I understand there is agreement among the Whips that the Minister will have an opportunity to reply at 3 p.m.
Green Paper: Development for Full Employment: Motion (Resumed).
Debate resumed on the following motion:
That Seanad Éireann takes note of the Green Paper: Development for Full Employment.
—(Senator E. Ryan.)
When I concluded last night I was trying to ascertain as best I could, from what the Green Paper states, what existing wage and salary earners will have to pay to meet the cost of the work-sharing programme, or the Government's job-creation programme, in order to meet their targets. In the Green Paper this cost seems to be of the order of 5 per cent of current annual income. There will be a continual involvement by wage and salary earners in overtime sharing, perhaps even a phasing out of overtime earnings which will be of considerable loss to them, as well as a slower rate of increase in wage levels and fewer opportunities for additional earnings. When the Minister is replying could he, in more concrete terms, quantify what the cost to wage and salary earners will be to meet this five-year programme? Workers in any company would be concerned about that question.
From my perusal of the Green Paper I do not feel the cost will end there. In chapter 7 the financial implications are detailed. It states:
In order to ensure the development of the public finances as desired, there are three main courses of action open to the Government. These are, first, a general expenditure policy which will seek more stringent control of the costs of public services, second, some increase in taxation and, third, the phasing out or reduction of publicly financed schemes...
It is no harm to spend some time going through the various headings.
As regards general expenditure policy, the Green Paper indicates that there could be some scope for increasing receipts for the provision of these services. This will involve extra cost through taxation which will be added on to what has already been ascertained in regard to meeting the costs of these targets. The Green Paper states that tax measures and more specific changes, in other words public spending, are also necessary. It also states that without some increases in taxation, financial constraints could become purely restrictive.
I am alarmed at what the Green Paper says in regard to the phasing out or reduction of publicly financed schemes under the headings of social welfare, health and education. For example, in the case of social welfare, it states that a pay-related contribution scheme will be implemented through the PAYE system to replace the existing social insurance system. Since 86 per cent of total income taxation is at pre sent obtained from PAYE workers, it would seem that this will mean an increased and a considerable imposition on PAYE workers in future.
The Green Paper then refers to the possible taxing of children's allowances and says:
...the children's allowance scheme offers scope for introducing an element of selectivity...one possible approach is to treat these allowances as taxable income. The adoption of this option would yield about £8 million to the Exchequer in the current year.
When I look at this statement I wonder what the wealth tax yielded, and would yield, in a year. Have we reached a situation in which we can give back £4 million collected in wealth tax and instead consider taxing children's allowances? There is something wrong with applying that sort of standard to social welfare.
The Green Paper states that steps must be taken to prevent abuses of the social welfare system. We are all agreed that there have been abuses in collecting unemployment benefit, disability benefit, and unemployment assistance. If we take steps to prevent abuses, we must be very careful to ensure that the innocent do not suffer in this. I fail to see any reference in the Green Paper to measures contemplated to prevent abuses in the income tax and capital tax field, for example, tax evasion and tax avoidance.
The Government are also considering treating income from short-term social welfare benefits as taxable income. This, again, highlights the point I have been stressing that, apart from what the Minister has tried to quantify as the costs of meeting the targets in the Green Paper, there are also considerable hidden taxation costs and hidden reductions in income, particularly for social welfare recipients. On the subject of health the Green Paper states:
...rising health costs cannot be allowed to pose excessive problems in the context of our general economic and public finance policies ...the capital allocation for health will be maintained at an adequate level.
That phrasing indicates that we cannot envisage any real growth in the allocation of Exchequer funds to our health services. In the field of education, increases in educational fees are contemplated.
The Green Paper states:
...it would seem equitable to increase the fees charged.
There is also talk of placing training college students on the same basis as other third-level students, and a charge might be levied for board and accommodation. These are extra costs which must be borne by the wage and salary earner.
Reference is made to phasing out and the eventual abolition of subsidies. It is admitted that these subsidies were introduced to combat inflation which was running at an exceptionally high rate. Then the Green Paper states:
While subsidies are useful in moderating inflationary pressures it is not envisaged that they will become a permanent feature.
That assumes we will not be subject to any inflationary pressures in the future. If we are, will the Government consider reintroducing food subsidies? Again, the abolition of subsidies will prove costly for the wage and salary earner. The "Conclusion" of the Green Paper is dealt with in Chapter 8. A simplistic attitude is adopted, particularly where it says:
While the actual pace of progress will be influenced external factors over which we have no control, success or failure will, in the final analysis, depend on our own efforts.
I find that difficult to understand. If we cannot have control over external factors and since we are very much an open economy, no matter how we try to succeed in our efforts, we will always be subject to pressures from these external factors.
There seems to be a clarion call in the concluding paragraphs for the whole community to play their part if we are to succeed in the vital task of providing work for all our people. The Green Paper says:
We need a five-year period of national effort and industrial peace with all sections of the community working towards that goal.
These conclusions raise certain questions as to whether the public are ready to answer the challenge presented to them, the same public who only 12 months ago were told no great sacrifices were necessary, that there were tens of thousands of jobs waiting to be created. They were accorded the bad national habit of being given and not being asked to give. Now the same public are being asked to acquire a completely different habit and to acclimatise themselves to a period of stringency, not gradually but immediately, not for one year only but for a number of years in the forseeable future.
This Green Paper is based on the assumption that inflation will continue to fall, that the world economy will go in an upward swing and stay there and that the £ sterling will remain stable. In all of these fields we are subject to external factors. To maintain that we can remain isolated from those external factors is straining crediblility. The Government must trim their sails. They have admitted as much having placed themselves in the dilemma of having to increase taxation as a result of the limit being reached in external borrowing. If the private enterprise sector does not come forward with the number of jobs expected of it—certainly to me, on the evidence to date in 1978, the employment figures expected of the private sector will not be forthcoming—it will all on the Government again to provide the jobs in the public sector. Economists maintain there is a limit to what can be provided in the non-productive sector of the economy.
The Minister in his opening remarks commented that, when the present Government took office, they found the economy in an unhealthy state. I think he has only to look to the bulletin produced in the past week by the Department of Foreign Affairs to see this contradicted and refuted. An article headed "Ireland's Booming Economy" starts off by the writer saying that, since the beginning of 1977, Ireland has shared with Japan the distinction of having the fastest growing economy of the 24 OECD countries. It states that these policies began to pay dividends by early 1977. A combination of wage restraints and the sharp fall in the value of sterling made Irish exports highly competitive.
By early 1977 income tax surcharges introduced in mid-1975 produced sufficient tax buoyancy to permit a stimulatory budget in early 1977 under the last Government.
It does the Minister no good to try to put it across that he took charge of an ailing economy and he now has it on an upward swing. That is certainly not what has been maintained by all responsible economists. If he reads what the Taoiseach said a month after the change of Government he will see there an inference that the economy and the way in which the last Government left the Exchequer was reasonably sound.
If unemployment figures have fallen in the past year can the Minister quantify how much of that fall was due to the increasing rate of emigration? The Irish Banking Review issued in the past week states:
It is also significant in considering the decline of about 8,000 in registered unemployment which has occured in the past year that mass emigration has resumed to the extent of 13,000 annually.
How much of the fall in unemployment can be attributed to an increase in the rate of emigration? I think sums must be done correctly if we really want to show there has been a real and positive fall in unemployment in the past year. The Minister referred to the "Buy Irish" campaign. I do not see any visible signs of the success of this scheme which was given a great deal of emphasis in the Fianna Fáil mainfesto of 1977.
It falls on the Minister to refute, if he wishes to sell his Green Paper, the criticisms and, as he likes to describe them, the pessimistic tones adopted by the ESRI report in the past week. The Central Bank also has definite reservations about the success of the targets aimed at in this Green Paper. There is responsibility on the Minister now to refute these criticisms and pessimistic projections by both the ESRI and the Central Bank in regard to the targets outlined in the Green Paper.
When all is said and done, I believe this Green Paper has taken an extraordinary leap and risk in making projections. It might well have halted, perhaps after the first few chapters, and not been as brave as it has been in projecting the abolition of unemployment and the achievement of full employment by 1983. It is now almost two weeks since this Green Paper was produced. As yet, I see no great signs of Ministers, other than the Minister for Economic Planning and Development, standing up and proclaiming the virtues of the Green Paper, saying how the targets can be achieved and what we should be doing to ensure that the figures are achieved. The Minister is prepared, as the Government are prepared, to wait until discussions are held on the proposals and the options outlined, after which they will make decisions on their implementation. I do not think they were elected 12 months ago to await discussion before making decisions. I think they were elected to act immediately. But, if the Government want to wait for another few months before deciding on these options, ultimately the onus will fall on them to make the decisions. It behoves every Minister now to go out and sell this Green Paper and to explain in understandable, quantifiable terms to every wage and salary earner what he will be expected to sacrifice over the next five years. I will conclude as I began by saying that targets for full employment in any western economy, or any democratic economy, are always commendable but it seems rather strange to me that a party, which has always boasted of its being the party of reality, can be so far from reality in this context.
It is a great pity indeed that every household in the State does not have a copy of this excellent document—Development for Full Employment, commonly known as the Green Paper. In fact, they should have the three documents—the manifesto, the White Paper and the Green Paper—because the three together put into focus and present in a very clear way the extraordinary task that the present Administration have put before them and before the people. For years and years, we have been suffering the ills of unemployment. The position eased from time to time but then it came back like a recurring decimal and the difficulty was increased when, towards the end of the 1960's emigration was licked. A further dimension has been added to the unemployment problem by the extraordinary number of young people we have coming up. The population is increasing. It cannot be emphasised enough that almost half the population of the State at the moment is under 25 years of age.
It is a pity that every household has not got a copy of these documents so that everybody would have a chance of considering the suggestions made and the options offered. Unemployment will have to cease. We cannot continue as a nation with this malaise hanging over us. It required great courage for the Government to sit down and work out these documents. They are of course discussion documents. The final set of plans have not come yet, but they will. It behoves everybody with an interest in the development of a sound economic future to seriously consider the options and considerations in these documents, particularly those in the Green Paper. If the best possible advice and suggestions are forthcoming, this Green Paper can actually be improved on.
On the one hand we have had many excellent suggestions as to how these ideas could be put into operation, and on the other we have nagging, cynical and derogatory remarks coming from various people and from the media. In The Cork Examiner of Friday, 30 June 1978 various spokesmen made some of these cynical and derogatory remarks. A certain spokesman said that
...the Cabinet must have worked on the Green Paper "with the enthusiasm of a chain gang," if all they had to offer after twelve months in office was a vague notion of work-sharing and cuts in social expenditure.
The same gentleman went on to say that his party
could not accept Dr. O'Donoghue's "glib and incessant" assurance that all our people would rise on a tide of future prosperity, provided the poor and less well off half drowned themselves in the meantime....
The Fianna Fáil suggestion that work sharing, reduced overtime, and early retirement could produce 65,000 jobs was bordering on the absurd. When these jobs had to come about in the context of reduced earnings, more taxation, and public service cuts, the the proposition bordered on the preposterous.
These comments are very harmful and show what to my mind could be described as a contraceptive attitude. Instead of studying the paper to see how it can be improved the people who denigrate it in every possible way are guilty of what I would call promoting economic contraception. Their aim is to prevent life taking place, because if this country is to live our rising population must have work, and work is life. It is up to each one of us public representatives, no matter what side of the House we are on, whenever we get the opportunity, to invite discussion and serious appreciation of the difficulties that face us.
I hope when we get this opportunity that useful suggestions will be made so that when the Government sit down to make out the actual plan of campaign they will have an improved overall picture of how to get the job done.
It would be very interesting, if one had the time, to go right through the various sections of this Green Paper, but I will just confine myself to a few points. On page 56, paragraph 5.10, we have a statement in connection with infrastructure as far as roads are concerned. It reads as follows:
An accelerated investment programme in road improvement would not only provide welcome extra employment both directly and indirectly but would also lead to the updating of deficient parts of the road system. An allocation of up to twice the 1978 provision of £23 million for road improvement could be put to good use by 1980. If these funds were made available the works undertaken would be chosen from those to be programmed in the Road Development Plan promised in the Government's pre-election Manifesto. Work is well advanced on the preparation of the Plan which will give high priority to the improvement of the main access routes to Dublin and to the development of the major route networks linking cities and larger towns. It will also be concerned with the construction of major bridges and relief roads in a number of cities and towns, the need for which has been established by studies already undertaken.
That to my mind is a very important paragraph because the country is crying out for the development and improvement of roads. As far as industry, communications, tourist traffic and tourist attraction are concerned, road development will work in a double way—not alone will it lead to infrastructure for future development but it will give badly needed employment where there is a high labour content. We have the same approach to telecommunications. All these matters are very important in the age in which we are living. As I said I would like to go through each item in this Green Paper but I will have to desist because other speakers are anxious to contribute and I will not keep the House much longer.
The next point I would like to make is this. We think of the sean-fhocal, trí rud a bhaineann le hól, é ól' é d'iompair agus díol as, and the sting is in the phrase "díol as". How is all this going to be paid for? In the second part of this booklet there are various suggestions as to how the money can be provide. First, we want to ask ourselves if we want unemployment abolished. If we do, we must face the situation seriously and face up to the costs it will entail. The cost will be reasonably distributed. Nobody will be at a loss. The standard of living will not be reduced with the general growth in production—it does not matter whether we argue that it will be 8 per cent, 7 per cent, 6½ per cent or even 5 per cent, the growth will be there. If we put our shoulders to the wheel we can overcome all these difficulties.
Let us ask ourselves if we are going to turn our people into haves and have nots. There is a certain amount of humbug about this. If we want to develop the country—and again it does not matter with what party we are associated or whether we are associated with any party—we must provide employment for our rising young population, otherwise I foresee what will happen. If we do not do that, we could have a much greater problem on our hands. The whole foundation of the State would be in jeopardy. It is up to each and every one of us to do his bit, to examine this document carefully, to point out any sections in which strategy could be improved and when the time comes to pay for it to act reasonably. I do not think there will be any question of a reduction in the standard of living but there are certain areas in which economies could be made.
Another point is the question of the "Buy Irish" campaign. I was saddened yesterday to hear of another experience, apart from my own, as regards the difficulty of getting Irish made goods in Dublin. Senator Staunton referred at some length to that point. I experienced it again this morning. I went into a shop early this morning with the intention of buying a garment. But what did I see "made in Korea"—that in the city of Dublin. There are garments of that type made every day in factories I could name. It is a very sad and depressing state of affairs. It shows how little concerned are those people about providing work and a future for our people. I refer to Chapter 8, paragraph 8.1 on page 87:
This Green Paper has two objectives. First it indicates the nature of the additional action and policy changes needed to underpin the White Paper targets for the period up to 1980, and, secondly, it sets out the basis for a programme to reach full employment in the early 1980s.
