Appropriation Act, 1977: Motion (Resumed).

Thursday, 26 January 1978

Seanad Eireann Debate
Vol. 88 No. 2

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Debate resumed on the following motion:

That Seanad Éireann notes the supply services and purposes to which sums have been appropriated in the Appropriation Act, 1977.

Mr. A. O'Brien: Information on Andy OBrien  Zoom on Andy OBrien  Yesterday evening I was dealing with the recommendations made in 1975 by a conference of representatives of teachers' organisations and management, and representatives of the Department of Education with regard to the age at which children should move from the primary to the post-primary sector. Another recommendation made at that time was that efforts should be made to have an easier transition from the primary level to the post-primary level, that a student, let us say, entering a post-primary school would move with the same ease from the 6th standard programme in the primary school to the first-year programme in the post-primary school. Very little has been done to bring that about. It is a matter deserving consideration and attention because it is a big step in the pupil's life and if he does not take that in his stride he gets off to a bad start at the post-primary stage of his schooling.

At the other end of the scale a matter of great concern is the very [96] high failure rates in first-year university examinations. That is something that deserves attention. It must be that the post-intermediate examination period in the secondary school is not sufficiently geared towards university or third-level education. If we have, as does happen, over 50 per cent to 60 per cent of first-year university students failing their examinations it is a matter that should be attended to.

I am glad to note that the subject of home economics, social and scientific, while not a university matriculation subject, is now accepted for entry by the universities if the student does that subject in the Leaving Certificate. That is as it should be because it is the function of the universities to cater for the needs of the people. Home economics, social and scientific, is a subject of importance and could do much to improve the standard of home life.

If I may refer to the Land Commission, great annoyance is felt by people at the length of time farms are held by the commission after being acquired before they are divided. Sometimes the Land Commission may have a farm for five, six or maybe even as long as seven years before it is divided among the applicants. I know that part of the reason is that having acquired one farm in an area, the commission may be waiting for a few years until they can acquire a second or third one in the same area. With the division of land, the whole structure of that parish or that area can be attended to. But I do believe that there is need for greater speed with regard to the division of land.

Local improvement scheme grants which are mainly devoted to minor drainage works and the making of roadways, lanes or boreens is another matter that causes much dissatisfaction in rural areas because of the fact that people are sometimes anxious to have the roadways, laneways or boreens to their homes brought into a state of reasonable repair. Notwithstanding the fact that they are willing to put up large contributions towards such work, the amount of money made available to local authorities for this work is so [97] inadequate that it is a common experience for people to have to wait four or five years to have the roadway made to their homes after they have made the application. This is a problem that should be tackled more seriously, and a much more general contribution should be made to help people to provide roadways to their homes.

The decision taken by the Coalition Government to relieve rates on private dwellings and carried further by the present Government will result in people at local authority level coming to the conclusion that the role of the local councillor is being reduced, that he will have a less effective part to play in local administration. I am not making a case for the restoration of rates on private houses, but I do think that some other measure should be taken by the Government to let it be seen that local authorities still have a very important part to play in the government at that level. It would be a mistake if people of experience and ability and with great local knowledge came to the conclusion that the contribution they could make to local government would not be worth while because it is likely that the funds at the disposal of county councils will be in the nature of block grants such as health boards get. People with something to offer may decide to take no further interest in local government and that would be an unfortunate development.

Mr. Mulcahy: Information on Noel William Mulcahy  Zoom on Noel William Mulcahy  In speaking of the Appropriation Act I cannot help getting the feeling that it is about driving forward at great speed by looking in the rear mirror—I am sure that may have been said before in this House —when considering appropriations which have already been spent. There is a little of that in it. Nevertheless, from the expenditure of the past it is possible to get some ideas about what might happen in the future, and what ought to happen. If I had any general theme I would like to address, I would call it the drag syndrome. At this point in the development of our economy and social affairs it is no time for drag. By drag I am thinking of things like fiscal drag, cultural drag, bureaucratic [98] drag—one might call it Celtic drag in some sense. We are trying to build an atmosphere of confidence and growth. Confidence is not something that is a soft notion; it is a hard notion built into the economic theories that are not to be lightly played with. Some of the things I heard in the debate so far makes me wonder about this. I am thinking particularly about the headlines in this morning's papers relating to what was said by one of our Senators and which to me can do nothing but challenge the confidence which the Government are trying to build up in this economy. The challenge is coming from a very eminent planner in our economy. He has every right to do this, but we must not lightly play with the confidence issue.

The Government, in effect, have set challenging targets. They have not done this for fun but because it is necessary. We might look on the nation as being the family of families and the offspring of the nation must be looked after. In the same way as a father of a family looks after his offspring, the nation must look after its offspring. So far it has been found wanting, particularly in the immediate past. As a result of that we have this cancerous unemployment position. Something must be done about curing this disease. These targets are not a matter of whether it is good or prudent in the economic sense. They are a must. They are what we must achieve in order to provide employment for our children. It was with some amusement that I heard some of the earlier statements, for instance from Senator Cooney, who spoke about the targets achieved so far in relation to employment. The fact is that the 5,000 jobs have been created. The effect on the overall register position is just playing with figures.

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  Yes, the Senator is playing with figures. He has started to cheat already.

Mr. Mulcahy: Information on Noel William Mulcahy  Zoom on Noel William Mulcahy  The jobs have been created.

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  The Senator is cheating already.

[99]Mr. Mulcahy: Information on Noel William Mulcahy  Zoom on Noel William Mulcahy  These were jobs that had not been created in the past.

It is easy for people to say that if the Government are successful they will eat their words. I would be glad to eat words any time but what we must do is achieve targets. It would be easy to say “I made statements in the Upper House which, in effect, had an impact on the confidence-building measures of Government but that does not matter because things worked out well in retrospect and I am willing to eat my words.” It is almost like what Senator Whitaker said yesterday. He told us that he disagreed with the Minister about deficit budgeting when it was first introduced, but, in retrospect it did not cause any great harm to the economy. I have forgotten his exact words. I worry about this.

One could be commended for being willing to be gracious in two years time for saying “Yes, the Fianna Fáil Government did a good job; we have to admit that”. That would be gracious but we are not in the business of being gracious, we are in the business of trying to find the best policy that will provide employment for our people.

Senator Cooney, for instance, raised the question about the treatment of agriculture in the White Paper. We all know that the agricultural policy is being examined at a number of levels. We know that Dr. Sheehy of An Foras Talúntais has been writing in great depth about this and that the National Economic and Social Council are considering documents on this with a view to publishing something. The fact is that in the White Paper a target was set in the light of information available. Again, it was a challenging target. It is interesting that while, in the beginning, Senator Cooney felt like knocking the notion of the paper models of Academia— nevertheless about 20 per cent of his contribution was given to examining a paper model for agricultural expansion. That amused me. But, I agree with him that the agricultural policy is an essential one in the total strategy for the provision of jobs. I hope to see, in fact, one of the paths outlined [100] in Dr. Sheehy's paper followed and adopted and investment provided for it. I hope to elaborate on that later under the heading of agriculture.

On the unemployment question— this must be the underlying motivating influence in all we are doing; we are all saying this but we have got to believe it—we must consider the trends in the past. I drew some graphs which I would love to show Members because sometimes when one looks at figures one can just see one or two but when one looks at a graph one can see a trend. It is fascinating to see that from 1950 up to 1973 we had this consistent growth in the employment and manufacturing industries. Then we had this extraordinary turndown. Obviously, people will say that the turndown was because the world economy went into recession. I do not believe that. The world economy had an effect on it but when one gets into a position like that, one take even more effective action, one identifies new strategy to enable one to deal with that new situation. In those intervening years of the Coalition Government this did not happen. What happened was that an industry which one can influence like the construction industry was hammered. The basic policies needed to bring it around were not implemented. As soon as they were implemented, over the last six months, we had an immediate upturn. The number of houses per year being completed, annualised up to the middle of 1977, had fallen down from 26,000 to something like 22,000 or 21,000. Immediately the new policy about SDA loans and limits went into operation and the £1,000 grant was introduced there was an upturn and, in fact, reversal of the trend. Those are facts and that correcting policy was open to the last Government.

What happened? About 20,000 extra people were thrown on to the unemployment register as a result of the lack of action. What are the targets we are trying to achieve? They have been spelled out in the White Paper but I would like to put them before the House again. The fundamental papers and analysis done by Professor Walsh are available, have been [101] gathered together and integrated by the National Economic and Social Council. They have been re-assessed by the National Economic and Social Council. We know the issues. In 1975 the ESRI put it that 30,000 new jobs outside agriculture were needed if we were to achieve full employment by 1985. That meant, on a one for one ratio of manufacturing and service industry, that about 15,000 were needed in manufacturing every year. That was after redundancies which they estimated at something around 5,000 per year.

In the period from 1961 to 1972 we managed to get an average of 3,000 extra jobs per year but 58,000 jobs were lost in manufacturing between 1972 and 1975, for various reasons. Senator Cooney said: what about the shortfall last year and the shortfall in the first month of this year when he examines the register of unemployment? I would say what about the shortfall of 58,000 in the last few years? He should have given more attention to that while he was there.

Following on the employment side, let us examine some myths underlying what goes on in Irish industry, and one of them has been exploded only in the last week. The myth was that new industry, for instance, did not add enough value, it did not purchase enough at home, it was not a healthy addition to our manufacturing totality. The facts now are that, as a result of solid action and development, particularly through the efforts of the IDA and others, in the year 1966 we had something like 17,000 employed in new industry and when we reached 1974 there were 56,000 employed. That was out of a national total in 1966 of 185,000 in industry versus 216,000 in 1974. It was higher than that early in 1973. The exports from new industry rose from £66 million in 1966 to £582 million in 1974. As a result of this growth 28 per cent of total manufacturing output is now in these industries. It has been shown that far from adding only a small amount of value and coming in to take a quick run at the export tax relief, these industries create more added value than home industries. The reason I say this is that it is a claim some of us [102] made in the past but we were not listened to. There are a lot of other statements made also by people who take a deeper look at it, and they are not listened to.

