young people in the deprived class. They know they will not get the same education as people of another class a few miles down the road. They know they will not get the same opportunities and will always be dependent on welfare benefits or, at best, on low paid jobs. These young people see a great parade of wealth — in housing, cars, hotels, and clubs to which others may go. They can see that some are destined to have and others are destined not to have — the men of no property, of whom Tone spoke.
When they see a Government putting through a budget like this they do not expect any better. This is what they expect a government and those in authority to do to them. They know that the ones in authority are the men of property. The men of property are the men who control government, who control and make the decisions in regard to taxes and the way the economy is run and, therefore, they expect governments to do what this Government did. This is why certain other people have not respect for property. Why should they have respect for property? They are never destined to have any of it themselves. Property is a thing which other people have. They have no respect for authority. Authority is what creates this system. Therefore, there is little use in crying about vandalism, crime and the young generation when we create the type of society which these young people naturally reject.
This budget of this Government was expected to be bad but many people thought that it would show some beginning of a change in the taxation structure. All right, maybe everyone would have to pay more this time. Things were bad so everyone would have to pay more, but most people expected that this would go right across the board. Therefore, probably the worst feature of the budget, bad as were the increase in PAYE, the extra one per cent income levy and so on, was the lack of capital taxes. A survey done eight or nine years ago revealed that 5 per cent of the people owned 75 per cent of the wealth and probably if a survey were done today similar to that done by Professor Lyons at that time we would find that fewer than 5 per cent own the 75 per cent of the wealth. The 5 per cent are those who get away untaxed. This budget made no effort to include them within the net. In fact, their taxes have been considerably reduced since 1974. Since death duties and estate duties were abolished then, the real taxes on wealth and capital have fallen year by year so that these people pay less duty than they did in 1974 in real terms. This budget has even a £10 million subsidy to private landlords but the PAYE taxpayer who is the tenant of these properties and who is paying these landlords £20, £30 and £40 per week will now have to pay them also, through taxation, an extra £10 million. This attitude, this type of thinking is unbelievable for the ordinary working-class person who cannot conceive how a government could proceed in that manner unless they are being dictated to by the landlords, the property owners, the farmers, the people who are not taxed, unless they are being dictated to by the five per cent who own 75 per cent of the wealth. That is how it is perceived by the majority of the people.
Regarding the manner in which tax evasion is dealth with in the budget. I will read one sentence of the Minister's budgetary statement. He sounded as if he was going to deal with tax evasion and then he said, and I quote:
The strengthening of legal powers for dealing with evasion should certainly yield results but this approach must be balanced against the necessity to protect the interests and privacy of the honest taxpayer.
That sounds great but at the same time there is no such constraint on the Government to protect the interests and privacy of the honest social welfare claimant. There is no such protection for people on social welfare. What happens to them is they are simply cut off social welfare benefits until they prove that they are entitled to them. The unemployed are told,"You are not seeking work, or you are not available for work. Therefore no money is coming to you from next Tuesday". The unemployed must appeal that decision and that will take at least two or three weeks. They go before an anonymous tribunal, queue up terrified and scared coming before three people who do not identify themselves, who question them as to where they went looking for work, question them in detail about what they are doing and where they are going, ask the women in particular how many children they have, and say, "Who is looking after them at home; how are you available for work if you have three children at home?" They are questioned, harried and harassed in an effort to prevent them getting social welfare benefits to which they are entitled and for which they have to go through a long procedure of appeals. In some cases they themselves even have to go eventually to the Minister before they can get the benefits to which they are entitled. Many of them give up the effort and never get the benefits to which they are entitled and they live on assistance. There is no protection for them as there is for the so-called interests and privacy of the honest taxpayer.
Regarding those who are evading their taxes and probably also availing of various subsidies, grants and so on to which they are not entitled, I received a letter only yesterday in which a worker sets out what he thinks of the budget and the way he is treated as compared with the way a farmer is treated. He says that the budget has come and still the farmers are getting VIP treatment. The means test limit for medical cards is £55 — I understand that it is £53.60. A farmer who is in receipt of the non-contributory old age pension, who gets regular creamery or mart cheques and has let his farm, is well above this figure and can still get the medical card. If he got his pension a few years ago there has never been a check-up since.
The majority of wealthy farmers move cash around to a number of banks in order to qualify for a pension and they are now to get an increase in the pension. They have never been asked to pay tax. The majority of farmers have refused to pay their contribution towards the health scheme since it started some years ago and are getting away with that. They owe well over £8 million in contributions to the health services but there is no pressure on them to pay.