Somebody said this morning it was a pity that Fianna Fáil suggested providing jobs and that the jobs are not to hand. I gather that was the burden of the argument. But jobs cannot be created suddenly. We hope that this programme will be working in the early 1980s. One cannot provide a job by a wave of a baton or a hand.
Also on page 87, paragraph 8.2 states:
We should have no illusions about the magnitude of the challenge involved in attempting to eliminate unemployment completely in such a short span of time. Neither should we be unnecessarily pessimistic about our ability to do so. While the actual pace of progress will be influenced by external factors over which we have no control, success or failure will in the final analysis, depend on our own efforts.
If we are not forthcoming in our efforts to bring about full employment for our people then future generations will judge us very harshly.
This is a very serious subject but, as it is our last day, perhaps I might be forgiven if I indulge in two pieces of facetiousness. One is the vision conjured up by Senator Cranitch's injunction that the manifesto, the White Paper and the Green Paper should be in every humble Irish cottage. It struck me that they might nestle very cosily next to a book called "The Fairytales of Ireland" by Sinéad de Valera. The other piece of facetiousness is to speculate on the seasonal appropriateness of these papers. Given the slowness with which the Seanad does its work, it will surely be Christmas by the time we consider the next White Paper. We are dealing with the Green Paper in high summer. The only thing we lack is a brown study of the economy some time in the autumn.
In my innocence I believed that governments were elected to govern. I share Senator Markey's sense of surprise that after a year in government we are still in the process of consultation with the people. Senator Conroy said that it was not up to the Government to decide whether or not this whole programme would work; it was a matter for all of us. But, with respect, the strongest Government in the history of the State and the Taoiseach who is in a remarkable and unprecendented position of popularity have already the mandate to do what they think should be done for the economy and society.
Nevertheless we have to consider the paper as we find it. The last sentence reads:
Discussions should centre not on whether full employment can be achieved but on the best means by which to achieve it.
I am in complete agreement with that sentiment. However, as my contribution to the White Paper debate made clear, I do not think it can be achieved in the way in which the Minister proposes. I stressed the great productive potential of various public bodies and pleaded that the energies of the public sector should be released. It is only in that way that we can achieve full employment. There is either innocent or wilful misrepresentation of a phrase like "the public sector" or an inability to distinguish between the purely administrative or service side on the one hand and the productive side on the other. Thus, after I completed my contribution to the White Paper debate Senator Eoin Ryan stood up and asked would Senator Murphy have us create more jobs in RTE, in CIE and Aer Lingus? I would like to think that his misrepresentation of what I said was sincere because he must have known very well that I did not mean to add to the the social welfare agency aspects of certain of these bodies. I spelled out clearly in my speech that I was stressing the productive capacity of the public sector and bodies like Bord na Móna, Comhlucht Siúicre Éireann and so on.
I do not want to go over all that ground again except to express my regret that the Green Paper once more is putting all of our eggs in the threadbare basket of private enterprise. Its musings on social welfare, on health and education suggest an unpleasant lurch to the right. It is more ingenious and novel than it is radical. But, as the same time, I must genuinely pay tribute to the Minister's dogged faith and courage in his optimistic predictions against all the sobering pronouncements of the ESRI, the Central Bank, The Economist and assorted individual observers. His vision is not mine. For example, when he says that if we are really serious about full employment we cannot assume that “existing interests' would be left untouched. The ‘existing interests’ I would like to see touched very much are quite different from those the Minister means. His vision is not mine, possibly his vision is not that even of his colleagues, but it is a courageous vision.
It is a long time since Fianna Fáil produced a plan of this kind, not since the great leap-forward of the late fifties. On that occasion the economic strategists were, shall we say, safely placed, were not risking their reputations; they were either established civil servants or indeed established political leaders. Here we have a Minister who is putting his neck very much on the line. For that I think he deserves our compliments on his courage. Of course I have a certain fellow feeling as well for him, as an academic, knowing the strong anti-intellectual vein among Irish politicians and their distrusts, condescension and contempt of academics. The Minister's party were experts in that, as exemplified in their propaganda against members of the Coalition Government. It is now a kind of poetic justice that the Minister is at the receiving end from people like Deputy Peter Barry who has frequently suggested that the Minister is an egghead, an ivory tower academic and so on. This is the same kind of phrase the Minister of State at the Department of Foreign Affairs uses in my direction any time I speak here. Therefore, the Minister, Deputy O'Donoghue, has my sympathy as well as my admiration for his courage.
I do not propose to comment on the jobs target because I discussed that in some detail in my contribution on the White Paper, except to say that I am honestly bewildered—and I think my bewilderment is shared by many people—about the way in which we are to know how the situation is moving along. How are we to know how many jobs are being created? Sometimes we are told about the creation of jobs, sometimes we are told about reducing unemployment; sometimes the bottle is half full; sometimes it is half empty. We never know what size the bottle is. We never know what are the criteria to apply to the question of how many people need jobs and how many are out of work. I do not think that the Minister could clarify that point too much.
On page 20 of the Green Paper it says:
The task of creating more jobs is neither new nor simple.
I am sorry, but that was precisely the impression given in the pre-election manifesto. Negatively, there was no reference to difficulties in creating jobs. Positively there was, in one section of the manifesto at least—in an emphatic and sustained passage—a promise that "tens of thousands of secure jobs" would be created from the development of natural resources. This was the passage which said:
The value of our natural resources to us as a nation must be judged primarily by the amount of spin-off employment they generate.... This applies equally to agriculture, oil, gas, fish, zinc and lead. There is no use our exporting these products to create employment and wealth in other countries. Our most assured long-term development will come from processing those to the fullest degree. To export unprocessed zinc concentrates is like exporting fresh unprocessed milk.
Then the manifesto went on:
A State-owned smelter could be established here for £40 million.... It is in the industrial use of these refined metals that their real value to Ireland lies. There are tens of thousands of secure jobs only waiting to be created.
That certainly gave the impression that creating employment would be quite a simple matter. Indeed, by implication, it condemned the existing Government for not creating these jobs immediately. In the manifesto then, there is this relatively long sustained passage about the importance of our natural resources and a promise that a smelter will be built. Now, contrast that confidence about "tens of thousands of jobs" and the criticism of exporting our unprocessed zinc concentrates with the cautious statement on page 49, paragraph 4.21, of the Green Paper:
A major foreseeable development in the onshore mining area is the construction of a smelter.
There is a big change there. The Minister may say that the prices of zinc in the world market have slumped and that zinc and perhaps minerals in general are notoriously unreliable in respect to their market situation. Nevertheless, there is much more to natural resources than that. Our geologists in the public employ have more than once reminded us that there are more minerals in Ireland than lead and zinc which are absolutely untapped.
Yesterday, Senator Conroy spoke about our natural resources and hoped that we would not squander them in the future. Alas, we have already squandered them, and the way in which we have squandered them is a lasting reproach to successive native Governments. Since 1965 more than 700,000 tons of zinc concentrates have been exported from Ireland. In addition, we have exported millions of tons of lead and copper, silver, mercury and magnesite over the past 20 years, making us in fact the leading producer of raw metals in western Europe, and we have got precious little out of it except holes in the ground. Belgium, a country with no zinc deposits, has been able to supply a vast industrial network from our base metals while we have not created one single industrial job from them here. That is criminal negligence on the part of Fianna Fáil and of the Coalition. Why has that been allowed to happen? One reason is that our society, our economy and in our politics we have influential people with a prior allegiance to promoting private gain who put the public good in second place. There is a rule in these Houses that a person who is a Member of either House of the Oireachtas cannot be a member of a State board. We had an example of that quite recently in the matter of Bord na Gaeilge. I deplored the fact that Senators Mulcahy and Whitaker were debarred, by virtue of their presence here, from renewing their excellent work on Bord na Gaeilge. If that is so, and if we all think that is a regrettable necessity, should it not also be the case that any director of a private enterprise company should not be a member of a State board? It is highly doubtful if any Member of Oireachtas Éireann should be a member or a director of a private board. I cannot see how the private interest and the public good can be reconciled. Certainly in the last Oireachtas and in this House there were Members whose private interest was put before the public gain. The sell-out of our mineral resources is not merely negligence.
There is much more to it than that. It is the old classic combination of foreign adventurer and native gombeen. Page 45, section 4.12 of the Green Paper says:
There is no reason in principle why there should be any rigid distinctions between the State and the private sector in the industrial sphere. Both sectors can complement each other in assisting industrial development.
I suggest that there is a very real conflict of interest between the private and the public sector.
Tourism is another example of what I mean. We have people who are primarily interested in lining their pockets as hotel tycoons, and yet they are inextricably mixed up with Bord Fáilte. I do not see that their prime interest is really developing the tourist economy or really caring for proper job creation. On tourism on page 50, section 4.25 the importance of job creation is stressed.
This additional revenue should lead to the creation throughout the economy of several thousand extra jobs per year.
At the opening of the new tourist entertainment centre in Cork last Saturday the importance of job creation was referred to again and again in what may be hopefully a boom year for tourism, 1978. We have both a social and an economic responsibility to care about the kind of jobs that will be created in tourism. I spoke about tycoon hoteliers, but there are many hoteliers throughout the country who cannot be classed as tycoons, but who certainly neglect their responsibilities in the proper payment and service conditions of their employees. There is far too much sweatshop employment in the tourist trade. Neither in tourism nor in any other sphere is it enough to say, "We will give you a job, there will be some class of a job there for you." Any job will not do.
Sacrifice is a recurring motif throughout the Green Paper, the word is used several times, and the concept recurs throughout the paper. I am all for sacrifice. Our people, given the political will and leadership, are capable of sacrifice but the sacrifice must be distibuted, the burden must be equally borne. The greatest flaw in this Green Paper is that sacrifice is predicated, by and large, in respect only of the same old class of people, the wage and salary earners, the working and lower middle class who must bear the burden of the day. Page 71 says:
It is a price which we should be willing to pay to reach the goal of full employment.
We might well exercise our minds by speculating on what is meant by personal pronouns like "we". Who are the "we"? All of us, from Paddy McGrath down? I do not think so. I think it means wage and salary earners. That is a great flaw in the thinking of the Green Paper.
We are told on page 64 that work-sharing must not lead to any additional cost of production. That sentiment is repeated on page 66. In other words, more jobs but not, apparently, more incomes. We are also told on page 65 that any work-sharing arrangements must also entail income-sharing. There is an uplifting sentence of page 65:
In return for this restraint they would be rewarded with direct personal benefits in the form of more leisure time, as well as with the knowledge that they are helping to produce the situation in which their friends, neighbours, perhaps their own children, will also enjoy the benefits of secure employment.
A most laudable sentiment. It conjures up an invigorating sense of sacrifice, I believe this sacrifice should be spread around to the large farmers, the wealthy businessmen, the well-off self-employed professional classes.
Work-sharing, it has been said, is a novel idea. It may commend itself to the workers provided it is seen to operate throughout the social spectrum. For example, why should we not have established and eminent senior counsel joyously sharing their briefs with impecunious barristers? Why should not the Incorporated Law Society encourage free, equal and just access to their profession so that legal knowledge and advice will be available to the poor and underprivileged, as the Free Legal Aid people are suggesting? There is endless scope for this notion of work-sharing. Wealthy medical consultants could be persuaded to share out with young medical graduates. The Irish Farmers' Association could be persuaded to divide their good fortune with the National Land League. It should not be confined simply to the wage and salary earners.
If the proposals in the Green Paper are to be credible, work-sharing must also be accompanied by taxation-sharing, another adventurous and novel idea I commend to the Minister. The Department of Finance six-monthly report published on Monday revealed, once again, that the tax load is still carried by the PAYE earners. There is a nice piece of understatement on page 30 of the Green Paper about taxation of farmers where it says:
The increase in farm incomes in recent years has not been matched by a proportionate increase in the direct taxation yield from farmers
A glorious understatement. You can say that again, as the Americans say. In fact, it is quite obvious that despite all the publicity made and the grievances voiced by the IFA, farmers are paying less tax now than they did even a year ago, taking into account the abolition of death duties. The manifesto was very coy in respect of where the money was to come from to pay for the goodies, which were promised, and which have been, to some extent, delivered but now we know. A document like the Department of Finance's six-monthly report clearly reveals that the money is going to come from the same area of the wage and salary packets.
The Green Paper, in my view, lays far too much stress, relatively speaking, on the alleged abuses in the social welfare system. Of course, there are abuses but to devote two pages to it is a bit excessive. It smacks far too much of the kind of lounge bar conversation you hear about those shiftless workers and those cunning nixers, those saucy dustmen and those county council layabouts. That is why I deprecate the excessive attention devoted to the alleged abuses in the social welfare system. If additional medical referees are to be appointed to monitor claims for disability benefit, if additional specialist staff are to investigate "concurrent claiming and working," why cannot the Government equally appoint additional squads of tax inspectors to expose criminal tax evasion on the part—not of any one social class but of a whole range of irresponsible citizens in our society, people ranging from freelance craftsmen to eminently respectable professional consultants, who are literally getting away with murder? Why not bring in an army of inspectors to those boyos? Not only would taxation sharing lessen the burden of PAYE workers but it would make the Government's whole social and economic policy more credible to unions and to the working class at large, if justice were seen to be done in this respect, yet there is not a word in the Green Paper about the inequitable burden of taxation.
Health and education are dealt with, or rather referred to, on pages 79 to 82. Both these areas in our society suffer from a piecemeal approach virtually over the whole period of our history since independence. It is time that both of them were really taken by the scruff of the collar and a whole new approach made. It is inexplicable that we have not yet had a White Paper on education. Perhaps, again, there is the same basic reason. Health and education are areas that share deeply entrenched vested interests and the abusers of the social welfare system are much easier targets. It is not clear that the latest proposals from the Minister for Health the other day about the £5,000 income limit will improve matters in the whole area of health. Admittedly, the administrative burden is already top heavy but I think that it would not be a great deal worse and it might become a bit better if we scrapped the present ramshackle system, started again and built a truly comprehensive national health service.
On "Education", page 82—a nice little neat page is devoted to education. I draw the Minister's attention to paragraph 7.34, second sentence:
The indications are that the cost to the State per student in training colleges is over twice that for University students generally.
