Thursday, 26 February 1976
Dáil Eireann Debate
Dr. O'Connell: If ever the present income tax structure and its injudicious nature was highlighted by anyone, it was by the Minister for Finance who emphasised how inequitable it is. This made me believe that there is an urgent need for us to review our taxation system and consider whether it is still possible to lavish subsidies on our industrial sector while, at the same time, imposing a crippling burden of taxation on workers. Can anyone justify the present discriminatory tax structure, when 700,000 workers covered by PAYE contribute 82 per cent of the total income tax revenue, companies contribute a miserly 5 per cent, farmers a negligible 1 per cent, and export orientated foreign capitalists contribute absolutely nothing? These are very illuminating statistics. In the light of them, I wonder who is contributing most to the economy. Is it the workers who are making demands to enable them to bear this crushing burden of taxation? Is it the companies who enjoy the multiplicity of taxation concessions?  Is it the foreign companies who function completely free of taxation while benefiting from the largesse of IDA grants paid for out of the taxes of the workers?
As if this direct taxation which cripples the working section of our community so much is not enough, the worker gets a second going over with the high rate of indirect taxation, VAT, and so on. As the Minister noted in his budget speech, indirect taxation is notorious for its regressive effects, and for the fact that inevitably it bears most heavily on those least able to afford it. The Minister was quite right to advert to this matter. Despite what the Minister said, the budget laid most emphasis on indirect taxation. At present Ireland enjoys the dubious distinction of having the highest incidence of indirect taxation in the EEC. As I worked on these figures I found that indirect taxation accounted for 55 per cent of all tax revenue collected in 1975, while direct income taxation accounted for 45 per cent. I believe the recent budget merely added fuel to the flames by introducing exasperating increases in indirect taxation, increases which are barely offset by the paltry increases in the tax free allowances.
The fact that tax revenue is composed of direct income taxation, with the worker paying 82 per cent, and indirect taxation with the worker again bearing the brunt, would seem to belie the notion that one of the functions of taxation is to achieve a more equitable distribution of wealth. The Labour Party have always champoined the Robin Hood approach of taxing the rich in order to support the poor. I may be accused of being over-critical, but it seems to me that the recent budget was more in favour of the opposite, of taxing the poor in order to support the rich. I believe we have reached a crisis point with regard to this crushing burden of taxation on the working classes. The patience of the workers has been exhausted. Unless there is a restructuring of the whole taxation system, an easing of the PAYE burden, and a spreading of the tax load, we will soon be faced with the prospect of a taxpayers' revolt. That is not exaggerating the situation.
 The Minister for Finance displayed a commendable grasp of the gross inequities of our tax system in his budget speech. I should like to give a few quotes from his speech. He mentioned that 72 per cent of total taxation came from indirect taxation, the old reliables, the cost of which bears most heavily on the working classes. He said in Ireland 50 per cent of total earnings is taken by taxation at an earnings level of just over £13,000. The next lowest corresponding thresholds in the EEC are Britain at £16,000, the Netherlands at £25,000, and Italy £100,000. In France the State never takes 50 per cent of earnings. The Minister has shown we have a system of taxation which is grossly inequitable. What he said is a very praiseworthy analysis. However, an analysis is not enough.
The steps the Minister took to alter the taxation system by way of anti-evasion measures, extending the net to include the lumpers and, to a small degree, the farmers, as well as the proposals for contemporary assessment, all fall far short of the type of measure necessary to reconstruct the tax system along justifiable lines. The Minister, regrettably, did not go beyond recognising the disproportionate distribution of the tax burden. He proposed nothing which would accomplish a fundamental change in the present tax system. If the Minister is sincerely determined to equalise the tax burden I propose that he establish immediately a taxation review committee which would provide him with recommendations for reforming the present system. I do not envisage this as some long drawn out committee which would make recommendations to him in a few years. This committee, as a matter of urgency, should tackle this crippling taxation burden on the PAYE sector in general and the lower income groups in particular.
We should aim at completely removing the tax burden from the lower paid sector by spreading the burden evenly across the economic spectrum. Such a spreading of the load would entail a closer look at the multitude of tax concessions enjoyed by companies  as well as the low level of farmers' contributions. This committee could report to the Minister within ten weeks. He could then accept their recommendations and implement them in a budget on 1st July.
The Minister, to show his sincerity in what he has said, should act with all haste to ensure that what he has said can be implemented. This could be implemented by applying higher company taxation, perhaps eliminating some of the tax free concessions, which foreign industrialists enjoy in this country. We are obsessed with the question of exports. This export obsession is not only evidenced by the myriad of tax concessions offered to industry with export sales relief, accelerated depreciation, stock relief and so forth, but also by the millions of pounds which the IDA offer in capital grants to foreign industrialists who agree to set up industries in Ireland. Over £45 million was paid to those people in 1974.
This export obsession also underlines the pay pause demands of industrial employers, the argument being that our competitiveness is being seriously undermined by wage costs. Since exports are the mainstay of employment, the argument goes, a pay pause is required, if further unemployment is to be avoided. This is not correct as I will explain later. The continuation of our economic crisis into our third year, the 118,000 people who remain unemployed and the system of taxation which fleeces the poor to support the rich, all demand that we give up looking for solutions in piecemeal economic tinkering and start questioning some basic assumptions.
We must have a cost/benefit analysis of these taxpayer subsidised bonanzas for export industries. What have they achieved in terms of immediate employment? Is the preoccupation with export growth costing us too much? This is the only way out of the labyrinth of economic depression. The argument regarding competitiveness is a conventionalism for most but the recent Economic and Social Research Institute commentary maintains that industrial exports did not lose competitiveness in 1975 when compared with other  OECD countries. There may be many valid reasons for a pay pause but the scare tactics of relating pay increases to a disastrous fall in export competitiveness simply does not wash.
The soaring unemployment figures indicate that job creation is forever falling far behind job loss and export industries do not have the capacity to provide the necessary level of employment. Of course, the world is in recession but an economy which depends so heavily on exports and, therefore, on the continued economic growth of other countries, leaves itself in a most vulnerable position because when the balloon bursts it is inevitably left defenceless.
The policy is even less justifiable when workers are taxed into oblivion and the Government give massive handouts to foreign export industries which contribute nothing by way of taxation and an insufficient amount by way of employment. Foreign capitalists are always the first to withdraw in difficult times since their commitment to the economy of this country does not extend beyond the tax free profits already obtained. It is amazing that we lack so much confidence in the economic benefits of fostering a home demand, a demand which so many foreign importers are eager to exploit.
The failure of export industries to protect and to maximise employment is very evident. We no longer have the right to link the fortunes of our people to every slump and recession in the world economy. It is time to devote some sort of effort to fostering the home market and jobs in home-orientated industry, instead of giving it to developing jobs in the export industries in the last decade.
I am not proposing an embargo on export efforts and I am no economic isolationist or economic Sinn Féiner, far from it; I am only interested in achieving a realistic balance which will encourage productive Government spending and offer people opportunities for employment. The present imbalance is the result of supporting capital intensive industry rather than labour intensive industry. Nearly two-thirds  of the jobs in Irish manufacture are still dependent on the home market for survival. It makes more sense to protect jobs through labour subsidies than to subsidise foreign capital to provide jobs.
The Government have failed to protect our citizens' most basic right, the right to work. The recent budget demonstrated a total lack of commitment to job creation. Direct and indirect taxation continues to undermine the living standards of our workers while money continues to pour into the coffers of manifestly incapable and foreign dominated export industries. It is apparent to me, and it should be to many who are studying the economy, that the working people of Ireland are paying everybody's way in the present crisis and that any new sacrifices which the Government deem necessary will fall on their shoulders alone.
If Ireland is to continue to be a place worth living in it is essential that we examine our basic economic assumptions, that we spread the burden of the crisis fairly, that we do not tax our workers out of existence in an attempt to prop-up foreign capital with this misguided faith in the capacity of export industries eventually to solve all our problems. We should make a new commitment to social injustice and unemployment.
I recognise the Minister's dilemma in choosing those areas which provide the most money and impose the least hardship on the taxpaying public but, without being over-critical, I got the feeling that the budget was a most unimaginative one. It seemed to me that it was done in haste and sufficient effort was not made by the Minister's Department to examine other areas where tax could be applied without hurting those most vulnerable. One wonders why the Minister taxed motorists so severely and allowed the punter to escape unscathed. This is particularly mystifying in the light of the staggering fact that £1½ million was speculated in the first four weeks of this year, which represents 62 per cent increase over the same period last year. We are left to wonder why those massive sums escaped the taxman's net.  The punter could have been taxed to alleviate the burden of the car owner.
I believe, if we are to save existing jobs—the figures each week suggest that something of an emergency nature may have to be applied—especially those vulnerable to free trade, we must give serious consideration to some form of import controls as an emergency measure. We have the highest rate of unemployment in the EEC. The official unemployment rate is 13 per cent. In my area alone I have estimated from a survey that it is over 20 per cent.
A 13 per cent rate is more than twice the average for the EEC countries. In Ireland unemployment was endemic for a long time but now it has reached epidemic proportions and with a virulence that saps the life of our nation. In a situation like this we should be obsessed with the question of solving the problem. I wounder why we have not applied import controls. The director of the business bureau in Brussels expressing surprise that we have not applied some form of import control, says this is all the more surprising in light of the fact that Article 135 of the Treaty of Accession entitled us, up to the end of 1977, to take safeguard measures. That Article refers also to Denmark and the UK but the director of the business bureau emphasises that Ireland is the only country which can take such safeguard measures in the case of extreme urgency, notifying the Commission after the event. That is an important point. I believe the other member countries would sympathise with us in our problem and would realise that because we have the highest unemployment rate, we have no option but to safeguard existing employment. Therefore, we should avail of this special provision in the agreement. Undoubtedly, this safeguard was in the minds of our negotiators when the Treaty was agreed and signed. Apart from this provision, France and Italy provided ample precedent recently for the imposition of emergency import controls.
The capital programme is worth examining in the light of the unemployment problem. This programme, ten years ago, accounted for 33.5 per  cent of government spending while in 1975 it accounted only for 24 per cent or a loss of £176 million in 1975 terms. This is a foreboding development since the capital programme offers the best opportunity for productive government spending. Investment in the programme creates jobs, produces tangible benefits in increased housing, road works, public buildings and so on. For the past year-and-a-half I have been emphasising the need for the expansion of the capital programme and for the implementation of a public works programme.
The unemployment problem is more than a burden on the State in terms of social welfare payments. It has a very depressing effect on those who are out of work. These people are anxious to find employment. They find it embarrassing and demoralising to have to queue up for benefit. There is the factor also of hardship resulting from the drop they suffer in their standards of living. The CII have estimated this drop to be 50 per cent. These factors should be borne in mind when we talk of these people living on handouts. It is a sad reflection on us that we have so many of our people in this predicament. The recent capital programme should have taken account of the unemployment situation and should have committed a greater proportion of funds to job-intensive sectors.