Some day the Government may bring in a Bill to enable refunds to be made to farmers who have paid health contributions. We had the case of a legitimate tax, the resource tax, being levied on farmers. Farmers refused to pay and instead of being put in jail a Bill was passed last year to make refunds to the small number of farmers who paid £700,000 in resource tax. That was the most extraordinary tax precedent in the history of the State: a tax was levied, people refused to pay, the tax was abolished and those who had paid were refunded.
Farmers used the Constitution, as many property owners are doing at present, to evade their lawful payments. By doing so they have got out of paying rates. It would be interesting if a PAYE worker took a case to the court on the basis that the only property he owns is his week's wages. Under the Constitution and his right to private property he could well have a case against the State that it has no right to deduct that property from him before he gets it into his pocket. If such a case was taken and succeeded the State would grind to a halt. It would collapse completely without the PAYE worker. Perhaps it is as well that no PAYE worker has as yet attempted to bring such a case as property owners are doing at present and as landlords did successfully proving that the State should not have the right to restrict them in their use of private property. The State now pays a £10 million subsidy from the Exchequer to them. This is taxpayers' money.
I do not say there is no room for cutbacks in Government spending. There is tremendous waste in the health services. However, the cutbacks are made in the wrong areas and the wrong people are hit. There is no cutback on payments to doctors or pharmacists many of whom get £40,000 to £50,000 a year from the taxpayer as well as having their own private practices. We do not know how much they earn from that because many of them just put their fees in a drawer and do not give receipts. They simply make a declaration to the Revenue Commissioners and there is no way of knowing just how much they earn. They are paid on a fee for item basis which means that when somebody goes to a doctor he is charged say £7 and if he is given a prescription he goes to a chemist. The tablets he receives may last only a week and if he needs more he has to go back to the doctor who will write him another prescription, charge him another £7 and so it goes on. The person may pay the chemist £10 or £15 each time. There are no cutbacks made here because the people who would be hurt would scream and fight back. However, the elderly man or woman who has spent 60 years paying tax will be told: "You are not entitled to such-and-such a benefit or such-and-such a service, go home".
There is no economic plan on which the budget is based. There is no hope for the future and no indication that the Government have any purpose in balancing the books or making ends meet. If they have no purpose there is no point in doing it. They must have a plan for employment. What precisely do they intend doing with the money in the Exchequer if they succeed in balancing the books and everyone is on his uppers? There is no indication that it will do anything for us. It will lead to more unemployment but there is nothing to say that we will be better off in the future or in a position to run our financial affairs more efficiently.
Despite increases in taxes and cutbacks in expenditure the more job losses there are, the deeper the Exchequer will be in trouble. The CII put the blame on the public sector and say that not only pay in the public sector must be cut back but also jobs. They make such comments as "the productive sector of the economy"— that is the private sector — and "the public sector is the unproductive sector". These pharses are meaningless because more than 50 per cent of the private sector is totally unproductive and a large slice of the public sector is very productive. Our biggest manufacturing industry is the ESB. They manufacture electricity and could export it if they were able to maintain the link with the North which was broken a number of years ago. It is not regarded as the largest manufacturing productive industry by the CII or anyone else. Bord na Móna is another productive industry as is the Sugar Company.
Within the civil service the Department of Fisheries and Forestry is a productive Department. They produce timber. It is interesting to look at that Department and see where savings could be made but are not and what actually happens to this productive natural resource, timber. When cutbacks were introduced those who administered them were working in the administration area. During the last few years they have cut back on the number of the foresters and outdoor staff they employ. They have been cut back by up to 50 per cent but at the same time the number of administrative staff have increased by one-third. Obviously there is room for saving and cutbacks but it is not in the forests that the cutbacks should be made. These forests have been built up over the past 60 years by our fathers, grandfathers and grandmothers paying their taxes, knowing they would not get a penny out of them but thinking their children or their grandchildren in the seventies and eighties would make a fortune when those great forests were mature. Those forests are maturing so rapidly that in 1990 the output from our forests will be double what they are this year. We have no capacity whatsoever for using the timber from our forests. There are hundreds of small timber contractors around the country. They can buy the timber in the forests for £1 a ton. They cut down those mature trees, trim them and take them to Wexford or Waterford where they export the raw timber. It will have cost them about £12 a ton by the time they get it to the port. That is what is happening our timber today.