This is a figure that has been flung around. I have reason to believe that it is based on a miscalculation. The 2:1 ratio comes from the McDonagh report "The Way the money Goes." That report was compiled on the basis of Government estimates for 1975 but the actual expenditure shows that the unit cost for teacher training was not over twice the figure for university students, as is claimed in the Green Paper, but only about 20 to 25 per cent higher. Perhaps the Minister would like to comment on this apparent blunder. It is not just a miscalculation of figures. It has a serious implication. All of us know how disastrous is the pupil-teacher ratio in the schools, and if somehow we think that the cost of training teachers is much greater than it actually is, then it adds to the psychological block against improving the pupil-teacher ratio.
Apart from that detail, the page on "Education" contains much material for discussion. Whatever adjustments may be contemplated to the means of financing higher education, whether acting on the Tussing report or otherwise, if there are, as the paper suggests, going to be substantial changes made in the means of financing higher education, let us remember—and it cannot be said too often—that it was only belatedly and in the teeth of entrenched interests that anything remotely like equality of opportunity has been gained in our society. There can be no going back from the small little breaches we have made in the ramparts of academic privilege. Third-level education must not be allowed regress to the state it was in before the sixties when it was the privileged domain of those who could afford to pay fees, irrespective of the merits of their children, while the ordinary taxpayer made this privilege possible without himself ever having access to the sacred walls of academe. In this matter there is still an outstanding piece of discrimination—the rich man's child with the two honours is equal to the poor man's child with the four honours. However, more extended discussion on education must await another day. Suffice it to say that the approach in the Green Paper tends to be negative and limited in that it sees education in isolation, ignores its vital role in socio-economic development, regards it as a problem rather than as a resource, and sees its benefits as individual rather than social. Paragraph 7.33 states that the high levels of benefits accrue to a small and privileged section of the community. This seems to put the benefits of education too much in individual terms as distinct from the value of these graduates in social terms and as a resource in our society.
On page 87, in paragraph 8.2, it is stated that, allowing for fluctuating economic factors outside our control, "success or failure will, in the final analysis, depend on our own efforts". I should fervently like to think that success or failure is a matter for our people here in Ireland. But I grow more and more alarmed when I consider the extent to which we have alienated control of those "efforts", either to Brussels bureaucrats or to foreign industrialists who increasingly dominate our industrial base. I am sure that a Minister who is responsible for national planning shares my misgivings and concern in this respect.
On a number of occasions throughout this discussion Senators referred to the "Buy Irish" campaign on which we had a specific debate some time ago. I remember saying that it was very doubtful whether we could, any more, with any consistency, tell people to buy Irish as distinct from telling them to buy English or Italian because of our regrettable commitments to the EEC. I was listening to Question Time in the Dáil Chamber the day following our debate and the same matter came up. The Minister of State, Deputy Raphael Burke, was answering a question dealing with only English jam being available on CIE trains. His answer seemed to make nonsense of the whole "Buy Irish" campaign and the time spent discussing it. Do you know what he said? He said: "By EEC regulations we cannot tell CIE not to stock these preserves." That is a very eloquent indication of the way in which control of our economy is disappearing from our hands.
When the Minister for Labour addressed the ICTU conference in Galway on Tuesday night, he referred to this Green Paper as putting forward—and I quote from the press report on Wednesday morning—"a number of options for the future course of our society". Alas, the Green Paper is nothing as radical as a reconsideration of "our society". Neither this paper, the White Paper nor the manifesto plots a new socio-economic course. They do not attempt to harness the great potential of our resources. I am not talking exclusively about minerals; I am talking about our total resources. These documents accept our society as it is with its ineffective private enterprise system, with its ramshackle structures in health and education, with its lack of popular control over the economy and its scandalous contrasts of wealth and poverty. It is against this unfavourable, even hostile, background that the Minister courageously, imaginatively—and I use the word in the best sense—proposes to achieve the daunting task of full employment. One can only wish him well—which is more than some of his Government colleagues do. One can only hope that he may be spared politically to give us, one day, a larger vision.
Now that nearly all the big guns have laid down their barrage in this debate I venture to loose off my pistol shot. I welcome the opportunity to continue the debate initated in the Lower House on the Green Paper. I recognise with other Members of the House the need for frank and fruitful discussion of the options put forward in the document and also the need to understand the implications of what is proposed, since the adoption of all, or even some, of these proposals will mean far-reaching changes in our lifestyle.
I have found the debate thoughtful and, up to now, informative. Most Members have resisted the temptation to indulge in the time-wasting exercise of denouncing or even praising the Fianna Fáil pre-election manifesto. The manifesto was published over a year ago; its commitments were honoured and its relevance to this debate is questionable.
The title of the Green Paper —Development for Full Employment—is, in itself, a challenge. No other EEC country has had the courage or the initiative to produce such a ambitious plan, to say, in effect, that it is possible to do away with the frightening spectre of large-scale unemployment.
The Government who implement the policies needed to get us back to a full employment situation cannot hope to be popular. They can, however, hope to be a credible Government, a Government who accept their responsibilities and who are prepared, in the end, to be judged on their performance. When we say that we accept the need to make sacrifices, we usually mean that we accept the necessity for the other fellow to tighten his belt while keeping the notches in our own firmly in place. But in so far as it can within the economic structures of our very imperfect society, the Green Paper seeks to make the necessary belttightening exercise a communal effort.
I should like to comment on some of the points made in the Green Paper. Firstly, it is a good sign, and one which the Taoiseach stressed in his Dáil speech last week, that the Green Paper should emphasise that the agricultural sector of the community can, and should pay a more prominent role in the recovery of the economy. There is potential for development, even within the constraints of the EEC Common Agricultural Policy. The Green Paper sets high targets but with the vigorous extension of planned farm development, with more use of advisory services and an increase, where necessary, of these services, with improvements in the area of land drainage, these targets are capable of being achieved.
One area which must cause concern is the high rate of expenditure on drugs in the health services. The annual report of the general medical services payments boards, which was published on 23 June last, lists the most frequently prescribed drugs during last year. Top of the list for the first time was a certain tranquilliser, with a sleeping pill fourth and another sedative in fifth place. It is safe to assume that a large proportion of these drugs are prescribed for and used by women with families. I notice that prescriptions for oral contraceptives have moved from twenty-second to twelfth place in the list. It seems there is an urgent need to investigate the causes of fatigue and stress in family life and to treat them in a more sympathetic and understanding way. There is a need for research into and information of the natural methods of birth control which are for many the only acceptable means of family planning. There is need to encourage young mothers to avail of the therapeutic effects of natural feeding of their babies. Any such national plan of positive health for young mothers would, I feel, not only save the taxpayer a great deal of money but in the long run be a national investment.
In the area of social welfare I notice that the Green Paper draws attention to the high proportion of married women who claim and are receiving disability benefit. I feel that the reason for the disproportionate numbers making such claims is not generally understood. Many of us are fortunate enough to be in a position to devote our time and our energy to rearing our families with little or no responsibility for paying the bills, but many married women have to be both mother and breadwinner and there is still a lack of recognition of this dual role in our social welfare schemes.
Certain submissions made in this area by the women's representative committee still remain to be implemented. For example, many insured married women find it difficult to comply with the conditions that are necessary for them to be eligible to claim unemployment benefit. While I am on this subject, I find it regrettable that people in responsible positions, people charged with the responsible job of preparing young people for employment, should suggest that the right of a married woman to work is somehow conditional on full employment being first available for everybody else.
The financial implications of the proposal to tax children's allowances are interesting if not palatable. Indeed, it would be a courageous Minister for Finance who would cast his covetous eye on children's allowances, upon this recognition—even though it is a niggardly enough one—of the importance of the role of the mother in our society. But, as this allowance is paid at the moment it disregards the needs of individual families and it is high time it was reviewed, if for no other reason than that it has failed to keep pace with the cost of living. It would be more equitable to have supplementary grants, such as grants for school books, uniforms and school meals for families who need them, while those better off families might be obliged to undergo a means test or, indeed, as the Green Paper suggests, to treat the allowance as taxable income. But whether Irish husbands would be willing to pay on an allowance that is paid to their wives is something I will look forward to finding out. The allowance as it is paid now, directly to the mother, has a certain emotive connotation which it would be unwise to disregard in a reappraisal of the scheme.
The Green Paper also proposes a review of the subsidies introduced in 1975 to combat inflation and to cushion the effects of EEC food price increases. No one likes to consider increases in food prices since they hit the poorer members of society. But in a situation of such gravity, can one expect the whole community to foot the food bill for the man who is lucky enough to have a job when so many people are utterly dependent upon the State for their existence?
These are some points which I felt were worth mentioning since they may be overlooked in the general discussion of Government strategy and alternative policies. Again, I commend the Government's courageous approach and I am confident that the proposals in the Green Paper will receive more deserving attention than to be damned with faint praise by the Opposition.
I want to join with the people who welcome the Green Paper at least on the grounds that it is another step on the road which we hope will ultimately lead to a situation where we will have some positive action. I cannot help but see this Green Paper more as a lot of questions that are being posed to the community, to the Opposition and to all people concerned rather than a hard and fast solution to our problems or for economic recovery.
Many reasonable hopes are expressed in this document, many hopes that I would not quarrel with. It is not on the grounds of optimism that I would find fault with the Green Paper. I think that if we were to work out realistic solutions to our problems we must begin by being realistically optimistic. The targets down here are not so optimistic as to be beyond realism. They are, I think, achievable. The question, of course, is whether they are likely to be achieved in the light of our past performance and whether the motivation that will be put to the Irish people will be accepted by those who are being asked to make sacrifices so that the results can be achieved.
I this regard I would say that, if we are to motivate people and impress them with the seriousness of our economic problems at the present time, with the importance of keeping our young people at home and providing jobs for them, I think we must adopt an attitude that will be seen to be open and honest. It does not help the cause we advocate here or the cause that the Minister advocates to start off by seeking to apportion the blame for our economic difficulties on our predecessors who left office after a number of difficult years, having in fact protected the Irish nation through their efforts from the worst effects of the recession that they had to endure. It would do the Minister no harm to acknowledge the difficulties that Government encountered and the honest efforts that they made to work out solutions to the problems and to acknowledge, as other Ministers in his Cabinet have done, that when he came into office he did not find an economic ship wrecked on the high seas but a ship that had been steered safely through the worst of the storm, but which could be in better shape no doubt. With the assistance of all of us a better job could have been made. But it is only right that, before we start on the next phase of our development, we should acknowledge the honest efforts by the Government that left office to leave the Irish economy in the state in which it was found. Most of us will say that it could, of course, have been better. I would be the first to say it. But if it were not for the courageous, steady, and dedicated leadership that this nation was given by the National Coalition over the four years, the situation could have been a lot worse.
Starting from there it is only fair to make the point that before this Government took office its manifesto was even more optimistic than the Green Paper. There was no indication, along with all the nice promises made, that it was the Irish people themselves, the ordinary working people, the managers in industry, who would eventually be asked to solve the problems. We have a difficult economic road ahead of us. We would do well, particularly those who are not so long in politics, to ask ourselves whether we spend too much time debating and seeking to score political points over the Opposition and too little time in an honest effort to reach the widest possible understanding between all parties as to what the solution should be for all sections of the community.
I find the Government's Green Paper a bit disappointing. After 12 months in office the Government are still posing the same serious question as they did at the outset. This point has been commented on adequately by other speakers and I do not want to dwell too long on it. The Government are in a strong position. They have a mandate from the people to do whatever is necessary in order to get the economy back on the rails. It is up to the Government to bring in quickly a set of proposals which will be a solution to our economic problems and, after adequate consultation, to make whatever difficult decisions are required.
One of the points I want to raise is the whole question of work-sharing. I may be alone in my view on this question, as I do not think too many people will come out and say what I believe to be the truth on this subject. I want to warn the Government and all those people who see work-sharing as a solution to our problems that this concept is no solution at this stage of our development to the problems which confront the country. It is not a scarcity of work which is the problem in the country; it is one of organising ourselves to exploit our resources. Full employment can be achieved by the better exploitation of our resources and by organising ourselves to do this without developing at present the concept of work-sharing.
If Ireland was one of the richer countries in Europe, we might perhaps give leadership in this area. If we were in a sufficiently strong position to resist competition we could experiment with the idea of reducing working hours. We must be absolutely confident that people are prepared to accept a lower standard of living before we ask them to accept the concept of work-sharing and there is no evidence at present that people are prepared to do this. It would be much more realistic to ask them to work harder to maintain their standards of living than to give up some of their standards and also give up some of the working hours.
In our particular situation it is not shorter working hours which will solve our problems; It is longer working hours which could contribute as a solution to our problems. I am not saying that it is necessary to put in longer hours. In fact, if the whole labour force at every level and stage accepted that we should do a little more in the hours in which we work, then instead of making work more difficult to find for other people we would improve our competitiveness, get on with the job of utilising our resources, achieve a higher rate of exports, thus providing more employment, and strengthen our economy in general. This is the line we should adopt rather than telling people that if we reduce our working hours this will contribute towards the solution of our unemployment problems.
I am particularly worried by the idea contained in the Green Paper that the Government will look at the possibility of work-sharing in the public sector. I think that there has been too much work-sharing already in this area. I said before if we want to solve our economic problems then we do not want more jobs at present in the public sector. We could do with some moving around in the public sector and get people into key roles. There are one or two areas in which I would recommend the creation of more jobs. Generally speaking, from what I have observed in the last few years, in local authorities, health boards and in the civil service there has been a rapid expansion in the number of people employed, particularly in the lesser productive grades. Offices seem to be full of people and the amount of paper work, with all types of complicated schemes and little jobs to be done, has increased. I warn the Minister not to introduce the concept of work-sharing in this area.
In all the suggestions made, not only in the Green Paper but in the White paper before it, not a single suggestion was made of people working harder. In fact, work restraint need not be stringently adhered to if people were prepared to accept that we could solve our economic problems by working a little harder. If people, including Members of the Oireachtas, the public service, people in managerial positions and those on the shop floor would work harder and be more careful about the quality of the goods they produce, the manner in which they treat the machines with which they work—if it is only the company car or lorry—much more could be achieved in this whole area than we realise. That is the way in which we could become more competitive. Eventually, it could be the way in which the could become more competitive. Eventually, it could be the way in which the Irish economy could be expanded to create work opportunities for all those who have no them at the present time.
I am particularly worried that the Government's idea of work-sharing could accelerate the flight from the land. At present the Government are weakly accepting the idea that 4,000 people will leave the land per annum and that 5,000 will lose their jobs in manufacturing industry. If we introduce the idea of work-sharing, what effect will it have on people engaged in agriculture, where traditionally people work long hours and where we are seeking to bring about increased production? There is a drift towards part-time farming, away from full-time farming, all over Europe and the idea of work-sharing will make it more difficult to retain our present population on the land. It will make it more difficult to sell to the agricultural community the idea that they must work harder and produce more.
