Committee on Finance. - Resolution No. 11—General (Resumed).

Thursday, 23 April 1964

Dáil Eireann Debate
Vol. 209 No. 3

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Debate resumed on the following motion:

[312] That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance.

Mr. M.E. Dockrell: Information on Maurice E. Dockrell  Zoom on Maurice E. Dockrell  When speaking yesterday evening, I referred to the four per cent increase in national productivity to which the Minister had adverted in his Budget speech. He made a certain amount of play with this four per cent national increase and I was making the point that I assumed that the four per cent increase was correct and, that being so, nothing had been done in this Budget to further any increase in that productivity as, indeed, nothing had been done in the last Budget to increase it.

The increase which have come about in national productivity have been very largely in spite of Government intervention and not because of it. I was linking up the effect of the 2½ per cent sales tax, or turnover tax, introduced by the Government in November last, in relation to which the Government spoke with two voices—we were told it was a very small tax, on the one hand, and that it would be anti-inflationary, on the other-and, as I said last night, these two things do not make sense. If it were a small tax, it would not have an inflationary or anti-inflationary effect. In point of fact, it was a very large tax which was to yield something like £11,000,000. The yield which has taken place since November has been well up to expectations and the Minister made no case that that tax had failed in its purpose of producing the expected revenue. It has produced more than was expected; in other words, it is buoyant as, indeed, we all expected it would be.

This tax has placed a considerable burden on the business community. I do not intend to go into that question in this Budget speech but, as the House will remember, there was a by-election very shortly before the tax came into effect and it showed overwhelmingly [313] the public reaction of anger at this tax. At the same time we were being told by the Taoiseach we must be careful not to increase wages, we must be careful to increase productivity without increasing wages, that otherwise we would interfere with exports, and so on.

That was what we were hearing in the autumn of last year. Yet suddenly, in February, the ninth round was granted. We were told in the Budget that it was to prevent a free-for-all. As I said, it was not a free-for-all, it was all for free. There was no increase in productivity, no increase in the volume of goods produced. It was bound to have not an inflationary tendency but, as it did have, an immediate inflationary effect. It appeared to be very nice for everyone who got the 12 per cent increase; of course, certain classes of the community did not participate in that.

The cost of living has shot up since then and will continue to shoot up. There is no way the farming community, the business community or the industrial community can carry the effects of these two tremendous increases that have taken place. There is the absurd situation that a tax is imposed in November; wage increases are given in February to help meet that; then taxation is finally imposed in April to meet the costs of the February increases.

Is there not something crazy about that type of finance? What sort of economics is it, that creates a situation in which a Government has to do that? We used to expect that the Budget would be a help to industry and to people generally. This Budget has failed miserably in that respect. Where it has given anything it has given with a very small hand and, indeed, it has not given it yet; the old age pensioners, the widows, and so on who are getting the 2/6 a week extra will not get it till next August. It is a case of live horse and you will get grass. There is not very much increase for them in this Budget.

I am primarily interested in the [314] business and the urban community, representing as I do a city constituency; there are others who are better able to put the case for the farmers. There was an idea that the ship of State should be trimmed, if necessary, for heavy weather. I do not see any trimming here except political trimming and that is what has landed us in the difficulty we are in. This is a political Budget, not an economic Budget. There is practically nothing in it for the poorer sections of the community and it does not help the business community. A little is done for the farming community but my farming friends and Deputies here have said that what is being done is not very practical. The idea that a budget is an instrument for furthering generally the economy and the economic wealth of the State is not recognised in this Budget.

When the Parliamentary Secretary to the Minister for Finance was speaking yesterday on the Budget he referred to a speech by Deputy John A. Costello. He said we did not speak as one voice. Of course, we do not speak as one voice. This Party has never been a regimented Party. We all have different viewpoints on certain matters but when joint action is necessary and desirable we act jointly. In fact it might be said that our motto is diversity in unity. We are a united Party and we hold diverse views on certain things. However, when one examines what Deputy Costello said yesterday about the Budget one begins to realise it is such an extraordinary Budget, it is such a patchwork of different ideas and different shades of economic thought that an Opposition who were doing their duty and were speaking sincerely could approach it only from different points of view.

I can perfectly well understand that Deputy Costello considered this to be a conservative Budget. It is conservative in the sense that it does not go forward and do the things which, in the 20th century, we expect the Budget to do for the state of the nation, and the well-being of the country as a whole. It is like a Budget which would [315] have been produced many years ago when a laissez faire policy held sway and little was done for the people. That is not how we should approach the Budget, in my view. It fails completely because it is not cohesive. It cannot be said that it gives anything to the really poor sections of the community, because what they are getting is long delayed, and is not very much anyway. An increase of 2/6 is not very much. It certainly cannot be said that it helps the business man, because it does not. It cannot be said that it does a whole lot for the farmers either. It does, probably, a little more for the farmers than for other sections of the community, but that is mighty little.

The price of milk is going up by 2d. a gallon. I am glad to see the producers of milk getting what they require to remunerate them properly. Some time ago we saw dairy herds being sold because they were uneconomic. I believe 2d. on the gallon of milk means something like 5d. or 6d. on the pound of butter and, in my constituency and all over the country, the purchasers of butter will very soon find that their costs are going up very considerably. In spite of the very big taxation imposed last November—and the purchase tax is a big tax—we were reduced to the three classics as well: 1d. on the pint, so much on spirits, and so much on cigarettes. Those three old classics were taken out of the stable and given a run. That practice was probably started in Gladstone's day or before it. With the already high taxation, we thought we would not have to face an increase on those three items. I wonder how far beer, spirits and cigarettes can be taxed before the point is reached at which their sales are affected to the extent which would make them unremunerative. I imagine we are getting very close to that point now.

The price of petrol is up, too. That will not be a help to industry generally, or to CIE. I think the Minister said CIE were partly exempted, but I believe it will have the effect of increasing [316] fares, and increasing the difficulties of that company.

I come now to the increases in the Post Office charges. They properly belong to this Budget and should have been brought in with it, but they were brought in afterwards so that they would not have the same political effect as they would have if they were introduced in the Budget. If they were, the Budget would be an even gloomier document than it is. A charge of 5d for a letter will be a very great burden on the business community. Many firms do a tremendous mail order business. They will be very heavily hit. Travel agencies and other businesses that send out a great number of circulars will be heavily hit. Indeed, there is an increasing use of circulars. With the very good, efficient and quick methods of printing, and the copying machines that are available, firms are making more and more use of mail order business, sending out advertising literature. They will be appallingly expensive now at 5d a letter.

The cost of telephones is increased. That will hit grocers very heavily. Many private grocers, butchers, and such people, ring up their customers in the morning to ask them what they want. This Budget puts up their costs, and it will be another nail in the coffin of the personal businesses as opposed to the big market places from which you carry your stuff away. I do not think the Government realise the effect it will have on a number of grocery businesses and purveyors generally.

Telegrams will now be very expensive. I think a minimum of 5/- was the figure mentioned. That will lead to a decreasing use of telegrams. Telegrams are very useful for business people, and it is very important to keep them as cheap as possible. By doing so, you get a great usage of them. If you put the price up, people will use telegrams only as they were used formerly to announce tragedies or, perhaps, some unexpected pleasant occurrences in families. Of late with cheap telegrams, people used them a great deal, and so did business generally. Now there will be an increase in their overheads.

All thinking people must be very [317] disappointed with the Budget. The country is now going through a period of inflation which is a direct result of the Government's action. It is ironical that were it not for the three by-elections, we might not have had the 2½ per cent tax, and the 12 per cent increase. We certainly would not have had the 12 per cent increase, and we would have had an entirely different type of Budget. All this shows that we are dealing with a form of political opportunism and not primarily with something designed really to help the country generally. That is why I and many other people are very disappointed with it.

Mr. Dolan: Information on Séamus Dolan  Zoom on Séamus Dolan  I respectfully submit that this is a good sound solid Budget. It is typically straightforward, level-headed and sane. It is designed to stimulate progress and to raise the standard of living of the individual and of the nation. One of the things that strike me since this debate started is the dead, lethargic wet-blanket approach of the Opposition. Somehow or other, they do not seem to have been able, despite their reconnoitring, to put forward any sound constructive criticisms but have wandered aimlessly around in their political desert, suggesting that certain benefits could be given without providing the necessary finance to pay for them and so on. It again clearly shows the irresponsible attitude which they have always adopted towards this very serious matter of providing necessary funds to run the services of our country for a year.

Perhaps it is because they have been more or less stunned and hypnotised by the results of the by-elections but whatever it is, they seem more or less to have gone dead completely in recent months. I know that it is the duty of an Opposition, if at all possible, to put forward constructive criticism. I submit that they have failed completely in that respect. One of the first and most essential parts of a good Budget is that it is balanced and that it more or less fits in with a co-ordinated plan. This Government in 1958, put forward the new [318] plans for economic expansion and each year since then they have designed the Budgets more or less to fit into that programme. This Budget is also designed to fit in with the Second Plan for Economic Expansion.

Mr. Coogan: Information on Fintan Coogan  Zoom on Fintan Coogan  We will soon burst with expansion.

Mr. Dolan: Information on Séamus Dolan  Zoom on Séamus Dolan  If we contrast the approach of this Government with that of the Opposition, we will not have to travel back very far into past history. It will suffice to glance at their two records when they formed the two disastrous Coalition Governments. They left us a deficit in 1951 and again in 1956/57. In that year, the deficit showed £7.9 million, there were 94,000 unemployed and the national income was down by three per cent. Buildings and national development programmes of all kinds had come to a standstill. The worst part of all was that public confidence had been frittered away by their dismal, feeble approach to stem the tides of unemployment and emigration.

