Committee on Finance. - Financial Resolution No. 8: General (Resumed).

Wednesday, 12 May 1971

Dáil Eireann Debate
Vol. 253 No. 11

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Debate resumed on the following motion:

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

Mr. McLaughlin: Information on Joseph McLoughlin  Zoom on Joseph McLoughlin  Last evening I had begun to speak about the injustice that had been caused to people who are deprived of social welfare benefits. Since the order was made there has been a good deal of talk but no Deputies from the West got an opportunity of speaking on the subject during [1693] the short debate when time was limited.

As a Deputy representing people from a western area, I take this opportunity of speaking on behalf of those who are being deprived of social assistance. In this country today many people are earning substantial salaries. Most of these are well organised so that when they decide that they deserve an increase in salary, they can go on strike if their demand is not met. This is not the case in so far as the people about whom I am speaking are concerned. These unfortunate people were receiving assistance of £3.25 at the maximum but yet it was decided to deprive them of this assistance. It was only after the Minister had made the order that many of us realised how important this assistance is to so many. All public representatives received many letters inquiring as to what could be done and those Deputies who spoke on the matter here put the case for those people very strongly. The Minister backpedalled a little and tried to tell us that a mistake had been made but, under pressure, he decided to water down the order a little and to continue the assistance to those more than 50 years of age. At no time should the Minister have deprived or attempted to deprive the weakest section of our community who certainly are not in any position to organise a very strong protest and who depend on those of us whom they elected to speak for them. Therefore, it is for us both here and in the council chambers to speak on their behalf.

I admire Deputy Foley for the courage he displayed, as a member of Fianna Fáil, in condemning this action on the part of the Government. What Deputy Foley said was very true. This country is being run at an expenditure of about £560 million a year yet we decided to take £3 a week from a few thousand people instead of taking a few pounds from those who are well paid, including ourselves, because if the Department had told us that we would have to make a sacrifice in this case, we would have had to agree to do so in preference to taking the few pounds from those people who have no comeback. However, if we were told that [1694] our salaries and the salaries of highly paid officials were to be reduced, I am sure we would hear quite a lot about it.

The Minister has made his decision and I do not suppose there is much he can do about it now but I would ask him to do everything possible to help those who have been deprived. Until such time as this money is restored to them, they will have to endure great deprivation. Not so very long ago the Minister for Social Welfare toured my area and, at a church gate meeting, he thanked the people for their support and spoke of the social welfare benefits.

Mr. L'Estrange: Information on Gerald L'Estrange  Zoom on Gerald L'Estrange  He did not tell them what was coming.

Mr. McLaughlin: Information on Joseph McLoughlin  Zoom on Joseph McLoughlin  No, but he will not be back for a long time. During the by-election campaign the platform speeches of the Minister were centred on social welfare benefits. In introducing the Budget, the Minister for Finance told us that expenditure was down by £76 million. It is very difficult to get that across to the people of the country when, at the same time, taxation is being increased all round and the price of everything we buy is being increased. Everybody complains of a shortage of money but we have the Fianna Fáil Administration telling us about the great work they are doing and saying that no other party could possibly do better.

I have here a letter from a bishop who returned to this country after being away for 38 years. He says that the first thing he noticed in rural Ireland is that the population is declining rapidly and that it is now too late to do anything about this particular problem. He says also that our educational system is not geared towards country living and that no training is given to those who wish to remain in rural areas. It is a pity, he says, that the problem was not tackled 30 or 40 years ago. There is a lot of talk about saving the West but anybody who travels to a rural area will realise that it is now too late to try to save the West.

Recently the Minister for Lands made a statement in this House which hit the headlines in regard to what [1695] he was going to do about land. The bishop had no need to tell the people what he was going to do about the taking over of land. He has only to wait patiently and land will fall into the hands of the Forestry Division without any pressure from the Minister for Lands. That is where Fianna Fáil fails: in not moving more quickly. Emphasis now is on the towns and country areas which are being depopulated. This makes the villages quieter and the youth are going. They are not geared for country living while we have this kind of administration.