I welcome this opportunity of expressing my views on the concept of work-sharing. Work-sharing may seem an acceptable solution. The idea of shorter hours may be accepted, but the lower standards will not and we will end up in a situation where we will be left uncompetitive, where our competitors may not be under the same pressures to adopt our ideas, and we will become more seriously disadvantaged so far as trade and exports are concerned.
On the idea of industry generally the Green Paper does not offer very much. We have had no important legislation except a Bill earlier in the year which was the product of the former Government. Of course, I am not overlooking some of the provisions of the Finance Bill which were helpful. Nevertheless, there were no radical moves, nothing extraordinary in all that has been said which will encourage me to believe that small or large industries can expect any new deal.
I see as one of the big weaknesses the lack of experience and expertise in industrial management. It is regrettable that no State agency scheme at the moment caters for this important gap. We have the AnCO training schemes for craftsmen and the other sections. We have many industrialists who are first-time starters and who do not have the experience because they were not brought up in industry and did not get the basic training required. In the past six months the Irish Management Institute advertised a course for managers of small businesses and I understand that the demand was so great that only a small proportion of the number who applied was accepted. The others were told to wait for future courses next year. By the time this Government leave office or seek re-election in four years only a small fraction of those managers will have had the opportunity to get the sort of training that they are prepared to give their time to and to pay for but for which there are no facilities available at the moment. There is no question at all of the country development team strengthening up in that area to help to guide small new industries where expertise in management is not readily available. I am disappointed that the paper not only convinces me that nothing is being done about it but that it has not been seriously thought about yet.
I will go now to the farm modernisation scheme. I do not claim that the farm modernisation scheme has been a failure. I see it as having made a genuine contribution to the development of agriculture. On the other hand, like other Senators who spoke here yesterday I have been disappointed at the manner in which part-time farmers and very small farmers are being treated in their applications for the scheme. The Green Paper should have indicated much more serious thinking on the development of the agricultural industry. A number of pages devoted to the subject clearly state problems but really offer no new solution. It is stated that a new Bill can be expected from the Minister for Agriculture. This is 18 months after the previous Bill was introduced by his predecessor. On a very small technicality that Bill was rejected by the present Minister who should there and then have put forward his own proposals and immediately introduced legislation to set up whatever body he felt was appropriate in order to get on with the work of research, advice and education for farmers. More than a year has gone now and by default the present Minister for Agriculture has created a period of uncertainty in which agricultural and farm research people have been put into a limbo of wondering what is going to happen and of wasteful discussion of what the Minister may and may not do, when the new body could have been organised and working out serious proposals for the development of the industry. It is another indication of how far the everyday running of the country is from the constructive thinking that the Minister for Economic Planning and Development is doing, while on the other hand destructive policies are being pursued by the Minister for Agriculture in refusing to make the orders allowing the new body set up by the previous Minister to come into operation, thus delaying the development of the industry for a year.
Furthermore, I think that there is a tightening up, probably for financial reasons on the farm modernisation scheme. If we want to create jobs and strengthen our economy we must utilise all the lands we have. At the movement a lot of land is owned by part-time farmers and 30 per cent of the farmers are part-time farmers. I think that is the lowest percentage in the EEC countries and in all the OECD countries. Nevertheless we have that 30 per cent. In some areas they represent a number of progressive, hard-working farmers who have made the maximum use of their holdings and who took up outside employment only in order to supplement their incomes and to generate cash to develop their land further. Now they are being excluded from the farm modernisation scheme and they are being refused the aids and incentives to develop their holdings.
When the scheme was first introduced practically all part-time farmers were included. Wages have increased in the meantime, but originally no ceiling on income was fixed and no figure of income above which a farmer could not participate was indicated. In the past year a figure of income has been introduced and then amended in order to make it more difficult for part-time farmers to become involved. It is a pity, because it goes against the idea that what we need is the development of our available agricultural resources by anybody who is prepared to develop them. We should not become involved in the argument whether a man with £70 a week should get State assistance. If we are seeking the maximum production that is what we should go after.
The Minister recently gave £29 million as the figure that has been spent on the farm modernisation scheme this year. I would have thought that the figure was higher, but I realise that the farmer participating in the scheme got an average of £300 worth of State aid. This is a comparatively small amount and in many cases this is the measure of the contribution which the Government has made towards saving a job and keeping another person off the labour market. When one compares this figure with the £22 million which is being spent on social welfare in the 12 western counties and with the £19 million that will be spent this year on the disadvantaged areas schemes, those two figures together are almost twice as big as what has been spent on the farm modernisation scheme.
The Green Paper should have tended much more towards the study of those figures and towards asking what ought to be done with the money which is being put into the disadvantaged areas and given to smaller farmers generally in order to keep people in those areas at an acceptable standard of living. The only radical suggestion there was that we might consider withdrawing advice from commercial farmers. Maybe there is something in this, particularly when one considers what was achieved a few years ago in the small farm incentive bonus scheme which involved something like 22,000 farmers under £25 valuation and with under 50 statute acres. In that scheme a comparatively small amount of money was spent but there was the principle of a lump sum payment for achieved targets of progress and production. This is mentioned here without any reference to the previous scheme. If there is any question about what can be achieved by a comparatively modest financial incentive plus the application of intensive advice to small farmers, we have only to look at the small farm incentive bonus scheme which went out of existence when the farm modernisation scheme came in. From 16,000 people who finished this scheme we had an average increase in production of 15 per cent annually as against 2 per cent by all others over the same period. It is an indication of what could be achieved with the right scheme properly applied and the right sort of intensive advice. At that time agricultural instructors were perhaps more free than they are at the moment, because they have become slightly restricted by the necessity to do a fair amount of documentation concerning the farm modernisation scheme. Perhaps at that time they did give intensive advice to a small number of farmers. But if there is any question of what can be achieved the answer is there. In the same period we had striking figures for increased production achieved by a comparatively small number of farmers who participated in the World Bank loan at that time. If the lessons which could be learned there were to be applied and the money which is being spent on the other three schemes that I have mentioned were used to good effect something could be done. I would not mind adding to that the £8 million given in the budget to a few wealthy people which in that area could achieve much more. That is an area where a great deal can be done to achieve results if the question of unemployment is to be seriously tackled and solved.
Another point about withdrawing advice from commercial farmers is that I would hope that at least financial incentives would still remain so that these people would continue to make progress and increase their production. It would be a pity if we were to withdraw advice from people who have proven themselves most capable of accepting that advice. Advice and financial incentives which are there ought to go to such farmers regardless of their other income, and of their status as classified under the farm modernisation scheme. Whatever resources we have ought to go to farmers who are prepared to use it to increase production. By doing this we will achieve much more than if we seek to push advice and education on farmers who are perhaps too old, too tired or maybe too well off to want it.
The other matter is the whole question of land restructuring. There was scant mention of this in the Green Paper although there was an indication that we will have something more on this in the future. Some years ago the previous Government commissioned a report on this matter and that report is to hand. We should have had a decision on this. In the past couple of years the pool of land in the hands of the Land Commission has seriously dropped. Of all the changes in ownership of land that has taken place only 12 per cent has gone through the Land Commission. That might seem an impressive figure but from my observations I know that within that 12 per cent at least half of it would have changed ownership if the Land Commission had never interfered. In many cases the Land Commission interfered with the transfer of land that would have gone to farmers who needed it. In a number of cases farmers who would have bought land stood back. The Land Commission was not sufficiently flexible in its attitude to assess each case on its merits, look at the situation and decide where to move and where not to move. Its movements are too slow and in some situations it succeeds in impeding progress and development that would have taken place without its interference. I admit that the ideals intended to be served by the Land Commission are desirable, that it has done a certain amount of good but its activities seem to be grinding slowly to a halt. It is time that the whole idea of restructuring land was reviewed.
We must look also at the failure of the pension scheme as an incentive to farmers to retire bearing in mind the fact that more than 50 per cent of our holdings are in the hands of people over 55 years of age. I understand that 5 million acres of land is owned by people over 55 years of age and 2 million acres could immediately come into the ownership of younger people if we had a realistic farm retirement scheme. In France something like 22 million acres have come into the hands of young people through their retirement scheme in the last seven or eight years. We should seek to have this scheme either abolished or brought to a proper standard so that it can achieve some of what was intended.
I was disappointed that forestry whose products have the second highest import bill into the EEC got very scant mention in the Green Paper, with an indication that we will have further discussion on it when the IDA come up with its proposals. This is part of the question of utilising our own resources. We do not expect immediate results but we owe it to our children that we develop land not suitable for agriculture by some means. It is my view that allocating it for forestry purposes is the way to do that. As I suggested before, some provision for a forestry scheme should be put in with the farm modernisation scheme. It is the only way in which we will seriously tackle the problem of getting unproductive land and land not suitable for agriculture into use. The forestry section have been finding it difficult to get land and because it is a State body and cannot be planting the odd acre here and there the only way to achieve the maximum results is by including it with the modernisation scheme.
I wish the Minister well in his efforts. I hope that time will prove his optimism to be justified. If encouragement from me is any good I extend to him my best wishes for success in achieving the targets he has set out but I blame himself and his colleagues for their dishonesty in the past in pretending that there were soft options or easy solutions. After one year he has produced what I can only describe as a softening-up process before eventually we are offered the pill which we will all have to swallow if we are to solve the problems for our own children and future generations. If we are to do that we will have to work harder and save more. It is not now that the Minister should be coming with that message.
The preface to this Green Paper declares that the pursuit and attainment of full employment within a framework of fiscal responsibility is the Government's single most important social and economic objective at the present time. Viewed as a discussion of the implications of this generally accepted objective the Green Paper measures up well. I am glad to have this early opportunity of offering comments on it as a discussion document.
There are certain things on which one would have liked to see more emphasis or elaboration. The vital need for incomes restraint, is, I feel, rather soft-pedalled or, at least, not sharply enough emphasised in chapter 8 and elsewhere. In this context I was surprised to find the current year's 16 per cent average increase in employee earnings—that is what the OECD survey estimates it to be—treated in chapter 1, paragraph 7, as indicating moderation, especially as it contrasts with effectively lower rates of income increases in many important competitor countries. It seems to me that the understatement of the Green Paper occurs in the same paragraph, where it is rather timidly asserted that an improvement in Ireland's competitive position could make a substantial contribution towards the achievement of the output and employment targets.
There are other matters, such as the apprehended competition between technology and jobs, between people and machines, which one would have liked to see discussed at some length. I would also have wished to see even more emphasis on the inadequacy of policies by themselves, however good, to achieve the extremely difficult objective which the Government have set themselves. I remarked before that Governments everywhere tend to overstate their capacity to manage the economies under their charge. Attitudes of people are extremely important and so are conditions that lie outside Government control. Paragraph 4 of the preface does admit that we will not meet the challenge unless there is a fundamental change in attitudes. As I see it even radical policies will not get us far unless attitudes change and unless the uncontrollable external and other conditions remain highly favourable. The conditionality of Government proposals can never be overstressed.
I have never suggested that we should not strive for the highest employment and living standard objectives, but I think the Green Paper, by showing some less favourable scenarios, could have tried to screw up the determination of all sections of the community to achieve the optimum and accept the associated obligations and disciplines. We cannot, obviously, still adhere to highly ambitious targets if the conditions necessary to achieve them are not being realised or if the assumptions on which they are based are proving to be unfounded.
My personal preference, as the Minister knows, would be to retain some margin against contingencies; and I would not, for instance, have thought it necessary or desirable to go for 100 per cent employment by 1983. This introduces a rather extravagant element into a practical programme which I would count successful well short of 100 per cent perfection and over a longer time span, provided the trends in output and employment were moving steadily upwards. On the whole, however, the Green Paper serves its purpose well and, subject to the reservations I have just expressed, it is just the sort of educative and consultative document that should have been, in my view, the first to come after the Government resumed office rather than a White Paper decision document so closely modelled without further consultations on the pre-election manifesto. In any case, we now have got into the right phase of the planning cycle and, contrary to some views expressed here, I do not believe that government is in suspense while this necessary democratic procedure is carried out.
While the Green Paper proposes options for consideration, it is important to keep in mind that not all the options are equally eligible; some are very much second or third bests and some are non-starters. Productive, self-sustaining, fulltime jobs are always to be preferred to jobs specially or artificially created in the public sector or to any form of work-sharing.
There is so much in the Green Paper to provoke debate that to be reasonably brief one must be selective and not be tempted down all the alleyways.
My best course is to take as being on record the general views on economic development policy I expressed during the White Paper debate on the 17 May last. I then put forward the hope that in this open economy the Green Paper would place less reliance on global demand expansion in favour of more selective approaches, especially those directed towards making our costs more competitive in labour intensive industry. I looked forward to the trying up in the Green Paper of various loose ends relating to what is to happen after 1980. I had pointed out that, even if all the White Paper assumptions were realised, there would still be after 1980 a very large State borrowing requirement, heavy balance of payments deficits and at a conservative estimate, some 70,000 unemployed. I said that these loose ends would have to be tied up in the Green Paper if a firm substratum of confidence was to be laid, because reassurance was needed that the deficits and imbalances would in time be reduced to levels compatible with a continued rise in employment and secure progress.
Let me say at once that the loose end regarding State borrowing, and current budget deficits in particular, has been tied up in the Green Paper, though whether the knot will hold is another question. I do not intend to tease or criticise the Government for having to take unpopular decisions about stringent curbing or elimination of various forms of current public spending. They will continue to here enough of this even from those who at the same time deplore the high level of public borrowing. I hope they will stick to their guns. Sensible people realise that they cannot have Government spending on the scale that would be represented by summing up individual and group desires for social and economic improvements. Aspirations always run ahead of resources and the discovery of how to make omelettes without breaking eggs has yet to be made.
There is, however, a rather insidious argument which will have to be resisted, and I hope the adjective "insidious" will not offend too much some of my colleagues here or in the ESRI. This argument is that the Government must keep on injecting more and more money into the economy by deficit financing or else there will be severe inflation. The Government, will, I am sure, recognise this as a blinkered and exaggerated thesis. It assumes a closed-in kind of economy in which Government borrowing and spending is virtually the only engine of growth, the dominant support of economic activity. The argument plays down the much surer and safer support for economic activity provided by external demand focused on more competitive Irish goods and services. External demand, even if not as buoyant as one would like, will still be growing over the years ahead, and we can if we are competitive enough continue to win more than our share of export markets. This argument also writes off the legitimate expectation underlying both the White Paper and the Green Paper: the expectation that enterprise of all kinds will need and will absorb into productive job-creating investment, with the help of credit drawn from the banks and elsewhere, much of the resources freed by a reduction in Government borrowing. This combination of external demand and private investment demand is capable of replacing the transitory and artificial prop of Government deficit financing.