Taking inflation into consideration and realising that the rate is still galloping, I wonder if a 17.3 per cent increase in respect of building or a 4.4 per cent increase in respect of housing was adequate. Were such increases an indication of a determination to expand the capital programme so as to lessen the unemployment problem? I do not think so. I recognise the needs of the industrial sector. I appreciate the need for increasing enormously the amount of money that must be put into this sector but I am aware also of the needs of the 22,000 people who were laid off in the construction industry. Many of those people could be returned to work immediately if funds were allocated to the job-intensive sectors. This would not involve any drain on our external reserves. It would not involve massive imports because we would be concentrating  on the home-generated products such as cement and all the other ancillary products associated with the construction industry. I am disappointed that no determined effort was made in this field.
Regarding the IDA, the industrial grants scheme should be reviewed with the object of replacing these handouts with long-term interest-free loans. Such a scheme would mean that investment in Ireland would continue to be attractive and would provide a fund which would replenish itself to some degree. A stricter criterion of job intensity should be applied to developers seeking assistance.
So far as the banks are concerned, these institutions have failed to play a socially useful role in directing the financial resources of the country towards more productive development such as job creation. Instead, they have fanned the flames of home-created inflation by expanding the money supply and by making available a large amount of credit for non-productive purposes. They have amassed assets of almost £3,000 million and they have profit margins in excess of 55 per cent. They hold in their hands the fortunes of many enterprises, industrial and agricultural. The criterion they apply is in terms of profits attainable when the enterprises concerned, in order to help them protect the livelihoods of those they employ, should be receiving every assistance.
Is there any reason why we should not impose an exceptional levy on bank assets, say 1 per cent? Such action was taken in France in 1969 as an exceptional measure and has been continued since. A similar measure here would generate revenue in excess of £25 million, an amount which could be used to finance the extension of the capital programme or the employment premium scheme and which could assist the construction industry. Such an extension has been mentioned as one means of rescuing six major construction projects planned for Dublin alone. Both areas offer immediate advantages in increased home demand. Is there any reason why the banks should not be compelled to offer low  interest loans to labour-intensive enterprises? Why should the Government not take steps to ensure the productive use of credit or why should the profits made by banks from their foreign investment not be taxed severly? Is there any reason why the banks should not declare an emergency delay on the repayment of loans by firms faced with the prospect of redundancies or closures?
An analysis of bank profits would suggest that the percentage paid by way of tax revenue is very small. I wonder if there is any reason why the tax on banks' profits should not increase at the same time as the tax on workers increases. It is the function of government to ensure that society's wealth is used to the best advantage of the community. No one sector should be asked to bear the weight while others profit from subsidies and concessions.
The export industry is of crucial importance. It can only benefit from the level of Government assistance given to it. Assistance cannot be provided at the cost of an inequitable tax structure with the workers alone pulling their weight. Banks, farmers and companies must contribute also.
We are at a critical point. I believe that suggestions along the lines I have made could help to reduce unemployment and get the country moving again. We must be prepared to take control of our problems if they are not to take control of us. The wider interests of the many must outweigh the narrow interests of the few.
We have almost forsaken our young school leavers. As an emergency measure, is there any reason why we cannot call for the early retirement of people in their sixties with full compensation granted to them in order to make way for the school leavers to enter industry? In this way we could absorb many of the young people and help the economic situation. They would be paying taxes, they would be contributing to the economy and the Government would not suffer any loss of revenue. Is there any reason why we cannot have a plan for phased retirement, where a person could go on a three-day week or a two-day week and  where the school leavers could be brought in on a graduated basis? This would not upset the work force or the economy and it would be of help to people who are about to retire.
There can be no progress in a country where people have no faith in the future. I was interested to hear the call by the Tánaiste for an economic and social plan. I hope there will be early action on this matter. An economic plan must be prepared that will open the opportunity for steady and productive employment. We must be told about the way the economy is going. I should hate to think that we were frittering away each day in a Micawber-like fashion hoping that something will turn up. If we float along rudderless we will be in serious trouble and the public and national morale will suffer. If people saw evidence of Government leadership, of a plan and of the goals to be attained, it would boost their morale and they would be prepared to contribute. We must take the burden from the lower section of the community who are paying tax. That burden should be spread more widely and I call now for implementation of the recent recommendation that the farming community should contribute a lot more in the payment of tax.
Mr. Dowling: I have listened to many of the speeches in this debate and I have been puzzled on hearing them. In the course of his budget speech, the Minister indicated that clarification of the future management of the economy and the measures to be taken would be announced. We wonder what is still to come because so far we have had a budget a day from the Government. We are in a serious situation because the budget is only a part of the overall system we will be debating in the course of 1976. It is obvious that the budget is responsible for many increases in the price of commodities. We heard the Minister in this House predict that as a result of the increase in VAT charges the price of the pint would rise by 1p but it is indicated in the Press this morning that the increase will be 3p. This gives some idea  of the inaccuracies in the statements of the Minister for Finance.
The Minister could properly be called the political pickpocket of the seventies. He has dug deep into every pocket in the country and, as Deputy O'Connell has pointed out, the housewives and the workers are those who are most seriously affected. However, we have heard no suggestions for an immediate remedy for the tragic situation that faces the country. We have had many utterances from the Minister. Recently, according to a supplied script, the Minister was found talking to himself outside a licensed premises with nobody to listen to him. This is because nobody believes him any more. We must examine the situation and see what steps can be taken in the immediate future.
There have been rumblings from the Tánaiste about an economic and social plan. What will this be based on? This is the first time we have heard the suggestion. Is it because they are about to collect their conscience money that they talk about an economic and social plan, because their pensions are safe? This is not good enough.
We must consider the unfortunate people who are unemployed. We are told the number will rise to 130,000 in the very near future. I suggest that an immediate examination be carried out in each local authority area regarding labour intensive schemes. Local authorities should be instructed to establish working groups to develop such projects and I will outline some of them during the debate. These schemes would not interfere in any way with the permanent staffs or with projects that are on hands. Co-operation with the Office of Public Works and with the Department of Lands would be worthwhile because the Office of Public Works have machinery that is depreciating in value because of lack of use. There are many schemes that require nothing but a labour content. The pooling of resources in a national emergency of this kind is necessary and desirable  and it should be undertaken immediately.
During this debate I will give the Minister a few suggestions he might consider. Let us consider the census of population which was shelved by the Government because it would cost £1.3 million. It was a completely irresponsible action on their part. I suggest that this project would have a high labour content. People who are unemployed at the moment are receiving 85 per cent of their wage packet and if the census were carried out it would cost only an additional 15 per cent. I do not think the Government are serious about an economic and social plan. I think the rumblings from the Tánaiste have come because of the pressure of members of the Labour Party, if they are still members of that party. Immediate action should be taken on the compilation of a census of population. That is both necessary and desirable in order to provide a base or platform from which to work in regard to future programmes and projects. It is imperative that we should have projections for the future and, from that point of view, a census of population is of vital importance.
As I said earlier, the Minister for Health and Social Welfare has again spoken without apparently the authority of the Government. The cloak of collective responsibility seems to have slipped and we now have from time to time rumblings and statements made in peculiar ways and in peculiar places.
I would appeal to the Minister and the Government to reconsider their attitude on this question of compiling a census of population. Such work would be labour intensive. I have already dealt with the cost and shown how the cost could be kept at the lowest possible figure while, at the same time, providing a certain amount of employment.
Local authorities in conjunction with the Office of Public Works could put in hand certain capital projects, such as the cleaning of water courses, the reclamation of land and, in cooperation with the Department of  Lands, the planting of trees. There would be ample scope in such projects for the employment of many men. No heavy machinery would be required. Building sites could be prepared. In the 1940s building sites were prepared in the Crumlin area but, because of the shortage of cement, houses could not be built at that time. These houses were subsequently erected. I have travelled all over the country on numerous occasions and I know there is a great deal of work that could be done on schemes that would be labour intensive but would not require any great capital expenditure. I know the Government are bankrupt, so bankrupt they have not even enough with which to pay a compliment.
Problems must be solved. All over the country in every parish there is scope for the development of playgrounds. The unemployed could be taken off the dole queues and put to work on such schemes. I fully agree with John O'Connell——
Mr. Dowling: Deputy John O'Connell. I fully agree with Deputy O'Connell that the situation needs critical examination. There is a constant demand throughout the country for sportsfields. Preparing such grounds would not interfere in any way with the permanent employees of local authorities. A great deal of work needs to be done in Army barracks and camps. That work could be done by manual labour without machinery or any very expensive materials. The work will have to be done at some stage, a stage at which it will probably cost a great deal more than it would cost now. The men on the dole queues could be put into productive employment at no great cost, as I have pointed out and this employment would help the morale of the people. We must get people back to work and restore their confidence.
Work could be done on land reclamation. This would not require machinery. It could be done by  manual labour. Land that has become overgrown could be cleaned up and put into production. Very often the owner is unable to get local labour to do this kind of work. If this land were cleaned up, it might be possible for the Government to lease it to people who would use it thereby increasing agricultural production. There are numerous schemes that could be carried out without machinery or with limited machinery. If machinery were required, such as trucks and bulldozers, these could be obtained from the local authorities and the Board of Works. Some kind of working cadre should be set up to carry out productive programmes at small cost, taking the unemployed off the dole and restoring their confidence, the confidence they have lost over the last few years.
The difference between the social welfare benefits paid, in many cases, 85 per cent, and the 100 per cent. which it was based, is 15 per cent. We should have productive schemes and not merely be digging holes and filling them in again. So far we have been given no hope. We must have more jobs immediately. The Government have a responsibility to do this. They have neglected to do this over the years with the result that we now have a crisis. We hear strange sounds from Ministers indicating that we now need economic and social plans. Some time ago the Minister for Finance told us it was impossible to formulate a future plan because we did not know where we were going. If that is true, it will not be possible to do what the Tánaiste suggested. Bluff no longer works. Whatever shred of confidence the people had in this Government, it has been lost and the people are waiting for an opportunity to demonstrate this.
The compilation of the census of population is very important. This point cannot be stressed too much. Future plans must be based on statistical information. In two, three, five or even seven years' time, it may be impossible to produce future plans because of the failure of this Government to provide statistical information. Or, is it their intention to cover  up their mistake by not keeping statistics up to date?
In the documents circulated, it is interesting to note that information of the public relations service in the Department of the Taoiseach shows a decrease. This means that the Taoiseach no longer wants to give information. The collection of statistics in the Central Statistics Office shows a reduction from £680,000 to £392,000. In his reply the Minister, I hope, will give some indication of the positive and immediate steps this bankrupt Government will take to alleviate the situation until such time as they are put out of office.
Social welfare benefits and the dole have been mentioned in newspapers and in this House from time to time. I am sure the majority of people signing on the labour exchanges and on the dole want to work. Of course, there are some who do not and some who will never work again. If unemployment and social benefits are to be used as a means to this end, we must ensure that the necessary measures are taken to see that the people who make their contributions to the nation are adequately rewarded. There must be a productive end to everything if we are to be successful. In some countries retired benefits are based on declared income. That means the income one earns during the year decides the size of one's pension. In many cases this means a man may get a retirement pension far in excess of ours. People who make their contributions to the nation over the years are entitled to that.