The Fianna Fáil First Programme for Economic Expansion gave a new sense of purpose and direction to economic expansion. Each year since then, we have provided the stimulus necessary to ensure that these targets will be attained, if at all possible. To cut down on expenditure at the expense of the vital services has never been our policy. We believe that if the nation is to go ahead, it is the duty of a Government to move in and to direct by the Budget certain trends so as to ensure that the nation and the individual will progress from year to year.

This Budget has been criticised because it provides assistance for farmers. I do not think that the Government's attitude needs any defence. The farming community, like all the other sections, are entitled to their share of the ninth round 12 per cent increase. They are in a rather awkward position by virtue of the fact that they have to sell their goods on markets that are not at all to their advantage. As a matter of fact, world competition in agriculture has brought prices down so low that it is necessary for the Government to subsidise on the [319] export market much of the agricultural goods leaving our country. Surely it could not be argued that the farmer should be expected to sell, say, his butter on a foreign market without a subsidy. He could not do this and survive. If the Government allowed such a situation to develop, it would eventually affect all our dairy industry, our store cattle trade and indeed the whole agricultural industry which is of itself a very important branch of our economy and no Government would be justified in allowing that to happen.

The important point about the aid which the Government are giving farmers is that it is more or less designed so that the farmers themselves can influence the amount given by their own industry; in other words, it has been given on fertilisers, and so on, which help the farmer to increase his production and that is exactly what is happening. There are also farm loans and grants for farm buildings available this year. Surely nobody would suggest that we cut down on these so as to avoid any unpleasant taxes.

I think that one of the greatest tragedies since the Famine that ever hit agriculture in this country and the rural people as a whole was the advent of the Leader of the Opposition as a Minister for Agriculture. When one realises that away back in 1948-49 he said, as reported in the Official Report, Volume 129, No. 14:

Do Deputies of this House know what our principal problem was in the years of the Marshall Aid—to get dollars spent? We spent dollars on maize. I spent five million dollars on wheat in one afternoon.

That was the boast made by a Minister because he spent money that was lent to this country by the American Government—money that has to be paid back. He spent that by buying commodities which could have been produced by the Irish farmer.

That was his approach towards the wheat problem and towards agriculture in general. Indeed, his record in [320] dealing with the dairying industry was nothing better than his attitude towards wheat or beet. That was at a time when our farmers should have been receiving the encouragement and the assistance which would help them to modernise their methods of working and to give them some hope of surviving on the export market. When he was approached regarding an increase in the price of milk, he refused even to meet these people about whom he now pontificates and waves their journal across the House in a defiant manner at Deputies on this side. He said he had not the slighest intention of asking the Government to increase the price of milk. That was at a meeting at Rathluirc in the Cork constituency on November 1st 1948.

I believe the Government did the right thing in providing this extra money to give the farmers an increase of 2d. per gallon on their milk. I heard a Deputy opposite say it would be disastrous so far as the cities are concerned, but I think the Minister said it would not mean an increase in the price of butter. It shows you how much a city Deputy often knows about the problems of the rural constituencies. I do not think the Government could have neglected to provide the extra money needed by the farming community.

In respect of any of the other headings in the Budget, I have not heard anybody say where any pruning could take place. This year the capital expenditure on housing is £16.6 millions. Surely it is necessary for the Government to provide the finances to enable the less fortunate members of the community to provide themselves with decent homes? If the Government cut down on that, it would eventually reflect on the local authorities and it would have the disastrous effect, as in 1956 and 1957, of stopping the housing drive all over the country. I would never like to get back to those drab years. In my own constituency, the housing grants were cut out overnight in a last ditch stand by the Coalition to try to overcome their misfortunes.

[321] It is now conceded by most people that in those days the then Minister for Finance called a conference in Dublin to which he invited all the county managers. The then Minister for Local Government was present. They were told to cut down immediately on all housing expenditure. There were to be no further grants and they were to delay in every possible way, because there was no money available in the Local Loans Fund. Although certain people may not like to hear these things said, it is only right that we should remind the country of the difference between a solid, united, one-Party Government and the disastrous effects of a Coalition.

No houses were built in my constituency. Private housing stopped completely because the small farmers found out that no Government grants were available and that the county council had not the money to provide them with a supplementary grant. It was, in particular, the stopping of the supplementary grants which caused this disaster. I am glad we have got away from that approach to the housing problem and that now, all over the country, new houses are being built. Indeed, never was there a greater boom in the building industry. Never was it more difficult to find contractors and skilled labour. I should like to contrast that with the years when the Coalition made their disastrous effort.

Mr. A. Barry: Information on Anthony Barry  Zoom on Anthony Barry  I will contrast it for the Deputy when I stand up. His ignorance of the subject is considerable.

Mr. Dolan: Information on Séamus Dolan  Zoom on Séamus Dolan  I shall be delighted to listen to your feeble efforts. I know it is not easy for these people to hear this being told to them. When they are out of office, they are great people for suggesting various schemes, but when in office, they seem to forget all these things and, in particular, they seem to forget to provide the necessary finances. It is time for them to review their whole programme and educate themselves to the fact that the ordinary people are much more educated than the Opposition, particularly Fine Gael, seem to think. The people are shrewd, [322] keen judges as to the Government under whom they will be better off. They have shown that very emphatically in recent times.

This year we are also providing £4.10 millions for sanitary services and water supplies, particularly in rural areas. Do the Opposition feel that these services are not necessary? Is their approach that we should leave the people in rural Ireland without sanitation and water? If so, they should say so; if not, they should not grumble if the money for these services is being provided. It is high time the people in rural Ireland had these amenities. We have provided them with rural electrification and we are doing everything within our power to provide them with sanitary and water services. Very often in local councils it has been very difficult to push these services through because of the organised opposition, particularly from Fine Gael. They are all things to all men when they are out of office, but when they are in office, they are very reluctant to do anything for the betterment of the ordinary individual.

Mr. O'Sullivan: Information on Denis O'Sullivan  Zoom on Denis O'Sullivan  That is a despicable remark.

Mr. Dolan: Information on Séamus Dolan  Zoom on Séamus Dolan  Recently, the Government announced a further plan to help bring better facilities for education within the grasp of the ordinary people. In 1961, they introduced the scholarship scheme, and now £69,000 is being provided for it. They also increased by about 670 the number of teachers in national schools. In recent years, they have reduced the number of pupils per class, thus giving teachers in larger schools a better opportunity of giving more individual attention to the pupils. To build 412 new schools in the past five years was no mean accomplishment for this Government. Indeed, when one thinks of the record of the Opposition in this respect, one realises how deplorable it is. Not a single school was built in my constituency during their term of office. The Government also have had in mind the question of raising the school-leaving age. They are planning for that by providing better schools [323] and more teachers. Eventually, when the time is ripe this is our aim.

A new training college has also been built in recent years as a further proof of our helpful approach to education. We believe that the national school is the foundation on which all other schools are founded and we believe in providing good national schools. We have increased the heating and cleaning grants, provided more money each year for new schools and the reconstruction of old ones and have introduced a system under which they will be painted periodically and repaired, if necessary. I think that approach is one that every Deputy should welcome, irrespective of his allegiance. Surely Fine Gael Deputies do not expect us to go back to the time when 60, 70 or 80 children were herded together in deep litter hovels with terrible sanitary conditions. Our idea is that the schools should be more or less showplaces in which children would have nice bright surroundings, proper sanitation and water supplies. Unless the rural water schemes of Fianna Fáil are pushed ahead, how can we get running water into the schools? Not alone is it good to have these facilities for the health as a whole but it is good for the health of the children and makes life brighter for them.

The Minister has also informed the Government that he is going to provide comprehensive schools. More money is being allocated in this Budget for vocational education too. Some Opposition Deputy said the other day that it is well for a Deputy to examine progress by reference to his own constituency. In my constituency now at least three new vocational schools are in course of erection and a school of technology, we hope, will also be provided. At least we are promised a 17-room vocational school in our capital town. During the Coalition term of office, there were none of these educational advances. Their dismal record was to cut grants to secondary schools by ten per cent. This Government have increased capitation grants which give a tremendous help to the development of post-primary education [324] and the provision of secondary school facilities that we know are needed. The only way to do this is to provide for it in the Budget.

It may also be necessary to refer to our record in social services. Every worthwhile service for the benefit of the people came from this side of the House. The Fianna Fáil Government provided the widows' pensions and children's allowances. They provided by their programme so far better working facilities, better working hours, a half-day during the week and so on. These came by Fianna Fáil legislation at a time when we had an overall majority.

It is necessary to provide the money, to keep the services going, to improve them, and to give better facilities to the less fortunate, especially to those who are sick and need hospital treatment; to maintain health services, provide for disabled people and mentally handicapped children and provide also for ordinary people who want better houses, schools and roads. If we wished this year, we could have stayed as we were and put on no increases but that would not fit in with our plan for economic expansion and consequently some small increases were necessary.