In any case, we all realise that we cannot stay on an accelerating whirlygig of Government borrowing. Get off it we must, and quickly, particularly as far as current deficits are concerned. No wise Government would use up all their borrowing power in good times, even for capital purposes, and leave themselves no recourse for dealing with recession or adversity if and when it strikes. It is obvious that the continued expansion of Government current deficit financing could lead only to disaster. The Green Paper, in Chapter 2, paragraph 13, speaks softly of "unacceptably high levels of Government borrowing" and in the same chapter of the dangers of conflict with EEC obligations. But one could be much blunter and point to the significant loss of sovereignty, of capacity to regulate its own vital affairs, which is suffered by any country that goes excessively into debt and has to conform in the end, whether through IMF letters of intent of otherwise, to the dicates of its creditors.
Anyone who takes the trouble to put money figures on the table in Chapter 7, as one can do by refererence to the GNP estimates for 1979 and 1980 given in reply to a recent parliamentary question, will see that, having allowed for the inevitable extra burden of debt service, only relatively small additions to social outlay, including education and health, will be possible in those years unless increases in pay, so large a fraction of current public expenditure, are held very firmly in check and unless, various economies, such as the removal of food subsidies, are made. I applaud the way the Government have faced up to this awkward but unavoidable problem.
Having expected it all along I will not be found amongst the objectors to the moderate increases in tax rates which are projected in order to help get rid of large-scale borrowing to finance everyday non-capital expenditure which, this year, accounts for almost half of total Government borrowing.
There cannot, in this perspective, be much scope for deals in which tax reliefs or tax cuts are traded for income restraint. In any case this was never a very successful ploy except in 1977, the only occasion out of four in recent years when the conditionality of the tax relief on income restraint was firmly insisted upon.
In general I commend the Government's intention to reduce the current account deficit to minimal proportions, to achieve a substantial overall reduction in the ratio of borrowing to GNP and to revert to using the public capital programme as their principal means of helping to maintain economic activity or stimulate it when necessary. Possibilities of accelerating the public capital programme under the headings of roads, telecommunications and sanitary services are indicated in Chapter 5. Current outlay on social improvements will necessarily be limited in the years immediately ahead. But let me emphasise that the room for real improvements will be the greater the less the increase in pay, which bulks so large in the public finances. It ought to be accepted that a successful approach to full employment would in itself be an outstanding social achievement.
The second loose end in the White Paper related to the deficit in the balance of payments. The White Paper forecast a growth in that deficit to over £500 millions by 1980, even if 3 per cent of consumer spending were switched from imports to home produced goods and services. It was rather vague and casual in leaving the future financing of indefinitely prolonged annual deficits to a combination of borrowing on international markets and long-term expansion of exports. The White Paper did say, however, that continuous monitoring of the external situation would be necessary so that corrective action could be undertaken if developments proved more adverse than anticipated. Corrective action of this kind would, of course, adversely affect output and jobs. This loose end is not tied up in the Green Paper which, as far as I can discover, limits itself to the tentative statement in Chapter I, paragraph 8 and I quote:
There are as yet no signs that the balance of payments is likely to prove a serious constraint, at least in the immediate period ahead.
It is fair to ask how far ahead is that and what of the period that follows? I regard this as a serious lacuna particularly as, in our circumstances, excessive home generated inflation or expansion of domestic demand, to use the more neutral expression, shows up more in balance of payments deficits than in the general price level which, in the long run, is largely determined by what happens the exchange rate of sterling with the deutschmark, the US dollar and other major currencies. We have to remember that balance of payments deficits can be financed only by drawing down external reserves or by incurring foreign indebtedness.
The third loose end in the White Paper related to the substantial number of persons, to be safe I put it at 70,000 but it is acknowledged in the Green Paper to be 80,000, who will still be unemployed by the end of 1980, even if the Government's policies are fully successful. I would like to say first, that the Government seem to me to be exaggerating this residual problem. They have set up the quite unnecessary aim of abolishing unemployment altogether by 1983. As I understand it, of those normally classified as unemployed, a hard core running into tens of thousands are not, for one reason or another, able and willing to work. A significant number, though not all of these, should probably be no some kind of disability relief. But amongst the 80,000 there would also be persons in the process of moving from one job or place of work to another and, particularly in this era of rapid technological change, being re-trained for other jobs. There is also a notable tendency in industrialised countries in recent years for a growth in the number of those who, though able, are not, for the time being, available for work. Emigration is rightly excluded as a solution but a bigger voluntary movement of persons to temporary jobs in Britain, Continental EEC, the Middle East, the third world, would be quite an acceptable easement. When allowance is made for these factors perhaps the residual problem is not much more than half the size of that posed in the Green Paper.
However, the first of the options put forward, work-sharing, makes very little appeal to me. Essentially it is a means of distributing income if one observes the condition, the crucial feature as the Green Paper calls it, that work-sharing must not lead to any additional costs of production. Otherwise work-sharing devices will merely add to production costs and destroy competitiveness and employment assuming, as to be realistic I suppose we must, that all the countries with which we deal do not simultaneously adopt similar schemes. If they do, we can safely follow them at some slight remove. One does not have to guess at the reaction of the trade unions to the idea of giving up overtime benefits and accepting reduced weekly incomes or slower rates of increase in their incomes in order to spread out job opportunities. Two of the largest unions have already declared their position flatly—the concept of work-sharing is acceptable only if earnings are not reduced. What we are hearing this week from the ICTU conference in Galway is not very encouraging.
How could we think seriously of lowering our productivity, or indeed foregoing possible gains in productivity, as long as it is so much below that of competitor countries, particularly continental European countries? Even if work-sharing did not carry this real danger, I might say certainty, of inflating costs and impairing competitiveness, it must be remembered that the creation of jobs in this way would not add to national output and therefore would not do anything to widen the base on which real social improvements depend. My preference for dealing with such residual unemployment as must be dealt with in the early 1980s would be to do something more to stimulate productive private investment and, if necessary, to accelerate public capital expenditure on productive work and on infrastructural and community needs. These, to my mind, are also the best ways to deal with any shortfall in domestic demand that may emerge in the years ahead.
In passing, may I express my distaste for any proposal which would condone and institutionalise absenteeism by arrangements to pay part-timers to replace the absentees.
There is a reference in the Green Paper, which I do not understand. In chapter 4.17 there is reference to "reviewing the imports of the State-sponsored agencies and of IDA-assisted firms". Does this imply some form of import protection for Irish products, even in a national free trade policy framework, or does it go further than just voluntary preference?
I was pleased to see the point made in chapter 8.5 that productivity gains ought not to be swallowed up completely by those already employed in the firms in which the higher productivity occurs. Productivity gains may be attributable to factors other than labour, indeed to factors outside the firm or industry concerned. There is no time to go into this now—I have put views on it on record in a Central Bank bulletin in 1971.
Finally, in the discussions which will take place on the Green Paper before the Government review their development plan and publish a White Paper, I would hope that the conditionality of full employment, however, we define it, on the acceptance of moderate increases in money incomes, will be fully stressed and the public in general made more widely and acutely aware of it. For the Government this moderation is the key to cutting their borrowing for current purposes and at the same time having resources to finance worthwhile improvements in education, health and other social services without immoderate tax increases, and resources to finance increased capital expenditure with maximum benefit in terms of employment. For the whole country this moderation is the key to the greater competitiveness which will gear us into world demand, and the key therefore to adequate expansion of output, exports and jobs. All the argument and criticism the Green Paper has provoked still leaves this message intact: there is no other way forward.
Less than eight months ago I welcomed the setting up of the new Department of Economic Planning and Development and the appointment of the Minister. After years of uncertainty in national planning, it is gratifying to private enterprise that we are moving once again into an era of positive planning and national management by objectives on an on-going basis.
Subsequently, in welcoming the White Paper I expressed approval that the promises and policies of the election manifesto were confirmed in a document clarifying the Government's purpose in establishing the framework by which longer term plans and activities could be motivated. Much progress has been made in setting the scene for the success of the Government's strategy to date and I agree with Senator Murphy that one must admire the dogged determination of the Minister now in the House in influencing others to follow his theories, and the stamina with which he has pursued available opportunities to make his plan work. The Minister has honoured his promise to produce a Green Paper before the summer recess for discussion, and once again I welcome this further step in a more orderly approach to national planning.
During my first year in the Seanad I have been bewildered at the pace at which millions of pounds have been appropriated, and in this Green Paper I take some reassurance that public expenditure is being subjected to closer scrutiny and that the money available will be used to better effect in backing up the public and private productive sectors. It is normal management practice when planning an annual budget to examine and to re-assess all expenditure according to the favourable or adverse circumstances which are emerging, and I welcome this open evidence of the Government's new planning cycle and, if I may add, their consistency in this regard.
Many of us have been worried about the exploitation of our social welfare system. We are all concerned that benefits should be as high as we can afford and that they will be given to the right people, the needy and the deserving, and it will be a difficult political decision to alter the structure without upsetting some people. Nevertheless, it is extremely important that the Government proceed with an updated social welfare system.
In the revision of the PAYE and social service schemes, I hope consideration will be given to the income tax code which encourages absenteeism during the last months of the tax year, because it is almost as rewarding to avail of tax rebates and unemployment assistance as to work in the months of January to March. This adds to the peak of the unemployment register. It has been a serious problem for the private sector, in particular the smaller businesses where it is found that having trained new recruits the firms are left in the lurch because of the disincentive to remain at work during the latter months of the income tax year.
In the chapter on Further Action on Employment, one must admit that not all of the targets can be justified on the basis of their economic desirability. The Minister has recognised that the presentation of these targets is ambitious and that it will demand fairly significant commitment from all who have a part to play in its achievement. Many sections of Irish industry are fraught with practical difficulties, the most outstanding being fear from the employers' point of view that the burden of extra costs will affect competitiveness. Therefore, it is imperative that we try to arrive at some conclusions, in co-operation with the EEC, so that any cost increases will be common to all member countries.
I am glad the Minister said he will be having consultations in the near future with the social partners—farmers, employers and trade unions—on all relevant matters. I hope the discussions will embrace a wider section of public opinion, as promised during the debate on the White Paper, such as the women's organisations and, indeed, some labour-intensive industries where the cost of labour proportionate to the total cost of the product is high and which will have many points to bear on the options proposed.
I am inspired by the harmony between the Taoiseach, the Tánaiste and the Minister and their confidence in the success of the Government's approach in the past year and their vision in putting forward the ambitious objective of full employment in five years. It is a daunting prospect, particularly when one studies the few countries which have achieved such an objective, where there is the advantage of a well-established tradition of work and where there is considerable wealth. It is interesting to have heard all the parties applaud the objective and it is only on the differences in the methods of achieving this objective that there may be disagreement. It will take a great deal of propaganda to change the individual employee's thinking on the options under discussion such as controlling overtime if work-sharing is to be translated into a practical reality.
It must also be remembered that additional workers require additional facilities. Therefore, job creation does not just entail the cost of labour, but also in manufacturing industries the question of additional locker room facilities, canteen facilities, increased management supervision, together with additional contributions to meet pension and social welfare requirements. Since these additional costs can be as high as 30 per cent of the wage cost they are, perhaps, a disincentive to and employer to recruit additional staff unless the momentum of the economy can be assured in the longer term.
Regarding the option of staggered holidays, I have had the experience of achieving this in my own company, and only having to concede, after a trial period of years, a return to the established holiday period, mainly because of the amount of absenteeism during August in the case of married women and single persons who were asked to take their holidays out of phase with their husbands, children or friends. This is a difficulty. Surely an obvious option to overcoming the problems caused by the short peak loading of the tourist season it a massive effort to iron out the peaks and valleys of tourism in all eight regions.
Now that there are such prolonged Christmas holidays stretching into the New Year, there are certainly opportunities for the development of winter festivals throughout the whole country during the post-Christmas period. Many years ago I made the suggestion of a junior sports international festival in Dublin during the winter vacation as a means of extending the tourist season in Ireland in general and in Dublin in particular. Such a festival involving young people would help to bring university students and secondary school children from the North and from Britain and possibly from Europe to Dublin during this off-peak tourist season. All sports organisations could be involved including soccer, rugby, GAA, right down to cycling, chess and judo. The whole thing could be an extension of the Dublin Community Games for children, which have been very worth while and successful.
Such a festival could also be linked with educational tours of Ireland's leading industrial concerns, and cultural interests could be catered for by visits to art galleries, the Abbey Theatre and other places of cultural and historic interest. Apart from January being a particularly bad month for those professionally engaged in the tourist business, it is also a low period for industrial activity, and such large-scale promotion of tourist attractions would be welcome and must lead to job creation. Also the youth of Europe would have a sporting reason for coming to Ireland and enjoying themselves, and they would be likely to return with much more money in their pockets in the years to come.
The reduction in the working year, or working week, can only be achieved through income sharing which also brings with it the challenge of education people for more leisure time. Early retirement seems to be the most workable option in conjunction with manpower planning, provided the cost of funding pension commitments earlier than planned can be met without undue burden on the employer. A payroll levy could add to the cost of employment and make overtime more financially attractive, rather than employing additional persons. Furthermore, as a nation we have suffered from gerentocracy for so long that it will need an extensive education programme to condition people to retire earlier and educate them to enjoy more leisure.
Not so long ago when I was a member of the ESB, the promoters of equality for women insisted on the retiring age being extended from 60 years to 65 years in keeping with the normal retirement age of men. From personal experience I was against this, because I have noted that most women who have been in routine jobs take up other interests when they retire at 60 years and become attuned to another career or hobby, while those who have to soldier on to the age of 65 years have not got the same opportunity and they have only the loneliness of old age to look forward to. I could never understand why the proposed phasing of early retirement for men was not promoted in the public sector rather than extending the retiring age for women.
Interest in one's work is the greatest single factor in human happiness. Without joy in work for its own sake, there is no emotional satisfaction or ambition. There is only boredom and fatigue. Early retirement means losing some of the human benefits of belonging to a community, the enjoyment of daily human relations, and all the other aspects of participation in life of one's environment. I was interested to hear the Minister's suggestion of phasing in this option of early retirement. Up to now, people who fought for their leisure and got it did not know what to do with it. Chiefly, they killed time and became devoted to the pursuit of pleasure. The thinking behind retirement was that the reward for hard-won leisure was to do as little as possible, to look at television and read magazines and newspapers with the least effort. Whatever options are chosen, the introduction of an education process for teaching people what to do with their leisure needs immediate attention. In fact, the whole question of early retirement, a shorter working week, more holidays, needs a great deal more consideration before our working population will benefit by the additional leisure even though they are making way for job creation.