We have heard a great deal of talk about the abuses of social welfare and the dole. In a declared income situation, the man who pays his taxes and meets his contributions over the years will get a greater reward. The man who does not want to work and evades his responsibility will not get the same retirement benefits and rightly so. Many people in receipt of social welfare benefits are not getting enough. The Minister gave them a 10 per cent increase at a time when inflation was at 20 per cent. These weaker sections of the community must be protected. All Governments could  have done more. If there are abuses of the social welfare system, they should be terminated to ensure that those who are working and paying their way do not have to carry others. We should have a retirement system which would depend on the amount a person paid in taxes.
The Labour Party have lost their identity. They are no longer the Labour Party. Listening to their contributions, one realises that this is basically a one-party Government. Of course, from time to time there are rumblings from the backbenchers but they mean little. The Labour Party are now part of the Fine Gael Party and have accepted the dictates of the Minister for Finance. One wonders how these people will feel in the future. There is no doubt that the Taoiseach when forming the Government cleverly placed the Labour Party members. He put Deputy M. O'Leary in the Department of Labour, a sensitive area. He has the equal pay problem around his neck and has been unable to deliver the goods, notwithstanding all the hullabaloo and Press releases through the Government Information Services, and outside it, in Bangkok and Australia. He is now in a sorry situation. He is faced with strikes everyday. Now that the rot has set in it is important that we would point these things out.
There are 23,050 persons unemployed in the building trade. The Minister for Local Government, Deputy Tully, tells us that a record number of houses is being built. Let us look at the facts of the situation and let us again call the bluff. However the Minister may twist the figures, the facts are that there are 23,050 building workers unemployed. This is the highest number of building workers unemployed since figures were first compiled. Cement sales were down in 1974 by 4 per cent, in 1975 by 10 per cent and this year so far by 2½ per cent. The manufacture of bricks is falling off. Builders' suppliers in some cases have reduced staffs and in other cases have gone out of business because of lack of demand for timber and other components for building.  Many furniture manufacturers have gone out of business and others are on short time because of lack of demand on the part of home seekers. By mid-November last, in the year of the so-called record, the figure for local authority dwellings completed was 7,600, whereas the target was 8,500 dwellings. In the Dublin Corporation area, in 1975, 1,529 dwellings were completed but in 1967-68 Dublin Corporation were able to complete 1,964—500 more than in that so-called record year. We were told that most of the houses would be in Dublin city. In 1968-69 1,996 houses were completed. In 1969-70 1,858 dwellings were completed by Dublin Corporation—almost 400 more than in the “record” year. These were not record years.
Perhaps the Minister can tell the House how he can build houses in record numbers without sand, cement, timber and men? He has been building castles in the air. We were told in The Irish Times yesterday that the building industry has the highest jobless rate—23,050—an increase of 7,487 over the corresponding date in 1974. There are a few questions to be answered by the Minister for Local Government who has bluffed his way through, who is responsible to a large degree for the deterioration in the situation.
Farmers have been using more cement in the last couple of years. This means that the building industry is affected to a much greater degree than would appear to be the case. Would the Minister tell us how he can build these houses? For far too long this bluff has been fed to the people. It is worth mentioning, while I am dealing with the Minister for Local Government——
Mr. Dowling: This debate covers the budgetary programme, the capital and current budgets. That covers housing. In the concept of collective responsibility the Minister for Local Government is as much responsible  for the situation as the Minister for Finance.
Mr. Dowling: A very serious situation is that taxpayers in Galway, Wicklow, Kildare are asked to pay money to Dublin Corporation to offset losses. At present there is £8 million worth of housing tied up in Dublin by squatters and there is the staggering total of £1½ million rent arrears. This is largely due to the irresponsibility of the Minister for Local Government both as a Minister and as a Deputy. I have said this outside the House and I now state it inside the House.
Mr. Dowling: The point I am making is that the taxpayer is asked to carry the additional burden for people who will not meet their responsibilities in Dublin, who have been guaranteed by the Government that if they do not pay rent that is all right, the shortfall will be met by taxation. It is important that the House should know this.
We see how this man has been cleverly tied up by the Taoiseach in this situation. When the Minister for Finance puts on the squeeze he puts that Minister out of business. In order to call his bluff I ask him to answer questions in relation to the building industry and the present figure of 23,000 unemployed which is the highest jobless rate in the industry and I ask him to tell the House how he can build houses without materials. Many people would like to know the answers to these questions. We would all build houses if we could find a way to do so without men and material and we would have a thriving industry. That man has great imagination.
Mr. Dowling: That is right. When the purse strings are tied, the Minister for Local Government is out of business. That applies to all the other Ministers. The Minister for Finance controls the purse strings and, perhaps, we should not attack the Minister for Local Government too heavily. Perhaps we should direct the attack on the Minister for Finance. Of course, he would take cover under the umbrella of collective responsibility and, perhaps, would suggest that it is the responsibility of the Minister for Local Government to build houses whether he has the money or not.
Mr. Dowling: There has been a complete betrayal by the Government in relation to the promises they made. The erroneous statements issued from day to day and week to week have clearly shown the loss of confidence in the Government on the part of the people. Confidence must be restored if we are to make progress. There was the Government's famous 14-point plan. We were told about free health services. The free health services never materialised. The Minister for Health has been cleverly cornered by the clever Taoiseach.
An Leas-Cheann Comhairle: The Deputy does not seem to have heard what the Chair has been asking him to do, that is, to relate his remarks to taxation, expenditure and financial policy and all other matters only in so far as they are related to financial policy.
Mr. Dowling: There is a cost involved here. We have seen the utter and complete failure of that Minister, not alone on that score but on a number of other scores. We have seen how in his private budget he disregarded the Prices Commission and increased telephone charges. I suppose it is in order to talk about television licences?
An Ceann Comhairle: It is not in order, Deputy. The Minister for Finance is here to answer on these financial motions and any other matter concerning Estimates will have to wait for the Estimate debate on that particular Department.
Mr. Dowling: This whole thing is a fraud. We have a budget a day. The Minister for Finance uses one device or another to pressure Ministers to bring in their own private budgets, as the Minister for Posts and Telegraphs did, and the Government disregarded the Prices Commission in connection with the television licence charge. This type of fraud cannot be tolerated from any Minister for Finance. From now on, I am directing all my attention to the Minister for Finance because his bluff is well known. There has been so much covering up in the past by other Ministers, some of them probably carrying the can for the Minister for Finance. I take it that they are Cabinet decisions, but it is hard to know now whether they are Cabinet decisions or whether it is just a tape recording that is available for conferences and meetings throughout the country.
I suppose I can talk about prices. The budget has certainly pushed up prices. Again we have a Minister who told us before he came to power— cleverly placed again by the Taoiseach, the Minister for Industry and Commerce—that he had a solution to stop the prices spiral. Again, an absolute failure. So all these men in  the Labour Party who are properly and cleverly placed, are now part and parcel of one great group who are bluffing their way to the end, but the end is near. As I said before, it is difficult to assess how serious they are in relation to their statements.
Before the Minister came in, I mentioned that the whole question of confidence in the people and in their statements is necessary and desirable at this stage. As I mentioned, according to a supplied script, the Minister for Finance was found talking to himself outside a licensed premises a short time ago. A person who talks to himself needs to be examined.
I want to move on to a variety of other matters, such as the question of the sabotaging of the building trade and the removal of the grants which has meant great difficulty for young people who are trying to buy homes. It is said at this stage that newlyweds should be attacked by a Minister for Finance, because the necessity of a new home will have increased by approximately £450 as a result of the increase in VAT. I do not want to go into detail, but I have all the figures here in relation to the various items and how they affect newlyweds. A very vulnerable section of the community, people who are making an effort to buy their own homes, are now attacked by this Government by the curtailment of grants. We are told from time to time that this Government want to assist. The people who have been attacked are the people who are making an effort. I ask the Minister to be realistic about this, irrespective of the pressures that are being placed upon him, to do something courageous and restore the grants so that young married couples can have a reasonable start in life. Attacking the purse of a newlywed person is a very serious matter. A newlywed housewife is doubly assaulted by VAT on household goods and by the ever-soaring costs that are allowed to develop. If she has a television, she must pay in excess of what is regarded as reasonable. This highwayman approach that we get from Ministers must be stopped. If the Prices Commission is  to have any meaning at all, the Government must have some respect for it. The Government must be subject to the same rules as the individual firms who make the applications. If the Government can side-step these rules then the people may be tempted to use offsetting factors which would not be beneficial to the Government or to the community. This type of bandit approach cannot be condoned.
On this issue I hope the Minister for Finance will say at this stage that he is going to ensure that young married couples who wish to buy their own homes will have an opportunity to do so and that the grants will be restored. The termination of the grants system means that a number of young people who have saved over the years are in difficulty, people who made an effort, an effort which every party in this House called on them to make. This betrayal of trust and ruthless sabotage cannot be condoned now or in the future.
This is a very serious situation. This time it is the kids. The question of the employment of young people is one of the most serious problems confronting us. Yesterday, Deputy Wyse asked the Minister if he was aware that this year, 33,207 students will be sitting for the leaving certificate and that 48,538 students will be sitting for the intermediate certificate. It would appear that there are quite a lot more for the boat because there are no prospects here. There is no future for them here, or no indication of a future for them here from any person who has spoken from the Government benches.
The signs are that things will get  worse before they get better. We were told 18 months ago that we were on the upswing. Now we are told it has not bottomed out. These estimates convey an erroneous impression to the people. Over the years people have accepted the factual situation. They have accepted the hard facts of life of a downward swing in the trade cycle, knowing that responsible Governments made every effort to halt that swing. When they were told there were difficult years ahead they understood the problems. They were never misled by Fianna Fáil Governments. Recently we heard the conflicting reports to which I have referred. We were told 1975 would be a better year. I wonder what the position will be at the end of 1976.
I do not want to go on quoting from newspapers or from Ministers' speeches. There is plenty of material in the documentation issued to the House to show how irresponsibly the Government have acted. We hear a lot of talk about the public service. I see the Minister for Local Government will be spending about £54,000 more on postage this year than he did last year and that grants for amenity works, derelict sites and dangerous places will be reduced from £50,000 in 1975 to £5,000 in 1976. This is an important area. There is no need for me to impress upon the Minister that continuity of development means that basic work must be done on sewerage services, sanitary services, and so on, but water supply schemes and sewerage services have been cut in the Minister's estimate. The long term planning, the social and economic plan, we heard about from the Tánaiste proves to be a joke.
Basically we have a one-party Government now. The Labour Party have lost their identity. They have been swallowed up. The dictates of Fine Gael are clearly seen to be fully accepted. Now they have their conscience money, now that their ministerial pensions are reasonably safe, we may hear an odd squeak from a Minister. The Tánaiste has been the first. I wonder what motivated him. A panic situation faces the unfortunate school leavers. They are without hope  and without a future. Perhaps the Minister will tell us what he intends to do about them.