We are told about the amount of money allocated to various Departments for different schemes, but I have before me a document from the vocational schools committee which shows what we are up against when we are asked about grants. This document, in the case of one school requiring renovation, says “Under review”; “Community school idea—discussions awaited”. In the case of another schools it says “Sanction to go to tender awaited from the Department of Education”.

An Leas-Cheann Comhairle: Information on Denis Francis Jones  Zoom on Denis Francis Jones  The Deputy is dealing with matters that refer to a Departmental Estimate.

Mr. McLaughlin: Information on Joseph McLoughlin  Zoom on Joseph McLoughlin  I shall not question your ruling but there should not be so much delay in giving out money, especially when we hear of the millions being spent. We are still going to the various Departments asking when grants will be paid. All over the country there are calls for renovations and extensions and the response is as I have indicated, “Sanction awaited,”“Drawings awaited,”“Discussions awaited” and so on. The same applies in every county. Surely, with £550 million and a population of 2,800,000 money should be available without having to wait so long and let so much that is necessary go by the board.

We still have a long way to go in providing accommodation for the mentally handicapped. It is very disappointing, for parents particularly, to be waiting and hoping that something will be done. I ask the Department to speed up the provision of the accommodation [1696] that is required. There is only one institute to cater for Mayo, Sligo and Leitrim. That is not in keeping with modern requirements.

We are invited to attend meetings about the care of geriatric patients. The Department is not spending sufficient money in this field and while some large sums may be spent they could be better used in other directions.

The grant of 55s per week by the Department of Social Welfare to those who care for the aged was generally welcomed but the scope of the scheme is too limited. It applies to about four classes of relatives and persons outside those classes are not considered. If the scope of the scheme were widened we would not have so great a demand on the Department of Health because more old people would be kept at home, and institutions which are costing so much would not be so heavily strained if the Department made it easier to qualify under the scheme. It made a great difference to many people to have £4.25 plus £2.75 coming into a home, almost £7. This helps to run a home that might otherwise be very hard to maintain. Many more pensioners should get the extra 55s and if it were granted the Department would not be called on to support so many elderly people; they would be kept at home.

The Government should be able to run the country without paying £91 million annually to service the national debt. This is really an enormous waste of money. We have borrowed money from Germany and other countries at very high rates of interest. One cannot believe everything one sees in the papers but I did read that a loan raised in Germany cost almost 50 per cent. There is something very wrong with a country that has to borrow in those circumstances. We should have tackled the problem 20 or 30 years ago and so be in a position now to solve our problems without having to borrow at such high rates of interest. We should copy some of our neighbouring countries where every acre of land is made productive. Many parts of this country, even where there is good land, are neglected. It would certainly be a different country if the land were properly managed.

[1697] Many people anxious to enlarge their holdings have been hoping the Land Commission would increase its staff so that the land near their holdings, which they have been looking at for the last 20 years, can be divided. Representations to the Department in Merrion Street can be made time and again and after the third time one will be told that the Department are looking into the matter. The Department of Lands should spend more money and get the machinery going so that land can be divided. This is what taxation is for and this is what revenue should be spent on. A clause in the Department's regulations states that no single man is eligible for land.

An Leas-Cheann Comhairle: Information on Denis Francis Jones  Zoom on Denis Francis Jones  The Deputy is entering into details of the Department.

Mr. McLaughlin: Information on Joseph McLoughlin  Zoom on Joseph McLoughlin  Taxation on a pint of stout is at the rate of 7½p, which means the price of a pint of stout is beyond the reach of many people. The one consolation people had when the day's work was over was to go and have a pint but taxation has made it too expensive.

Farmers were hoping they would be given an increase in the price of milk, but the price of milk has been increased by only half an old penny which is not enough to entice people to go into milk production. Farmers have to work seven days a week in milk production and they need greater encouragement to do so. People in the west should be given greater consideration than those living on good land elsewhere.

Yesterday I mentioned that there are five million cattle in the country but only £250,000 has been allocated for the warble fly eradication scheme which should get under way in the autumn. This scheme was far from being successful last year and the Department should ensure that the same thing does not happen again next year because if it does all the money which has been spent in the past will be wasted.

