I have always taken that view and I feel more strongly about it now than ever before. We really need a spirit of enterprise, incentive and initiative. As long as the growth we have seen in public Departments continues our people will not lift with us. The role of Government is not so much what we do for the people but what we enable them and encourage them to do for themselves. Yesterday the director general of the CII, among other comments on the investment climate here, said that the tax rates are so crippling that top executives are leaving their jobs and leaving the country. I know that sometimes we look at the other person. Can we really afford to lose the best we have because of adding an extra 5 per cent to the tax burden as the Minister did this year? We tried to dissuade the Minister from raising the level of income tax from 60 per cent to 65 per cent.
Can we really afford to make success a penalty? Can we really afford to make success, with whatever may come from it, to be something which will arouse the absolute interest of one section — the Revenue Commissioners? The more successful you are, the more the Revenue Commissioners come after you. The only way a person can be safe from the Revenue Commissioners is not to start, avoid the headache. I do not suppose we want to do that. We want to ensure, if those executives are leaving their jobs and the country now, that we will encourage them back and we will look at our tax bands. The Minister will have enough time to look at that area before the next budget and see the level of income tax is growing to 30 per cent of total taxation. He will be able to say that he will not allow it to kill the most essential thing for the country: incentive and initiative.
The recent report of the NESC told us that 30 per cent of jobs in manufacturing industry in 1973 were lost by 1980. It is also telling us that job losses will continue over quite a number of years in the order of 9,000 to 10,000 per annum. That is the climate in which we find ourselves. Those job losses were mostly in the area of food, clothing, footwear and textiles. Is it not sad to think that in an area where we could be the food supplier of the world that job losses are occurring?
The private sector really needs support particularly in its marketing strategy. We apparently manufacture and process food on the basis of what we think the consumers in Britain, Paris, Germany, South Africa and elsewhere should consume. Our marketing strategy in respect of the best primary product in the world, agriculture, is deplorable. The private sector need support there. Our small industries need support there and if they get that support it will not be only to their advantage but to the advantage of our whole economy. Instead of developing marketing, research and development in those areas we are throwing it into Government agencies. We can give SFADCo and the IDA all of the advance factories they like at this stage and we can give their executives, advisers, consultants and everybody else who comes up with a report all the financial provisions they like at this stage. But unless we create the climate in which the people on whom we rely — the risk takers, promoters and initiators — occupy one of those factory bays we will find we are building them just for the sake of building them. We are providing money through the public sector, State and semi-State, and at the same time we are not creating the incentive for the private sector to get up and rescue the country from the problems in which we find ourselves.
We must get our balance right in our Estimates. We must ensure that we will not find a growth in public expenditure only and a diminution of the private sector. The level of investment in the country at present as a proportion of total public expenditure has dropped over the last few years from 30 per cent to approximately 23 per cent now. Public expenditure is growing enormously and the private sector does not obviously find it can invest because the penalties for investment and activity are too high.
I do not wish to be party political in this connection. Above all else what we must do is ensure that the investment level, the gross fixed capital formation, as a percentage of our public expenditure, grows rather than diminishes. The only way we can ensure that is to create the climate about which I have been talking in which tax burdens will not be unduly high and incentives will be promoted rather than discouraged.
There will be no easy way through this recession. Discipline and facing reality must form an essential part of that process. The first reality we should face is to tell the people that good Government is not necessarily a Government who spend. If there are some members of that Government — and self-evidently there are — who believe that the role of Government is to spend more, then we take issue with them and I place the strongest possible emphasis on that. The role of Government is to ensure that every penny they receive is effectively spent and that they collect not one penny more than they require. Above all else they should watch the growth of tax within this economy. Certainly this year the tax growth within our economy is of considerable concern particularly in relation to income tax, the reductions in credits for corporation tax, investment for shareholders and matters of that kind. All of those things should be geared to creating incentive, initiative, not to penalise them, but to reward them as forming an essential element of our economic development.
We have immense resources in this country. Instead of a Government telling us that things are bad and will get worse let us look at our resources and ascertain how they can be developed. I might give just a few examples. Take that of fisheries. Is it not a bit of a laugh that in these Estimates which the Department of Finance scrutinise we provide five-and-a-half times as much for the Department of Labour as we do to develop what is regarded in other countries as an asset of immense wealth, approximately £20 million? But that demonstrates our sense of priority here. Is it not a bit of a laugh that we spend about half as much on the Department of the Public Service? And their job is to tell other Departments, including the Ministers, how they should do their business. I belong to the old-fashioned school that thinks that there is one thing that can be said for the Department of Finance and the Minister, that is that they obey the bottom line, that one must prove oneself and that everybody else and every other Department should be obliged to do so. But we provide nearly half as much money for the Department of the Public Service as we do for the development of our fisheries industry. There is something terribly wrong there. We have about half as much to spare for that Department as we have for the development of our forests.
Perhaps I should keep all this to myself and say wait until we get back over there and we will do it ourselves. That scheme of priorities demonstrates that we have not as yet recognised the immense potential of our natural resources. It must be remembered that forestry constitutes a huge element in our development programme. Its potential wealth is enormous. Indeed, fisheries is not just a matter for Howth, Killybegs, Dingle or wherever else. Potentially a young man from the midlands could, as could a young man from Denmark, gain meaningful, profitable employment in the fishing industry, if properly developed. In regard to agriculture surely nobody would suggest — and I am referring now to reductions the Minister proposes this year — that Irish agriculture is too modern.
One thing you will always find is that, if you cut back on the capital programme — I might tell the Minister this, it is his first year in that Department — nobody will scream immediately. Do you know why? It is because nobody is hurt immediately. It is the current programme that causes the screams, with people having to pay immediately a little more for this or that. One might hear some objection to a cut-back on the capital programme by people who may have a somewhat longer view of the economy and its development. One can cut back the capital programme for roads, housing, sewerage, the services and one will not find anybody having to pay a penny more immediately that year. But the whole basis of the employment infrastructural programme will have been undermined. The Minister must readjust his priorities even in public expenditure. Let the Minister look back over the last few years when he will ascertain that the capital programme this year is just about the same as it was three years ago. That is an interesting statistic. Meanwhile the current budget has grown from something of the order of £3.218 billion to £4.891 billion, a growth of well over 50 per cent while the capital programme — which forms a very small proportion of the budget as a whole, as can be seen from the tables — has remained about line ball. If the capital programme does not merit the same development as the current programme I do not know where we are going.
The building industry, and we heard from them yesterday, can speak for themselves. Surely instead of cutting back on the whole infrastructural base we should be looking at other areas where cuts could be effected. If we are to look at the semi-State bodies in terms of the capital programme — and I go along with that — let us apply the norm that would be applied to any other area, their profitability being the test of their success. Perhaps because the Minister was rushed, I do not know why——