I want to deal with another matter which was in the news this morning, that is, the national wage agreement. Basically what we require is honesty, honesty of purpose, an honest assessment of the situation, and honest forecasts of the problems as the Government know them. To my mind, the most reasonable people in this country are the trade union officials. When in possession of factual information they can assess the situation properly. Before the last national pay agreement was negotiated they were fed with information on which certain decisions were reached. Weeks afterwards they were told the situation was different.
The reckless way in which the Government have been supplying information does not fool the workers or the trade union officials. If there is a serious situation to be faced up to, let us face up to it collectively. Let us put our cards on the table, instead of being told we are building more houses with fewer men and no materials. If they knew the factual situation, there would be a reasonable response from reasonable men. The Government should not endeavour to deceive the trade union organisations. Trade union officials have spoken out loud and clear on this matter.
We must get back on the rails, get rid of the Government, and get the country back to work. Information may have to be forced out of the Government. If it is not available here, it may be available elsewhere. The Government have information which has not been disclosed to the public accurately, or at all in some cases, and to organisations like the trade union organisations who are seeking vital information so that their members can fully assess the grave problems. They are concerned about their future, about their children's future and about the nation's future. It appears to me that politicians on the other side of the House are concerned only about their own future, and that will be a short one. As soon as the people get an  opportunity, the Government will be gone by the board.
We heard a member of the Labour Party condemning foreign industrialists who have been attracted here and given good employment to large sections of the community. One member of what used to be called the Labour Party is now abroad trying to attract foreign industrialists to come here. I heard on the radio this morning that there is a possibility that some of them may come here. Another member of the same party says they are not welcome. It is about time the Government had a common policy and we knew exactly what their policy is. The 14-point plan is gone. Perhaps in the dying days of this doomed Government we might be told what that policy is.
I have here a publication dealing with industry in society published by the EEC. The Commission forecasts the changes in the main aggregates for 1976 as against 1975. Consumer prices are given as follows: Denmark, plus 8 per cent, Germany, plus 5.5 per cent, France, plus 9 per cent, Ireland, plus 16 per cent, Italy, plus 12 per cent, Netherlands, plus 10 per cent, Belgium, plus 10 per cent, Luxembourg, plus 8.5 per cent and Britain plus 15.5 per cent. Ireland is the highest in the league. We are then given the unemployment figures as a percentage of the civilian labour force. The figures for 1975 were Ireland, 8.4 per cent, Denmark, 4.5 per cent, Germany, 4.5 per cent, France 3.9 per cent, Italy, 3.7 per cent, Netherlands, 4.4 per cent, Belgium, 4.8 per cent, Luxembourg, .7 per cent and the United Kingdom, 3.6 per cent. There is something wrong if we are at the head of the league on all occasions. They then tell us the unemployment rate as a percentage of the civilian labour force in 1976. This is even worse. The forecast given is Denmark, 3.7 per cent, Germany, 4.6 per cent, France, 4 per cent, Ireland, 10.1 per cent, Italy, 3.9 per cent, Netherlands, 5.2 per cent, Belgium, 5.6 per cent, Luxembourg, .7 per cent and the United Kingdom, 5.3 per cent. The average is 4.6 per cent and we have 10.1 per cent.
 We have got many geography lessons from Ministers about what is happening in Japan, Belgium and Germany but they all seem to be much better off than we are. It appears that the other countries in the EEC have all made a more positive approach to unemployment and prices. We have forecast a 10.1 per cent unemployment rate as a percentage of the civilian labour force in 1976. In 1975 the average was 4.1 per cent and we had 8.4 per cent. The Community average in relation to consumer prices was 9.6 per cent and we have 16 per cent. When we compare other countries with ours we see how we lag behind at all times. The Government have allowed a deterioration of the situation until it has reached the chronic state which is indicated in the EEC report.
There is another booklet by the EEC called “Europe Day by Day,” issued in Brussels on 3rd February. This gives the unemployment figure as 107,079, a variation from 1975 to 1974 of 28 per cent. The Central Statistics Office give us a figure of 118,000 for the same period. Why is there such a difference in the unemployment figures? Is there any special reason why Europe should be informed that we have 107,079 unemployed while the Central Statistics Office tell us we have 118,000 unemployed? I hope that in future factual information will be supplied.
We had savage increases imposed on various commodities such as schoolbooks, newspapers, furnishings for newly-weds and so on. The newly-weds had their grants removed and they also had savage increases imposed on the necessaries of life. The increases to those people at the moment are up to £700. The Government have no conscience so it is hard to expect that any individual member of that Government would have a conscience. However, I hope some of the matters mentioned during the course of the debate will have penetrated through to some of the Minister's advisers who may be able to give him advice to alleviate some of the problems created by the budgets introduced by the Government since they came into office.
Mr. Staunton: I am glad to have the opportunity of making a few remarks in this debate on the 1976 budget. I listened with some amusement to Deputy Dowling's comments about Coalition and particularly the fact that in his judgment the Labour Party were being swallowed by Fine Gael. It seems to me that the Opposition are playing this in two ways. In the urban situation it is political to say that Labour are being swallowed by Fine Gael but in many parts of rural Ireland it is political to say the reverse, that Fine Gael are being dominated by the Labour Party. They are suggesting part of the time that Fine Gael are being dominated by the Labour Party and the rest of the time they are being swallowed by Fine Gael. Therefore, we are, perhaps, on an even keel in this area.
I take Deputy Dowling's point about the problems we have in the country and the problems we have vis-à-vis our competitiveness in world markets. I do not know where the Deputy got the EEC statistics he quoted a few moments ago. I accept that we had very substantial increases in consumer prices but when I look at some statistics I have I find it is important to say that Ireland is not isolated in relation to inflation and consumer price increases. It is an international phenomenon. There are certain factors operating where Ireland is concerned. Our problem is greater, perhaps, than it is in other countries. It is important to stress that, while consumer price increases are rising in Ireland and while wage unit costs have been increasing at a higher rate than other European countries, we started from a much lower base and we are a country which a few years ago was at an infinitely lesser stage of development than many countries we are partners with. Countries like Britain, France, Germany, Sweden and Denmark had a much more developed economy than we had five or six years ago.
It is not many years since unskilled workers were earning only £8 a week in this country. When one has regard to our level of underdevelopment we  had much more to catch up on than those other countries. This is one of the reasons why rates per capita have been increasing here at a higher rate. It is also important to say that we faced particular problems when we entered the EEC. We have, of all of the countries in Europe, by far the highest proportion of our population engaged in farming and agricultural activities. One of the greatest advantages of our entering the EEC is the lessening of our dependence on Britain as almost the sole market so far as our beef and agricultural produce are concerned, the involvement of this country in the common agricultural policy and a support system under which massive subsidies are funded by industrial nations essentially to the farming areas of the Community. This was immensely beneficial to us as a nation because it helped increase our balance of payments. It helped to increase very substantially farm incomes especially the incomes of farmers engaged in intensive production of any type, in particular, milk production. When we consider the statistics relating to the milk production areas we realise the prosperity that exists in that field. But one of the problems that accompanied that prosperity was that of substantial increases in prices of agricultural products. This meant, also, that consumer prices in certain areas increased dramatically. It was consequent on our entry to the EEC that we had this problem but I should hope that we are now at a levelling out period, that our economy is settled to some extent. There are factors in relation to our economy which did not exist prior to our accession to the Community. For example, we now have the commitment to social welfare because subsequent to the increased prices of which I spoke, the Government were committed to increasing social welfare to levels which would allow the less well off among us to get their share of the national cake.
We can put statistics into perspective to show that we are not the only country with these problems of inflation and rising prices. For example, we find from an OECD survey regarding  wage rates and annual increases during the years 1967-72 that our country had a substantial increase of 13.5 per cent. However, the survey shows that other countries have these problems, too, but we should not be dominated psychologically by such problems. The figures for some other countries were: Germany, 9.3 per cent; France, 11.3 per cent; Finland, 11.8 per cent; Denmark, 12.4 per cent; Belgium, 10.2 per cent; Japan, 15.6 per cent; the Netherlands, more than 10 per cent and Spain, more than 12 per cent. However, we must not convince ourselves that these problems are so immense that the country cannot overcome them. Statements such as we have had from Deputy Dowling can do a certain amount of damage. If we are to have criticism, it should be constructive and should attempt to put into perspective our situation vis-à-vis the other countries but what we had from the Opposition was a mere meaningless litany which views our problems in total isolation from these other factors.
Very little of the criticism we had from the Opposition is in any way constructive. They have been saying that we need more jobs, that we need to have a change of Government. We know that the provision of jobs is of vital importance but if one examines the avenues through which jobs can be provided, one finds there are limitations in so far as, for example, tourism and farming are concerned. In the latter case this difficulty arises because of the high proportion of our population already engaged in the industry. Generally, it is conceded that the area in which there is the greatest scope for development and for the provision of jobs is the industrial sector. Successive governments have been committed to this policy. Sometimes the Opposition tend to suggest that this Government are not sufficiently expansionist or entrepreneurial in their approach. It is worth pointing out that the incentives being given by the Government are unequalled anywhere in Europe. There are the tax-free concessions in respect of export sales. There are capital grants available for investment and there is a wide  range of assistance through institutes such as the Institute for Industrial Research and Standards, the ICC and the Irish Export Board and there is the employment premium programme which was introduced by the Minister for Labour. It will be seen, therefore, that the Government have not been negligent. The policy is there but in the context of the recession which has existed the Government have been experiencing a very difficult period.
Let us consider the attitude of the Opposition and find out what they are proposing. On December 16th last, in respect of the allocation of funds to the IDA, the Fianna Fáil spokesman on Industry and Commerce tried to move an amendment the net effect of which would have been to give the impression that the IDA are not giving a fair deal to Irish industry or to Irish people seeking grants, that there should be a higher level of development for the Irish sector. We would all like to see more development so far as the Irish sector is concerned but I deny any charge that the authorities are not giving a fair deal to Irish people. From my experience both in public life and in a personal capacity I am in a position to refute that suggestion entirely. The grants and the facilities are available but the reason for the higher level of financial investment by foreign interests is that we have not had an industrial tradition. We have not had a base on which to develop at the rate desirable in terms of the provision of employment. Here is the farce of the Opposition attitude: not only did their spokesman make these suggestions but he moved an amendment which sought to provide that not less than 50 per cent of the aggregate amount of grants paid by the IDA be paid to Irish citizens or to companies that were Irish controlled. In other words, their attitude to this critical area of industry was to endeavour to force a policy in a direction whereby there would be legislation directing the IDA to give to Irish companies not less than 50 per cent of the grants available. If we take it that no grants have been refused to Irish companies because of any shortage of funds, there is no reason to believe  that the Irish proportion of investment in industry would increase if that amendment were accepted. The acceptance of the amendment would not improve in any way the level of investment by Irish people. The net effect of demanding that there be a 50 per cent maximum level of foreign investment would not be increased Irish investment but massive cutting back by foreign companies in Irish industrial development.