These findings about the performance of new industries mean that there is a chance, if we set our targets high enough. Seventeen thousand to 56,000 over the eight year period is an achievement. If at the beginning of 1966 if it was said that this could have been achieved there would have been a lot of questions raised about it; as there were questions raised at the end of the fifties when Senator Whitaker put forward his views about an investment policy and said he would achieve a certain minimum increase in GNP. People said it was not on. We are raising our targets now and the Celtic drag has come out, the-backside-out-of-the-trousers syndrome, say it is not on. That it is too ambitious.

A breakdown of those figures is very interesting. Out of the 431 new firms set up in that period—I am taking these figures from the recent analysis carried out by Professor McAleese for the IDA—164 are Irish, and by Irish I mean the firms set up by Irish people and not brought in from America, Germany or elsewhere—24,000 of the 60,000 employed are in those Irish firms. What I am not completely happy about is that the smaller firms, of which there are 274 employing less than 100 people, employ 12,000 out of the 60,000 which is 20 per cent, even though that 274 out of 431 is more than 50 per cent of the firms involved. That again makes the point that extra effort has to be put into setting up smaller industries. That was contained in the Fianna Fáil manifesto.

The extent of the unemployment problem can sometimes bore people, but it does not bore me because the area I operate most in is Dublin North Central. My estimate is that the unemployment percentage in that area, downtown central Dublin, is about 30 per cent, and not the 10 per cent we are talking about nationality. I do not want to go to those people and say we are not setting our targets high enough because we want to be prudent economic managers. I would like to [103] see special efforts put into that area, in relation to small industry development, but this is not the place to elaborate on that. Action of that kind is needed but it has not happened yet.

There is too much concentration amongst our planners and our civil service on prudence and efficiency. I mentioned before that we have got to take risks. I would like to differentiate between two terms which we use a lot in the management world, effectiveness and efficiency. There is a difference between them. Efficiency is about doing things right. A lot of people are preoccupied with that. It is about protecting your back, about keeping the file right, about having just-in-case files in case you are caught doing things right. We should be more interested in doing the right things. Doing the right things is saying what the targets should be and pursuing them, investing, developing, using right technology, deciding that the agricultural strategy is incomplete and going after it with strength and confidence. This is effectiveness—not just efficiency. I call all of this bureaucratic drag. We are suffering from it. My recommendation to the Ministers would be not to get caught up by bureaucratic drag. Keep the mind clear and keep the main targets clear. That is the essence of the Fianna Fáil policy, state what the targets are ahead of time, and do not say that it cannot be done because the world is such a mixed up place. The more mixed up it is the clearer one has to be about the targets and the more readily one has to adjust as one finds that things change as one goes along. It is essential common sense.

Ireland must develop faster than other countries. It must not gear itself to the lowest common denominator. Just because we are a little bit worried about what the growth rates are going to be in the EEC countries or the OECD countries does not mean we should set our targets around theirs. We must catch up if possible. It should not be necessary for me to elaborate on the notion of catching up on the GNP per capita even though that is an enormous target to set. We must [104] grow faster. We should keep in mind that the reason we went into the EEC was that we recognised that we were a relatively under-developed region of that total geographic region and that the fundamental policy of the EEC is to help the under-developed regions, and to switch resources into those regions. I see an essential derivative of that policy that the EEC would be willing to allow us to work at a higher borrowing rate than other countries in order to let us catch up, and that the criteria for our borrowing levels should not be decided on the basis of Ireland as a single economy living in a vacuum, but as an under-developed region of the EEC, a very small wren on a very big eagle. The wren was able to fly higher from the back of the eagle. That should be our strategy.

The world environment is not that bad. The projections are for a gross domestic product growth over all the EEC countries of 3.3 per cent. For the OECD countries the figure is 3.5 per cent while America has been growing at 5 per cent. There are some rumblings over there at the moment but anybody looking at the situation carefully will see that President Carter has no option, given his commitment, but to keep the American economy going. There is growth out there. Even a growth of 3.5 or 4 per cent might sound small, but in the context of the late fifties and early sixties it is just the norm. We must assume that that level of expansion will take place and we must take advantage of it. I would reiterate that our borrowing capacity measured by any criteria should take into account the capacity for borrowing at the EEC as a whole and not the Irish nation.

In the case of agriculture I would agree with Senator Cooney that it should be a key element in our growth strategy and that we have possibly tended to look on it as a sector of our operations which would naturally throw off people on to the unemployment list. As Senator Cooney pointed out, if a particular high growth rate can be achieved in agriculture, that may not be the case. In fact it may contribute to taking up employment, [105] and a figure up to 60,000 extra employed during the next five or six years is on. If that is the case we must accept the so-called ambitious targets set in the White Paper. Let us look at some of the issues that to me are important in the agricultural scene. It is not one that I can claim any great expertise in, but I can read the facts. The number of agricultural advisers available to advise farmers to increase their efficiency is one for every 700 farmers. Given that something like 75 per cent of the land is not being managed correctly, how can one adviser help 700 farmers? I have listened to some discussion recently on this where I had advocated that that figure should be brought down—I cannot claim any great novelty or originality in this because it has been written up in some very good papers— to a figure of one in 50 or one in 100 to bring about the extra help that is required. Again I heard the bureaucratic drag, “Let us be prudent, let us not go too far; what we really need to do is to educate farmers.” But education as we all know is a long-term solution. It is an essential one, but it is long-term.

We need crash action and crash action raises the question of how we have a massive training and development programme for agricultural advisers, how we train them to get over the psychological blocks that seem to exist among our farming producers? I came across some information recently which frightened me. It related to a survey of a group of farmers taken in the south of Ireland and showed something like 30 per cent of them had never heard of some of the incentives that were available to them to improve their husbandry, while another 50 per cent did not understand these incentives. I am told that the agricultural advisers are now taking up a lot of their time in dealing with the paper work that relates to the farm modernisation scheme and so on. This is what I mean by bureaucratic drag.

Where incentives are provided that make sense to the people they can usually relate their reward to the efforts they make directly, this kind of incentive seems to work. For instance, [106] where the small farm incentive scheme was operated it was possible to improve the stocking rate from a figure of something like 2.05 to 1.41. There is a need in agriculture to make sure that the incentive is related to the effort and that does not necessarily mean related to output. If a good try is made, a plan is conceived and a good attempt is made to implement it, then on that basis the pay out takes place—reward for planned action as approved. It is frightening when you think of the fact—maybe it is not frightening; maybe it is a good thing, depending on what you do about it— that 423,000 people or almost 40 per cent employed in this country depend on agricultural output. This arises when you take into account the processing industries, the way that some aspects of the construction industry are dependent on farm construction and so on. The action taken in that area cannot be left to some secondary parallel operation looked after by the Department of Agriculture. It is an integral, an essential part of the total national strategy and must be integrated. That again is a reason for having an independent and separate planning department and for not accepting the existing structures which, good as they might have been ten or 15 years ago, are not sufficient for the problems of today. That in my view is bureaucratic drag. Over reliance on old structures is a form of orthodoxy. For me planning imperatives supersede old structures.

It frightens me to hear Senator Whitaker advocating some of these old structures. Because of his eminence in the country he may be undermining the confidence that we are talking about. For instance, let us consider the amount of debt that the agricultural industry is using in order to get the growth that is essential. The percentage of agricultural total domestic credit is 24 per cent; in Denmark it is 40 per cent. The debt to total assets in agriculture here is 4.1 per cent, while in Denmark it is 40 per cent. If we had to engage in the amount of debt that should be taken on by the agricultural system in order to gear up its growth and to base our policy on the equivalent in Denmark, we [107] would have to take on an extra credit of £700 million.

These are the kind of things that worry me when we start talking about ambitious targets, when we see that the underlying policy that might bring about these targets do not seem to be followed. Any chance I get I will try to highlight these gaps in policy. Agriculture is an essential element, as we all know. When one thinks of the facts I have given—one adviser for 700 farmers and nearly 75 per cent of the farmers in the survey not knowing the incentives that are available to them—and when one thinks also of the amount of debt we put into the system, which is out of all proportion to what goes on in countries with which we have to compete and having regard, too, to the size of the problem of creating 30,000 new jobs every year while 43,000 young people are coming out of school each year, one almost despairs. Failure to deal with it using new policies is what I call bureaucratic drag.

Inflation is something of which we are all afraid, and rightly so. It is, indeed, heartening to see that from the recent figures available, on the three-month basis, Ireland has now come to 1.7 per cent which makes, annualised about 7 per cent, a very good figure. I hope it will stay around that figure. The annualised figure was 10.8 per cent but 1.7 per cent for the three months shows a great improvement. Ireland must accept that we must stay there. The OECD countries are running at something like 6 per cent or 7 per cent inflation. In any move that could take place over which we have some discretion—like our incomes policy. There are many things which can happen in terms of international trade and market over which we have no discretion—we must take into account that we stay at that level of inflation.

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  Or the level of borrowing which is inflationary, too.

Mr. Mulcahy: Information on Noel William Mulcahy  Zoom on Noel William Mulcahy  But if the borrowing is used to go into manufacturing investment, as the Senator knows very well, we will get the growth where we want it.

[108]Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  From the manifesto we know where it is going.