I do not think anybody should grumble about the tax that has gone on spirits. It was high time that the Minister adverted to the fact that there are many people lately, who probably through snobbery or otherwise develop a preference for imported spirits. We have had a tradition for many years of making the best whiskey in the world and it is deplorable to find many people standing in bars bemoaning and lamenting emigration and unemployment, criticising the failure to widen certain roads or build new bridges and otherwise complaining, while at the same time drinking foreign whiskey and so depriving farmers of a better barley price and depriving those engaged in the distillery industry of a livelihood. If people feel like drinking these imported spirits, that is their own business. We do not want to marshal them into the type of State in which we would tell them what to eat and [325] drink but it is only fair to bring home to them that if they want these drinks, they must pay a little extra for them.

I submit this is a good Budget. The Opposition, and, particularly, Fine Gael remind me of the Bourbons, who over all the years learned nothing and forgot nothing. Certainly they do not seem to have learned a lot with regard to framing a budget designed to improve the lot of the people. I compliment the Minister on the way he has framed this Budget. I am quite sure it is for the benefit of the nation. It will provide greater facilities for employment and is an attempt to cure many of the ills that have beset us in the past and prepare us for a better life, a higher standard of living and better facilities all round in the future.

Mr. Treacy: Information on Seán Treacy  Zoom on Seán Treacy  It is extremely pathetic to have to sit here and listen to Deputy Dolan pretending to the House and the nation that the Government Party are a great Party and constitute a glorious regime and telling us what a wonderful state of affairs obtains in the land today. It is still more pathetic to hear the Deputy harking back to the periods of Coalition Government and seeking to blame these Governments for the conditions that exist in Ireland now. That was all right a number of years ago but the allegations that the Coalition Governments were responsible for destroying the hopes for a better future for this country are now threadbare and people do not accept that kind of argument any longer. The people are not so gullible as not to realise that since this State was founded in 1922 for by far the greatest period of time Fianna Fáil have been the dominant Party in this country and have in fact governed for 25 years out of those 40 years. For that period of time they have been charged by the people with the responsibility of ordering the affairs of this nation. During that long period, they have had unbridled liberty to control the destinies of the nation. Since 1957 to this day, they have been in office. They have been afforded every conceivable opportunity of implementing the ideals and aspirations [326] for which so many great men on all sides died.

They must therefore accept the full responsibility for the shocking state of affairs which obtains in Ireland today. Government Deputies must realise that this country has become a virtual byword for a degenerating nation amongst great and progressive nations and we have got the name of a vanishing race because of the permitted exodus and flight of our youth, a rising tide of emigration, with our people flying to the four corners of the world because they are denied a living in their own land. We have the highest unemployment rate in Europe; we have the worst social welfare benefits; and we have a rotten health system. Moreover, we have not as yet conceded to our children equal rights and equal opportunities in respect of education. We are the only country in Europe which has not yet conferred on the children an opportunity to go on for further education in accordance with their abilities. The odious means test applies in this fundamental issue of health and education and money is the criterion not the ability of the child to learn, and not the need for hospitalisation.

This is the kind of sorry situation for which the Government Party have been responsible. It is not good enough to try to blame the other fellow any longer. That cuts no ice and the people are not swayed by that type of propaganda any longer. The fact is that this Government have failed miserably to solve our economic problems. We have had very many proposals in regard to economic plans. We have had one economic plan which allegedly has been implemented and we have now embarked on another. Before I come to that plan, I want to say that this Budget has caused shock and disappointment amongst all sections of the community, and not least amongst the supporters of the Fianna Fáil Party. One cannot discuss this Budget except in the context of the Budget of 1963 because we must not forget that the inherent directives of that Budget were only implemented last November through the turnover tax.

[327] It amused me this time 12 months ago when the Minister for Finance announced his Budget because so many people were clapping their hands and saying what a wonderful Budget it was. They did not realise the sting in its tail, the implementing of a turnover tax which would increase the price of all commodities, send the cost of living spiralling upwards, drag down the standard of living, as well as precipitate a ninth round wage increase. This wage increase has caused a vicious spiralling of prices and the 12 per cent, with the floor of £1, has been very largely invalidated, very largely absorbed altogether by the rising costs which the Government are allowing to continue without taking the necessary precaution of bringing in any kind of price control or restraint whatsoever.

It would seem to us in the Labour Party that the Fianna Fáil Party seem to have a vested interest in allowing prices to spiral. Admittedly, the higher prices go, the more they will rake in through the turnover tax, but I must allege further that the Party seem to have allowed themselves to become a pawn of the vested interests of this country, and are deliberately allowing our people to be exploited by all the profiteers, the usurers and the extortioners. Profiteering is rampant throughout the land. We have a pretence of investigation but we all know that the prices of bread, flour, sugar, clothes, shoes, medicines, cigarettes, beers, spirits, bus fares, electricity and every essential commodity and service have increased out of all proportion and that that came about as a direct result of the Government's action in introducing this turnover tax.

By set purpose and by their own deliberate action, they precipitated this kind of economic situation which is fraught with very grave danger for the future. We are in a period of serious inflation. The Minister by the implementation of this Budget sought to do something about that serious inflationary trend. I have referred to the shock and disappointment caused by this Budget. Let us not forget that the only hope the Government and [328] their spokesmen had of selling the turnover tax to the people was on the basis that the ordinary methods of raising revenue would no longer operate or bring in the required amount of tax, that saturation point had been reached in regard to such things as cigarettes, beer, spirits, etc.

They told their followers and this House that the turnover tax would bring in a colossal revenue, and it was expected that out of that revenue the standard of living of our people would be improved out of all proportion. It was realised that in any one year there would be not less than £14 million extra revenue and it was expected that £14 million extra would be devoted to improving social welfare benefits out of all proportion. The aged, the sick, the unemployed, the disabled were hoping enthusiastically that following the implementation of the Budget and the amount of money the Minister for Finance was handling as a result of the turnover tax, they would all be in the lap of luxury. The farmers were hoping for great things. So also were the workers, the industrialists, the shopkeepers and, in particular, those against whom the winds of adversity blow hardest.

What has been the outcome? I must suggest that the people have been absolutely betrayed. This Budget is a betrayal of promises made, of hopes held out to our people. Not only have the Government betrayed the promises made and held out to our people in respect of better services all round but they have had the brazen audacity to go back on their word and to impose additional taxation to the extent of £7 million on beer, spirits, cigarettes and petrol.

These are commodities which this time 12 months ago were untouchable, which could not be relied upon to raise any worthwhile increase in revenue and, therefore, we had to have a turnover tax. It is a particularly scandalous performance on the part of any Government that they should have the audacity to go back on their word and to impose additional taxation of this kind. Clearly, they have not the courage to carry out the intention [329] behind the principle of turnover tax, that future revenue would be garnered by increasing the turnover tax percentage by the amount required. If two and a half per cent was not enough this year, they should have had the courage to make it three per cent or five per cent but too many of us had forecast that this little baby, the two and a half per cent, might yet turn out to be a monster and, rather than reveal the monster at this early stage, it was decided to go back on the promises that were made and to have another bash at cigarettes, beer and spirits and to drag in petrol as well.

As a Labour member of this House, I must ask myself what benefit does this Budget confer on the people to whom I have a particular responsibility. We have had vain boasting in recent times about what would be done in respect of education. We have had statements about revolutionary changes to take place in respect of education, housing and many other facets of our economy. Being actively interested in education, I must express my deep and profound regret that there is nothing in the Budget to improve the educational system. The increase in the Estimate for Education is barely sufficient to provide chalk for the blackboards, never mind to implement the revolutionary changes of which the Taoiseach and many of his Ministers have talked in past months.

What, now, of the schools of technology which we all cry out for? what, now, of the increased grants for the attainment of the ideal for which we stand of free education for our children? What, now, about breaking down the class barriers? What, now, of the erection of the comprehensive schools? What, now, of the erection of the many new schools that are required and the repair of the many dilapidated and insanitary hovels in which our children are compelled to receive education in these times? There is nothing in the Estimate which will transform that sorry picture which I have illustrated.

When I came into this House, in [330] 1961, one of the burning topics which agitated our minds was the complete withdrawal of the Health Act or, at least, its radical alteration. The Opposition in this House were able to force the Minister for Health to set up a Select Committee of this House to examine the Health Act and to bring in the necessary amendments. Three years have elapsed. Admittedly, the Committee were given leave to continue their deliberations but I want to express my personal impatience with that Committee. It was felt that the Minister for Health would have availed of the opportunity provided by the Budget to introduce, at least as a temporary measure, some of the changes which we deem to be essential in the Health Act. The essential changes we require are that the odious and vicious means test for medical cards would be liberalised.

An Leas-Cheann Comhairle: Information on Cormac Breslin  Zoom on Cormac Breslin  The Deputy should leave the details of the Health Act over until the Estimate is before the House.

Mr. Treacy: Information on Seán Treacy  Zoom on Seán Treacy  Very good, but I must at least refer to the absence of any worthwhile figure in the Estimate in respect of essential health services, which affect so many of our people. There are thousands of our people affected by this odious measure and who are looking to the Government and to the Dáil for speedy amendment of the Health Act and the introduction of a measure which will guarantee all of the people the right to hospitalisation, to free choice of doctor, to drugs and medicines as required, that money will not be the criterion.

An Leas-Cheann Comhairle: Information on Cormac Breslin  Zoom on Cormac Breslin  These are all details that would be relevant to the Estimate. They are not relevant to a Budget debate.