In 1974 domestic industry provided about 12,500 jobs while foreign industry provided about 40,000 jobs. If half this domestic industry is foreign controlled, it follows that of the total of 26,000 job approvals in 1974, approximately 20,000 would, by the definition of the Deputy who moved the amendment, be termed “foreign”. Therefore, the effect of the amendment would have been a cutting back in jobs provided by foreign controlled companies from a level of 20,000 to about 6,000 or a reduction of 14,000 jobs. This is the attitude of the Opposition to Government policy and plans for expansion. We should stress these matters so that the people will realise that we are a credible Government who happen to be in office at a very difficult time. To follow the policy of the Opposition would lead us to disaster. The expressing to the gallery of national sentiments is not the answer to the problems of our economy. I apologise if I have strayed slightly from the budget and shall attempt now to get back on a more even keel.
In broad terms I accept the Government's and the Minister's strategy where this budget is concerned. It has been a difficult budget to compile. To an extent, there has been consensus that borrowing is necessary but there is a limit to which it is prudent for the Government to borrow outside the country. We had reached the limit and it was necessary for the Minister to contain in the budget proposals that would bring in taxation of approximately £100 million.
When one is considering taxation, regardless of what the Government do, there will be criticism from the sectors affected and from trade and  industry. There will be criticism from people about increases in the cost of living but, having regard to the Minister's problems and to the options available, it appears to me that the strategy adopted was the correct one.
I am glad the Minister did not attempt to tackle personal income tax; in fact, he went in the other direction and gave some increased reliefs. The policy of getting revenue through indirect taxation is sensible and is in line with thinking in most other European countries. We know that in some of the areas that are facing increased taxation there is no discretion but in broad terms in the areas that have been hit there is an element of discretion that does not operate elsewhere. Where this discretion exists and where we are talking to an extent of semi-luxuries in certain sectors, if the choice is between seeking revenue from such sources or from areas that would hit the housewives and families much more directly, I do not think the Minister had an option. In broad terms his strategy was right.
We have been living in a fool's paradise for the last two or three years. We have been hit in a national sense with this economic crisis; it has been a crisis and let us not make any mistake about it. To an extent it has been above the heads of our people in the sense that the Government were able to absorb the crisis by borrowing to a substantial degree and this was justified in the circumstances. If the country is adversely affected then, by definition, the individual eventually will be affected. Until now the Government sheltered the individual from the effects of the ravages of the world economy but when the chips were down it had to catch up with the individual. One of the salutary effects of the budget is that the price we must pay for the difficulties we have experienced has to be borne.
There is no getting away from the fact that Ireland, with other countries in Europe, has suffered a loss in living standards. I believe most people understand this but there are those who try to tell us that we will have a bonanza for life and that the good  times are there for us as of right. Of course, they are not; people who look back to other ages in this country, to the economic war in the 1930s and to the lack of employment during other eras, know there is no such right. Those who travel outside the country know how difficult it is to get a job in Britain, in the United States or even in Germany. We are living in difficult times and it is necessary to be aware of it. In such times a measure of sacrifice is necessary. There is no point in fooling ourselves; it does hurt but there is no option. The only reservation I have is that some of the tougher measures adopted recently might have been taken even earlier.
The Government have had to face massive increases in expenditure. After entry into the EEC there was a consequent increase in consumer prices and, in addition, the Government were committed to increase social welfare payments to a substantial degree. In the area of defence a most appalling situation has arisen. Apart from the political effects, the financial effects of the ravages on the north of the country are appalling. In 1976 the budget for security, involving the Department of Justice and the Department of Defence, is £156 million, whereas in 1972-73 we were talking about £61 million. That is only three years ago but in that short period the commitment by the Government of £156 million in comparison with £61 million is massive and beyond all of the levels of inflation that have operated here.
The reason for that is that this country has had to look to its security and to issues such as defence in an entirely different manner to the way it was regarded since the State was founded. We had lulled ourselves into taking for granted matters such as defence and security. Proportionately we expended a small amount of money in that area where other countries had to get on to a war footing from time to time, where they had major commitments to groups such as NATO, where there was major British involvement overseas and where there were major commitments  for defence by America and Russia. As a nation we did not experience anything like this. In addition to the normal economic problems, the Government have had to find funds to pay for this staggering increase of practically £100 million per year in the commitment to the Army and the Garda Síochána. Alas, the end of the road may not be reached yet. About a year ago I had experience in one or two Middle-East countries that were ravaged by war and where the proportion of the national budget going to defence was about 70 per cent. This shows the kind of escalation that can arise in this area. It is important to mention it to show the extent of the problems the Government had in compiling the budget and in arranging adequate revenue to meet the colossal expenditure.
I should like to commend the Government for the efforts they are making to seek wage restraint for 1976. The Government are the sum total of the people and they cannot autocratically impose solutions because that is not the way to govern. In so far as it is possible to seek this restraint by influencing events they have been right to do so. It is a necessary part of the budgetary strategy and of Government policy that there should be this restraint. People have got to recognise that the lessening of demand and ambition and the lowering of sights are not too much to ask if the ultimate price is a dramatic improvement in our competitive position on world markets. The competitive position of our exports is the single key to the future prosperity of our country. The other course is a recipe for disaster. If costs escalate to too high a degree we will have a country with declining wealth, with a very inadequate tax base and with increasing financial commitments to those who are not in a position to work because the work will not be there. There will be no future for our country. Alternatively, if we get the pay pause that is sought and restraint by all sections we can move into such brighter times in 1977 and 1978 because, as I said, other countries have been affected too and the devaluation of the £ in some countries  and the revaluation of the £ in others has put us into a very competitive position, a much more competitive position than many people realise.
It was interesting to read a few days ago a report published by a British group of consultants. Their finding was that this country was one of the best in Europe for industrial investment at the moment and there was strong advice to British industrialists to take a hard look at this country as a very sensible country in which to invest and in which to expand. We all know, travelling through Europe, rocketting costs and prices still leave this country in a competitive position. However, it would be very sad if restraint did not continue in the short term in the national interest. I suppose politicians are suspect when they talk of the national interest but restraint is vital and I hope common sense will prevail in the different sectors so that as a community we can get over the present difficulties and go on from that to attack world markets again. There are signs that the crisis is passing.
I would like the Minister and the Government to look at some aspects of decentralisation. I welcome the building of the offices for the Department of Lands in Castlebar. When this partial decentralisation was first mooted there were suggestions that civil servants would not work in the country and would, therefore, not go to Mayo to work in Castlebar. I understand there was almost double the number of applicants required for the jobs in Castlebar. In other words, one out of every two applicants had to be refused. That is a dramatic indication that people are more than happy to work in the provinces. There are two factors involved. Living in cities is proving more and more difficult because of congestion, traffic, smoke and so on. On the other hand, conditions in the provinces have been improving fairly rapidly and there are many sensible reasons now why people would decide to live and work in Castlebar instead of in Dublin.
There could be more decentralisation. A great deal of work presently being done in Dublin could be done  in the country. I am thinking now of more fundamental decentralisation rather than the hiving off of sections of a Department. Take the matter of grants and loans for housing, reconstruction and so on. The administration system is ludicrous. For a simple reconstruction grant two application forms must be filled in. One is sent to the Department of Local Government and the other to the local authority. The Department then notify the inspector in the area to inspect. He has to report back to Dublin and at a later stage carry out a further inspection, after which the grant is paid by the Department in Dublin. The Department then advise the county council that the grant has been paid and the county council pay their portion of the grant. That is at the halfway stage. At the final stage the same procedure is gone through all over again. I believe a higher proportion of administrative work could be done within the ambit of the local authority independent of the Department to which they are responsible in Dublin.
An examination could usefully be carried out in this area to see if we can increase the volume of work that could be done by local authorities thereby reducing the necessity for a constant expansion in the workload and in the number of workers in Dublin city. I do not say this in any town versus country sense. I know many people are horrified at the level of development and would welcome any policy leading to decentralisation. I have given an example but I am not suggesting the possibilities end there. Some study should be made of the activities in other Departments, such as Social Welfare and Agriculture and Fisheries. There is an immense amount of administration involved in social welfare. Decentralisation on the lines I suggest would not inconvenience anybody. On the contrary, it would create employment in parts of the country where employment is badly needed.
The Minister is right in tackling the issue of taxation on co-operatives. In some of the more developed parts of  the country they are a major sector. There are anomalies and some co-operatives engage in trading activities in competition with private enterprise. The Minister ought to have a look at this. I have, however, a reservation about my own part of the country. West of the Shannon the experience of the co-operative movement was an unhappy one until recently and the result is we are very much behind the south, the south-east and the east in co-operative development. We are a generation behind. There were not a sufficient number of co-operatives working on a sufficient scale to provide the benefits that can be provided particularly for the small farmer. Recent developments have been much more successful. A substantial development has taken place in Balla where the co-operative has a very substantial volume of business and provides a very useful service to farmers living within a 25 mile radius.
Work has been done by the North Connacht farmers in arranging a series of amalgamations thereby providing a very enlightened service to the farming community. The position in which these co-operatives find themselves is different from that of those in the south and east. They have not built up their resources and they have not been able to retain profits in the same way as those of the south and east. When thinking of agricultural development, in the interests of the small farmer in the west, it is essential that the co-operatives there should be helped and buttressed. I appeal to the Minister to recognise the fact that there are these specific problems in the west. It is a part of the country which needs to be treated differently by the Government than other parts. I would welcome an investigation of these facts. Analysis will show I speak the truth.
I do not envy the Minister his problem in seeking wage restraints. The root of all his problems is that, as a Government, we inherited a system under which wage claims were decided, namely, the consumer price index. The notion that wage increases must automatically follow price increases is economically unsound, while socially very desirable. The hard economic  facts of life show that there are times when this simply cannot be done and can do enormous damage.
I was glad the Minister in his budget speech referred to certain anomalies that have arisen from the acceptance in principle of this system. Under the national wage agreement we had successive wage agreements. In the private sector certain companies were in a position to plead an inability to pay these increases. This fact was accepted. The anomaly in this acceptance is that while the private sector could keep their costs in check to a certain extent where reason could prevail on both sides, automatically the increases were paid in the public sector. I do not take away from the fact that it is necessary that there should be increases for work done in the public sector as much as the private sector, but what was happening was disproportionate in the sense that a far higher proportion of increases were going to the public sector rather than to the private sector because the private sector could plead inability to pay.
Equally, in times of difficulty in the economy, the Government, using the same economic yardstick and the same type of financial prudence, could plead inability to pay but the problem with Government is that Government is Big Daddy and is supposed to have a bottomless well of funds with which to do the decent thing. The Government must take a very serious look at the means of basing salary and wage increases to get more rationalisation. I would be extremely wary of getting involved in agreements at a higher level than is desirable having regard to the needs of the economy.