Mr. Mulcahy: Information on Noel William Mulcahy  Zoom on Noel William Mulcahy  In the Senator's time, there was borrowing but where did the investment go? It certainly did not go into industries that might have fuelled the economy in a productive way. Where is the money spent? That is the question. Borrowing is all right if the money is spent properly. That was the essence of the Whitaker strategy in the late 1950s—get money and put it into manufacturing investment and we will achieve growth. That still applies today. In the years between 1950 and 1971 or 1972, of the total added value created annually 50 per cent went into wages and salaries. In the past couple of years that has gone up to 60 per cent when one takes into account the extra benefits that have been paid out. I am not against benefits by any means but I am against changing underlying ratios which have worked. The only way that you will get those benefits is to create more added value in order to make them available. But to change the ratio from 50 per cent to 60 per cent may very well be the cause of our problems at the moment. Of course, when we did get inflation running at 20 per cent and did not have enough added value generated in firms to finance the extra working capital that was required because prices of stocks and materials were going up we ran into trouble and had to stop. These were underlying, forecastable, predictable trends which were not seen because of ineffective planning in that period. Inflation can be kept down if we do not upset the underlying structure of our economics and the underlying structure of our economics is that the ratio of our added value produced across the board cannot go above an agreed level without working out that ratio and discussing it and knowing what is being done. It cannot be changed in a couple of years from 50 per cent to 60 per cent.

To refer to the borrowings in more detail since they have become an issue —I am sure the Minister will raise this in his own way when he is replying— between 1973 and 1977 the borrowings went from £230 million to £618 [109] million. The figures in the intervening period were £230 million, £338 million, £533 million in 1975 and £545 million in 1976. The ratio of total Government expenditure was 28 per cent, 33 per cent, 30 per cent, 27 per cent and 25 per cent in 1977, as I make it out. We did not die while all that happened. The institutions have not lost confidence in us. The efforts made by the last Government to get inflation down have been successful. We have not lost the confidence. Why get worked up now? Why dampen the enthusiasm for growth by raising issues about the effect of borrowings?

What Fianna Fáil have done, what they did in the manifesto, what they have done in the White Paper, as I interpret it, is that they have said: “We will tell you what our intentions are during the next four years—1977, 1978, 1979 and 1980. We will tell you what levels of borrowings we intend to work at and we will tell you within general policy statements and elaborate as time goes on how we intend to spend it.” That is a statement of intent. It is clear. It removes the uncertainty. It does not say that we do not want a plan. What it does say is that “this is the path we are following; if we get knocked off it, as I see it like any prudent planner, we will have to adjust, but that is our intention, that is the way we are going, and we are asking the people of this nation to come behind us in doing it.” That means the investors, the private investors, the trades unions and everybody. We have had 11 per cent of the GNP borrowed in 1977. By the way, it was 16 per cent a few years ago and we did not die. In 1978 it is to be 13 per cent, coming down in 1979 to 10½ per cent and 8 per cent in 1980. You may say, “live horse and you will get grass” and the more you predict of the future the more optimistic you can be, be that as it may the figure is stated. It is there and we must live with it.

The manifesto and the White Paper show the borrowing strategy. It is not hidden up the sleeve of the Minister for Finance or of the Minister for Economic Planning and Development. It is there stated. Is Senator Whitaker [110] saying that we should not do this, that we should let the young people of this nation just stay there because we want to run a prudent economy? What is the criterion for borrowing? My criterion is—so long as the EEC will support us we should go ahead while, at the same time, not being silly about it, managing our affairs in an effective professional way and knowing what we are doing. Knowing what we are doing is stating our intentions and tracking results and annually seeing how we stand.

Is Senator Cooney saying, when talking about the ambitious targets, that the young people of this country are not worth a chance? We use the word “gamble”. Our young people are worth a chance but some of the fundamental decisions and strategies available to us are being lost in the rhetoric. We must put them into action. For me that is an example, in terms of my drag syndrome, of cultural drag, that our planners, the managers of our economy are not moving fast enough to see this and to follow the obvious strategies that are available to them.

The deficit on trade, which has been mentioned, was £200 million in 1977, say, 4 per cent and £500 million in 1980 representing about 6 per cent. In the context of our membership of the EEC and their commitment to helping underdeveloped regions of the kind that we are, this seems to be an appropriate level so long as we keep an eye on it. It is worth a chance.

Regarding the investment policy, the gross domestic capital formation has grown by 30 per cent between 1975 and 1976 from a figure of £1,055 million. The projection of the estimate for 1977, so far as I can make it out from studying the papers, is £1,380 million, which would be another 30 per cent, and about 12½ per cent in volume on the rest of the price.

Of that amount of investment of £1,000 million, building and construction gets 55 per cent. I ask Senators to note that. Any playing around with that industry is playing around with the fundamental investment policy of the country. Some way or another we must make sure that this industry is [111] not messed about if we are to meet these targets. Any notion of casual manipulation of the construction industry as a way of cooling or heating up the economy must be watched very carefully in the light of these targets, no matter what Government is in power.

The investment in new plant and equipment makes up about 40 per cent of that. It would appear that that percentage is growing, which is a very healthy sign because in the first five months of this year the import figures for producer-capital goods is up by 55 per cent. That is a healthy sign and it gives confidence when looking at the figures.

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  Is that 1977?

Mr. Mulcahy: Information on Noel William Mulcahy  Zoom on Noel William Mulcahy  Yes. The public expenditure programme however, in 1976 —to give an example of what I mean by playing about—went down by 10 per cent. We must watch that whether it is a Fianna Fáil, a Coalition Government or any other Government. The effects were plain to be seen. The CII reckon that, for the extra 15,000 jobs another £300 million investment a year is required in manufacturing industry. That must happen one way or the other. I say that—I am on a limb here in terms of the Government position or otherwise—if private industry does not do it then we must do it in the sense that the Government must do it.

CII also mentioned £140 million for an annual rate of increase of 7,000 net new jobs per year. This means effectively that investment in 1980 should be running at about 37 per cent of the gross national product. When I looked at these figures last year it was 23 per cent. This is what we are up against and this is why the targets must be ambitious. I make no apology for saying this because I believe our young people are worth the chance.

I referred to an incomes policy earlier in relation to borrowings and inflation. There are negotiations going on at present and the House should not become involved in these discussions as the matter is a touchy one. However, as I have said many times in the past, if incomes grow at a [112] faster rate than the added value produced, we will have problems. It is interesting to note that when looking at the figures between 1950 and 1971-72 the growth in incomes and in added value went point by point hand in hand and went completely out of control once inflation occurred. We mismanaged the situation there. It is not a question of what one can get away with each time. It is a question of having some underlying formula which makes some sense in the context of a total national strategy. If it remained constant, as it did for so long and the share remained constant, why not accept that and work on from there? What we are doing is not getting more money for one group but trying to ensure that all our people available for work enjoy the dignity of work.

I want to mention two figures which might illustrate what happens when there are differences. Take two companies, Leyland and Toyota, both making cars in different countries, both operating under different national strategies. In 1966, in the Leyland company 76 per cent of the added value produced in that company went on wages and salaries. In the same year in the Toyota company 44 per cent went on wages and salaries. That is at a time when workers in Japan were being paid on a similar level. I am talking about percentages. In 1976, Leyland went to 106 per cent and Toyota went back to 41 per cent, while there was still growth in incomes. The interesting point behind that—this brings me back to what I said about investment—is that the investment behind the Leyland situation was £206 per capita, the Toyota was £2,000 per capita.

In case my Labour colleague thinks I am concentrating on incomes policy, I am concentrating on all elements of our strategy. These elements must be looked at together. National wage agreements are worked out in the context of a negotiation, on a bargaining basis, between a position taken by one group on the one side and a position taken by the other group on the other side, and we all know that they will hone down gently towards each other eventually and find a solution mutually agreeable. It is a good [113] way of ironing out conflicts but, if it must be done year after year, if we must renegotiate relatives year after year, how will we catch up with this cancerous situation of unemployment? Can we not call a truce for the period of our strategy, decide on the basis on which we will work and then get on with it?

The other arm in the strategy is the so-called guaranteed Irish or Buy Irish campaign. We are being entertained now by the glorious vision of Tom Hardiman on RTE telling us that we should buy Irish both in Irish and in English. It is very good and I am delighted to see it happening. I mentioned this here before Christmas. The magnitude of the problem does not seem to be getting home to the Irish purchaser. If any message can be transmitted through the media from this House it is this. In 1976 the selective products I looked at after some consultation with Vivian Murray, the director of that campaign, were £277 million worth coming in—clothes, food and drink, household durable goods and so on, retailed locally at £400 million. Our imports in 1976 were worth £2,335 million. Our exports were worth £1,857 million, giving an excess of £478 million which, with a small shift in the purchasing habits of the people—in the fathers and mothers of children who will not get jobs—could be changed.

The total imported goods in that year, those which were ready for consumption or use, were £619 million and products worth £500 million were competing directly with goods produced here. I am not advocating a trade war but we should think a little before we buy. Anything that can be done to support the buy Irish campaign should be done. I am sure the House will support it.

The percentage of our personal expenditure on consumption goods ready for use has gone up by 50 per cent since 1973. I am not tempted to blame the last Government. It was a national malaise, part of this Celtic drag. The figure rose from 21 per cent to 31 per cent over that period and 13,000 jobs were lost. These sectors—textile, food, furniture and so on—are high unemployment [114] sectors. My last figures are, therefore, food 11.7 per cent, textiles 13.5 per cent, clothing 19.6 per cent and wood and furniture 16.4 per cent. Those are the sectors being affected by what I call the Celtic drag—but will not “Buy Irish”.