Mr. Treacy: Information on Seán Treacy  Zoom on Seán Treacy  Again, with regard to social welfare, we have had the vain boasting as to what a great Party the Government Party have been. Any of us close to the wants and sufferings of the aged must have felt a sense of outrage at the miserable 2/6d. offered in the Budget. In the context of the circumstances in which we now live and [331] having regard to the vast amount of money at the disposal of the Minister for Finance, it was expected that social welfare beneficiaries would get a very liberal increase, certainly not less than 7/6 and many felt that it would be 10/-, not so much because the Government could afford it, as they could, but that because of the increase in the cost of living, such increase in benefit was justified.

It is galling in the extreme that for workers and salary earners a 12 per cent increase has been approved while little or no regard has been had for the most destitute and helpless section of our community. It was a disgraceful performance on the part of the Minister for Social Welfare to allow this Budget to come before the House with nothing whatsoever in it for social welfare contributors and with only a miserly halfcrown for social welfare assistance. It was, as has been said, a deliberate insult to those people to offer them that miserable halfcrown which, in terms of pre-war values, is worth about sixpence.

Mr. A. Barry: Information on Anthony Barry  Zoom on Anthony Barry  Be fair—9½d.

Mr. Treacy: Information on Seán Treacy  Zoom on Seán Treacy  I shall not concede the 3½d. Some people estimated it at 8½d. but we shall not fall out over the penny. They have been conceded eightpence or ninepence. I wish to disabuse Deputy Dolan, and other Fianna Fáil Deputies, of the idea or the pretence that all is well in this country. My experience is that poverty, want, suffering and great humiliation are the lot of a goodly number of our people, particularly those of whom I have been speaking—the aged, the infirm and the sick poor.

We know there are many living in destitution. We know it is impossible for any old age pensioner living alone to exist on 35/- or 37/6 a week in these times. Anyone can calculate the cost of food, services and comforts and how much of these one can purchase for 30/- in these times. There is abject poverty in the homes of these aged people. Were it not for the help of good neighbours or relatives, were [332] it not in the main for the support of home assistance officers in all areas, these people would die of virtual starvation.

I assert that many aged people living alone are starving during the last two days of each week. The money is spun out and they wait again for Friday to stagger down to the post office for the pension. There is hardship, suffering and poverty in this country, despite the fact that the barefoot children have disappeared. If the Minister for Social Welfare wants to look at it, we shall be only too delighted to show it to him.

The Labour Party have always suggested that the imposition of taxation should be apportioned in accordance with the ability to pay and that the revenue should be expended in accordance with the needs of the people. We have suggested that those who are most in need, the weakest, poorest sections of our people, should be helped first. What we deplore about this Budget is its unfairness, its inequality, its injustice, because of the manner in which the taxation is collected and the revenue apportioned to the various sections of the community.

The Minister for Social Welfare can deny that, if he thinks that in recent Budgets, in the allocation of revenue, the amounts apportioned for social welfare are not in fact decreasing rather than increasing. Was the Taoiseach sincere in his assertion some time ago in reply to a query by Deputy McQuillan as to what was being done about reuniting this country and bringing into the fold our brethren in North-East Ulster? The Taoiseach said that if those people came into a 32-county Republic, he would guarantee them the same social welfare benefits as they enjoy in that part of Ireland today.

I know of no better way of reuniting this country than by bringing up the standard of living of our people in this part to the level of those in the North. There need not be a shot fired; there need not be any more antagonism or distrust. All that is needed is that the Government have the courage to raise the standard of living of our people [333] to the level of our brothers and sisters in Ulster. If that were done, we would have a reunited Ireland in the morning.

Since we expect shortly a second Budget from the Minister for Posts and Telegraphs to cover increased charges for stamps, telephones, telegrams and, probably, television and radio licences, is it too much to hope that the Minister for Social Welfare would have the courage, before the Budget becomes law, to realise the injustice perpetrated on the social welfare section of the community and increase that miserly half-crown to at least 7/6, and to indicate clearly what he intends to provide for all the other beneficiaries, both contributory and non-contributory? The allocation of 2/6 in these days of high prices is nothing less than making a mockery of the sufferings of those unfortunate people.

We have heard quite a lot about the Government's Second Programme for Economic Expansion. The Labour Party believe in economic planning: we believe in the organised planned development of our economy. We believe the State has a fundamental responsibility to see that planning is so carried out as to bring about full employment, rising standards of living and to give us the essential services to which we feel our people are entitled. It is true to say that the Government's partial acceptance of the principle of planning is a tribute to the labour and trade union movements, because the labour and trade union movements have consistently advocated the necessity for organised planned development of the economy. It is an integral part of Labour policy and philosophy and we are proud of it. We shall support this Government in every measure they take to implement planning of this kind.

However, where the private enterprise section of our economy is unable or unwilling to do the job, as is clearly evident from the fact that we have 60,000 unemployed and many hundreds of thousands fleeing the country, we believe the State has a bounden duty to intervene to direct and control the destinies of the nation. This type [334] of planning is something we shall always support. Our fundamental objection to this so-called plan is that if one examines it in detail, it transpires that it is nothing but a forecast, a listing of objectives. No action whatsoever is taken to ensure that the plan is implemented in anything like its entirety. The so-called plan must be changed and the Government must take the necessary steps to ensure that the targets set are realised.

The First Programme for Economic Expansion had as its fundamental principle the provision of 100,000 jobs. That plan operated from 1958 to 1963 and had as its aim, as I said, the attainment of 100,000 jobs or near full employment in this country. The facts are that over the period of the implementation of the First Programme for Economic Expansion, under the Fianna Fáil Government, far from attaining anything like the figure of 100,000 jobs, statistics prove that 170,000 of our people emigrated—170,000 emigrated over the period of the first plan. As has been said so many times, work was provided all right under that plan. It was provided in Birmingham Coventry, London, Glasgow and elsewhere.

That first plan, in respect of the target set out, was an abject failure in attaining the first essential, full employment. The effort of the Government to put people into productive employment was a dismal failure. Even today unemployment is some thousands higher than it was in recent years and there are fewer people at work here at present. Statistics will prove that there are fewer in employment than there were when the first plan was implemented in 1958. One must conclude, as far as planning of this kind is concerned, it is worthless.

We now have the Second Programme for Economic Expansion, which was launched with a flourish of trumpets. We are told it is intended under this plan that 78,000 jobs will be provided by 1970. I read speeches by the Parliamentary Secretary to the Minister for Lands and the Minister for Industry and Commerce and they were all loud [335] in their praises of what was to be achieved for this nation by the second plan. If we examine the second plan, it will be seen that even if this targets are attained, even assuming 78,000 jobs are provided by 1970, seven years hence, that amounts to nearly 8,000 jobs per year and is less than half the number of jobs required for full employment. Even if this plan goes according to plan, without making a pun of it, the Fianna Fáil Government will be satisfied at the end of 1970 with at least a 3½ per cent unemployment figure and an emigration rate of at least 10,000 persons per year. If all goes well and all the details of the plan are implemented, that will be the situation in 1970. That is the plan.

When the first plan was implemented, the labour and trade union movements advocated that the growth rate of 2 per cent set out at that time should be increased and that it was inadequate to bring about the happy situation intended. The Government told the labour and trade union movements that they were being unrealistic in seeking to increase the growth rate by anything over 2 per cent, but in the period 1958 to 1963 the actual growth rate attained was not 2 per cent, but 4½ per cent. By accident rather than by design of the Government, the growth rate attained was 4½ per cent, though the target set out was only 2 per cent.

Again, at the expense of being called unrealistic, we suggest that the present growth rate set out in the Second Programme for Economic Expansion of 4 per cent be increased to at least 6 per cent. I realise in saying that that some changes must be made but we are prepared to see radical changes made in the systems we operate in this country in order to attain full employment, the standard of living we desire and the happiness and prosperity of our people.

Again, the growth rate set out in the Second Programme for Economic Expansion will not even bridge the gap between our living standards and the living standards of those in Great Britain and the countries of the Common Market. A revealing table in [336] the document outlining the Government's plan clearly shows that the the gross national product in Britain in population in Ireland in 1970 will be £360. This very same table indicates clearly that the gross national product for Great Britain in 1961, three years ago, was £510 per head of the population. The gross national product in Ireland in 1970 will be £360, while gross national product per head of the 1961 was £510. It is clearly evident. at a growth rate of 4 per cent, that, while our relative standards will have improved, we will be far, far behind the standards of Britain or the countries of the Common Market.

In the Second Programme for Economic Expansion all sections of the community, industry, agriculture, etc., are given targets to attain. We are all expected to work enthusiastically towards the attainment of these targets but we feel that without the determination of the Government to take the necessary steps to ensure that these targets are, in fact, attained this is a planless plan in every sense. It will achieve nothing. We deny the contention of the Government as laid down in this so-called plan. The Government can only persude, guide and exhort people to attain these objectives. We maintain, in order to ensure that this plan becomes a reality, that the Government have an obligation to intervene directly in the management of the economic affairs of this country. If they do not do that, this plan is nothing more than a hope for the economic salvation of this country. Without taking the necessary steps to achieve it, it will produce nothing.

There are inherent dangers in the Government's plan. There is the lowering of tariffs at a time when we are denied the benefits and the advantages of the Common Market. We regard this as the height of folly. It is being done deliberately by the Government in order to spur on lazy employers, force them to modernise and re-equip their premises. All that is being done at the expense of labour. The modernisation of industry through the medium of the grants, aids and [337] stimulants being poured into industry today means, in essence, the introduction of labour-saving devices of all kinds.