Sometimes we tend to underestimate the public. They have a fundamental common sense, and an appreciation of our problems. In my judgment the Government will get into far greater difficulties when they face the Irish public if they take the easy way out. My view from talking to a cross-section of the public is that there is a demand for tough Government  action in these areas. If the long term interests of the country demand tough action, the public will respond. It will be disastrous for the country if the Government take the soft way out.
There has been a great deal of discussion about this budget and the propriety or otherwise of the deficits in recent budgets. We had advice from economists of different hues. I think it was Mr. Menzies of Australia who said some years ago that he had much respect for economists because they represented such diverse opinions. The buck stops with the Minister. The deficits were entirely justified in the circumstances in which we found ourselves. There is a hidden factor in the background to which the Minister for Finance could hardly prudently address himself in his speech because it might seem to be a gamble. There can be immense buoyancy in the background to the financial affairs of this country if we have regard to our natural resources, particularly if we take a serious look at the implications of the possibility of oil being discovered off our shores. We should talk a little about this because it can give a feeling of confidence about what can happen.
We have seen in Norway the most extraordinary developments because they discovered oil off their shores. At present that country is probably the single wealthiest country in Europe. There is full employment there. They have had to bring in workers from the United States, Britain, France and this country to help them get the oil ashore. The phenomenon of oil in Norway is that it is providing between 20 and 25 per cent of their entire resources.
We have a smaller budget than that country. It is estimated that we need only discover about one-fifth of the volume of the resources in Norway for an equal input into our economy. It would require a relatively small amount of oil to provide us with anything up to £600 million a year. We should put this into perspective. This is a small country. Our entire budget is equalled by the manufacturing company ranked 354th in the United  States. Our budget is small but the potential off our shores is vast. It is in the background so far as our budget deficits are concerned. Oil has been discovered to a certain extent already and if we are fortunate when major exploration starts and they come up trumps during 1976, that will probably be followed in 1977 by further successful exploration, and the benefits that could accrue for the country can be immense. I am glad the Minister for Industry and Commerce, when negotiating with the oil companies, was able to protect the national interests and achieve a satisfactory balance between the national interests and the need to encourage developers to look to this country. If we are lucky to discover oil, we will be able to provide the entire amount of oil necessary for this country and become self-sufficient. This will improve the balance of payments dramatically. I mention this as a backbench Deputy. I support the Minister in this because he has been accused of many things. If he spoke as I have just done, he would be accused of gambling. As I said, this is all in the background and we do not know what is there until we start digging. The geological surveys are encouraging and the fact that international companies are looking at this country in such detail is, in itself, fairly significant.
Speaking about marine sources, a point about which there has been considerable dissatisfaction among the general public for a number of years can be made about the organisation of Government. This is the fact that marine affairs are not treated sufficiently separately by the Government in terms of organisation. For example there is a logical rapport between marine activities such as oil exploration, gas exploration, fisheries, and the development of our coastline that would tend to put these activities under the same roof. Indeed, there is a necessity for consultation between fishing interests and oil exploration interests in so far as the placing of rigs is concerned. There is an unsatisfactory administrative position, especially in linking fishery developments with the  same Department as agriculture, because agriculture is of overwhelming importance to the country and necessitates the Minister spending a vast proportion of his time looking after agricultural affairs. Additionally, there is not a close affinity between the land and the sea. I feel very strongly that some consideration should be given to the containing of matters such as fisheries and other marine activities in a separate Department. It need not necessarily be an entirely new Department, because there would be limitations under the Constitution, but it would be more rational and sensible to contain some of these areas within the responsibility of a Government Minister with a lesser workload and one of somewhat lesser significance than agriculture. This is something that should be looked at. I am concluding by complimenting the Minister on doing a good job in very difficult circumstances. I wish him well and hope that the books will balance out.
Mr. Noonan: Listening to Deputy Staunton over the last 15 minutes or so, one would imagine that this was the only country with major recession problems over the last couple of years. I should like to mention that most economies in the world have suffered a recession not alone over the past couple of years but indeed from time to time. The one thing that Deputy Staunton did not point out is that most economies, particularly European economies, are now pulling out very strongly from this world-wide recession and yet our Government and our country are not making any progress. One would ask is this the fault of a world-wide recession or is it the fault of Government inactivity and mismanagement? I would be inclined to accept the latter. This is something which Deputy Staunton, as a Government back-bencher, should consider bringing up at his party meetings.
He spoke—and rightly so—about the Government's plan for expansion. This is something I have yet to see. Indeed, listening to the Minister for Health quite recently one heard that he is looking for this plan as well. I wonder what is this mysterious plan  Deputy Staunton referred to. I was further surprised to hear Deputy Staunton supporting the Government's approach to withdrawing the tax exemption from fishery and agricultural co-operatives. Indeed, coming from an area such as Deputy Staunton does, one would think he would oppose that measure.
At long last we are beginning to see the result of the past few years of panic borrowing and gross mismanagement of our economy by this Government. We have listened time and time again to the Government denying any responsibility for our financial situation. The Government have mentioned time and again that our problems are due to the world-wide recession and to the oil crisis. They have said these problems are caused by outside factors but, when forced, they have to admit that the outside factors are perhaps only responsible for 50 per cent of the difficulties which we are now facing as an economy.
Let us accept this figure from the Government and examine the question of the 50 per cent of our problems for which the Government are responsible. If 50 per cent alone were to be accepted as that part of our problem which can be remedied by the Government, then we are entitled to such a remedy, to some result from their efforts over the past years. We have no such result, no such plan for any progress in the future.
What we have seen is endless panic borrowing to try to close the gap every time we run into financial difficulties. Endless borrowing will incur the severe penalty of the need to repay loans and unfortunately this has been a feature of this Government's policy. In turn it has resulted in panic measures to provide the revenue with which to repay these loans. It is not enough to anticipate a difficult budget by saying it would be the most difficult in peacetime because even now our people are prepared to face deprivation in order to overcome our problems.
On the other hand our people must be assured that the money gathered in taxes by the budget will be put to a realistic programme of economic repair  and renewal. We see no such programme, no plan for future development, although there has been crippling taxation by the Minister for Finance in the new system he has evolved. He had to look to all possible sources of revenue and in his panic he has so damaged the spending power of our people that he has left no incentive to people in managerial positions to enable them to plan for the years ahead. Unfortunately it will not be he and his Government who will have to repair the damage. It is part of history that the damage done by successive Coalition Governments has had to be repaired by Fianna Fáil and it is on them the people will have to rely again after the next general election—the results of Coalition mismanagement will again have to be reversed by Fianna Fáil.
It has become obvious that the Minister for Finance has been dictated to by the smaller group in the Coalition. This can be clearly seen in the attack on the middle and higher income groups by way of the Minister's stunted idea of taxation. The result will be relatively small amounts of extra revenue and the taking away of any incentive at management level for development. The new taxation measures introduced by the Minister for Finance, although they will yield comparatively little extra revenue, will deprive management of the incentive to invest and expand. These measures are depriving the nation of the managerial talents which it needs now more than ever to take the economy out of its present crisis position. This is a frightening situation and in drawing attention to it I should not be taken as advocating the bolstering of any particular class.
Fianna Fáil's policy always has been that any man or woman from any section of society who applies himself or herself to the job can rise to the highest position and having done so, by effort and hard work, should be entitled to be paid for it. Therefore, it should not be the policy of any Minister for Finance to attack such a sector of society. I should point out that managerial skills come from all levels.
 Later I shall deal with the agricultural industry. A farmer is a businessman in his own right in a very basic sense. Therefore, if a farmer invests in his business and reaps rewards from his labours, the whole economy prospers. We must remember that basically we are an agricultural economy, notwithstanding the industrial development that has taken place. I accept that industrial development is important as far as employment is concerned, but we must never lose sight of the fact that agriculture will continue to be our greatest source of revenue. Agriculture must be given the incentive to expand and to be competitive.
Agricultural and fishery co-operatives have enjoyed for many years exemption from company tax. This exemption was originally designed to stimulate greater efficiency and output in those sectors. In the last decade, however, the co-operatives' activities have expanded enormously. They now include some of the largest business in the country and the scale of operations is now such that the continuance of the exemption is both difficult to justify and inequitable to the general body of taxpayers as well as to the ordinary traders who are subject to the normal tax regime.
That is interesting. The idea seems to be that if anything is succeeding tax it. That is a most extraordinary statement by a Minister who tells us he wants to see the agricultural economy expand. At a moment's notice he is prepared to deprive the farmers of incentives if they endeavour to expand. That is certainly double thinking and typical of Government muddling. Nobody contends that any sector of the economy should not pay its way but we have just got by the infancy stage in the co-operative movement compared with other countries. In particular, this applies to the fishery co-operatives. There is a need for reinvestment of the profits of the co-operatives so that they can expand.
Mr. Noonan: Just as the co-operatives get out of the infancy stage the Minister for Finance tries to stifle them. That is a ridiculous situation and ridiculous thinking. That sector of our economy is in dire need. We are all aware that 50 per cent of our inflation is caused at home and because of that there is a great need to give incentives to tackle the markets of the world. The farmer can no longer look to £100 valuation as a safety level. He will be taxed in the future. I should like to say many things about the taxation of farming profits but I will refrain from doing so until the Minister gives us a clear indication of his intentions in this regard.
Farmers got little out of this budget. In fact, they are attacked in such a way that they will not be able to invest in order to expand. I was never in favour of giving money for nothing but I am in favour of giving constructive financial help to the farming sector. If every other sector can get help from such bodies as the IDA to expand their industrial operations a system should be forthcoming from the Government to develop farming. Farmers should not have to face destructive taxation which the Minister is thinking of imposing on them.
As my constituency contains a very large number of farmers I wish to deal with some aspects of the budget that affect agriculture. In his brief  reference to agriculture in his budget statement the Minister says:
The 1976 Estimate for Agriculture provides for non-capital expenditure of £79 million compared with £65 million in 1975, an increase of 20 per cent. In addition, £36.5 million is being provided for relief of rates on agricultural land —an increase of over £6 million on 1975. The increased expenditure on agriculture is a reflection of the Government's anxiety that the growth potential of Irish farming should be used to the full.
Growth potential is not something that falls from the air. It is something that you work on and invest in. As regards the statement that the Minister increased non-capital expenditure by 20 per cent, costs to the farmer have risen in excess of 20 per cent. Therefore, far from investing in the growth potential, he does not even keep up with the level of expenditure last year.
It may well be that the Minister's thinking has an urban bias, and I suppose that is understandable from his background. However, he is Minister for the entire country and to talk in terms of growth potential and development by standing still is ridiculous, even applied to industry, let alone agriculture which constitutes the largest part of our economy. This is backward thinking and panic thinking. In his wild rush to get from the people the money to meet the inexcusable level of borrowing, he does not take care to tell the people the entire truth and becomes confused in trying to explain this financial grab.
In this budget every aspect of our economy was hit, drink, petrol, tobacco, cigarettes and so on. As drink and tobacco are luxuries to some degree, it would be expected that they should rise. In passing, I would draw attention to the Government's hypocritical attitude to tobacco and cigarettes. Although every packet of cigarettes bears a notice that they endanger health, the Government, lest the revenue suffer by the introduction of too large an increase, went a little easy on cigarettes. It is a small thing,  but it is a fair indication of the Government's attitude.