The other area which is essential to the strategy and the achievement of these challenging targets is the area of competition. I support the Confederation of Irish Industry in their highlighting of the dangers of the British Temporary Employment Subsidy. The British temporary employment subsidy is a way, for them, of getting over the redundancy problem. They give £20 per week for 12 months to firms if they will keep on people that they had intended to make redundant. This can be extended for a further six months on a £10 per week basis. That is to be reviewed next April but the payments will go on until the same time next year. Three hundred and twenty-two thousand employees have been brought under that scheme in the U.K. and 71,000 are pending. That number of people is equivalent to the total industrial employment of this country. That amounts to payments of £322 million per year as a support.

The effect of that on us has been that the output of our clothing industry has gone down 13 per cent from what it was in 1974 whereas in the UK the output went up by five per cent. Employment in that sector has gone down by 25 per cent whereas in the UK it has only gone down by five per cent. They recognise the redundancies. The export to import ratio in those industries, which for us was 120 per cent in 1974, which meant we were exporting more than we were importing, has now dropped to 78 per cent. One thousand jobs were lost. Imports went up by 18 per cent, while home consumption went up by only five per cent which was a loss of market share. Everything is against us not only by losing jobs but also by losing market share. Market share is very hard to buy back. I publicly support the confederation's position. A counter measure is required and is well and truly justified—I gather it would cost about £5 million.

If I can be forgiven for going off [115] the economic strategy for a moment, I have my own quirks about some of the other items in the Appropriation Act. Other aspects of our activities like RTE, Posts and Telegraphs, and Education, have an indirect contribution to make to this strategy. One or two points under those headings affect the attitudes to expenditure required in those areas. RTE, for instance, by having the appropriate programmes can add to confidence and can make entrepreneurial activity more respectable than it would appear to be in the context of this Celtic drag that I mentioned. They can encourage the entertainment industry to develop more effectively. This talk about pirates and so on in the Dublin area is all part of it. RTE should give every encouragement to the development of activity which produces employment. We are good at singing and play-acting and we are good at music. Why not build on it? The Beatles got going in the UK. by virtue of a decision that the BBC would always give prime place to home-produced material. The BBC fostered and fathered an industry which is now worth millions in that country. We have that opportunity here. I believe that the entertainment industry has come together to make representation on that. I appeal to RTE and to the Minister to make funds available for development of that and not to discourage it because of the effect of some sort of a bureaucratic drag. It might be useful if the Department of Industry, Commerce and Energy, or the IDA, made funds available to RTE to have some sort of a programme which would teach entrepreneurship. We had “Listen and Learn”, “Telefís Scoile” and “Telefís na Feirme”. Why can we not have entrepreneurial teaching on television?

In the Department of Labour's appropriations I notice that £150,000 is down for training in the trade union area. If there is any area where meaningful adult attitudes must be developed to economic growth and to the underlying mechanisms of economic growth—the requirement for employment—it is the trade union [116] area, £150,000 is all that is being given to that area. I know that the Government cannot be blamed too much for this because in many cases the trade union groupings are not looking for money and it took a long time to persuade them to take it. This is only a symptom of bureaucratic drag possibly, but maybe it is a power drag, in the trade union circles.

Posts and Telegraphs with £60 million of income and some £100 million of expenditure, is a big business. We have talked for some time about the possibility of a separate corporation, an independent semi-State body operating in that area. Although I would not want to follow the Brits blindly on anything, looking forward and watching I have noticed that the British attempt in this regard seems to have worked. Maybe again there is room for us to do something here. Let us not have the bureaucratic drag slowing it down while people at top levels manoeuvre for positions and slow things down because it suits them. If a good job is to be done on Posts and Telegraphs it may have to be done outside the existing system. We talked late last year about the apparent inability of that system to do a fairly simple forecasting exercise which showed capacity for fulfilling demands for telephones in the same way, as I said at the time, that the ESB found no difficulty in forecasting. Let us have a deeper look at that, and let us do it fast. Speed of reaction seems to be needed. Let us overcome the bureaucratic drag.

The question of education has been developed at length by other speakers. I heard one speaker say that no Minister seems to have the authority or position in the Cabinet to get things done. Any Minister has a challenge to make his position felt in his area. We had one Minister who did it. The late Donough O'Malley in his time managed to buck that system; he got things going and despite articles in the media about my relationship with him, at a particular time, the facts are that the regional technical colleges, Limerick NIHE and Dublin NIHE are now there. They are there because somebody believed in it and made it happen. [117] It did not come up out of the bureaucratic system; it came from the conviction of a Minister who was enlightened enough to go ahead. He said we would find the money, and we had to find it. Are we not glad we found it? Look at the extra people who would now be unemployed or on the emigration boats if it had not been done. I support more money for education.

The drag syndrome must be overcome if we are to meet these targets. It shows up in a number of ways. I have illustrated the way it shows up the bureaucratic system. It shows up as a cultural drag in the way ideas and values lagged behind those required to make progress. That shows up in the political system as well as in the civil service system. It is up to us who get an opportunity to speak in the Parliament of this nation to highlight it. We all know it exists. We may ask why bring up the notion of drag? It is used a lot in economic circles when we speak about fiscal drag. Fiscal drag is about progressive taxation on higher incomes. We were told at the start of this debate that we cannot get into taxation matters, but I think it fair to advert to the fact that if fiscal drag removes the incentive for entrepreneurial development and growth then we have serious problems. I hope that next week we may see something that will help us in that regard. My challenge is to the prophets of gloom. Do they think that the young people are not worth the chance? Are they going to use their position of influence to underline the confidence which is the essential ingredient of development? We do not want people to say later on “I told you so”, on the one hand or on the other, “I am glad I was wrong and I will be gracious about it.” It is not a gracious gesture in five years' time that we want; it is the contribution to confidence now, today. I was quite disappointed to hear Senator Whitaker at the opening of this debate starting off on that note.

Professor Murphy: Information on Ciaran P. Murphy  Zoom on Ciaran P. Murphy  Let me begin by congratulating my fellow Corkman, Deputy Pearse Wyse, on his appointment as Minister of State. I [118] wish him and the whole Government well.

The function of an independent Senator is to criticise Government policy from time to time. The whole burden of criticism of Government must not be left to Senator Whitaker. The policy then is to criticise the Government but to hope for the sake of all of us that they know what they are about and that we can help them to fulfil their manifesto. The logic of Senator Mulcahy's argument warning that we would be aware of undermining confidence is that we should not criticise at all. Criticism is a very important part of the process of fulfilling Government policy. When in 1783 Henry Flood, having been out of patriot politics for some time, came back after the major victory was won —an illusory victory it proved to be— a victory of legislative independence, and demanded that the English Government give a further guarantee in the Renunciation Act, Henry Grattan, who had borne the heat of the day, bitterly criticised his rival and said “Mr. Flood is opposed to freedom because he did not achieve it”. Despite Senator Mulcahy's criticisms, we will all welcome prosperity in the next three or four years even if we have not achieved it.

Before I move on to express my views on some broad aspects of national policy, let me express the feelings of many people I have talked to who have been discussing current Government thinking on the economy. They are no professional economists, but they know something of the history of the past few decades and they are very disappointed in the current Government thinking on the economy as reflected in pronouncements to date and in the White Paper. Total confidence is being built on the expectation that the private sector will deliver. What grounds have we for expecting this against the mediocre performance of the private sector since independence? Despite being shored up in the days of protection by Government and being rescued in the late fifties and after by international capitalism for its own sake, there is no reason to hope that the private sector is going to get us out of our troubles. [119] On the other hand, four out of five jobs are in the public sector. There is already massive public investment in that sector. The work of people in bodies ranging from the Agricultural Institute to the ESB has not received enough appreciation. It is fashionable in plush lounge bars to knock the public sector and to say that you cannot get a thing out of the Post Office and that CIE is dreadful. Nearly always, of course, when they refer to the alleged inefficiencies of these public areas they are talking about public services that entrepreneurs would not touch with a forty foot pole because there is no money there.

If we are to create jobs from any section of the economy we will have to have public control and public direction. Entrepreneurs are all very well, but even the best of them, indeed including you, a Leas-Chathaoirleach, have admitted that they had reason to be greatful in what they have done for the advice and help available from the public sector. Even the best entrepreneurs are animated by a desire to make money, not to create jobs, and that is why I see no great reason, for placing any trust on the private sector. The latest strategy of the IDA, as far as I can make out, will encourage a new breed of gombeen man. The new plan apparently is to cultivate and encourage entrepreneurial flair, but this seems to be a regressive trend designed to produce small scale industries which are totally irrelevant to the present technological trends.

On taxation in general, considerable and indeed justifiable publicity was given some months ago to the revelation that the PAYE wage and salary earners paid 87.5 per cent of direct taxation, and the guns of adverse publicity were turned on the large farmers. I carry no brief for those farmers who are doing extremely well and who are not paying their fair share of taxation. Their own definition of “a fair share” is that they should themselves be allowed to decide what that is. At any rate, Mr. Paddy Lane, et al, are well able to defend the interests of the farmers.

In all the adverse publicity about [120] farmers not paying enough tax we are devoting little attention to the fact that there is a wealthy self-employed professional section of our society who are really getting away with murder. Again, I do not want to say anything which impinges on the present national wage agreement talks but if I were a salaried—and, indeed, I am a salaried person—clerk in the public service who was screwed to the last penny because his income was known, and if one of my children went to a medical consultant whose speciality was yanking out tonsils, and I knew that man's salary in weekly terms could be calculated almost in thousands, of which he paid only a notional amount in tax, I would be justifiably angry.

We have a certain false mystique about certain professions, the law and medicine being two prime examples. We have no tradition of pursuing such people for criminal tax evasion, as happens freely in America, for example. Why should we not put hundreds of tax inspectors into medical consultant's rooms, into the consulting rooms of barristers, and so on, and really get down to it? It is not so much that the total money that would thus come into the public coffers would be terribly significant, but justice would be seen to be done and a grave cause of public disquiet removed. Why should you expect the man on a readily ascertainable income to exercise restraint when he sees this kind of injustice and when he sees banks and other conglomerates returning enormous profits?