There should be a larger allocation for the local improvements scheme. Even at this stage more industry should [1698] be established in the West of Ireland. Employment is necessary there because with ever-increasing costs people are not able to live on their small holdings. Finally I would once again ask that farmers be given a higher price for milk.

Mr. Crotty: Information on Kieran Crotty  Zoom on Kieran Crotty  I am not an economist and I do not pretend to know much about high finance but I should like to make a few remarks on some of the things which did strike me in regard to this Budget. As we had a new Minister for Finance introducing the Budget this year many people hoped there would be a new outlook in financial thinking which would give the people an uplift. I am afraid we did not get anything new in this Budget. I had felt the Minister might create a climate for investment and bring in new foreign investment by his Budget and I had thought he might put a stop to the Irish money which is going out in increasing amounts year by year to foreign money markets.

People have become cynical and this fact was brought home to me when I spoke on Budget day to people who did not even know that the Budget was being brought in on that day. On the day after the Budget had been announced I spoke to people who did not know much about the Budget and could not have cared less anyway. This sorry state of affairs has been brought about to some extent by high taxation. People no longer worry about increases in income tax and all the other taxes which are levied on them from the central authority and from the local authority through the rates. They merely took for increases in their wages to compensate for the higher taxes they have to pay. This brings about inflation which has been talked about so much over the last few years and to which the Minister devoted a fair amount of his Budget Statement.

The Minister has not grappled with the problem of inflation in this Budget. He is obviously hoping it will right itself but every person of common sense—one need not be very clever or an economist—knows that one cannot wish away inflation. Measures must be taken to control the finances of the [1699] State. The Minister has failed to do this and that is the biggest fault in this Budget. It is a standstill Budget. It does not do very much for anyone. There are a few increases in social welfare and there are taxes levied, taxes which some people feel should not have been levied. Some taxes may be justifiable. Others are not.

The increases given to social welfare recipients are far from adequate. They will not bring the benefits up to the spending power they had 12 months ago. Social welfare benefits generally are not high enough. The Minister really should make a better effort to give the recipients a living. They do not get that at the moment. Prices increased by 12 per cent in the last 12 months. Contributory pensions will be increased by 10 per cent. There will be a smaller increase in the case of non-contributory pensions. I suppose those on non-contributory pensions do not eat as much or drink as much as those who get contributory pensions. Invariably these increases come into operation from four to six months after the Budget. Invariably there is also an increase in the price of the stamp. The Minister should tell us in his Budget by how much he proposes to increase the price of the stamp to compensate for these increased payments. I suppose we can take it that the increase this year will be of the order of 3s—2s from the employer and 1s from the employee.

A new stamp is being introduced this year. The information given about this has been very vague and the Minister for Health yesterday gave literally no information in reply to questions on this matter. It is my opinion he did not want to give information. According to the Minister for Finance this new stamp will raise some £2 million in the period in which it will operate this year. We can, I suppose, take it that in a full year the figure will be £5 million. This stamp is introduced to cover hospitalisation. It will be a new tax on those who up to this had free hospitalisation. According to surveys carried out. 30 per cent of the population have medical cards; 15 per cent are in the higher income group. This leaves 55 per cent on whom will fall the cost of this new stamp. As a result [1700] of inquiries I know that 50 per cent of these are at the moment geting free hospitalisation. There are borderline cases; there are small farmers and businessmen who have to put someone in to look after their affairs if they are hospitalised and local health boards up to this have always taken this into consideration and refrained from charging these people the 10s per day for hospitalisation. Henceforth these people will not receive free hospitalisation. They will have to pay this tax, for that is what it is.

The Minister said it would be in or about 15 or 16 new pence. That would be 3s in pre-decimalisation currency. The Minister may be right. I do not say he is not right. All of us can throw our minds back to the time when we were told that the Health Act would not cost local authorities any more than 2s in the £. I do not think any of us ever thought it would remain at that figure. Neither did we think that it should remain at that figure. Naturally it would have to increase with increased costs. But no one ever expected that health charges would reach the astronomical figure they have reached from the point of view of rates at the moment. Indeed, the time has come when some new source of income will have to be found. Local authorities will have to shed this burden.