The tax on petrol and oil has created problems for the agricultural community. If a farmer is to stay viable, he usually cannot afford to have a pick-up truck for his farm operations. Therefore, he uses his car with a trailer for the business of his farm, for carrying the milk to the creamery, collecting supplies, making deliveries, going to the market and, as so often happens in rural areas where there is no telephone service, for calling in the veterinary surgeon in an emergency. The car is an important part of his everyday life. Because the farmer uses a trailer, he needs a car of reasonable horse power. Usually it is a second-hand, cheap car of fairly high horse power but obviously the Minister for Finance has given no thought to this in his approach to car taxation which must in future constitute a heavy part of a farmer's expenditure. Petrol and oil costs have risen and continue to rise not due to outside influences but due to the harsh taxation imposed by this Government since they took office in 1973. We had the increase of 15p in December, 1974, several increases since, the recent increase in the budget of 10p with a further increase coming on March 1st in the form of increased VAT. There seems to be no end to the taxation the Minister will put on petrol. That is bad enough but the increase in car taxation is ridiculous when in most cases car tax has practically doubled. The Minister in his statement said:
Road tax on private motor vehicles will be calculated at £4 per horse power for those not exceeding 8 horse power, at £5 per horse power for those exceeding 8 horse power but not exceeding 12 horse power, and at £6 per horse power for those exceeding 12 horse power.
A farmer may have a 14 horse power car which is probably second-hand, bought for its ability to do hard work —sometimes on bad roads—and pull a trailer and this car, at £6 per horse power, will cost £84 to tax. Before the tax increases, the tax on this car was £52 which was bad enough.
The farmer's general expenses must rise also because of the Government's  vast increase in the cost of living and in the cost of business with resulting increases in other costs. Insurance and other costs must rise in the future as they have done in the past and this is a further crippling of the agricultural sector.
Perhaps I have singled out one section because in this limited debate it is not possible to refer to all sections and this is the section with which I am most familiar. I know that all sections are equally affected by this budget. In the agricultural sector the direct and indirect effects of this panic grab for money will be crippling. The industry can ill afford to meet such a situation and it will be many years before the farmers can recover from the effects of this taxation.
The Government might say that Fianna Fáil require vast expansion without increased taxation. We realise that in the mess resulting from Government mismanagement increased taxation is inevitable but we want to point out that the use to which the taxation is put is vitally important in view of our present loans position. Constructive use of taxation to promote the economy so that in years ahead we will be able to pay off this vast amount of borrowing is essential. It is also vitally important that taxation should be collected from the proper sectors in direct proportion to their ability to pay. Blanket increases should be the very minimum and the money should be applied to growth areas of the economy and not, as at present, to the day-to-day expenditure of the Government.
As a country, we shall have a great deal of careful thinking to do in the future. I am, of course, referring to the time after the next general election when Fianna Fáil are returned to power because the present Government are incapable of any constructive thinking. We have already faced that prospect before the Minister introduced his budget and the prospects now are much worse as a result of the after effects of this ridiculous, inflationary budget which offers no help or incentive to get the country back on the road to prosperity and  progress. I would compare this budget to a doctor treating a circulation problem by rubbing the hands to increase circulation of the extremities without treating the basic cause of the circulation problem. There are defects that need to be treated.
Mr. Noonan: The people will tell us at the next general election and my comments will certainly be endorsed then. These are the defects that need to be treated. The remedies which were introduced may to some extent help to bring down our inflation rate and the soaring costs which this Government are experiencing at present. Nevertheless, these remedies depend on positive action by the Government. We are brought back again and again to the necessity for strong action. If this had been taken twelve months ago, as was pointed out by this party, we would not now be experiencing the problems with which we are faced. We would not be facing the prospect of close on 120,000 people unemployed in the near future. The remedies pointed out were put into action far too late. In the June budget, which was one of the many budgets the Minister introduced last year, one wonders whether he was simply afraid to move with these actions, or was it possible that he and his Government were so indecisive and blind that they could not see the need for these measures last year? He made the move in the June budget, however late and however weak. Again he treats the symptoms without treating the cause.
While there is need for the people to get together to pull the country out of its problems, the Government have never given the lead by a show of leadership. As well as positive thinking, we must have leadership which is lacking in our Government today. This Government over the past couple of years have persistently spoken of national partnership, of getting together, but they ignore the fact that this national partnership needs a leader. It needs a head of Government, a Taoiseach who would be seen by the people as leading that effort, who is and must be in the  public eye, vocally and otherwise encouraging the people to join together under him in a national effort to avoid the problems which we are now facing. But as one who reads the daily papers and was accustomed under the Fianna Fáil Government to see our leader, so to speak, show himself to the public, I am flabbergasted by the lack of leadership from this Government. The people have no leader to look to. They see no leader and they hear very little from him. Any economic resurrection in this country must have a leader who is seen to be a leader. This is one of the root causes of our apparent inability to move. While we cannot, as responsible representatives, fail to applaud and encourage in the budget of last June the costs in commodity prices, the easing of value-added tax, and the increased house loans, we must, as was pointed out from these benches in January, 1975, point to the lack of attention to the root cause. We must point to a leaderless people and to failure and lack of courage in Government, the failure to tackle these difficulties much earlier than last June when such action could have been far more effective and, perhaps, when all of us together could have come out of the difficult and hard times in which we now find ourselves.
It is not enough for the Minister for Finance and other Ministers of this Government to cry out in the wilderness as they are doing at present. There must be positive thinking and courageous action. For all the good points in it and in the previous one—they cannot be given praise because there is no positive leadership, no positive thinking, no plan for the future, no road ahead. In other words, the Government are moving from one crisis to another without taking the necessary corrective action when the time comes. Therefore, in so far as the Government are concerned the longer they remain in office the deeper and deeper this country will sink. As I have previously pointed out, two other Administrations were comprised mainly of the Fine Gael and Labour Parties. We must highlight the  pitiable state into which they have allowed the country to fall. The Government, and they alone, are responsible for that. They talk about the approaching bankruptcy of our economy. Perhaps we should look back over the scandalous activities which have been the hallmark of this Government.
Mr. Noonan: I wonder what is the Parliamentary Secretary's approach to the withdrawal of the tax exemptions from the fishery co-operatives? We would like to hear him speaking about that. I hope he will not be like his colleague Deputy Staunton who said it was all right from one aspect and all wrong from the other.
Mr. Noonan: We want to hear something positive from the Parliamentary Secretary about the removal of the tax exemption from the fishery co-operatives. So far as policy and action are concerned, the people are frustrated. The two parties in the Government realised that alone neither of them could appeal to the electorate in sufficient numbers to achieve the goal of forming a Government. They have two divisive views in their approach to governing the country. They overcame their difficulties in their hunger for power. Any sacrifice of conviction  was justified to get power. This is the key to the problem. The one thing which will hold this Government together is their common desire to remain in office. The economy will sink, but the Government will go on their merry way.
Mr. Noonan: The Government embarked on a spending spree in their first year or two in office to try to live up to the promises incorporated in the 14-point plan with which they conned the electorate. Now we have to pay dearly for that folly with the recent taxation imposed by the Minister who dipped into the pockets of our citizens as deeply as he could. This year he is seeking further loans to meet the financial commitments of this spendthrift Government.
There is no alternative in this country to a single party Government. The Fianna Fáil Party are capable of taking definite action. Our experience proves this. Like previous Coalitions this Government will run away when no more money is left to be squandered on their impossible dreams. The time is nearly ripe for such an exit. Judging by past experience only one Government can save this country, a Fianna Fáil Government.
Mr. Briscoe: A very significant thing happened the other evening. I went to a debate at the famous L and H Society in UCD. The L and H Society were well known in the past for their great support for the Fine Gael Party in particular. For many years Fianna Fáil Ministers had a difficult time in getting a hearing. The motion before the House was, “That this house has no confidence in the present Government.” What was significant was not only that the motion was carried by a two-thirds majority, in what I would call a hot bed of Fine Gael conservatism, but also the fact that not one Minister or  Parliamentary Secretary appeared. One backbencher was sent along to defend the Government's policies.
In debating the motion, “That this house has no confidence in the present Government”, not one speaker could defend the Government. All they could do—and it is so similar in this House—was to attack Fianna Fáil. Not one of them would put up a defence for their inefficiency and complete mishandling of the economy. Time and again we have been accused by critics of Fianna Fáil who work for the media of never putting forward constructive policies. We put forward constructive suggestions in this House time and again. At first these suggestions were ignored. By the time they were acted upon, it was too late. The proverbial horse had left the stable.
This is easy to illustrate. We advocated the introduction of the green £ six months before the Government finally came around to it and, by that time, the country had lost millions of pounds. We advocated the removal of the food subsidies to bring down the rate of inflation. That was acted on six months later. They are always just that bit too late. The art of good Government is to be able to handle a recession or a difficult situation. An English politician once said that if you pull the string too tight you cannot push it back and it falls down in the middle. The Government have completely over-reacted in some directions and under-reacted in others. They have let the people down. We are talking about the budget introduced in January but a number of budgets were introduced before and since that one. We had a Posts and Telegraphs budget just before Christmas when postal and telephone charges went up. We had the increase in the price of electricity and also in the price of oil. We have now been told that electricity charges will not go up next Monday but they went up about a month ago. In my constituency I have been in houses where people were wrapped in blankets because they were afraid to turn on their electric or gas fires. I wish the  Minister whose constituency it is would take time off to go to see the plight of some of the constituents he is supposed to represent.
I have met nobody who feels it was fair to increase motor taxation because it did not take into consideration the age of the car. There are many people in my constituency who drive what might be called vintage models—1964, 1965, 1966 or 1967 Mercedes and Jaguar cars. They sometimes find them cheaper to buy than new smaller cars because they are able to maintain them themselves. Those people are not very pleased with the new car tax. I am not very pleased either. A year ago I decided that it would be more economical to buy a 28 horse power Rover out of which I reckoned I would get a good ten years than to buy a new mini at a lower price out of which I reckoned I would get four or five years. This proved to be faulty economics because nobody could have foreseen the haphazard manner in which this Government would slap on the increase in motor taxation.
It intrigues me that only one section of the community have totally escaped the impact of the January budget. I refer, perhaps, to three members of the Cabinet who do not drink or smoke. They will not have to pay any increase in tobacco or drink and they will not have to pay any increase in car tax or petrol. They are the only people who have got away scot free from the impact of the recent increases.
We know that in parts of the country where transport is not available people must use their cars to get to work. This has been stated by many contributors to the budget debate. The Minister must look at the way in which he applied the motor tax. Most people I spoke to about this said they would prefer if motor tax was abolished and the tax put on petrol. Members of the Labour Party in a discussion said they noted that the public were more or less attuned to the £1 a gallon for petrol and, therefore, when it arrived it would be more acceptable. The Minister did not increase the price of a gallon of petrol to £1. Instead, he raised it to 85½p which will go up  again next Monday to 88½p a gallon. Therefore, we are getting nearer to the £1 a gallon.