One of my own areas of interest for a long time has been the question of natural resources. In my own little manifesto I linked the question of resources to unemployment and saw in the neglect and unsatisfactory development of our mineral resources a reason for massive unemployment. I was, therefore, extremely chuffed when I read in the Fianna Faíl manifesto the following passage on pages 14 and 15:

The value of our natural resources to us as a nation must be judged primarily by the amount of spin-off employment they generate in downstream industries. This applies equally [121] to agriculture, oil, gas, fish, zinc and lead. There is no use our exporting these products, to create employment and wealth in other countries. One most assured long-term development will come from processing those to the fullest degree. To export unprocessed zinc concentrates is like exporting fresh, unprocessed milk.

The State should retain control of the conversion process of minerals, oil, gas, etc. to assure that they are used here to maximum benefit. A State owned smelter could be established here for £40 million— £10 million of this could further the equity capital. This is equivalent to the sum paid by the Government in the Bula affair. The balance could be easily financed from contracts with Irish mines. The zinc production could thereby be made available for manufacturing purposes here at a price that would make it competitive.

The House will bear with me while I read the rest of this.

It is in the industrial use of these refined metals that their real value to Ireland lies. There are tens of thousands of secure jobs only waiting to be created. It is here, rather than in the exclusive encouragement of ephemeral foreign finishing industries, using foreign raw materials, that Fianna Faíl's industrial efforts will lie in the future.

The question is: why after seven months have we got no indication of the furtherance of this part of the manifesto? “There are tens of thousands of secure jobs only waiting to be created.” Now, I know the manifesto has to be interpreted. Senator Mulcahy this morning used the phrase “the manifesto as I interpret it”. We may well be on to a kind of a Protestant-Catholic interpretation of the manifesto. Is there somewhere a source of infallibility? Is there a magisterium on the manifesto, or is it a game everyone can play? However, we are entitled to interpret that sentence unequivocally. “There are tens of thousands of secure jobs only waiting to be created.” Tens. What does it suggest? [122] Three tens certainly. Three or four tens I think. Forty thousand jobs waiting to be created from June 1977. Maybe it means that the smelter will lead to the creation of 40,000 jobs, but it does not say that.

Why this delay on the matter of a State smeller, something that was well on the cards with the last Government? Are there vested interests here somewhere? Are there people whose interests span those of capitalism and the public interest and who are opposed to the creation of a State smelter and of any public control of our mineral resources? Perhaps it is too much to expect that the Minister will tell us that in his reply.

On education I simply want to refer to the question of grants. There will be many occasions I hope when I can talk about other aspects of education. I have to refer again to the manner in which the announcement about the increase in student grants was delayed until, unfortunately, it gave the impression that the Minister was reacting to street protest, a very undesirable thing indeed. Though the grants were raised, the eligibility criteria remain untouched. Senator Robinson referred to this yesterday and I do not propose to say any more about it. You cannot have any real equality of opportunity in education until you adjust things like raising the eligibility criteria, until you cancel the difference between the child who has money and who needs only two honours, and the child who has no money, whose parents have no money, and who needs four honours. This kind of thing should be seen to. I do not think it would cost all that much money.

Let me say that student demands sometimes, in the nature of things, are not very mature. When they point to the student grant scheme in Britain and Northern Ireland they forget that they are talking about a country which is very much richer than ours. In fact, not only in the field of education but in other areas, people should remember they are living in a country which is not bursting with riches but which has other compensations as a place to live in. I do not think students are entitled to demand a levelling up to [123] the position in Britain and Northern Ireland. There may well be a case actually—I will not be very popular with the USI for saying this—for making students pay back the money advanced to them in the form of a grant. I know the loan idea has been tried out elsewhere and is difficult to work in practice. It should be given more consideration here to see what could be done with it. I am not suggesting students should live royally off the fat of the land, off grants, and so on. What they want is a modest sufficiency to keep them in college, above all, to encourage, irrespective of wealth, of parental circumstances, equal opportunity of entry into third level education. The main thing is the equality of educational opportunity. It is not a question of giving them munificent grants. Indeed, society is justified in wondering whether we might look for the money back in the course of time from these privileged—as they are when they graduate—members of society.

Senator Mulcahy in his wide-ranging address referred among other things to RTE. What I said about students looking to Britain and Northern Ireland as a comparison applies also to those people who say “Why can we not have a multi-channel service as those who live on the east coast have?” This is the wrong perspective. There is no God-given right to multi-channel service. It is a geographical accident that the people in this area have a multi-channel service. Just as there are compensations for living in Ireland that are not realisable in Britain, so there are compensations in Cork and Kerry that well outweigh any deprivation by reason of having only one channel.

I disagree with Senator Mulcahy when he suggests that encouragement should be given to commercial radio and that this is a field for encouraging entrepreneurial enterprise. There has been a well-orchestrated chorus developing in the last week or so to save the private commercial station and in general to advance the idea: why not let these things develop? That well-orchestrated chorus was not given any ostensible backing by those whose real [124] interests are involved. When the youngsters of Dublin pranced around the streets comming to Leinster House wanting their radio saved, the exploiting commercial powers behind the scenes took care not to be present. The motivation behind commercial radio is money, not the provision of a service. The Government would be well advised to think carefuly before allowing this form of private enterprise take its head.

Radio Éireann has done this State very good service. It has been one of the most distinctive forms of our natural expression. It has been a success story. It serves not just the teenagers with pop music but the whole nation with a complete range of entertainment and information. It serves not only the Dublin area but the countryside as well. In the countryside the commercial pirates have no interest. Therefore, I would ask the Government to think twice before they give these commercial radio people their head.

Finally, I want to mention briefly Northern Ireland and Anglo-Irish affairs. Since we are considering the total range of Estimates I take it that these matters fall within the area of either the Taoiseach or the Minister for Foreign Affairs. You might say that this is out of place in a discussion which is mainly on the economy. There was a letter in The Irish Times the other day in which somebody said that the whole furore about the Taoiseach's speech and reaction to it was simply a diversion from our economic problem. I do not go along with that. I think, as we know to our cost, that what has been happening in Northern Ireland has a real relevance directly to our economy, in terms of tourism, cost of security and so on, and to society at large. The problems in Northern Ireland have had reactionary effect on our general thinking about liberty and civil rights. The progressive, wide-minded approach of the 1960s was inhibited by the events in Northern Ireland. These matters are very relevant to our general condition.

I do not agree that the best thing to do about Northern Ireland is to forget it on the grounds that if you say anything you only create trouble. [125] Such an approach results in stagnation and paralysis. I do not agree that for the Taoiseach to have spoken out and expressed a particular line of policy was something beyond his competence or something he should not have done. The matter of Anglo-Irish relations comes in here as well, and at the moment they are in one of their slump periods. Perhaps our colleague Senator Cruise-O'Brien might be in a position to do something positive about that. In his Ewart Biggs Memorial Lecture on 17 January he suggested that there was in this country a very extensive Anglophobia and that that Anglophobia suggests an intellectual retardation and/or emotional disturbance on the part of the people who express it.

If that is the case, let us consider the other side of the coin. Anyone who has any knowledge of England, current English attitudes and English historical attitudes to Ireland will know very well that Hibernophobia is endemic and very widespread, in Britain much more so that its converse here. Does that not suggest that Senator Cruise-O'Brien has fertile scope for exercising a therapeutic role in his Observer by trying to remedy this widespread Hibernophobia? At any rate, he might remind English readers and English politicians that this country is no longer a colony and that the Act of Union is long over as far as most of the country is concerned. That is a service which the Senator might well render, provided of course he is himself convinced that the Act of Union is over.

I said the Taoiseach had every right to speak on Northern Ireland, but the right to speak carries with it an obligation. It is not enough to suggest that the British presence should be ended. It is not enough to prattle about peaceful reunification. These do not add up to policy on Northern Ireland. When the youth conference in Cork endorsed the Taoiseach's stand and said that this was a reiteration of Fianna Fáil policy, the question arose what is Fianna Fáil policy? I think the Taoiseach has no clothes on this particular one. Suggesting that the British should leave or talking about reunification by peaceful [126] means do not, in themselves, add up to a policy. There is no White Paper forthcoming, no blueprint. That could have been forgiven in the past.

I remember saying in 1969, when Dr. Hillery went off at the Taoiseach's direction to various parts of the world complaining about what the bad Brits had done to our boys in the North, that Dr. Hillery should have had with him in his briefcase some suggestion as to what we, if we are really interested in unity, want to do about it. That omission could have been forgiven in 1969. It is incredible that, after eight or nine years of death, destruction and turmoil in Northern Ireland, Fianna Fáil still have no policy on Northern Ireland and apparently approach a four-year period of office without any policy. The same Taoiseach who suggested that the British should consider withdrawing has twice in the last few months said that the present Constitution is good enough for us. If it was good enough for Éamonn de Valera, why would it not be good enough for us? I take that as an indication that there seems to be little intention of preparing society in the Twenty-six Counties for an all Ireland rapprochment—some form of all Ireland peace, and combination between the different traditions in this Island.

I think the last Government made the mistake of saying nothing at all in case it would annoy the Unionists. What they were really saying was that we will not do anything at all because it would annoy the Paisleyites. I do not believe that there are a monolithic million Unionists who absolutely will not, under any circumstances, consider any proposal from the South. There are too many interesting individuals now speaking in Northern Ireland, and coming to the South to speak, to allow us to still believe that there is a monolithic Unionism. People like John Robb, Canon Eric Elliott, Barry White of the Belfast Telegraph and many others, surely speak for more than themselves. Are we going to be ready to speak back to them?