The introduction of a residence related employment scheme is long overdue. This should embrace any private individual who is willing to give employment, not only in the improvement or maintenance of property, but in housekeeping or gardening. I see no difficulty in administering such a scheme through the proposed new PAYE and social welfare schemes. One questions why we should have to import so much fruit and vegetables when, even on a domestic scale, there is plenty of opportunity to cut down on such imports if the job of gardening is encouraged. Why does one seldom hear of a woman gardener when there is such a great need to upgrade our national environment?
This opportunity of income sharing should be open to everyone, men and women, married and single, because many people on the unemployment register may be either unsuited or lacking in intellectual or physical ability to take up the majority of jobs listed as available and yet may have talents in the areas I have mentioned. Such a scheme would overcome some of the objections by married women with regard to income tax allowances. They could employ people to look after their children. It would also help the women of Ireland to use their intellect to the maximum in suitable jobs, knowing they could better afford to employ others to do domestic work and look after their children.
Residence related employment is an obvious way of promoting income sharing by enticing the "haves" to help the "have-nots" more actively. Willing employers could help young people to get some early training in cooking, in hygiene and in household management. Furthermore, it would help to integrate society by having young and old people employed in the home with perhaps more comfort, more facilities and living with people of better educational background which, in some way, could help towards more social equality. Of course, another obvious extension of this option must be the job potential for abstemious men and women chauffeurs since the introduction of the new Road Traffic Bill.
In the Dáil Adjournment Debate the Leader of the Opposition pointed the finger at the failure of the "Guaranteed Irish" campaign. This was premature and unfair, as the new promotional programme was launched in January and is being developed in a planned progression over the next two-and-a-half years. We know there has been an improvement in the level of manufacturing performance in the sectors of industry where much of the initial programme has been concentrated but, whilst the allocation to the "Guaranteed Irish" campaign has been trebled this year, I would like to put this into context with the comparative expenditure of the most heavily advertised multinational products on RTE, for instance. I might add that the contribution of Irish industry has also been trebled.
During 1977 only two independent Irish companies featured in the top ten television advertising spenders. These were Bord Bainne and Irish Biscuits who came ninth and tenth respectively. Within the top 20, 16 were multinationals, or representatives of multinationals, and among the remaining four the Government Health Bureau featured. The "Guaranteed Irish" campaign did not appear in the top 20 last year. Whether it will rate this year, with the additional finance, I cannot fully assess. In 1977, I estimate that the top eight multinational advertisers spent £2½ million on RTE. Admittedly, some of this was on Irish made products but then they can confuse the public by switching to imported products under famous brand names without explanation.
I estimate that the "Guaranteed Irish" spent approximately £56,000 out of their £227,000 on RTE last year—in other words, about 25 per cent of their allocation. On this basis it could be approximately £170,000 in this year which still may not rate in the top ten.
I can explain what we are up against. It costs an Irish company approximately £15,000 for a good quality 30-second television commercial on film which can be as much as a third of the cost of the home market campaign. I reckon that some multinational television commercials cost in the region of £80,000 to £100,000, but this film is used worldwide and spread over a huge volume of sales internationally. The question is, can the "Guaranteed Irish" campaign have the impact that is forecast with its limited budget against such odds? When I was on export business in Canada some years ago I noted that the Canadian Government ran a very effective "Buy Canadian" campaign,—one interesting aspect of which was that all advertising of products not made in Canada had to include the country of origin whether printed in the press advertising, spoken on radio or superimposed on the television commercial.
I feel that the introduction of such a measure would be fair not only to home-based manufacturers but as a protection for the Irish consumer who should have this information when being enticed to purchase. It would help to put the "Guaranteed Irish" campaign on a more equitable footing with the multinationals, and then with the resources available the objective of increasing jobs by 10,000 by diverting 3 per cent of the purchasing power to Irish products would be more easily achievable. After all, the EEC Directive on advertising is being framed to allow adequate and effective laws against misleading advertising and, furthermore, the implementation of the directive is being granted to each country.
Some people have commented on the "Guaranteed Irish" concept as having a negative inference of "Do not buy Irish goods which have not got the ‘Guaranteed Irish' label". In contrast, we have nothing to counteract the substandard imports which are flooding this country. Indeed, when I was in Europe recently at a food conference, one of the delegates commented to me that Ireland was the easiest country in Europe to export food into and he intimated that he had quite blatantly used the ease of access to divert secondary products of his company in bulk to Ireland and that they had received a ready market here though they would not be acceptable in other countries. On inquiring what his country did about this problem, he said they had a very strict policing of imports to ensure that the description was in keeping with the mandatory and non-tariff requirements of his country and matched the quality of the goods described on the packaging.
In other words, while we have a "Guaranteed Irish" campaign we have nothing to guarantee the standards of quality of imported products to ensure the specification of their import documentation, and the OECD Report forewarns me of the propensity to importing heavily when demand is stimulated. As I have suggested, we should take some urgent measures in this area. Perhaps additional resources for the Irish Goods Council could be granted to redress this defect. I am sure that Irish industry would be willing to help in the policing activity in co-operation provided they could have some assurance of fair action. After all, there is the opportunity under the terms of Ireland's accession to the EEC in the recognition that the Community economic policy should be flexible to permit necessary corrections of economic problems in weak member states, such as Ireland, until—and this came out in the debate last night on economic and monetary union—there is more general harmonisation of laws within the Community. I am sorry that Senator Justin Keating has been indisposed during recent debates as he is the one who keeps us alert to the dominating influence of the multinationals and their efforts to bend the laws in their own interests.
I would like to conclude with an extract from the final statement in the Second Programme for Economic Development in 1963 which is still pertinent today. I quote:
The realisation of these aims will depend on the degree to which all members of the community cooperate in their individual as well as their representative capacity. It is, however, a heartening characteristic of the national economic planning that the more people who plan on the assumption that the target will be realised the more certain it is to be realised. Courage and consistency in planning are the first requirements, general acceptance and co-operation will then promote success.
The Minister can be assured that all my executives and managers have received copies of this Green Paper and will be participating in the discussion on the options. Furthermore, I feel we can do so with more confidence because I feel that feasible suggestions will receive consideration particularly when the White Paper is published which will set the Government's guidelines for the preparation of next year's budget. I commend Senator McCartin's comments on working harder and his whole attitude to this Green Paper on utilising our own resources. Whatever our problems ahead I am sure I speak for the whole private sector in welcoming the opportunity to integrate one's own corporate plan into the overall national planning objectives.
Unemployment is the major social and economic problem of our time. The Green Paper sets the radical and unique target of full employment by 1983. The Green Paper represents a further logical step in the process which was started by the manifesto itself setting out a set of policies for necessary change followed by the budget, the provisions of which have now been given effect by the Finance Act.
Senator Cooney said that the manifesto created high expectations with consequential undesirable effects, but the reality is that the manifesto was a carefully prepared document whose targets have been achieved to date. The same Senator also remarked that there was a universally critical and hostile reaction to the Green Paper. This scarcely fits in with the remarks on work-sharing by the president of one of the major interest groups in the country. I refer, of course, to the remarks of the President of the ICTU who, when discussing aspects of work-sharing, referred to the necessity for tackling the problem of excessive overtime. Indeed, I understand that in Belgium there is a legal limit on the amount of overtime that can be worked.
The trade union movement has placed job creation as one of its top priorities and the understandably cautious but nonetheless thoughtful and constructive response from the president of congress is both commendable and welcome. Work-sharing is being debated throughout the EEC countries and it is worth repeating that there is no question of reducing living standards under these proposals. What is involved is a slower rate of increase in real incomes which will be accompanied by some reduction in the length of the working week, for example. Congress is now ready to consult and negotiate on the provisions of the Green Paper and this is welcome.
Senator Cooney agrees with the target of full employment but says the means of achieving that aim, as outlined in the Green Paper, is not feasible. What would Fine Gael do in the circumstances? The last attempt at planning by the National Coalition was an impoverished document entitled Economic and Social Development, 1976-1980, published in September 1976. This document painted a most pessimistic picture of gloom and doom. Compared with that attempt, the Green Paper is teeming with ideas which are now open for discussion.
Reference was made by the Opposition to the employment figures aimed for in the Green Paper and it was said that these are historically impossible. Not only is this a defeatist attitude but history is of very little value anyhow. Fianna Fáil implemented different, indeed radical, policies in 1932 and 1959, for example, to meet the problems of the particular times. The sheer magnitude of the unemployment problem today demands dramatic measures and policies suited to tomorrow's problems. Various policy options along these lines are set out in the Green Paper for discussion.
Senator Robinson referred to the frightening consistency of Fianna Fáil in implementing election promises. I can understand that she has good reason to feel frightened as a member of the Opposition, precisely because the Government are meeting their election promises. Furthermore, she detects a move by Fianna Fáil to the right as opposed to an alternative socialist policy. Like so many other people, I am waiting to hear this socialist policy articulated, to have it brought into the light of day and compared with the economic strategy adopted by the Government. She also considers Fianna Fáil are fundamentally conservative in fostering the productive minority elite. Fianna Fáil have no ideological hang-ups. Party spokesmen are on record in many instances as saying we believe in a mixed economy.
As a nation we need enterprise, whether it comes from the public or the private sector. The private sector received valuable, specific incentives in this year's budget. It was an incentive budget designed, among other things, to give a further boost to business confidence. Far from Government policies supporting a minority elite, the reality is that we need a thriving private sector, willing to take risks and to invest. This same private sector produces goods not only for our home market but for exports, the same exports which are of critical importance to our small, open economy and on which we depend so much for the standard of living we enjoy. The role and importance of a confident and expanding private sector in creating jobs is self-evident.
In conclusion, we need a constructive and realistic discussion now, followed by support and, action from every section of the community in the major task of providing work for all our people.
I do not propose to make a long contribution to this debate. I have spoken many times on the White Paper and on various aspects of the economic strategy, since the manifesto to date. Therefore it is not necessary to repeat what is already on the record. I propose to take a few points arising from the publication of the Green Paper and develop some reactions I have to them.
What do we mean when we speak of full employment? It seems to mean different things to different people. To me it means that the State, by virtue of the statement in the Green Paper, will set up a system so that if a person is unemployed he will go to that system—call it what you will—look for employment and he will be employed as a result of that request. This will mean that if training is needed to put him in a better position to get conventional employment, he will go into training. This would mean that his hours would be occupied doing something productive, either training or working. Clearly, there will be some sort of structural side to this notion, in the sense that employment will be available in some parts of the country and people seeking employment will be in other parts, and there will be some sort of a floating population. What percentage of the total population that will be I do not know, but we take it that it will exist.
I do not accept the notion of a hard core of unemployed. In principle, once you accept the idea that people can draw money from the State and do nothing—and at the same time do other jobs on the side—or just go to seed, that is bad. That is why the notion of full employment, interpreted in this way, is radical and a brave step by the Government to put it forward. It is important that it be thought of in that light.
I see simplistic comments in newspapers asking do Fianna Fáil recognise or does Deputy O'Donoghue recognise, that never in the history of a capitalist society, and so on, was there full employment, and if there was, it meant that the economy would be in a bad way because a certain amount of unemployment is needed to achieve balances and so on. This shows that people are not reading what is in the Green Paper.
The nation asked the Government to plan effectively. They are doing that and have laid out their plan in the Green Paper. Those who are going to comment must at least do the Government the service of giving the Green Paper a decent reading.
Talking about the option or work-sharing and the question of whether work-sharing will cause increased unit costs, we know that Irish industry in many cases are working at a fraction of the production rate of which they are capable. It is my belief that, if the time is shortened, the product will still be achieved. When various firms in the United Kingdom went on a three-day week they showed that they were able to produce almost the same output in the three days as had been done in the five days. There is something to be said about work expanding to fill the time available to do it. May be the notion that we will give up competitiveness in this way is too facile a way of looking at it.
In that regard perhaps the Minister might think about influencing his colleague, the Minister for Finance, to give some taxation concessions in regard to incentives paid to workers who were working on payment by results schemes.
In other words, instead of taxing the amount of money extra that the worker makes on an incentive basis at the marginal taxation rate, it might be taxed at the average rate to make it worth while. In that way working shorter time more effectively with better payment by results schemes, we will achieve the unit-cost productivity we are after. Needless to say the work-sharing idea will be debated at length and I shall not add any more at this stage. I have noticed people like John Healy commenting in the paper about the number of studies referred to in the Green Paper. This is an example, to some extent, of this rather derisive and somewhat cynical attitude that seems to run through us as a nation. I mentioned this before. We should look in the mirror fairly regularly and ask ourselves are we being very positive about things in life. Why should there not be 30 studies referred to in the paper? If there are a number of Government Departments, subsections of those Departments, Ministers of State operating in Departments and semi-State bodies operating in different areas, is it strange that each of those would be carrying out a study to inform the process? Is there anything strange about the fact that it should be referred to in the Green Paper? Statements like that are difficult to understand.
I too intended to say what the Leader of the Opposition has said about the "Guaranteed Irish" campaign failing. I was delighted that Senator Lambert elaborated at length on the question. Of course, the point is that the campaign is based on a three-year plan. It is a constructive, well thought out approach to influencing the Irish purchaser over a period of three years and, hopefully, to get some immediate pay-off. As I said in the Seanad, when speaking on the motion on the "Guaranteed Irish" campaign, some figures were very encouraging even at that time. But I was shocked to see in the paper today a survey carried out in Limerick. As a Limerick man, I hope it is not just Limerick people who are like that and that it applies to other people as well. Fifty-two of the people in the sample were not aware of the notion of buying Irish and when they went to buy were not aware of that need. That is a rather damning statistic. Hopefully, the campaign will do something about that. You may remember that I suggested during that debate that perhaps each family should appoint one person, perhaps one of the children, as the sort of "Guaranteed Irish" promoter. Each week they would ask Mammy and Daddy "Did you watch what you were purchasing this week? In other words, we would become aware of our purchasing pattern. This is not a defensive posture; it is a positive one in an effort to make people aware that "Guaranteed Irish" products are there and that one can be proud of them.