We have, as the CIO reports have revealed in relation to the industries they have been examining, a colossal redundancy problem to contend with, not tomorrow but today. Redundancy is rearing its ugly head in many industries here. It is particularly regrettable that the protection these industries have enjoyed is being stripped away by deliberate Government policy in reducing tariffs and quotas. Workers and management are advised to engage in productivity schemes, introduce all the most modern techniques and devices available in order to increase production. In most cases all that is being done at the expense of men. More and more are becoming unemployed according as these new ideas are foisted on industry. There is no appreciable increase in production and no realistic attempt being made to increase production. Too many firms are satisfied to introduce all kinds of labour-saving gimmicks and economise at the expense of the worker rather than go out and seek new markets, increase production to meet the demands of these, and re-absorb redundant operatives.

The Minister should have included in his Budget something to meet the colossal problem of redundancy, a redundancy which is likely to increase over the next few years. Clearly, industry is either unable or unwilling to compensate those whom they are obliged to lay off. In these circumstances, we contend the State has a bounden duty to see to it that men who are thrown on the unemployment scrapheap after 25 or 30 years' service with their employers are compensated, adequately compensated, for the services they have rendered their employers almost over a working lifetime. It is patently unjust that any man should be dismissed ignominiously without any regard being had to the social responsibility for the maintenance of his wife and family. Not alone should these men be compensated but [338] there should be a training scheme implemented immediately to retrain these operatives and absorb them in some other productive work. It is perhaps futile to be talking about retraining in present circumstances when we already have 60,000 unemployed seeking work. The situation is farcical. I do not know what the outcome will be but the Government should be alive to the situation and not allow it to get out of hand altogether.

I am pleased that the farming community were considered and have received benefits under this Budget. With regard to the cushioning in respect of rates, I want to make an appeal for ratepayers other than farmers. There is no relief and no redress apparently for urban ratepayers. We welcome the concessions for the farmers but it is our duty to bring to the notice of the Government the problem of the spiralling of rates and the hardship and suffering it is causing so many shopkeepers, householders and cottiers all over the country. It is gratifying that the Taoiseach should have indicated an interest in this matter but it is sad to think it may be as many years as he intimated before there will be any relief for those other sections of the community.

Clearly, it was not very difficult for the Minister for Finance to devise ways and means of helping the farmer to meet the impact of rates. If the Government are sincere in their desire to assist the other categories to whom I have referred, it should be a simple matter to bring in proposals here for cushioning the impact of rates on other sections of the community. The burden of rates is a tremendous worry and anxiety to many people. I invite the Minister to say what he has in mind for helping the other categories to whom I have referred and when it is hoped the investigations will be completed. Above all, when may local authorities hope for some good news in regard to the easing of the burden of rates?

I know that many shopkeepers are feeling completely frustrated because of ever-increasing rates. State grants given for the repair and improvement [339] of dwellings are being used now for the purpose of increasing rates. Grants for the reconstruction of houses have increased only slightly but these grants give the valuation authorities an opportunity of going in and revaluing. There have been instances in which the valuations have increased out of all proportion to the value of the reconstruction and repair carried out.

An Leas-Cheann Comhairle: Information on Cormac Breslin  Zoom on Cormac Breslin  That would not be a matter for discussion on the Budget.

Mr. Treacy: Information on Seán Treacy  Zoom on Seán Treacy  I am making the argument as best I can——

An Leas-Cheann Comhairle: Information on Cormac Breslin  Zoom on Cormac Breslin  These details do not arise appropriately on the Budget.

Mr. Treacy: Information on Seán Treacy  Zoom on Seán Treacy  ——for the relief of rates for categories other than the farmer and I make no apology to anyone for that. At a time when so much was hoped for, when the Minister had a veritable bonanza in his lap, £14 million turnover tax and an extra £7 million as a result of other imposts, this Budget has been a shocking disappointment. I know the Government are insincere in these things, that all they are concerned about is political expediency. This year they have given the sop to the farmers.

Mr. N. Egan: Information on Nicholas Egan  Zoom on Nicholas Egan  Does the Deputy object to the farmers getting it?

Mr. Treacy: Information on Seán Treacy  Zoom on Seán Treacy  Not at all; I am quite happy about it. Next year the sop will probably be given to the social welfare beneficiaries in a general election Budget. This year the promises of this Government have been broken, the hopes of the people completely and utterly dashed, and the revolutionary changes we heard about in respect of health, education and lands have come to nothing.

We have never squirmed at increasing taxation provided that taxation was utilised to benefit all sections of our community, particularly those most in need. In this Budget that is not being done. When replying the Minister might tell the House [340] when the social welfare contributory section will get their increase. He might tell us what relief of rates he will concede to the urban dweller. He might indicate clearly to the House and to the nation, in respect of further revenue required, whether it will be his policy to pick out specific items such as cigarettes, petrol, beer and spirits rather than act upon the principle of increasing the turnover tax. Either we have a turnover tax which is designed to garner in all the essential revenue or there will be this complete mix-up, this complete abandonment of the principle which the Government enunciated in relation to the turnover tax.

I could deal with some other matters dear to my heart, housing, etc., but I feel sufficient has been said on this Budget. I do not want to repeat myself or to repeat what has been said by other Deputies. From my point of view, the Budget has been a great shock, a great disappointment, and an abject failure. It brings no solace or hope to our people and the sections most betrayed and most disappointed are the ardent supporters of the present regime.

Minister for Social Welfare (Mr. Boland): Information on Kevin Boland  Zoom on Kevin Boland  I suppose it would be too much to expect that the Budget would be criticised in a logical way, that the Opposition would make the case that there had been either too much or too little expenditure provided for, because it is the expenditure which is provided for which decides the amount of taxation to be levied. The Opposition, however, appear to be confirmed in the belief that it is good tactics to argue that the amount provided for all the services administered by the Government is too small and that, at the same time, the amount collected by way of taxation is too large.

I should have thought that the results of the two recent by-elections in Cork and Kildare would have made it clear that the public are by now sufficiently mature to see through this kind of double talk, and that on this occasion the Opposition would have made up their minds to take a stand one way or the other, either to suggest [341] alternative ways of raising the necessary money being spent on the various services or else to say precisely where expenditure that is provided for in the Budget should be cut down, to say, for instance, that we should not have applied the ninth round of wage increases to State employees or to suggest that we should not have taken action to see that farmers' incomes did not lag too much behind other sectors and to relieve the position of social assistance recipients. Instead of that lesson being learned from the recent by-elections, we have the same illogical and irreconcilable speeches being made this year.

The Budget has been described as a farmers' Budget and I suppose that is not an unreasonable description in a year when direct arrangements are being made in the Budget for an increase of £5 million in farmers' incomes. However, it is unfair to say that the Government imposed this taxation specially for farmers or for social assistance recipients, simply because others got there first and the buoyancy of the revenue had already been swallowed up in wage increases for State employees. It is, at least, as justifiable to say that the extra taxation was necessary for the payment of ninth round wage increases and status increases which have been granted to State employees as to say it was needed to raise farmers' incomes. If this swallowing up of revenue buoyancy is to be a continuing feature, then extra taxation, in order to ensure that those sections of the community that have to depend on Government action to secure their share of increasing prosperity do not lag behind, is also likely to be a continuing feature.

It is largely due to international conditions outside our control that Government action is necessary to ensure that farmers' incomes do not lag behind improvements in other sectors but, in the circumstances that exist, farmers had every right to expect their share of the increase in national income. If they were not able to get it as speedily as others, it is unfair and it is not correct to say this extra [342] taxation was levied specially for the farmers.

I have never said I am satisfied with the rates of social welfare payments in general and I do not think anybody else on either side of the House has said so. However, our social welfare services are not as bad as Deputies make out. It is not correct, as Deputy Tracey has said, to say they are the worst in Europe. They are not. They can stand comparison with those of many other countries. The rates of insurance benefits compare favourably in lower paid employment in this country in the case of a man with a family, but in other cases there is scope for improvement. I regard it as my function to bring about an improvement in the position of social welfare recipients generally relative to the cost of living. It has been demonstrated time and time again that since this Government took office in 1957 this process of improving the position of social welfare recipients relative to the cost of living has been continuous.

Since the imposition of the turnover tax, workers have obtained a 12 per cent increase in wages and, notwith-standing the fact that there have been some price increases, it is beyond all doubt that that increase represents a real improvement in incomes. Taking into account the increases that are being given to social assistance recipients in the Budget, it can be shown that the position of practically every single recipient of social welfare payments has been improved by more than 12 per cent since imposition of the turnover tax.

In the case of non-contributory old age pensions, the increase has been from 32/6d. to 37/6d. which is an increase of 15.4 per cent. In the case of the non-contributory widow with no children, the increase has been from 31/- to 36/-, which is an increase of 16.2 per cent. In the case of a non-contributory widow with four children, taking children's allowances into account, the increase has been 12.8 per cent. In the case of a man with an adult dependant drawing unemployment assistance, the increase has been from 42/6 to 52/6, or 23.5 per cent.

[343] There are no increases in insurance benefits in the Budget this year, but the increases granted last year were in every instance, except one, greater than the 12 per cent increase obtained by the workers. With regard to unemployment benefits and disablement benefits, the increase for a single person is 13? per cent. For the married man, the increase is 16 per cent. For the married man with four children, taking children's allowances into account, the increase is 14 per cent. The increase for a widow drawing a contributory widow's pension is 13? per cent. The only case in which 12 per cent has not been reached is the case of the contributory old age pension where the increase works out at 11 per cent, which is marginally less than the increase obtained by workers, but still considerably greater than the increase in the cost of living.