Mícheál Cranitch: Information on Micheal C Cranitch  Zoom on Micheal C Cranitch  Ag an am seo den bhliain, bíonn seans ag gach Seanadóir a thuairimí a nochtadh faoin Rialtas, [127] faoi gach Roinn den Rialtas, faoi pholasaí an Rialtais i ngach ceann de na Ranna sin. Is mór an faoiseamh é sin do na Seanadóirí toisc nach mbíonn an deis labharatha acu faoi mar a bhíonn ag na Teachtaí Dála nuair a thagann gnóthaí éagsúla os a gcomhair sna meastacháin. I mbliana ta suim mhór, uafásach i gceist, os cionn £1,800 milliún. Is ar éigean a fhéadfadh a lán daoine, fiú amháin an suim airgid sin a léamh go cruinn. Is uafásach an méid airgid é. Ba bhaith liom labhairt ar chaitheamh an airgid sin agus ar an fhealsúnacht ba cheart a bheith laistiar de pholasaí an Rialtais agus iad ag leagadh amach na costaisí faoi theidil áirithe anseo is ansúd.

The sum involved is a staggering one of £1,800 million. If time allowed it would be very interesting to speak on all sections of Government expenditure. I shall confine myself to just three or four and I will begin with the one I am most familiar with, namely, education.

Let us take the simple sentence “The master teaches John Latin.” There we have what we used to call the double accusative. John is one, Latin is the other. Which of the two is the more important? Latin can cover the subjects taught to pupils and it raises immediately the question, are the right subjects being taught at the right time? There was a time when it was accepted in many educational circles that if you did not teach a boy Latin what was there to teach him? Thinking has changed a lot since. Nowadays we are inclined to think of and develop the ideas of a former educational psychologist when he posed the question of what knowledge is worth the most. I shall come to that point later. We must not alone teach Latin, or any subject, we must teach John. It is around that I have built my thesis—the importance of John in the school which is a family, in his own family, in the family of his parish and in the family of his country, and in the whole human family. I am afraid John is having it tough at the present time especially since the phenomenon crept in some years ago of isolating John and Mary [128] when they reach the age of 13. They were to be kept in isolation and in a particular group from 13 to 19 years. The phenomenon of the teenager was unheard of when I was going to school. That was the first notable attempt in modern times to break up the natural family, the local community family or the family of members of a State. That campaign has had disastrous effects as far as peace and harmony and good relationships between all human beings are concerned.

Another phrase crept in also—the generation gap. Again when I and most of us here—with the exception of very young Senators—were growing up we never heard of such a thing as a generation gap. We all grew up in the presence of our parents, uncles, aunts, neighbours, young and old, and we found nothing strange about that. Between the generation gap and the teenage category things began to come in, teenage clothes, teenage rights, teenage fashions and styles and teenage philosophy. Bit by bit the wedge was brought in. The teenagers thought they had to be different, that they had to isolate their parents. Unfortunately that sort of thing seems to have developed. It is one of the biggest problems we have, especially for those of us who are concerned with education at any level. It is posing many grave social and moral questions. I shall come back to that later.

Senator Robinson gave a very interesting discourse yesterday on the problems of youth, of the under-privileged and so on. She mentioned vandalism, corrective methods as far as youths who get into trouble are concerned, family troubles and so on. She dealt very sympathetically with them but she did not suggest what the remedy might be. She disparaged strong-arm methods; and she said, they are simplistic ways of dealing with it and to a large extent, we agree with her. But in the interest of the harmony that should exist between all members of our community, we would want to seek further. We have got to make sure that in our education system, in everything that the State has control over, particularly television, nothing is done to undermine the status of the family, that nothing is [129] done to undermine lawful and rightful authority.

Another manifestation of the malaise that seems to exist at the moment is the other phase that has come in, that everybody should be doing his own thing. I suppose there is a natural tendency to question authority at some stage but I think we have come to the stage when we have to look at this very seriously and see how far we have gone and examine whether we have not gone too far. Some time ago I got the shock of my life to read a columnist in a Sunday paper who stated:

I am a 28-year-old woman. I believe I have an absolute right to decide how I should treat my body; an absolute right as to how I handle my mind.

That appeared on page 11 of the Sunday Independent, 24 April, 1977. All these things are being read by young people. People have more access to reading material now than they ever had before and that doctrine seems to be preached. Nobody has an absolute right to do anything of the kind. We have rights but we have no absolute right. If we all had absolute rights to do this, that and the other the world would be in a state of total chaos. That sort of thinking is an absolute revolt against, say, the Ten Commandments, the basis of our structure in this country, indeed in the civilised world. Those are some of the considerations to be borne in mind when formulating our education system.

I should like to say a few words about the various sections in the Department of Education—primary, post-primary and what is now known as third level. The school should be a happy place. That was foremost in minds of people when they introduced this new curriculum. School was always a happy place if you had the right kind of teacher there in so far as was humanly possible. In earlier days buildings and conditions were very bad. But the most important person in a school at any given time is the teacher; if a teacher is not right then the school cannot be right. I remember a famous educator years [130] ago who said—and it is a motto I always bear in mind—that if you have just nothing more than a log, you do not even have an old schoolhouse, then at one end of the log you have a wise man and at the other you have an apt pupil, and you have a complete university; it is not so much the conditions but rather the quality, philosophy and attitude of the teacher. It is terribly important that we ensure, when training teachers at all levels, that we get the best there is and give them the best possible training.

There have been many complaints made for some years past, whatever the reason, maybe we are turning out too many too fast, that the quality of teachers leaving training colleges is not what it used to be. Particular complaints have been made regarding the standard of their proficiency in our language. I have heard many complaints about young teachers who have a very poor knowledge of our language, with no great desire to impart it. I am told also that much of the fault lies with what is described as a falling standard of Irish amongst entrants to colleges of education. That should be examined because one of the most important subjects there is at primary and all levels is the subject which embraces our language and all that goes with it, its songs, its philosophy, its sean-fhocail.

If we have not got our language then we have not got our identity. We have nothing on which we can fall back. This thought comes to mind immediately—the unifying influence that is our language. Our language, and the things that go with it, music, place names, log ainmneacha, has a great unifying influence. I find that when speaking with many of our brethren in the Six Counties. I have often played music with them and we are in one thought when we are playing together. Many the happy session I have had with musicians from the Six Counties, people of various religions—nobody asks anybody his religion, background or anything else. We played for the sake of the music and they loved it as much as we did. They loved the songs. Indeed a great many of them would love to [131] know the meaning of those songs and place names. May I digress slightly now? Unfortunately, so many of our fellow Irishmen in the Six Counties are hungering for an identity. They are not British, they do not wish to be called British, they wish to be called Irish. They try to pretend there is such a thing as a British culture when, of course, there is no such thing. There is an English culture, a Scottish culture and a strong Welsh culture but no British culture. Those of our brethren in the North, irrespective of class or creed, so often hunger to identify themselves. Very often they try to identify themselves just as Ulster people, the Ulstermen, because they feel that need.

To revert to primary education, I was speaking of the curriculum introduced some years ago. Having examined it very closely I expressed my doubts in many public places. Most of the subjects in the curriculum being introduced then were already in use in progressive schools. I foresaw one danger and, in that respect, unfortunately, my fears were well founded, that there could be a neglect of the basics to which we always refer as the three Rs. There are widespread complaints nowadays of bad spelling, inability to do simple calculations and so on. These will have to be put right. A person must learn to spell if he is to write properly. He must learn his tables if he is to calculate properly or understand what business is all about. If he does not do these things then he cannot possibly go ahead. I believe that has been carried over into post-primary education. Recently a friend of mine, a professor of education at one of our university colleges, told me he had received a letter from a graduate a few days before in which there were some gross mis-spellings. Basic things cannot be interfered with, such as spelling and tables. If you are a musician you must have your scales and sing or play them in tune. There is no other way; otherwise one cannot advance. These things should be concentrated on.

The third point regarding primary education is this: why has there been [132] such a deterioration in text books? By deterioration in text books I mean their subject matter. Books are glossier with better paper and better print, far more expensive, of course, but their content is not what it should be.

When I started in national school— and that was not yesterday or the day before—I remember quite distinctly the type of textbook we had. I am speaking about textbooks in the English language. There was one series called “Nation-building”. It included a splendid lesson which went into pages and pages about the farmer trying to eke out an existence, a lazy farmer whose wife was a most industrious woman. It told of the plans she had for improving the place and finally, as is always the case when a man and woman have different views, she won, and they made an economic holding out of their little farm. That was a lesson, if you like, on home economics, good husbandry and so on. It was told in such a simple way that it went home to each and everyone of us.

There was also a lesson on the Shannon scheme. The Shannon scheme was about to start at that time and we took a great interest in it. What scope there would be for a good text nowadays when we have discovered we have mineral resources of our own. I am sure many will remember from school days that we all learned that we had no mineral resources, good, bad, or indifferent. Now all that has changed and there is great scope for good texts at the moment, lessons on industry, our natural resources, our traditions, our potential as a nation right in the middle of a big fishing area, our place in the Economic Community and so on. I would draw the attention of the Minister to the desirability of having a new series of texts dealing in the widest possible way with our own culture, our potential and our resources. Children's textbooks are widely read by parents and the message can very easily be got over to the parents. Another thing that comes to mind is the “Buy Irish” Campaign. We had lessons on those. I have one of these textbooks at home; unfortunately, I have not got it with me but I would like to pass it around to anybody interested. It had the old trademark, “Déanta in Éireann”. It is [133] still there. But that was many years ago. It is high time we provided textbooks on the same lines as those for the present generation.