According to the Minister this new stamp will bring in £5 million in a full year. There are people who are already paying something in the region of 32s a week for the stamp. The Minister says the figure will be 3s; in five years time it could well be 10s, 15s or £1 on top of the cost of the present stamp. The Minister should have given us a better analysis when he introduced this.

The price of spirits will be increased as a result of the Budget. Spirits are a luxury. If people want to drink spirits they can pay for them. I have no complaint against the Minister on that score. However, the pint is a different matter. Everyone from the highest to the lowest drinks a pint. The man with the well-lined pocket can pay for it. Unfortunately we cannot charge him more than we charge [1701] the ordinary working man and, from that point of view, where the working man is concerned, this is a tax on leisure. To a great many people this leisure is essential, the drinking of a pint or two at night and a chat in pleasant company. The Minister should have left the pint as it was.

There is a problem in connection with drink and, perhaps, this is what influenced the Minister in raising the price of drink. There are many young people around the country, from 15 years up, consuming large amounts of drink and then, perhaps under the influence of drink, driving cars to a dance. This problem is causing great concern to parents, church authorities and to the public in general. Young people can go into lounge bars and I have never seen them challenged with regard to their age. I wonder have the gardaí ever checked on this or are they told to turn the blind eye to it in view of the amount of revenue being derived from drink? Bars are springing up all over the country. Premises nearly as big as aircraft hangars are being converted into lounge bars. This is bringing in tremendous revenue to the Exchequer. However, if we are to damage the moral wellbeing of our young people this is revenue the Minister could well do without.

It strikes me that the Garda force is not adequate to deal with the situation. The Minister, in his Budget, did not provide sufficient funds for the Justice Estimate in respect of the Garda force. He increased it by £1,500,000, which will provide 200 extra gardaí in the next year. I believe that if the Minister raised another £1,500,000 through some tax or other and told the people he was providing another 200 gardaí, they would not criticise the Minister but would congratulate him. If there is one thing people do not mind paying for it is protection, to know that they themselves and their families are secure, that their property is safe, that the gardaí are only around the corner from them and are ready to assist them when necessary.

Anyone who takes note of the Garda strength throughout the country—I do not know much about the city—will [1702] tell you that there are no gardaí readily available. They are trying to cover the same territory as before with half the numbers, racing around trying to give proper protection to the citizens. Another thing I noticed in the Estimate was that the provision for overtime for the gardaí is the same as last year. The gardaí are now working shorter hours and will not be able to cover the same amount of ground as they did before. With a small increase of 200 gardaí and only the same amount of money provided for overtime we will get less protection than we had heretofore. This is a very unhappy situation and I regret that the Minister did very little in the Budget to improve it.

I was also disappointed that the Minister did not reduce the very heavy company tax. From talking to people I am convinced that this tax is holding back the expansion of our industries. The British Government realised the threat to expansion of their industries and reduced the company tax to 40 per cent. The British Budget was introduced before the Irish Budget. It gave a lead to our Minister and I cannot understand why he did not take the lead and reduce this taxation. An English company might think Ireland was a good place to set up a factory having regard to the availability of labour and essential services, but having studied the company tax they would probably decide to establish the industry in Scotland, Wales or in the North of England where they would not get exactly what they wanted but at least they would not be taxed out of existence.

Companies must be left profits to expand. “Profits” is not a dirty word, and the Minister has missed an opportunity of giving the encouragement he should give to Irish companies to expand. They need extra money for stock and so on. The banks are very restrictive at the moment with regard to credit. I suppose the Government are taking too much out of the commercial and other banks who lend money. This means there is not enough money available for industry that needs it so badly to provide more jobs for the people who are leaving the land and for all the new people who are [1703] coming on to the labour market. We must either give these people jobs at home or export them to England or America. I can only take it from this Budget that the Minister is interested in exporting them.

The Minister provided extra money for the IDA. That is a very good thing, but it will be agreed that it is cheaper to provide new jobs by expanding existing industry. Then we know the kind of industries we have already. We have “fly-by-night” men coming in, men who even after the screening of the IDA and the various Departments go flop and cod the poor gullible Irish. In the long run I think the Minister would have done a better job if he had cut the IDA grant and given some relief to these factories.