Mr. O'Sullivan: Information on Denis O'Sullivan  Zoom on Denis O'Sullivan  Does that allow for the increased contribution? Does it include or exclude the increased contribution?

Mr. Boland: Information on Kevin Boland  Zoom on Kevin Boland  People who are drawing insurance benefits do not pay contributions. They are paid by workers who are not drawing benefits. Unlike the agreement associated with the ninth round of wage increases, there is no stipulation in regard to the increases given to social welfare recipients that they should suffice for a period of two years. The Government will be watching the progress of the national income with a view to continuing their policy of improving the social welfare services in accordance with increasing prosperity.

Labour Deputies in particular have been making great play with the fact that Exchequer expenditure on social welfare, expressed as a percentage of total tax revenue, has been dropping slowly. That is true, but it is not of any particular significance. The important thing is that the rates of social welfare services have been substantially increased in practically every year by this Government. Obviously, if the number of unemployed had remained at the record high level it reached during the [344] Coalition period, then this percentage figure would be higher than it is. I can see no reason why it should be the aim of Government policy to keep that particular statistic constant. If the Coalition Government paid a bigger proportion of their total revenue on social services at the much lower rates that obtained at that time, it was obviously because more people had to depend on social welfare, due to the depressed state of the economy at that time.

In my opinion, the Government should fix the rates of benefit at a level the community can afford, and then the total amount paid, expressed as a percentage of total tax revenue, will be high or low, according to the number of people who have to avail of the different social welfare services. Our object should be to increase the level of payments and, at the same time, to reduce the percentage of the total revenue paid on social services by expanding the economy of the country, providing more employment for the people, and spending more of the revenue for productive purposes. That is what we have been doing.

If you take the gross amount spent on social welfare, that is, including the amount spent from the social insurance fund—as a percentage of total tax revenue, the figure has, in fact, remained practically constant over the years. This means, of course, that although the number drawing unemployment assistance and unemployment benefit has declined—in spite of the fact that the means test for qualification for unemployment assistance has been considerably relaxed in the past few years—the increases given in the rates of benefit have had the effect of keeping the gross amount spent on social welfare constant as a proportion of total revenue. The fact that now a greater proportion of social welfare recipients qualify for contributory benefits is an inevitable consequence of the expansion in the economy which followed on the change of Government in 1957, with the greater availability of work that now exists.

In the number of people registered as drawing unemployment assistance, there is a hard core of over 10,000 [345] uneconomic farmers in whose case assistance payments are really income supplements of a permanent nature, rather than payments during periods of unemployment. The total number of unemployment assistance recipients has dropped by a greater percentage than in the case of unemployment benefit, and if you allow for the fact that there is this hard core of uneconomic smallholders in that total, then the percentage decrease in the case of unemployment assistance has been very much greater indeed than in the case of unemployment benefit. That shows that a greater proportion of the unemployment that exists now is of a transitory nature, that in general it does not last longer than the period of entitlement to unemployment benefit. In other words, people who lose their jobs now find it easier to get new jobs.

One of the consequences of the fact that more people are now eligible for insurance benefits is that the proportion of total social welfare disbursements made out of actual tax revenue is somewhat less than during the Coalition period when a smaller number of people were able to keep their jobs long enough to fulfil the contribution conditions to qualify for unemployment benefit, and a greater number of people who lost their jobs were unable to get new ones before the 26 weeks period entitling them to unemployment benefit expired. Those two factors operate to reduce this percentage figure which Deputy Corish thinks should remain sacrosanct. First, there is the reduction in unemployment and secondly, there is the fact that more people now qualify for insurance benefits. Both of those factors arise from the improvement in the economy that has taken place since 1957.

It is ridiculous to suggest that there is some sinister move by the Government to have more of the total social welfare payments paid out of the social insurance fund. All this money both on the assistance side, and the insurance side, is paid by the Department of Social Welfare, and it is all collected from the community under [346] compulsory arrangements made by the Government. The only difference is that all the money paid on the assistance side is collected by way of general taxation, while, in regard to the insurance services, approximately only one-third is collected in that way. The remainder is collected by means of a levy of equal amount in respect of each worker on employers and employees. It is a superficial view to say that because of these arrangements, employers and workers contribute two-thirds of the cost of the social insurance benefits because, of course, wage and price adjustments eventually spread the cost over the community as a whole, just as efficiently as the Minister for Finance could do it, so it is pointless to say that some of that expenditure is paid by the State, some by the worker and some by the employer. The total amount paid out on social welfare, both assistance and insurance, is in fact paid by the consumer. It represents a re-distribution by the Government of portion of the national income to those who have to depend on social welfare.

It is true that under the Coalition Government more people had to depend on social assistance. The fact that a greater number are now qualifying for the contributory schemes is a desirable trend which reflects an expanding economy. While, then, it is true that the percentage of tax revenue as paid out in social welfare has dropped slightly it is also true that the provision for social welfare has been increased greatly by the Government. We have by no means reached the end of the road with regard to social welfare.

I am glad to have been associated with some improvements both in the level of payments and in regard to the scope of the different social welfare services. Just the same as other Deputies, I can see much more that remains to be done. I admit that I should like to move faster than we have found it possible to do but I realise that we must develop our economy if we are to develop our social welfare services to what we would all consider a satisfactory state.

[347] I realise that it would be foolish to levy taxation for this purpose, desirable as it is, at a rate that would strangle economic expansion either by imposing excessive overheads on it or by withholding money that is necessary for productive investment. I agree that the step forward is not as big a one as was taken last year or the year before but it is still impressive by Coalition Government standards and there are more Fianna Fáil Budgets to come and further improvements to be made.

Mr. A. Barry: Information on Anthony Barry  Zoom on Anthony Barry  I have the usual notes here which Deputies who speak on a Finance Bill always have and I want to keep what I say inside the compass of those notes but, before I do so, I want to refer as quietly as possible to the second last speech made in this House, by Deputy Dolan of Cavan. There are 144 points of view in this House about most things. Even within the Parties, there is a variation of view-point. Exaggeration of the Party role is understandable. A gloss on the Party achievement is understandable. A suppression of the Party's failure is understandable.

Deputy Dolan's reference to housing this morning was, I think, rather frightening. It would be understandable only if it could be attributed to illiteracy or ignorance. I must assume that in Deputy Dolan's case neither of these reasons can be attributed to the distortion that occurred in his speech.

Deputy Dolan invited comparison between the housing records of the present Government and what he called the Coalition Governments. The figures, of course, are there for all of us. The fact is that the Fianna Fáil Government have never equalled the inter-Party's achievements in housing. Now, the present Government may have been better than the Coalition Governments in other regards but in this particular one, they have not yet got near the figures achieved by the inter-Party Governments. These figures are printed and are available for all of us to see. I think that is why the case Deputy Dolan made is rather frightening. After all, truth should be [348] a sacrosanct thing. This shows a sort of frightening disregard for the truth. It would be far better if Deputy Dolan did not refer to this.

Now, as quietly as possible, I shall come to the points I want to make about the Budget. I want to begin by congratulating the Minister who, I understand, is being honoured today by the National University. I want to be the first in this House to congratulate him. Given the existing circumstances and the recent developments, it is very difficult to say what else the Minister could do other than what he did in this Budget. The moneys must be got to carry on the work of the nation but certainly the camel's back does begin to sag in the middle. In ten years we have exactly doubled the bill, that is, in terms of money but of course not in real terms because the unpleasant spectre of inflation has haunted those ten years. We have money, but what kind of money and how much less is the Minister's £ compared with the £ of the Minister for Finance in 1954? That is reflected in every page of the Budget Statement and in every page of the Book of Estimates.

The Minister is properly worried about the dangers of inflation and I share his worry. Indeed, counting chickens which return to roost is a depressing activity but the Minister was warned about the dangers of some of his proposals, particularly his proposal last year. The action the Minister took last year was not in itself a cause of devaluation; It was not a cause of inflation. In fact, in theory, it should have helped to cream off excess spending. But what flowed from the turnover tax had the most serious consequences.

The Taoiseach has switched on the green light once again. Indeed, he spoke last week in the House as a prophet returning from the mountain would speak with the Tables of the Lord under his arm. He blandly lectured the House, and those of us who had warned previously of the dangers that were before us, and he warned us again about those dangers. He did say that it was not possible to make ourselves [349] better off than we are. Now, of course, that is only a three-quarter truth. There is a time lag between increased incomes and increased prices and in that euphoric period, the pay is and was better—and that was the period in which the voters of Cork and Kildare reacted so favourably to the Government. I do not think their hands would stretch out as eagerly now to the ballot box. I think this Budget will reduce that operation to a very slow motion.

Of course, the Minister and the Taoiseach know the real situation. I would have much more respect for the Taoiseach if he did not pronounce the truth as some kind of a pearl of wisdom. We said these things before the elections and the Taoiseach is saying them now. He knew they were true when we said them, but a closed mouth catches gullible voters.

We all know increased income is an illusion if production does not grow. This Budget sets out to take back what was given on the hustings. All this inevitably followed the imposition of the turnover tax. Its effect could not be limited to 2½ per cent, because it was a primer for income demands. How much less those income demands would have been without the turnover tax is an exercise in speculation in which we can all indulge. Certainly, the demands would be much less than 12 per cent. If the Government could unwind the clock now and get back to April, 1963, there would not be any turnover tax and we would all be better off. The Minister would be better off. This bill would be less and the £ would be a far healthier article. Of course, it is a profitable occupation to cry afterwards “Spilt milk”. I wonder how the cynical and the knowledgeable will react to the Taoiseach's rather pious lecture last week—the lecture he was too shy to deliver before the elections?