I have spoken of the importance of our own language for its own beauty, for its philosophy, for its sean-fhocail. There we have a mine of philosophy— good, sound philosophy, our attitude to life. Somebody spoke about education earlier and used the word “educated”. Some of the most educated people I have met are people who never went beyond third, fourth or fifth standard in national school. They educated themselves, listened to their elders, picked up the wisdom that was handed down and used their own intelligent observation to assess the values of the various things they met with. One of our greatest Ministers for Educations, the late Seán Moylan, addressing a cumann meeting in north Cork many years ago told his audience, in response to a question, that in every household in his area—and the same applied to every part of Ireland—there was the basis for a splendid library in three areas: economics, theology and astrology. For theology there was the penny catechisms, for economics, he said, there was the creamery book and, with a twinkling in his eye he said, in astrology there was Old Moore's Almanac. There was a lot in what he said. He was a keen and observant man himself.

We have many people of refinement, education, good taste, compassion and good sense who never had any formal schooling beyond fourth or fifth class in national school. As a matter of fact very few of those involved in the foundation of the State had any formal education beyond that level.

I shall now deal with post-primary education. The complaint is widespread that boys and girls going to primary schools are not equipped to do the sort of work required of them in a secondary school where certain texts and a well-defined programme is laid down in the various subjects. This brings me back to the new curriculum. It has been said that often the left hand does not know what the right hand is doing, but, at last, I [134] understand that a committee is being set up by the Minister to examine how best to smooth a way for the transition from primary to secondary schooling.

When a boy or girl goes to a post-primary school he or she is usually about 12½, 13 or 13½ years of age. That is a bit young. If I had my way I would still retain the old seventh class that was there when I was going to school. It was a most important class. It has gone out of fashion now, and more is the pity. There are more fashions in education than in any Department of state in any country. At the age of 13½ or 14 years the boy and girl are developing, they are subject to many changes and they come to a most impressionable age. Much of the reading material that is sent around surreptitiously to those children is of an odious kind. These are things that parents will have to be very watchful of. Children nowadays get into groups and there are clubs for boys and girls of various ages. These would require a close watch. There are many newfangled ideas as regards the type of discussions they should have and there are such things as sensitivity training and so on. Sometimes the guidelines for these are written by people whose philosophy and background are entirely different from our own and whose standard of morals, in the widest sense of the word, leaves a lot to be desired.

Would it not be possible to try to make the leaving certificate course a complete course in itself rather than a jumping-off ground towards third-level education? It seems to be accepted now that a person goes to a post-primary school with the sole objective of going to a university or a third-level institution. Is that a good thing? As regards university entrance, is this points system the best possible means of selecting candidates? I am doubtful. In fact, I go so far as to say that it is not. We could have a boy or a girl—to take the discipline of medicine—very interested in healing but because at the time they may be off form or something or other they do not get sufficient points to allow them go into that discipline. They have no earthly hope then of practising medicine which would give [135] them great satisfaction because they felt they were natural healers. If the points system had been in vogue many years ago some of us would not have been treated by the excellent doctors we were lucky enough to have to call upon.

The points system should be examined very closely. Why not have an interview or a series of interviews instead? A lot more can be found out through an interview, if the interviewer is well qualified and knows his business. If he has compassion, sympathy, knowledge and good sense he will select the right person. It is a much safer way than depending solely on a points system. It would be all right to have so many points and have the interview subsequently, but let the interview decide the matter.

The best value is expected from third-level institutions in view of the enormous amount of money invested in them by the State. It costs the State at least £1,500 for the education of a doctor compared to an expenditure of £180 for a child at primary level. The figures are: £180 for primary education, £270 at secondary level, £800 at third level and at least £1,500 for the education of a doctor. That is a lot of money, apart from grants. We should insist that the best value be given for it.

The majority of students come from good homes, they are well-adjusted young men and women but, unfortunately, to judge by the type of agenda we read of at the recent USI Conference in Wexford, they are dealing with matters which we do not expect students to be dealing with. Again, to judge by what appeared in the papers, there did not seem to be any great discussions on the subjects which they are supposed to study at the various colleges. There were other matters in which they seemed to be more interested, matters which would be unheard of some years ago and which are no concern of students at all.

We hear disturbing reports of literature being distributed by students to new students entering university. Whether they be true or not I cannot say. If they are not true, they should [136] be denied; but if they are true they ought to be investigated because any right-thinking person would not see any point in paying taxes to provide money, part of which is used for the dissemination of very questionable literature among students.

I should like to reply to Posts and Telegraphs. Telephones, telephones, telephones. Everybody is coming along and saying “Senator, could you possibly get a telephone for me? I have started a little business and I cannot go on without one”. I ask “When did you apply?” and they say “Six months ago”. I say “I am sorry, I cannot do anything for you”, and that is that. Every effort must be made to expedite the provision of telephones, especially nowadays. With the upsurge in the economy, everybody wants to be up and doing and getting business. A telephone is an absolute essential at the present time. It goes to my heart when some elderly person comes along and says he applied for a telephone. His family is scattered and he is very lonely, living in an isolated place and is afraid of being attacked. Such people ask if I could get them a telephone so that they could get help if need be. Again, I have to tell them that they must wait for another while.

Then there is the question of vandalism. Those Members who were canvassing during the Seanad campaign will remember the number of telephone kiosks they tried before they got one that worked. Vandalism is on the increase the whole time, due to the break-up of family discipline. It seems to be a revolt against what they term the “Establishment”. The “Establishment”, as far as vandals are concerned, is anything which tries to keep them on the right road.

Television comes under the authority of the Department of Posts and Telegraphs. I want to spend some time on the question of television. I am discussing it as a teacher, a parent and as an Irishman. Television is the greatest influence we have come across for centuries. It is the greatest influence in moulding attitudes and public opinion. Since the advent of television, moral standards seem to have fallen, I mean, moral standards in the widest sense. We have revolts against authority, [137] violence, vandalism, immorality in every sense of the word. Pertinent to that is an article which appeared in the Cork Evening Echo of 28 December 1977, quoting the Assistant General Secretary of the National Association of Schoolmasters in England, a Mr. Fred Smitheys. It reads:

The “dirt and smut” which has crept into television and the media is making the job of schools almost impossible and turning Britain into a “perverted” society, a teachers' leader warned today.

We are having to cope with the effects of increases in the numbers of one-parent families, the difficulties caused by easier divorces and separations, and an increase in the number of unmarried mothers.

I will not read the whole article but I have it if anybody wishes to see it. As in many other areas, we are inclined to imitate the British and the Americans. There has been an alarming increase in recent years in the number of picture houses showing what are very often referred to as “blue” films. How they pass the censor I do not know. If there are people who wish to see these things they can go and see them. That is fair enough, but what I object to and what thousands of other people who have spoken to me object to is the bringing of films of that type into our sittingrooms. I object to having fornication scenes brought into my own sittingroom while I am sitting there with my family and friends. What is even worse is that in many of the films we have seen recently on Telefís Éireann the hero and heroine are as often as not either libertines or glorified prostitutes. In a film recently called “The Moneychangers” the last scene in the final episode was the hero arranging with the heroine that they live together, despite criticism and the fact that his wife was a patient in a hospital at the time. Then the scene was faded out. Things like that leave a dreadful impression on minds, particularly of the young. That is undermining our society. I said at the beginning that my theme would be the inviolability and the sanctity of the family, from the natural family at home to the family [138] of the nation. That sort of thing is undermining our morality and corrupting our minds. I am not exaggerating at all and what I am saying is known to everyone. The Roman Empire fell not because of want of legions but because of the corruption that set in throughout the whole empire. These are the things that bring down empires. People cannot concentrate on an economic recovery and the raising of our standards if their minds are corrupted by the things I have spoken of.

I should like to say something more about Radio Telefís Éireann. We want to see more healthy home-made programmes. Games are well catered for but we want more programmes like “Trom agus Eadrom”. We want more of our own artistes and we have splendid artistes, musicians and vocalists. They are as good, if not better, than one would get in most countries comparable in size to ours. We have a natural instinct for music, speech and drama, but let us have clean drama. Filth and smut are not drama. We do not want that sort of thing in our homes. People will say, by way of an excuse for these things, that that is reality, it is life. A heap of farmyard manure is also reality but no one would suggest bringing it in by bucketfuls into our sittingrooms. We should be careful of these things and especially now that we are expecting to have RTE 2. I hope they will give a broad spectrum of programmes in our own language. We have not near enough programmes in the Irish language. People are asking for them; they want them. We have some interesting programmes but we want more of them.

Finally, before I leave television and radio, why do we have so many mispronunciations of names and phrases in our own language. I hate to have to say this—I know people will be saying that is the schoolmaster again—but it has to be said. I notice very often the people who make these glaring errors are very careful, if they have a French phrase to offer, to have their pronunciation correct. They seem to gloss over names of Irish firms, even names of political parties. I have heard names of political parties [139] getting a frightful battering from some of these reporters. There is no excuse for that in 1978.

I should now like to say something about the furore that took place recently when the Taoiseach made a statement on a Sunday afternoon programme, “This Week”. What he did was to reiterate what has been said thousands of times already, and what is generally accepted by the vast majority of the people of the State, and by every Irishman outside the State. I do not think there is any doubt about that. I can say that the same obtains with our friends on the other side of the House. Basically, everybody is in agreement with that, but still the furore was kicked up. The big bass drum was walloped very hard in the Six Counties and by a certain number down here. It reminded me of the verse of the song: “each of them making the most of his chance, altogether in the shoneens dance”. I do not know what all the furore was about.