The unemployment situation was brought home forcibly to me this week when a new fire station was opened in a small village in my county. I was flooded with applications for jobs as part-time firemen. It is only a small station and they would not be called out very often. When I asked them for their credentials I was shocked to hear they were all unemployed. It was disheartening to see so many able-bodied young married men unemployed. This is a serious situation and unless we tackle it rural Ireland will be depopulated. It would be a pity to see the fine young men who came to me during the week leaving rural Ireland.

I was disappointed that the Minister did not provide more money for housing. He has provided about the same amount as last year, taking into consideration the increase in the cost of materials. There was a shortfall in housing last year. There were only 3,900 local authority houses built. Of course we had the cement strike. The Department would not allow the house building anyway. Plans were sent back and forward so often that houses could not be built. I think every local authority had experience of this. The Minister must face up to facts and get down to providing houses.

There were a fair number of houses provided under the Small Dwellings Acts. This type of house was stepped up considerably. I can see that the [1704] Minister wants more of these houses built. Local councils are co-operating with the Department on this and it is a great exercise, but with the increase in the loan charges and repayments in the last two years even this type of house is going out of the reach of people for whom it was intended, people earning £20 to £25 a week. With the large increase in rates, and repayments having increased from 50 to 75 per cent over the last two years —this is our experience in Kilkenny— these houses are being put out of the reach of the people for whom they were intended.

One of the greatest drawbacks is the deposit which these people have to find. I often wonder why the Minister did not work out some method by which the young people who do all this drinking and spend all their money in the bars and dance halls could be encouraged to save. I know the Minister is taking money from them by way of drink tax but it would be much better if he encouraged them to save so that on marriage they could pay a deposit on a house and perhaps some of the capital. I wonder why the Minister did not establish house bonds which these people could buy at so much a week. These could be tax free and interest could be paid on them. The Government would have the use of the money. These things should be investigated. If we do not encourage young people to save for some specific purpose, they will not put their money in the post office, no matter how attractive the terms may be. These are things that should have been done and that have not been done. It is no harm for ordinary Deputies to say these things and let the people know we have views on these matters.

Mr. O'Donnell:  At this stage of the Budget debate it is difficult to be original. My first comment is in relation to the Minister's reference to the control of expenditure where he states:

It is essential therefore to slow down the rate of growth of Government current expenditure to something more closely approaching the automatic growth in revenues at existing rates of taxation.

[1705] He goes on to deal with a new system of block allocations to the various Departments and later on he talks about programme budgeting and says:

Experimental studies in programme budgeting have been proceeding in the Department of Education....

If the control of public expenditure and the new system of programming is to be introduced, surely a realistic sense of priorities in Government expenditure must be the guideline.

The people in my constituency have been the first victims of this new curtailment of Government expenditure and particularly of the new budgeting system introduced in the Department of Education when out of the blue, last Friday, we received the bombshell news that the third level educational institute which was promised to us not merely by the present Minister but by the previous Minister had been axed. Hundreds of secondary school students waiting to go into this college in September, 1972, have been disappointed. They may not be able to get into other university institutions and their parents may not be able to [1706] afford to send them there. This decision is a disgraceful one and a grave injustice to the hundreds of students who are now in their final year at secondary school. This decision has been taken for purely financial reasons and the message that has come from the Department of Education and the Minister for Justice over the weekend that it was taken on educational grounds is codology. It was made on financial grounds. If this is the type of curtailment of public expenditure we are to have, God knows what else will be axed. Education should be a top priority in Government expenditure. We have been campaigning for over a decade for this institute. We have been promised it. We had the building ready to start first-year classes. All that was necessary was to appoint the staff. This is a disgraceful decision which is strongly resented by the people of my constituency. I want to place on record my condemnation of the Government for what has happened. It is something I believe the Government will rue.

Progress reported; Committee to sit again.

The Dáil adjourned at 6 p.m. until 3 p.m. on Tuesday, 18th May, 1971.

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