I do not have much criticism of the sources to which the Minister went for the moneys he required. If we smoke and drink we pay. These are traditional sources. Really, we are taking back with the other hand, as I said before. But the increase in the cost of communication [350] is serious and could be very inhibitive to the progress of industry and of the economy. It was always traditional that postal charges should be included with the other charges in the Budget proposals. That was the way for 35 or 40 years. I do not see the reason for the change, for a second Budget by the Minister for Posts and Telegraphs. It is a doubtful practice. We want to get the whole bill together at Budget time. I hope, regarding these postal and telegraphic charges, that the law of diminishing returns will not operate and that there will not be fewer letters, fewer phones and fewer parcels. Of course, the telegram will become a museum exhibit.

There can be no grumble at the assistance being given to agriculture in the Budget. All townsmen should realise that the real basis of the prosperity of our towns is agriculture. Our failure to realise that in the past has resulted in a great reduction of employment on the land. That would seem to disprove the average ignorant, indeed hasty, urban opinion that the farmers are getting too much—that those who work the land are getting too much of the national cake. If the living on the land was good, the people would stay on the land. They have not stayed there. Obviously, they are not getting a reasonable slice of the national cake. Therefore, they leave the land. This Budget is a belated recognition of the neglect of agriculture which has characterised Fianna Fáil policy for 30 years.

The change is a very welcome one. All changes in Party point of view are welcome, because they show an evolvement, a growing up. In the case of Fianna Fáil, the old shibboleths and prejudices are being discarded. They are being pushed into the cupboard with other Party skeletons. I welcome it, although I believe in one regard—the reduction of tariffs—that the protection policy of Fianna Fáil has been pushed into reverse too rapidly.

I would like the Minister to tell us to what extent he has really got considered advice from the very influential and important officers of his [351] Department, from those engaged in industry and from the economists in the universities about what has been the experience abroad. What happens when there is a grave and deep slashing of the protection wall? It must, on the face of it, seem to result, even from the Minister's point of view as head of our financial system, in an increase in imports. Surely the Minister is not without worry about the disimprovement in our balance of payments position?

Apart from that, if we did feather-bed the manufacturers too well in the 30s, our very doing so had made them less hardy and resilient and less able to take the shock we are now trying to administer. Like people hypnotised, we are walking towards this ten per cent every January. That is too severe. The inevitability of it seems to be unnecessary. We had the Parliamentary Secretary yesterday saying that the lazy and incompetent manufacturers here required to get a jolt. That kind of talk is too easy. I hope the most exhaustive consideration has been given to the effect this will have on industry and industrial employment.

I wonder, if there had been a change of Government and the Minister were sitting over here, how would the Fianna Fáil Front Bench react if Fine Gael were in office and raided the Road Fund? I could imagine the cries of rage that would come from this side of the House. It is being done at a time when, by State policy, we are putting a great deal more traffic on the roads. Apart from the natural growth of mechanical transport, the closing down of the railways has diverted a great deal more traffic to the roads. The Road Fund should be regarded as something which the Minister and his Department should keep hands off. It would be interesting to imagine the kind of speech that would be made, had this decision been made by a Fine Gael Minister over there.

Of course, that does not give us any opportunity of escaping responsibility for what has been done in the House. We all have to accept responsibility for that. I had an unhappy experience of that driving from Kingsbridge [352] station to the Dáil last week before the Minister read his Budget speech. I told the taximan I wanted to be driven to Dáil Éireann. He did not seem pleased at that. He said: “Why are you coming up from the country to the Dáil? You are not doing any good for us. We are paying through the nose for your activities in Leinster House. I do not get any increased income but my wife and children have had to pay more for everything they bought in the past few months. I do not know what kind of muddling you are doing in there.” That was a taxpayer's point of view. At that time he did not know about the increase in the cost of petrol. I hoped to avoid him yesterday and I succeeded.

Mr. Corish: Information on Brendan Corish  Zoom on Brendan Corish  Is the Road Fund being raided?

Mr. A. Barry: Information on Anthony Barry  Zoom on Anthony Barry  To the extent of £200,000. It is not being raided——

Mr. Corish: Information on Brendan Corish  Zoom on Brendan Corish  The grants are not the type of grants they have given in recent years.

Mr. A. Barry: Information on Anthony Barry  Zoom on Anthony Barry  Precisely.

Mr. Corish: Information on Brendan Corish  Zoom on Brendan Corish  But the Road Fund is not being raided.

Mr. A. Barry: Information on Anthony Barry  Zoom on Anthony Barry  I have no doubt that is the description that would be given to it if the position of the Parties were reversed.

I now come to a subject that politicians generally shy off. The cost of the service of our debt is alarming. We must start wondering what will be the position in five or ten years time when we look at the present grants for the service of debt over the past two years. If they are to continue in that direction, how are they to be borne? Has there been no examination of the kind of control we exercise, or might exercise, over the issue of credit? Nearly ten years ago, I said here that we might have to look over our credit structure and see if it could be more skilfully adapted to our needs. We have an instrument that could be used, the Central Bank. Surely the control of the volume of credit available should be closer to hand than it [353] is under the present haphazard system. Are excessive profits being taken by the commercial banks? Is the control we exercise delicate enough for our needs because the regulation of this matter is a very vital factor? It seems to me essential in any real planning for the future. I do not want the Minister to go to extremes but I want some evidence of planning or consideration of how efficient this instrument is, or could be, if used by the Minister for Finance in the execution of his policy and whether we have made it as efficient as possible. There is disquiet and uneasiness on this issue in many circles and any change which would be indicated by examination of the present credit structure should be faced courageously. There are many things we must do and many problems we must face and we should not be dependent on conditions of easy money, for instance, obtaining because money should always be easy for the investment needed to promote growth in our society.

My thinking is probably pretty close to that of Deputy Costello on this point and the grave uncertainties we all have about the problems of the future indicate that this examination should be undertaken now. I remember what happened to money in my lifetime. Inflation has always been regarded as a dirty word and I, personally, regard devaluation as a dirtier word. Planned control is very important and we should start talking and thinking about it. In one regard, the Government were able to say to a most important production unit in the country they thought they were charging too much and were able to get an adjustment of the price by the Sugar Company. The Sugar Company, being a monopoly, is easy to deal with but I think something of the same sort should operate in regard to the price of money and its availability. We do not want this to be an umbrella that we can borrow only when the sun is shining.

Last night the Parliamentary Secretary said that many industrialists needed a jolt. Do our bankers need a jolt? Would the Minister think of doing something in this regard? In the [354]First Programme for Economic Expansion, the Government said they would strive to reduce the effective burden of taxation by curtailing the growth in the national debt service charges by achieving maximum efficiency in administration. Were these mere words? Has there been any practice? What steps have been taken, or are contemplated, to increase efficiency? The criterion has been laid down that taxation which is more than 25 per cent of national income is dangerous. Have we passed that limit? There seems to be disputation about it. Last week the Taoiseach claimed we had not but I think the Taoiseach was relating his percentages to gross national product rather than national income. Most people will agree that if the demands of taxation do exceed 25 per cent, it would be bad. I think they have exceeded it. That will inhibit our growth in the future.

Listening to the debate, it was impossible not to be aware that figures are very dangerous things. It is impossible to use money as a measure because of its changing value but there are other indices. The trade gap continues to widen and the removal of tariffs should lead to the further widening of the gap. The employment returns show a very stubborn reluctance to climb or even remain steady. There are possibly as many jobs fewer in Ireland now as the Taoiseach, Deputy Lemass, when in Opposition, promised there would be more, when he blue-printed our future in Clery's Restaurant. Emigration has not been exactly headed off as recent figures show. All these disturbing trends tend to be disquieting. We live in a kind of dreamland euphoria from which we may have a rude awakening.

One of the drawbacks in regard to the Minister's appeal for saving is that it is very hard to expect people to save money for long periods because even if it earns interest, it hardly catches up with the devaluing process. There is no encouragement to save. I would prefer to be wrong about this and I am sure the Government would prefer that also, but intelligent men on both sides know how dangerous some of the symptoms are and how the cost of [355] living figures are. We know there are fewer at work than there were ten years ago and we know there is much less than 20/- in every £1. The gravamen of the charge that can be made against the Government is that in real terms money has been weakened; but that it has been weakened excessively is the most serious charge we can make against the Government. We have been uneven in our distribution of benefits. Deputy Dockrell this morning made an allegory of the ship of state which struck me as being good. Our ship caters very well for the first-class passengers but the steerage passengers are not quite so well off. My view of recent developments is that a great many people have been left on the quayside.

Mr. Barrett: Information on Stephen D. Barrett  Zoom on Stephen D. Barrett  The country has been having a great time and the people have been encouraged by the statements of members of the Government to believe there is no end to the prosperity of the State and no bottom to the national pocket, and that the very best thing they could do was to go on spending money as fast as they could. It was in that spirit that the Taoiseach approached the electorate in my constituency in Cork city and also in Kildare before the last by-elections. He was jubilant, full of confidence and bounce and he never expressed any of the fears which the Minister for Finance expressed last Tuesday week. It was the old story which had been told across the Channel: “You never had it so good.”