I went in to buy a pair of shoes the other day. I went to a shop I thought was pushing Irish shoes. At the start nothing Irish-made was offered to me. I felt somewhat embarrassed, but I made clear how I felt. Everybody else should do that as well. I found Irish made shoes. They are quite comfortable and I feel happy standing in them now.
The other general point I wanted to raise was this question of pump-priming. The Green Paper was analysed by Brendan Dowling in Business and Finance 22 June 1978. There is one paragraph in this report which angers me:
In the 1977 White Paper the theory of pump-priming was advanced as the rationale for the proposed 1978 Budget excercise. As I noted at the time, this theory is more an intellectual curiosity than a practical proposition. It would now appear that in addition to this theory we must add a brand new approach to macroeconomic policy which suggests that while increases in public spending and cuts in taxes restore confidence, stimulate the private sector and ensure rapid growth, equivalent or greater cuts in public spending and increases in taxation have no effects whatsoever on the rate of growth or the level of activity.
I am sure the Minister will have his points to make on that statement. But to me and to any ordinary Irishmen what we tried to do was to get the economy out of the doldrums it was in, to remove—to use a word I used last week—the "stiction", overcome that, with an impulse of expenditure without adding to the price of goods. Therefore, by giving it in cuts the effective spending power of people was increased without affecting the consumer price index. The con-Government took the first step. The confidence is restored and the country is moving again.
The Government are now saying to the private sector "It is up to you to have a go, the confidence is there. Carry on." I was delighted to hear Senator Lambert say that the private sector were ready, willing and able to do it, that he was willing to make sure that his corporate plan fitted neatly into the corporate plan of the State. That is the challenge to private industry all through. The President of the Confederation of Irish Industry, speaking at a lunch attended by the Taoiseach, said: Taoiseach it can be done. Statements by spokesmen of private industry saying that it cannot all be done. Statements by spokesmen of private industry saying that it cannot all be laid on the private sector are an example of just being too careful.
There is a small network of people in most countries who have a lot of influence on investment policy. They meet each other a lot; they go to the same lunches, they attend the same kinds of meetings. If that group of people do not feel confident or any one of them feels somewhat pessimistic or over-cautious, that spreads through that small network fairly quickly. Fianna Fáil have succeeded in making that group of people more confident that this Government will make it possible for the private sector of the economy to expand and to provide the employment opportunities. They are going to go ahead, and that is what it was all about. It is nothing to do with revisionism in macro-economics or anything like that.
On the question of industrial and agricultural policies and options outlined in the Green Paper, I could go on at length. I might make one or two comments in regard to industry. It is important to preserve jobs. We should not lose sight of that. It is mentioned in the Green Paper. The preservation of a job might cost a lot less than investment in starting anew. We must not forget about that as we go forward.
Fianna Fáil in their manifesto indicated that they were unhappy at that stage with the emphasis on small industry development. It was very satisfying to see in a very short time after we came back into power that the IDA had expanded their activities and the number of people working in that area. The targets mentioned in the Green Paper for of people working in that area. The targets mentioned in the Green Paper for extra expenditure and the 300 expected new projects in the coming period—all of that is very heartening. However, the Confederation of Irish Industry have brought out their report on the small firm in Ireland. They are unhappy about the extent to which the services for small industries are spread around various Departments. I have some sympathy with this. They are suggesting that a small firm agency should be set up or that the whole thing should be coordinated under a Minister of State. I would certainly refer this suggestion to small firm agency should be set up or that the whole thing should be coordinated under a Minister of State. I would certainly refer this suggestion to the Minister for consideration. There is no great glory in small industries. The big industries—Alcan, or the great big smelter—seem to attract the headlines; but the small industry employing about 50 people is the seed that can grow. There may be something in what the confederation are saying.
In relation to small industries there is a need for AnCO possibly to develop special training centres for the cash trades. When we talk about residence type employment, which is mentioned in the Green Paper, I feel, although this may be partisan, that in the inner city of Dublin there is room for an AnCO centre which would specialise in training people in the cash trades so that they can work and get cash for it. This would be a useful contribution to getting people into the employment category.
In relation to the question of developing our minerals, the Green Paper says if the price of zinc is bad internationally there is nothing we can do about it. However, there is one area of this development which is not getting enough attention. People from whom I would have expected better are making the assumption in various reports that we cannot develop the downstream industries from zinc or any other metal until we have the smelter. If there is a possibility of developing industry from these basic metals once they are refined and ready for processing we can do it now because we can buy the zinc at a very reasonable price. This suggestion tends to come from commentators of the left, who say that when we get the smelter we can get all these things done.
My previous reference here to the entertainment industry was misinterpreted a bit. A lot more can be done to help to put the record making industry in a position to move into exports. It was in that context that I advocated in the Seanad previously that we should have competing radio stations. At that time I was interpreted as supporting the pirate stations. I made it clear afterwards that I was supporting competition in this area. Competition would improve the coverage being given to records being made here. I heard recently from one of the firms producing records that a new record they had produced had been played five times in the week over RTE but that it had been played five times in a day in Belfast. We have to develop the entertainment industry. We are good at it and it should be dealt with more urgently.
The Green Paper devotes Chapter 3 to agriculture and gives an outline of the options available. It is a big challenge and I hope that the farming organisations and others will examine the implication of the Green Paper in that regard. There are two basic approaches; structural reform to ensure that land not being used will be used and will be passed on to people who will make better use of it; and better incentives through payment by result schemes. This leads us to the question of a more effective farm modernisation scheme, which was discussed on the Adjournment Debate last night. I hope that from this there will result a faster move in the farming community towards these structural reforms, and putting more land in the hands of the professionals who will develop it and operate it at the high productivity required.
Deputy Garret FitzGerald, a few years ago when giving a lecture, pointed out that agriculture as a percentage of our total output was decreasing and that the output from the industrial side, transportable goods industries, was expanding; and he pointed out that since the rate of expansion of that sector was high, because it constituted a larger percentage of the total, it would constitute a bigger impulse to growth in our gross national product. It is very interesting and most satisfying to see that as agriculture still represents a large percentage of our GNP output we are now talking about figures of growth for that area of 5 and 6 per cent. If that is on, now the reverse is happening. Because it is a reasonable percentage of the total agriculture, it will make a big contribution to the GNP growth.
The target of 7 per cent is mentioned. There is a question of whether we are over-optimistic about the target. Full employment is the target. Arising from the acceptance of that target, there are certain economic dimensions that will have to be met. The Green Paper is saying that 7 per cent, based on certain assumptions and other economic dimensions, will help us to move towards that full employment target. It is important that the people—as organised into youth groups, ICA groups, agricultural groups, industrial support groups, community groups, and so on-discuss this document because it is the basis for our future.
I thank all the Members of the House who have contributed to this debate. We have had very interesting and wide-ranging discussions. Very many points have been raised, not all of which I could hope to reply to in a limited time. The fact that I do not reply to some point should not be taken as in any way indicative that its relevance is not appreciated. I have taken many notes for follow-up at a later date.
I will refer to a number of issues I regard as requiring some comment at this stage. I noted that the main speakers for the two Opposition parties were both careful to say that they did not object to or oppose the end of full employment and that where they differ from the Government is as to the means by which to attain that end. I waited carefully to hear any statement of those alternative means. I never heard it. Perhaps that was due to some omission on their part, which would be amended at a later date. I am more of the view that it is because they do not have an alternative programme or policy. Senator Robinson, for the Labour Party, was indeed conscious of this flaw in her argument, because she rather tamely said at one point that there would indeed be a document published by the Labour Party later this year which would set out their alternative. I look forward to it with interest. I welcome it and I hope that we will have a statement of such an alternative programme for the attainment of full employment at the earliest possible date.
Senator Cooney, leading for the Fine Gael Party, having made this point, attempted to say that we were out of step with all the leading experts and commentators and so on. The inference was that we were out of step with respect to both our goal and our means of attaining it. It then transpired that his predominant concern was that most people were forecasting a lower rate of growth for the economy this year than the official figure of 7 per cent. This question of playing with numbers is a point to which I will return later on in my remarks. At this stage I simply want to answer the specific question which he raised. He asked what would be the effect of failure to achieve the ambitious 7 per cent gross target by the Government. Would it mean that all of these programmes for attainment of full employment and so on would have to be abandoned or postponed? The answer is no, not necessarily. If growth is to fall within the range which is spoken of—the most pessimistic forecast is 5¼ per cent, ours is 7—if we sustain growth in that range, it is perfectly feasible to attain all the targets we propose.
Where would the shortfall occur? It would occur in the growth in living standards. Let me make it clear we would still be talking about a rise in living standards; we would not be talking about a fall. That would be the primary area in which the consequence of any failure to achieve the ambitious growth targets set by the Government would occur. Of course, what would be relevant would be the manner in which different sections within the community would react to any situation in which they felt that the growth in their living standards was not as rapid as they felt feasible or desirable.
I shall deal with some of the specific point raised by Senators very quickly before I come back to the main issue of the debate. Senator Murphy made a number of interesting observations, to which I will not reply in full, but he made one particular point. He said why was it that you could have directors of private companies as Members of the Oireachtas but you could not have directors of State boards as Members of this House. He deplored that for that reason some of our present Senators had had to forego their membership of other State bodies. I sympathise with his view.
I understand and share his concern that we should be able to draw on the services of the most talented and dedicated people in our community. I think the reason there has to be this distinction between membership of the Oireachtas and participation in State companies and so forth is that it would be dangerous to create a situation in which members of State bodies could be subjected to any influence, or could be felt to be subject to any influence, even though that influence might never actually be exerted.
It would be extremely difficult to get the average citizen to believe that a Member of this House or of the Dáil who is also a member of a State company would not transfer into that relevant State company the particular party or other viewpoint which he represented in this Chamber. He may regret that; he may feel it is sad. But I think it is a fact of life, and we should recognise facts of life. I make that point because one of the other ploys often adopted by opponents when talking about this Green Paper is to try for the line that it is a nice, interesting academic exercise, but of course it bears no relation to reality. I want to go on record as indicating that I think we have just as realistic an approach—indeed I would argue it is more realistic—to many of these issues as some of our critics and commentators.
A number of speakers referred to the "Buy Irish" campaign. The general point was made by a speaker from the Government side when he said that it was rather early yet to be criticising the apparent lack of results, because such a campaign takes time to get under way. If our opponents had bothered to read the manifesto and our other documents—— they usually manage to read bits of it if they think it suits their case—they could have read there that we said it would take about three years to build up the "Buy Irish" campaign to its maximum effect. In other words, we were perfectly aware of the practical difficulties in the way of mounting an effective campaign. We recognised that it would take time to bring about the necessary change in purchasing patterns and in other distributional and related areas before the goal that we have set ourselves of a 3 per cent switch in consumer spending could be realistically attained. We did not expect overnight results nor have we ever claimed that they would come about in that way.
On the specific point a number of speakers made, giving instances from personal experience of failure to have Irish products offered to them in shops, it strikes me that this is an area in which might help to make the campaign more effective would be to publish at frequent intervals lists of Irish products which were available in certain stores and also list the stores which did not stock them. I believe that part of the task in facing up to any problem is to have it spelled out clearly and to have enough information available about the nature of the problem. It would be appropriate that we should give as much information as possible to prospective purchasers when they are making their choice as between Irish and alternative products. I was particularly interested in the references made by Senator Lambert to the manner in which the Canadian authorities operate their Buy Canadian Programme.
Another point raised was the question of food subsidies. Were we or were we not phasing them out? Of course, in talking about phasing out food subsidies, it is easy to represent us as the stony-faced, hard-hearted Government grinding the poor and all that. Again you have to face up to the reality of this situation. First of all, I have to put it on the record that it was Fianna Fáil who campaigned for the introduction of these subsides in 1974. The justification for their introduction was that there was a period of rapid inflation and a deterioration in living standards. The argument was that the introduction of subsidies would help to protect living standards, would also cut out some of the price rises and therefore, would help to ease some of the pressures for pay rises and other cost increases. That was the justification for their introduction. I am sure it was right. We campaigned for their introduction and supported it. The corollary is that, if you want to introduce subsidies in bad times, you ought to be able to phase them out in good times. If bad times ever come again, naturally nobody ever likes to contemplate such an unhappy prospect; but you must, if you are going to be prudent in the management of your affairs, allow for the possibility—surely you want the Government of the day, whoever they might be to be in the position to reintroduce subsidies as appropriate. In order to do that you must phase out subsidies in good times, good times being defined as periods of low inflation and rising living standards.
No one is talking about an overnight phasing out of them but I think it is appropriate to set it out as a practical policy option for the years ahead. As the Green Paper makes clear, the actual pace at which this could be done is something which can be decided upon in relation to the circumstances of a particular year or period. The only other alternative is to imply that you would make the existing level of subsidies permanent. When further action of that nature would be required you would add to the subsidies. You would eventually find that you had accumulated an incredible level of subsidy. That is not realistic and practicable.
One of the questions put to me by Senator Robinson related to the possible phasing-out of the dole, as referred to in Chapter 6 of the Green Paper. She thought that smacked of views put forward by conservatives, that it had a ring of authoritarianism and so on.
I wanted to know if there was a compulsory element in it.
The answer is "no". There is no compulsory element as such. What the Senator is saying is that we should develop a system in which people who are seeking work will find it. Remember, that is what unemployment exchanges are about. Unemployment exchanges are places where people go to register the fact that they are willing to work, are seeking work and cannot find it. What we are saying is that we want to introduce a system where people who are seeking work can find it. If that represents a compulsory aspect or not, I do not know. To elaborate further, I take it the point would be: Does that mean that the person would have to take whatever job was offered to him? No, one does not envisage that at all. If he does not want to take a job, that is all right. Obviously, the suggestion is to try to provide as great a range of career opportunities as possible, but no society has ever found itself in a position where it could offer the job of the individual's choice to the individual. I do not believe it is within the bounds of practical policy for the foreseeable future to hold out that prospect. I would like to think it would be so but I do not see it as a practical prospect. What I do see as a practical prospect is the being able to offer some form of work. That is the reality for the majority of people. There are very few people who are privileged and happy enough to be able to find the job of their own choice. Most of us, at some stage or another, find ourselves taking jobs because they happen to be the ones available. That is the element that would be associated with the operation of the full employment programme.