The increases in motor taxation and the price of petrol do not take into consideration the amount of driving a person does, the week-end driver or the person who travels for his firm. This will contribute a lot to the increase in the cost of living this year when it works its way through the economy. I intend to put down a question very shortly to the Taoiseach or, perhaps, the Minister for Industry and Commerce, asking how many applications are at present before the Prices Commission for increases since the budget was introduced as a result of the increase in the price of petrol which has necessitated an increase in the running costs of firms which deliver their goods by petrol-driven vehicles. We know that the price of diesel did not go up so much but many firms use petrol-driven vehicles. Television rental firms use petrol-driven vehicles so they will possibly be looking for an increase in their rental charges.
Since we came over to this side of the House I have often stated that the biggest mistake the Government made was to remove VAT from food. VAT was levied on food at the rate of 5.26 per cent but soon after this Government came into office they removed it. Everybody must eat. The wealthier one is the more one spends on food and the more expensive food one buys. The wealthier people were relieved of this tax on food. What did the Government do to bring in sufficient money to compensate for the loss of revenue on food? They put increased taxation on motor cars, motor cycles, radios, television sets and many goods which are popularly termed luxury items. When VAT was removed from food we predicted that those luxury industries would experience unemployment because there would be a drop in the demand for those items. We have been proved right in our prediction. Following Monday's increase in VAT on those items there will be a further increase in unemployment.
Much criticism has been levelled at Fianna Fáil but they can never be accused of borrowing money for  social welfare. Fianna Fáil always paid social welfare out of current revenue. This Government are borrowing money to pay social welfare. This is money which goes down the drain. It is like renting a flat. You never see the money you pay out. Any money Fianna Fáil borrowed was put into capital ventures, ventures which would create employment.
The only thing which will save the country from its helter-skelter slide into complete ruin is an election as quickly as possible which will give a chance to the people to put Fianna Fáil back into office. If the Government are so confident they are doing such a wonderful job or that Fianna Fáil could not do anything better, let them go to the country and test opinion. I am in touch with people in my constituency. People who never spoke to me before are now talking to me about the performance of the Government. The Government count on the fact that the public memory is short and they will forget those inconveniences.
We hope there is a pay pause but we do not envisage it, not the way the cost of living is going up. The Government have predicted a growth rate this year of 2 per cent. I predict not only stagnation but also a fall again in exports. Technically we are bankrupt. Now we have to go abroad with cap in hand for loans and have the people abroad dictate to the Government exactly how they will spend this money because they are not too happy about the performance of the Government as shown in the latest OECD report. They laid the blame even on the Leader of the Government, whom, I call the PMV Taoiseach, the petty, mean, vindictive Taoiseach, who said it was home produced because of lack of leadership.
It is said that the oil companies are making huge profits but I expect that the turnover on the various petroleum products has decreased to such an extent that it will cause unemployment in that industry. It is an industry which must suffer unemployment as  a result of the last budget. These companies have huge overhead expenses. I remember Deputy Colley, as Minister for Finance, being asked by the present Minister for Finance to reduce the duty on petrol at a time when the oil companies had increased their prices. We remember Deputy Tully shedding tears for the working man who needed his car to get to work. All of this does not bear thinking about now in the context of what has occurred since this Government came to power.
The budget document is a grandiose presentation. Obviously there was no cutting back in regard to its printing. I do not recall this party while in Government ever producing such a flashy document. I notice that the greatest increases in the budget are being allocated to those Departments which spent less than the amount allocated to them in the previous year. For example in respect of agriculture, the budget estimate for 1975 was £32.58 million while the actual expenditure amounted to £27 million. There is a grand estimate for 1976 of £37.9 million but the Government know very well that this amount will not be spent.
It is stated in the budget that so far as the bovine tuberculosis eradication scheme is concerned the entire State was declared attested, almost free of the disease, in 1965 but that testing must continue so as to guard against fresh outbreaks. We are told that expenditure consists mainly of compensation to farmers who were found to have reactors among their herds and of fees to veterinary surgeons. The net expenditure for 1976 is estimated at £9.1 million compared with £3.8 million in 1975. For that part of this year which has already passed this means a saving of £2 million as a result of the vets dispute. In regard to the brucellosis eradication scheme the net expenditure in 1976 is estimated at £8.7 million compared with £5.9 million in 1975. Again, since almost a quarter of the year has elapsed, one can calculate a saving already of £2 million in that regard.
If one studies this trick-of-the-loopery budget one finds that in many  instances the biggest increases are granted to those areas in respect of which the allocations for last year were not utilised fully so that the Minister considered it safe to grant these increases this year knowing that they will not be used up. The budget estimate in respect of loans to industry was £32 million for 1975 with the outturn being £24.41 million. The estimate for this year is increased bravely to £34 million. One notes that in respect of those Departments or semi-State bodies which utilised their allocations in full, the increases are much less than in respect of those areas in which allocations for last year were not utilised fully. An example of this is the allocation to RTE. They used up their £3.17 million in 1975—their full allocation— and they are to receive a magnificent increase this year to £3.80 million. This is not to take account of the increase in the television licence fee. This is the sort of hypocrisy and artificiality that we are faced with.
Deputy O'Connell, whom I shall refer to as the toothless lion, is obviously getting a feedback from his constituents regarding their dissatisfaction with the Government. I am applying this term to him because of his abstention from the vote on a motion moved by him, but in that regard he was threatened with expulsion and succumbed to the pressure of that threat. While speaking this morning Deputy O'Connell reminded us that our unemployment figure of 13 per cent is twice that of any other European country. But he informed us that from a survey he had carried out he calculated that the unemployment figure for his constituency is 20 per cent. He was bringing this situation to the attention of the Minister, who as usual was not present. He was reminding the Minister that article 135 of our accession treaty to the EEC gives us certain privileges in relation to imports where it can be shown that the home industry concerned was being hurt. The Deputy reminded us that we are the only member country to which this provision applies—a provision which was achieved by Dr. Hillery during his negotiations with the Community regarding our membership. Despite  this privilege we find it necessary to have a question today to the Minister for Posts and Telegraphs asking what was the country of origin of 400 pairs of special type sports boots supplied through an agent for, I think, the Navy. We look forward to the Minister's answer in this regard. This is the sort of thing that sickens the people.
The budget will result in much damage to the tourist industry. I have had reports of people going back from here to England and telling their friends how lucky they are not to be living in Ireland because of the high price of petrol and also the VAT rate that is being applied to the hire of cars. We depend for the greatest proportion of our tourism on our nearest neighbour but because of these price increases we will suffer badly. This party have been urging the Government to introduce some sort of voucher system in respect of petrol for tourists so as to encourage people to come here.
I heard yesterday of a man who owns a petrol station near the Border and whose total turnover in petrol sales since the budget has been £2.50. People may come here from the North but they will ensure that they fill their petrol tanks on the other side of the Border.
I do not think that the average citizen has grasped yet the extent to which we are borrowing. People do not think of such matters so long as there is money available, but it would be well to reflect on the fact that this Government have borrowed more during their almost three years in office than has been borrowed since the foundation of the State. All this money must be repaid and a quarter of the revenue collected in taxation is being used to pay the interest on these borrowings. The Government must go abroad and borrow money in order to be able to pay the interest on loans outstanding. This is a very bad situation.
A couple of years ago when we saw the way the Government were handling the economy I compared the situation to the silencer of a car which is well worn, which gradually acquires further tiny holes that join together so that eventually the whole thing  blows out. That is what will happen to our economy. The Parliamentary Secretary may smile cynically but he has a lot to answer for in regard to his Department concerning the non-allocation of funds and the practice that has arisen whereby letters from people seeking information are not being replied to. I will deal with that on another occasion when it will get more attention.
Dublin Corporation have allocated more for the provision of recreational facilities than the Government allocates for the entire country. They tell us about an increase in grants for physical recreation and sporting facilities but they take back the money from the local authorities in the amenity grants. The Department of Education have reneged on their agreement to pay a part grant towards swimming pools and they have removed the allocation of £36,000 to Dublin Corporation for the primary school library service although we wanted to extend the service to the secondary schools. We are told they have agreed to restore the allocation for this year but it is not yet in writing. I hope the Parliamentary Secretary will talk to his Minister about it, if he is not too confused about which Minister he is serving. So many things are happening that the people cannot keep up with them. For instance, how many people know that primary education is no longer free?
Mr. Briscoe: A capitation grant is given to each primary school and the parents pay something. The free element in primary school education is removed and people in certain categories are put in an embarrassing position when they may not have the money, even though it may be only  £1 per week. In The Irish Independent today, there is an item stating that the child clinic services have to be closed although immunisation will continue. The cutbacks in medical services are absolutely horrendous. I am on the committee at the Children's Hospital in Crumlin and I saw the letter the board received telling them about their allocation for this year, that if they overspend there will be no money available from the Department. This is happening to the Children's Hospital that should get top priority.
An Leas-Cheann Comhairle: The debate is confined to taxation, expenditure and financial policy and other matters only in so far as they are connected with financial policy. Matters of administration and details are not appropriate to this discussion.
Mr. Briscoe: I should like to know when we last had a debate on the Estimate for the Department of the Taoiseach? We are not getting many estimates in the House these days. Finally the Government announced they were bringing out a national economic plan although they said at first they did not need it. How will they do this without having a census? That is a straight question and they should be able to answer it. We know why they will not take the census. They know Fianna Fáil will come back into office and that we will  restore the country to the state it was in before they took over. It may involve a lot of hardship and we may have to take unpopular decisions but we have always faced up to them.
Money for social welfare has been thrown here and there. The Government are depending on the oil gushing out of the ground without even taking into account the length of time it takes to exploit resources once it is known they are there.
Mr. Briscoe: I have dealt with that —14th March will be a very notable day. The Minister for Finance gave a pathetic performance and he made a laughing-stock of this country in Europe when he attacked our Commissioner. He did not realise that the French Commissioner had to take his Government to court and that the Italian Commissioner had to chastise his Government. In our case the matter was made a political football and the behaviour of the Minister has not brought any credit to his Government. Before the last election the great expert on finance, the present Minister for Foreign Affairs, was able to tell us what to do but it has turned out he could do nothing. Perhaps he could be described as a political eunuch—he could tell us what to do but could not do it himself.
In tourism the estimate for 1975 was £2.05 million and the outturn was £1.35 million. They increased that estimate to £2.4 million this year. In 1975 the estimate for ports, harbours and airports was £4.34 million and they spent £3.5 million. They were very brave and this year they raised the estimate to £7.79 million. It  would be interesting to see the outturn in the budget next January.
I have spoken to people in the building trade and they are really puzzled. They do not know where the Minister for Local Government is getting his figures allowing for the fact that there are 22,000 more people unemployed in that industry than in 1973. Fianna Fáil are also puzzled about this matter. There are plenty of houses in the country but people have not the money to buy them. An empty house may be a statistic but in my view it is of no value.
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