All this was done deliberately by the Government to give the people the impression that all that the Government were doing was successful. Up to last Tuesday week, anybody who advocated not spending money was described as a conservative, a fuddy-duddy or some such person. When the turnover tax was first mooted in this House, we suggested that there would be a day of reckoning, that something was bound to happen as a result of it and that the prospect was not good, but the Government continued on the motif:“You never had it so good; spend as freely as you like.”

There was one very serious offshoot [356] of that attitude of the Government, that is, that consumer resistance was reduced to nil. People never questioned the amazing price increases which took place in respect of the various commodities and essential services because they seemed to feel they had the money to meet them. Of course before the two by-elections, which evidently the Government take as an imprimature on their entire policy, the encouragement to spend was still there. It was the boast of the Fianna Fáil Party during these by-elections that there never had been such a Christmas as last Christmas, that there had never been so much money in circulation and that shopkeepers never did so well.

The Taoiseach did not just encourage people to spend. When he made his pre-by-election television appearance, he implied very plainly that more or less by an act of grace of the Fianna Fáil Party, the worker had been given a 12 per cent increase in his earnings and that of course this would mean extra purchasing power for the worker. For the first time, the note of warning is now sounded by the Minister for Finance who warned the workers not to spend the increase on personal consumption goods. If that warning had been sounded by the Taoiseach from the television screens to the electorate of Cork city and Kildare and if he had said: “You got your increase but you are not to use it; you must save it; you must not spend it as you would like,” he would never have got the endorsement he did get in the two by-elections. If he had pointed out that not alone could they not use it as they wanted to but that in real terms of purchasing power they would have nothing at all, I am quite sure the policy of the Government would not have been endorsed.

I am inclined to blame the people themselves. I blame them because they are completely apathetic towards political and economic matters and they have blunted their own critical faculties over such matters. Many of them are much better equipped to discuss the merits of a performance by the Beatles than the merits of a performance by the Taoiseach. My own view about these performances is that there [357] is an amount of virtuosity about both which entirely gives them a much higher grading than either of them deserve. We are in the position that the Government have remained in office as a result of deliberate misrepresentation to the people that the 12 per cent they were getting could be used by them in any way they liked and that it would be an actual increase. It is good to see even at this stage that instead of the “Daddy Christmas” Taoiseach we saw on the television before the by-elections we have the sober Minister for Finance warning that there are risks involved. At column 1536, of volume 208, No. 10, of the Official Report, he says:

At the same time, it cannot be overlooked that, as the increased incomes are being paid in advance of the expected increase in output, there are risks involved for the economy. A steep rise in productivity is needed to offset the higher wages and salaries and keep costs in industry and services from rising significantly. If industrial costs are pushed up so as to render our goods or services less competitive with those of other countries, this will hamper the expansion of our sales abroad and our tourist industry. Since the growth of the economy depends mainly on increased exports the continued expansion of production and employment could in consequence be endangered.

The Minister seems to think that that was the first time that was said in this House. It was said from this side of the House 12 months ago when the Minister's proposals outlining the turnover tax were announced. Surely it is a bit late in the day to talk about keeping costs in industry and services from rising, as the Minister suggested in his Budget speech? They have already risen. There is very little that can be done about it now, unless there is some positive movement by the Government in that regard, mainly for the reason I have already given, that consumer resistance to increased prices has been completely destroyed by the Government who encouraged people to spend as they wished, without sounding any word of warning.

[358] In so far as the Budget is meant to be a brake on the spending power of the alleged benefits given to the workers through the 12 per cent increase it is an unnecessary exercise. Even those who received the 12 per cent—and the Minister seems to forget that many have not received it—find that they have no more purchasing power than they had in the past.

There is another aspect of the Minister's speech which interested me enormously. It is contained in the same volume from which I have quoted. At column 1536 the Minister said:

There are grounds for hoping that an even higher growth rate than the 4 per cent of 1963 may be achieved this year. The buoyancy of the economies of Britain, America and Western Europe should help us to expand our exports and thus to maintain the momentum gained in the second half of 1963.

It is gratifying to me to find that the Minister does not appear to think our exports to the Iron Curtain countries over the next 12 months are going to grow as the Minister evidently hoped. I have been a consistent critic of the Government's policy in allowing imports from the Iron Curtain countries, which gave rise to happenings such as the importation of a hundredweight of religious objects from Czechoslovakia. If we have to have that trade, at least we should have some reciprocal trade. The Minister, apparently, does not foresee any big improvement in the position of exports to the Iron Curtain countries and I should like to ask him will the Government use the powers given to them in the Restriction of Imports Act, 1962, if we do not get reciprocal trade from the Iron Curtain countries.

Most Deputies are, naturally, horrified at the increased demands made upon the people in this Budget. For myself, I feel that one of the difficulties in dealing with Estimates generally is that those who devise and actually carry out the estimation are never inclined to look upon expenditure in terms of real cash. At local government level those who prepare the estimates never talk in terms of spending [359] so many thousand pounds. They talk in terms of spending 1d. in the £, which sounds much better. I imagine that in the Department of Finance they never talk in terms of spending, say, £½ million but, rather, in terms of spending a half-penny on the pint or on the packet of cigarettes, or something like that.

It is a very unreal approach but I do know that it is, definitely, the approach in local government and I strongly suspect that the same sort of approach is made in Government Departments. It is a sort of occupational disease that one cannot escape regarding expenditure in terms of so much in the £ or 1d or some pence or some commodity.

Deputy Dolan, earlier, was talking about the question of housing in Cork city during the inter-Party Government régime and my colleague, Deputy Barry, took him up. He did not accuse him of telling an untruth but he did say that, obviously, Deputy Dolan had not the facts at his disposal. Speaking for my own constituency, I can assure the House and the country that during the last three years of the inter-Party Government régime more houses were built than in the three years before that when Fianna Fáil were in power or during the three years after that when Fianna Fáil were in power. In 1956, the second year of the inter-Party Government régime, there were 491 houses built in Cork, which is an alltime record, especially when it is considered that since Fianna Fáil returned to power, in 1957, we have never built more than 300 houses.

I do not mind criticism of this Party or of the Opposition but the criticism should be based on facts. If Deputy Dolan wishes to criticise us he should criticise us on a factual and truthful basis.

I want to add my voice to that of Deputy J. A. Costello who spoke about expenditure on roads. I almost forbore to do so because I have been speaking on this subject year after year since I came into this House. There has never been a year since I [360] came into this House, over 10 years ago, that I have not found tens of thousands of pounds being obviously wasted on the main road from Cork to Dublin. I mention the main road from Cork to Dublin simply because I am more familiar with it than I am with other roads but the same story is to be told about other roads. I have no objection to roads being improved but when I find immense schemes being carried out on which vast amounts of money are being spent I begin to feel that had one-quarter or one-eighth of the money now being spent on the roads been spent on CIE to keep the branchlines going, we would have a much better communications system at the moment. The roads, obviously, are being changed and built to take traffic they were never intended to take, traffic that could be carried by rail. I noticed work being carried out on the road when I was coming to the House yesterday. There is no need to carry out improvements of roads to the extent that they are being carried out at the moment.

Mr. O'Sullivan: Information on Denis O'Sullivan  Zoom on Denis O'Sullivan  It is extraordinary that three Cork Deputies on this side of the House had to follow one another. I avail of this opportunity to say in relation to the present financial position of the country that the Government seem to accept the verdict of the two by-elections as a clear mandate to them to embark on every and any kind of financial folly. It would be well for them to remember that the by-elections were held at a time that could be described as a consumer's honeymoon but that since the by-elections divorce proceedings are now actively separating the consumers from the honeymoon indulged in at that time.

The House will recall that the Minister for Industry and Commerce, who spearheaded the publicity for the Government in the Cork city by-election, kept a little item completely under his own hat until the people had voted, that was, the fact that in consequence of rising costs the price of bread would go up. That was followed some weeks later by an increase in the [361] price of flour. These are essential commodities which cannot be done without. These facts were withheld from the people at that time.

I remember being in the working class regions of Cork city and meeting an occasional housewife who had given consideration to the conditions that then existed. One housewife said to me: “You can talk to me but you cannot talk to my husband. He is below in the pub spending the back pay he got of the 12 per cent pay increase but he will have another story in a month or two when under the system of PAYE the revenue will have recovered so much of that 12 per cent, when I will have to pay the shop next door increased prices for all the necessaries of life and when, quite possibly, the little luxuries that he indulges in will also go up in price.” The point was also raised that in relation to differential rents the Corporation in Cork city would recover a substantial proportion of the 12 per cent increase.

That 12 per cent increase, as Labour Deputies have vouched for, was occasioned by the introduction of a system of taxation on the necessaries of life that was never deemed to be suitable for the economy of this country. When the matter was considered by a commission it was rejected except as an alternative to the present income tax system. It was introduced and made operative last November and subsequently there occurred a spiralling of living costs that required the Government to accede to demands for wage and salary increases. The Government had already the lesson of the reduction and subsequent elimination of food subsidies and of having to compensate the sections in our community who were in a position to require them to do so, in order to abate the consequences of increased living costs.

For quite a time, when it suited the aims of the Government, the Taoiseach and members of his Government claimed to be the sole architects of this increase of 12 per cent. We recall an incident where a Deputy of this Party, in his capacity on polling day in Kildare, was approached on his [362] way to the polling booth by a canvasser for the Government candidate who announced to him: “Do not forget today that you got 12 per cent, and vote for it.” There was a leading article in the Irish Press after this Budget seeking to dissociate the Taoiseach and the Government from any implication in the fixing of this figure of 12 per cent.

Progress reported; Committee to sit again.

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