The next point from Senator Robinson relates to targets versus the reality and the inference that all our ambitious targets were unreal. I think she quoted from Brendan Dowling. I think Senator Mulcahy also quoted him and said we were asked to believe that last year the injection of Government funds in a classic pump-priming exercise was needed to achieve rapid growth and now we are asked to believe that for the next two years cutbacks would be appropriate. Yes, Senators are asked to believe that because we believe it as a practical realistic policy. It was set out first in our economic document of September 1976; it was repeated in the manifesto; it has been elaborated on, not only in the White Papers and Green Papers but in various speeches made around the country. The rationale for it was that we said we wanted to initiate a policy which would restore confidence, which would encourage people to start taking risks, displaying enterprise, making investment. We recognised that such a programme would take time to build up to any sort of an adequate level and we said:
Because it takes time for a programme of lowering costs and boosting output and exports to take effect, Fianna FáIl also propose immediate action to ...
That has been repeated many times. We said it will take time to build up a sufficient momentum of investment, growth, output, exports and so on, and that pending such a build-up in the productive sectors, the Government would start the process with, if you like, a classic pump-priming exercise of direct job creation and some tax cuts. Many of the tax cuts are also being geared to create this climate of greater competence and incentive to enterprise. So there is no contradiction and I find it difficult to believe that any economist worthy of the name would find any difficulty in understanding the concept. I am not in any sense taking Senator Robinson to task, I am taking to task the sources from which she draws these remarks. I have to say also that I do not propose to go into a numbers game on it for reasons which I mentioned at the outset, because ultimately the numbers are not important. I will come back to that.
Surely the policies the Government must pursue during 1979 and 1980, if we are to bring down external borrowing from 13½ per cent to 8 per cent, have to be deflationary.
Senator Whitaker dealt with that point in an earlier contribution during Senator Robinson's absence. He was making the point that we should resist the insidious argument that the only way in which we could get a stimulus to the economy was from continued injections from the public sector. This was a peculiarly blinkered view which seemed to ignore the scope for expanding the economy through growth in investment, exports and private sector output catering for private sector demand and so on. I agree. That is why the view we take is that, if the economy is growing rapidly through, let us call it autonomous investment, export demand and so on there is no need for any sustained public sector stimulus. Not only is there no need for it but to maintain it would be positively harmful. There is another well-known phenomenon widely discussed by the academic economists in recent years, usually referred to as the crowding-out effect, the argument being that if the public sector tries to give too much of a stimulus it gets in the way of expansion by the private sector. Therefore, it has a self-defeating effect because it crowds out, and obstructs the extent to which the acquisition of resources, the expansion of output and so on can take place in the private sector or in the rest of the economy.
That is the rationale for our policy. It has been stated many times. It has a logical basis and a respectable intellectual pedigree. I will debate it in more academic detail in appropriate circles, if necessary. For the purposes of this House I want to set it firmly on the record that it is a perfectly realistic set of policies and owes nothing whatsoever to intellectual flights of fancy.
A point was made about the ambitious job targets and so on and how there is absolutely no basis for them. To summarise quickly I will use the OEDC Report as, hopefully, a neutral source. It points out that the number of gross jobs created, even during the bad years 1973 to 1976, is of the order of 17,000. The reason why those new jobs did not lead to any overall expansion in employment was that they were more than offset by the very high level of job losses, by the redundancies and closures of that period. What we are saying in the Green Paper and White Paper is that we do envisage, first of all, a more rapid rate of gross job creation. I will single out one item as giving rise to a faster rate of new job creation and that would be the faster rate of investment from new firms.
It was a fact that the inflow of new firms, the creation of jobs associated with them slowed down during the recession. It is also a fact that it has revived again over the last two years or so and is continuing to grow so that there is every basis for expecting that there will be a greater contribution of new jobs from that source over this period, 1978-1980, than there was in earlier years. That is on the job creation side. Then on the other side of the account we naturally expect a much lower rate of job loss through redundancies and closures because of the recession having passed and because we would say of more appropriate policies being operated, also because of a more buoyant level of demand on the home market and so on. We see much less pressure on existing firms and existing jobs. Of course, there will continue to be some redundancies, some closures; there will always be some changes taking place. The basic notion that the job targets are totally unrealistic and have no basis is not supported in any way by the available information.
Some Senators spoke about sacrifice and so on, requiring effort, support and contributions from the different sectors of the economy and said that this again was not spelled out before the election. I have to say it was. For the detailed exposition of economic policy I have to refer back to the September 1976, statement which made it quite clear that after these initial tax changes and additional Government spending to create jobs there would be restraint in Government spending in later years in order to gradually restore stability to the Government's finances. The phrase we used there was that not even Fianna Fáil could produce a programme that would simultaneously solve the three major problems we faced—unemployment, inflation and the state of the public finances. We said that as a priority we would tackle unemployment and inflation and we would later gradually restore stability to the public finances and that the way in which that would be done would be by keeping a fairly tight brake on spending in later years and allowing tax revenue to rise as a consequence of there being more people at work and higher levels of income from which taxation would be paid.
In an actual election document you naturally do not go into the same detail but may I say there is reference. I think it was Senator Markey who asked for it. Page 30, paragraph 9 of the manifesto says:
The growth projected by Fianna Fáil for the economy will make resources available to maintain the real value of incomes and to provide a modest amount for increases. This amount will depend on investment requirements. Income earners must be prepared to co-operate in order to assure the level of job creation already outlined in section 2. In any event, the level of income increases must not exceed the average level of industrial income increases given by the industrial countries with which this country must compete....
I think that is spelling out in a reasonably clear way that there is a limit to the extent to which the Irish economy could afford to accommodate pay rises, that there would be a need for restraint, that the actual amount of the increase would also depend on investment requirements, making it quite clear that if we were serious about a job creation programme we would have to find the resources to finance that programme.
In that context let me make clear that we did say that there would have to be quite a shake up in our attitude to these areas. On page 12, the opening of it, we said:
Hundreds of thousands of people are going to be unemployed over the next five to ten years if there is not a major shake up in the provision of employment, particularly manufacturing employment.
"Shakeup" is a lovely word.
Yes, it is all right. I am making the point. Since so many speakers on the Opposition side could not apparently find the reference, I thought I would help them and make the point that we did indeed spell out just as clearly in that area as in any other area the nature of the policy which we intended to pursue—and Senator Robinson, I think, referred to our terrifying consistency.
Frightening consistency.
I do not know how you select the adjectives but as far as I am concerned it is commendable consistency. We identified the options before us; we selected our policies; we put it before the people and since we came into office a year ago we have been doing what we said we would do. I think that is a reasonable, fair and realistic approach to the operation of Government.
There are areas such as family legal aid and——
No doubt. The manifesto was in two parts, if I may deal with that point. Part I made it quite clear what would be done in the first 12 months. The rest of the manifesto I think can be reasonably taken as a statement of the Government's programme for its term of office. So, we have three years in which to deliver on all the other things in the manifesto. I am quite happy that we will be able to come back when our term is complete and point to the record.
Senator Robinson also said—because we are taking note of this OECD Report on the Economy as well as the Green Paper—that, reading between the lines of the nice polite phrases of international civil servants and so on, they were critical of the Government and of its policies and quoted one or two sentences to indicate the nature of the criticism. I think I am correct in saying things like "while policy is giving considerable emphasis to labour-supporting measures, it could be that a slower growth of private consumption than projected in favour of more direct labour market measures would be preferable in the interests of employment. Such strategy may also help to reduce the associated inflation...." I think that is the sort of thing the Senator quoted, the emphasis on sucking in imports, and she implied that was being more critical than they normally are. The previous OECD report on the Irish economy happens to be dated November 1976, and if the Senator is interested in the way in which the niceties of international diplomacy make criticisms of Government, may I make a few quotations? It says on page 43:
It is evident that the economic situation has reached a critical stage, and if present trends continue it may become extremely difficult to take remedial action without impairing medium to longer-term growth prospects.
On page 39 it says:
On almost any plausible assumptions the outlook for 1977 looks, in itself, unfavourable. Given the 1976 starting point, it could hardly be otherwise.
I could go on in the same vein.
You are not going to claim credit for the upsurge in the economy from mid-1975 on, are you?
If you want to quote the OECD as an independent source, quote it, and that is what they were saying in November 1976. It is their document, not mine. Could I make the point also that they were commenting on a document which had recently been published by the Coalition, the Green Paper discussion document?
If anybody really wants to know how international civil servants criticise Governments, I will give a good example of it. They go on to summarise the main features of the Green Paper calling for a growth rate of 6 per cent and various changes and so on and then they say:
What follows here is an alternative, complementary approach to medium-term analysis examining the implications for the labour force....
If you wonder why they have to do it in that sort of nice way, you turn over the page and on page 40 they say:
These factors suggest that the average age of capital must be declining.... Projecting the trend in output per man-hour at 5 per cent to 1986...
They then deduce what that would do for employment. Why do they have to do that? Because what they are trying to say in the nice language of international diplomacy is that they just do not believe the Coalition's Green Paper which said that productivity in industry would grow by only 3.4 per cent a year in the period 1976 to 1980, because if it did grow that slowly and if industrial output did rise by about 8 per cent, naturally you would be able to get a very large increase in industrial employment. That is how the Coalition were going to solve the unemployment problem, by playing with numbers, and what the OECD were saying was that they did not believe the numbers, that you were going to get a much higher growth in productivity. We agree with that. It went on to say:
The scenario presented above does not pretend to show a precise forecast or target pattern of growth but should rather be taken as indicating the orders of magnitude involved and drawing attention to some important problems that face Ireland in the coming years. While the analysis does not outline the only feasible path to a full employment economy, the conclusions to be drawn would be broadly similar whatever the course adopted. The analysis emphasises the need for a considerable acceleration in the overall growth of the economy to be achieved by raising the trend rates of increase of investment, especially manufacturing investment, and of industrial exports.
So, there you have it. The OECD say that what is needed is to accelerate the growth rate and to do it in a manner which would lay greater stress on accelerating investment and exports. Who have adopted such a policy? Fianna Fáil.
They seem to have overdone it by the look of the latest report.
If the Senator can get comparable criticisms from the OECD I would be interested to hear them. I read through their whole report very carefully and I could find none. I want to emphasise, then, their point about not spelling out precise numbers. What is much more important are the orders of magnitude and the nature of the policy to be pursued and that is the point I want to make.
Opposition speakers said that they agreed with the goal of full employment but they did not agree with the means by which we were going to attain it. They never spelled out the alternative means. What we got instead was an attempt to fall back on numbers, and questioning the ambitious numbers and suggesting that we would have lower rates of growth and so on. What I want to suggest is that at times playing with numbers was almost an obsession with members of the Opposition. Ultimately these are not important. I see little point in being precisely wrong through an over-obsessive elaboration of numbers. I would far rather settle for being broadly right and being broadly right means identifying the nature of the problem, spelling out the options, the possible means of action to tackle those problems and then to pursue one's chosen course of action within some sort of tolerable limit. It does not concern me at all whether the growth rate for this year turns out to be 6 or 6.5 per cent. That is not terribly important. It would worry me if it were only 1 per cent or 2 per cent but not even the most hardened critic is suggesting that sort of pessimistic turnabout.
What is relevant is the nature of the policy, the broad orders of magnitude and then to pursue one's chosen goals by appropriate means. In other words, we are talking about ideas and ideals being much more important than were numbers. I want to put it quite clearly on the record that, yes, we are being ambitious, we are talking about changes in attitudes, we do want to see changes in the trends because the one thing we know is that if we had continued on the then course of action there was no possibility of providing full employment in the foreseeable future. If that were the attitude of mind, the way we were to discuss the problems of Irish society, then we would be saying, in effect, that although we deplore and lament the inadequacy of the opportunities for our young people of course, there is nothing we can do about it because, as realistic, practical people we know that we cannot have full employment, that no capitalist society achieves it and therefore we must lament our lot and soldier on.
We have come into government to change quite a number of things. We can safely claim that having changed the specific things which we set out to do in the first year we want to try to build on that and change in a much more ambitious and more permanent way. The major change which we are putting forward for discussion at present is whether we are willing to change our whole approach, attitudes and ideas in tackling the unemployment problem. What we are saying is that we believe it is feasible that we can provide everybody with work within a relatively short time span. To achieve that result will call for effort, commitment and sacrifice as described in the Green Paper, sacrifice in the form of asking those who already enjoy employment and secure incomes to settle for slower rates of increase in their living standards than might otherwise be available to them. It remains to be seen whether there are enough groups in the community who share our belief, our ideals, our commitment and who are willing to join with us in seeking to bring about what would be a dramatic change in the whole future of our country and which would then give us the basis for building a much more healthy society into the eighties and the nineties.
I know there are many other issues which, understandably, people feel should be put forward for discussion. Of course there are many areas of community concern and interest which are not touched on but it is just not realistic and appropriate to try to solve every problem at once. Returning to a remark which I made a few minutes ago, not even Fianna Fáil can produce plans to solve every problem simultaneously. That is why we take our choice, we set out our priorities. We indicate the areas we want to tackle and the reasons we select that order of preference. If some people want to come along with an alternative, where they profess to be able to solve more problems simultaneously, or if they want to advocate an alternative order of preference let it be so. Let us have those alternatives and let them be debated fully. In the meantime in the absence of any alternative and in the professed support from the Opposition side of the House that they endorse the goal of full employment, and since the Government's proposals are the only ones on the table for discussing realistic means to achieve that goal, let us go out of this House now and use the time available to us in the coming months to generate the maximum degree of support for those proposals. If there are any ways which they can be realistically amended, improved or made more effective, the Government and I would be more than willing to take all those suggestions aboard and to enter into constructive debate and discussion because we want to implement at the earliest possible date policies which can hold out a better future for our people.
May I put again to the Minister one specific question which I think, he has not clarified? The Minister was criticising Members on this side of the House for quibbling about figures and for pinning too specifically to precise targets but I should like to know, and I had asked, whether the commitment of the Government to reduce the external borrowing from 13 per cent of GNP this year to 10½ per cent next year and 8 per cent the year after is a general endeavour of the Government or is it a specific commitment on which the Government will deliver?
Obviously it is like any other statement of a target or targets. We will endeavour to create 20,000 jobs this year. Does that mean that we must create exactly 20,000? If we can create more——
It could be different. There could be a requirement that we do it.
There is certainly no requirement. If the Senator's questions is if we are required to do it either by the EEC, the Central Bank or by any other body, the answer is quite categorically"no". It is an instrument of policy decided by the Government. The reason we set it as a target is because it is a target that would be consistent with the attainment of our other targets. Clearly if there were to be any major deviation in the performance of the economy as a whole, then not only that target but all targets would fall for consideration and for possible revision.
What about taxation sharing?
I replied earlier on to one or two of the points the Senator made and I certainly have taken aboard his remarks. We will be putting forward proposals on taxation sharing.
Question put and agreed to.
An Leas-Chathaoirleach
Item No. 3 has already been discussed and perhaps Senator Robinson will formally move it.