Waterford Chipboard closed down and Scariff Chipboard, a private company, are kept going by the taxpayer. The Clondalkin pulp mill closed down three years ago and the paper mill closed down last December. This company have been successfully taken over by the State. Private enterprise has collapsed so far as forestry is concerned, from the beginning right up to paper making. Private enterprise is given the timber almost free, but it cannot be competitive with foreign markets. Timber is produced here twice as fast as it is in Norway and Sweden. Maturity comes in 40 to 50 years while it is 80 to 90 years in Norway and Sweden. Private enterprise is a failure and only lives off the taxpayer. In 1981 the private sector cost the Exchequer in subsidies, tax incentives, direct State aids and services administered by various public companies a total of £2,550 million. The figures which make up that are: tax incentives £245 million, Exchequer aid to farming £230 million, Industrial Development Authority's aid to private industry £203 million, Shannon Free Airport Development Company £21 million, Údarás na Gaeltachta £30 million, Development Fund £30 million, Córas Tráchtála £10 million, AnCO £38 million. State expenditure on the construction carried out by the private section £1,350 million. The private sector, not the public sector, has failed.
The Government have not given any indication what policy they will pursue in the future. They have not given any indication if they will accept the Telesis consultants report on the IDA and industrial development. They have not told us if they will use our national resources to create jobs and exports. We have not been told if they will continue to allow almost three million acres of our agricultural land almost to lie idle, as Dr. Tom Walsh of the Agricultural Institute pointed out about three years ago. We have not been told if they will change the structures of farming or if they have any policy on farming.
When did the Government last have an agricultural policy? The last agricultural policy I recall, put forward by the Department of Agriculture was the infamous dual-purpose cow, the greatest disaster of all time in Irish agriculture. Now the Government are simply administering the EEC agricultural policy. There is no policy for Irish agriculture. This is our greatest industry, the backbone of the country and it should be the basis for a great food processing industry and should provide at least 60,000 to 100,000 jobs. We still allow farmers to decide if they will use their land. It is not up to them. It is our land and belongs as much to the worker in Ballyfermot as to the worker on the land. Farmers cannot do what they like with the land. All of the people fought for the land. The land must be used for the benefit of all the people. Unless the Government act in that fashion agriculture will never be of benefit to the country.
Have the Government any plan for our forestries? It would be a simple matter to take forestry out of the hands of the civil service and establish a dynamic company similar to Bord na Móna to deal with our forests and our timber, to set up drying plants, of which we have hardly any, and bring order into the market. At the moment a contractor living in Cork will see a contract in the paper for a forest in Wicklow. He will cut his timber bring it down to Cork. The following week a contractor in Wicklow will see a contract in Cork. He will go down to Cork, cut his timber and bring it back to Wicklow. Timber contractors are passing each other on the road all over the country. Will anybody bring order into that and use that great natural resource?
Will anybody attempt to use the marvellous natural resources of the sea? A large number of jobs could be created there. Almost the whole of Iceland depend on one fish, the cod, between the catching of the cod, its processing and sale. Iceland has a higher standard of living than we have, and indeed many European countries have. We have not anything from the sea.
Will anybody make use of our mineral wealth, where thousands of tons are poured out in the raw state and not even one job created from it?
The workers from whom such enormous sums are being taken as a result of this budget, wish to know what the Government are planning to do with the money. The workers are anxious to know whether their money will be given away to those same fly-by-nights who have been robbing us for years and who have put us in the mess we are in. We should like to know also if the banks will be allowed to continue lending £30 million to people like the Gallaghers for the purpose of allowing them engage in property deals. One need go no futher away than Leeson Street to see houses that were listed for preservation now in rubble. What remains is a big derelict site. Another omission in this budget is the failure to impose a tax in respect of derelict sites. Are the banks to be allowed give money to property speculators instead of lending for investment in productive industrial purposes? What I am asking is whether the Government intend taking control of the lending policy of the banks and also of their interest rates. This must be done if the Government are to have any control of the economy. But none of the Government's predecessors had control of the economy either. Instead, this control was vested in a handful of industrialists, those who controlled the banks. They are the people who decide how the accumulated wealth created by workers and farmers is reinvested.
This budget represents the thinking of Thatcher and Reagan in regard to cutting back on medical, social welfare and education services while at the same time increasing the tax burden on those people who will be hit most by these cuts. This sort of policy will lead to even greater chaos than has been experienced in Britain, because, unlike Britain, we do not have North Sea Oil to support us. Mrs. Thatcher's policy of creating more unemployment so that the books might be balanced is bringing down increasingly the British economy.
The policy put forward in our document of November last was designed to balance the books in the reverse order, that is, instead of cutting back our spending, we increase our output, expand our economy and increase our earnings. This could be done by way of a 5 per cent annual increase in output. Any Government having the interest of the country at heart should be putting forward a plan on the lines envisaged by us in our document. This would still enable them to balance their books at the end of the day.