I do not think anybody referred much to the Six Counties' problem, except Senator Murphy earlier. It is not Ulster I am talking about, it is the Six Counties. Sometimes we hear people, even in our own State, refer to the Ulster problem. It is the Six Counties' problem and it should be stated that way and no other way. There are so many imponderables there. I can speak freely on this because my own people have been in this country only about 200 years. They came here from Britain, originally from Normandy. They came Protestant English and in due course they lived among the people. At least I can say I am as Irish as anybody else in this House. The very opposite occurred when these plantations took place 370 or 380 years ago in the time of James I. Thousands of people were brought in and were not allowed to mix with the people, inter-marry and become one with them, mould their opinions and have their own opinions moulded also and become one unit. In other words instead of allowing them to integrate, steps were taken to make sure that that would not happen by the promotion of bigotry in its most diabolical form. Certainly we had [140] the worst type of bigots, from Cooke down to Paisley, down through the years. That is an unnatural thing and that sort of intransigent, Unionist-thinking is absolutely unnatural. I do not know of anywhere in the world where we have even a parallel for it. I do not think we have anything like it in the pages of history. It is an enormous question.

Then we have our own national element in the North of Ireland. Their character has been twisted and turned, also as a result of being stamped on down through the centuries. There is no doubt that it is still a question of “croppies lie down” up there. The recent survey showed that beyond all doubt—the case of unemployment. The way the Catholic minority are being treated there cries for redress. When all else fails they have to turn to force. That is the position.

In my opinion we can do two things. Fianna Fáil are doing them to the best of their ability; so is every Irishman worthy of the name. We should try to make friends with as many as possible in the Six Counties, irrespective of their class or creed. Let them see that nobody is suggesting that changes will occur, except with the consent of the majority. That has been stated loudly and clearly, but no matter how loudly and clearly it is said it is still no use. We had a number of bishops the other day asking for that very thing which has already been spoken of. It seems incomprehensible. There is this constant air of suspicion and doubt. Let us all rejoice in the common name of Irishmen. The key to all this could be if Britain could realise, as so many Englishmen privately realise, how much it would be to their advantage to encourage unity. Then the Northerners—I mean the intransigent Unionists—would see that there is no future for them in their present state. If they are willing to do something about putting aside their intransigence, the time will come when we may talk about a new Constitution or a simplification of the Constitution. There is nothing to prevent a discussion on a Federal Parliament up there. All these things can be discussed. The easiest way Britain could do this would be [141] to say “We hope to pull out after so many years and when we do pull out the money we are investing in Northern Ireland at present will be taken away too.” I read somewhere that the cost to the British taxpayer for the Six Counties for 1977 was something in the region of £600 or £700 million. That is a staggering figure. These are very big questions.

An Cathaoirleach: Information on Séamus Dolan  Zoom on Séamus Dolan  It is now I o'clock and it is customary for the Seanad to adjourn at this time. Will somebody move the adjournment?

Mícheál Cranitch: Information on Micheal C Cranitch  Zoom on Micheal C Cranitch  I move the adjournment.

Séamus de Brún: Information on Seamus De Brun  Zoom on Seamus De Brun  Before we adjourn, I have been asked to find out if the House will agree to two things, first, to return at 2.15 p.m. and secondly, that the Minister would reply to the debate at 4.00 p.m.

An Cathaoirleach: Information on Séamus Dolan  Zoom on Séamus Dolan  Can we agree to adjourn until 2.15 p.m? The second matter is that the Minister be allowed in at 4.00 p.m.

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  There is a very good chance that the Minister can get in at 4 o'clock, or even earlier, but I am bound to say that I feel the debate should go its normal course especially in view of the sort of speeches, without any reflection on the Chair, which we have been hearing from the Government side. We should let it take its course and anybody who has a desire to express himself can have the opportunity to do so. There is a very good chance that it will finish by 4 o'clock but I am disinclined to agree to this specific argument in view of the sort of debate we have had.

An Cathaoirleach: Information on Séamus Dolan  Zoom on Séamus Dolan  The question is that we allow the Minister in at 4 o'clock.

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  No.

An Cathaoirleach: Information on Séamus Dolan  Zoom on Séamus Dolan  Senator Keating has mentioned that it might finish before that. Does the Senator wish to press the matter that the Minister should not get in at 4 o'clock?

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  Yes. I wish to speak. I will certainly not be excessively [142] lengthy but we ought to let it take its natural course. If there was a desire to finish by a particular time it might have been conveyed to some of the people who have been speaking both yesterday and today.

An Cathaoirleach: Information on Séamus Dolan  Zoom on Séamus Dolan  I thank Senator Keating. Perhaps during the luncheon break the Whips could have a chat on this.

Séamus de Brún: Information on Seamus De Brun  Zoom on Seamus De Brun  I understood that they had a chat on this matter, but I do not know.

Mr. Burke: Information on Liam Burke  Zoom on Liam Burke  I had a chat with the Government Whip and I have agreed with the Government Whip on it. I looked for Senator Harte and he was not available at that time to have a chat with him. We will be back at 2.15 p.m. and we might have agreement with the Whips during the break.

An Cathaoirleach: Information on Séamus Dolan  Zoom on Séamus Dolan  Could we leave it that they will discuss it during the break?

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  We can agree to discuss it then.

Business suspended at 1.05 p.m. and resumed at 2.15 p.m.

Mícheál Cranitch: Information on Micheal C Cranitch  Zoom on Micheal C Cranitch  Just before we broke for lunch I was coming to the end of my contribution. I have just one or two small points to make now. Both are concerned with the Fianna Fáil manifesto. I think that it should be understood by everybody that the manifesto is not just another instalment of promises. Promises have often been made before, possibly in good faith, but many of these promises were never fulfilled. As I and members of my party see it, the manifesto is a statement of intent. It shows what the Government intend to do and what with the help of God and the help of the Irish people they will do.

There are two particular points that I have been advocating for years; one is the abolition of rates on private dwellings and the other is the abolition of car tax. I think it is a basic human right—and I have said so many times and in many places—that a person may have a roof over his head without having to pay rates for it. Even the animals can provide shelter [143] for themselves and they do not have to pay any penal taxation for it. It is a timely arrangement that people may now have a house and may improve the house if they so wish but will not have this load of rates on top of them as a result.

The other point concerns car tax. There was a time when people were able to move about freely on our roads. They were able to walk or to cycle but that day has gone. If a person wishes to go from A to B nowadays, except in the cities and big towns where there are bus services and so on, he must have some mode of conveyance. One just cannot walk or cycle with safety. A car has at this time become absolutely indispensable for moving from one place to another. Therefore, I regard it as a basic human right that a person may have a car without having to pay road tax for it.

Finally, we are facing a very tough period. Possibly the biggest job that ever faced a Government coming into office now faces the present administration. They have got to undo the damage that was done for four-and-a-half years. They have to start in a completely new set of circumstances to build up the confidence and the economic structures that are necessary for our survival, agus le cúnamh Dé agus le cúnamh mhuintir na hÉireann déanfaidh siad é sin.

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  In the past two days politics has emerged again in the Seanad. We spent the back end of last year being extremely polite and working in circles around each other. It is nice to know that the honeymoon is over, that sort of false period when track records were not long enough to be judged and there was no anxiousness in the Opposition for vigorous political attack because, of course, a new Government are entitled to a honeymoon. Enough has happened in the last half-year, or just over, for it to be possible to make some assessment and to offer some opinions on performance and on promise and on the gap between the two.

I want to talk about three things mainly. I want to talk about general [144] budget management, the question of deficit and borrowing and whether they are right or wrong and so on. I want to talk about the area of industry, commerce and energy. I have some difficulty in doing that because I identify so much with it still that I find it extremely difficult to stand aside from it. Then I want to say some general things.

I want first to take up a thought of Senator Mulcahy. In fact, probably in private we would share a lot of ideas; even in public it would be no harm where we did agree to affirm it as we have done in this House. He has no particular patent rights on the concept of growth. Anybody who is serious about the Irish economy knows that growth is essential. We do not have the luxury of the very rich countries of saying that we can have ex-growth, we can consider the quality of life. Growth is absolutely essential to solve every problem. Senator Mulcahy heard me say that in private when I was a Minister. I do not know whether he heard me or not but I devoted the whole of the contribution that I made at a Labour Party Conference in 1975 to that one concept. It is not peculiar to Fianna Fáil, Fine Gael or Labour; we are agreed about the necessity for it and what we can reasonably debate is the best way to get it.

Then he identified what he presented to us as an inhibition to growth because, in truth, whatever Government were in power, whether it was Cumann na nGaedheal or for a short period Fianna Fáil with Labour, then Fianna Fáil alone and then a couple of Coalitions with Fianna Fáil, —various people have been in power— we have never managed our economy very well; that is the truth of it. All of us are blameworthy. He presented this concept of fiscal drag. That is a nice clear idea that economists have and we can talk about it. Then there was bureaucratic drag which was widening the concept a little and, finally, the vague and nebulous false genetic of Celtic drag, if I was to pursue further some of his and Senator Cranitch's thoughts. We are not a Celtic nation, of course; we are a mixture. Thank God we are a mixture; it is a nice way to be. Any serious efforts at [145] national unity inside the boundaries of the island have to recognise, linguistically and genetically and every other way, that we are a mixture. Just as there are many people who are not Celts and whose genes are not responsible for the drag that exists, so indeed —and here I will just make one observation on what Senator Cranitch said— there are many people in this island and in this Republic whose own language was never Irish and it is a divisive thing to talk about our own language as the Irish language. These people will feel excluded by this process, just as they will feel excluded by talk about Celtic drag or Celtic anything else. We are a mixture and thank God we are. That is enough of that.

What do I see, what are my feelings and my conclusion from the last nine months in Irish politics? With inevitable feelings of being bruised and buffeted and a bit angry at times, what do I see as one of the great causes of our relatively inefficient performance, our relative pessimism, our relative cynicism? I found a quotation accidently over Christmas in a little book of Dag Hammarskjöld, a book called Markings. It was published after his death. It rang bells in my head and I offer it as a characterisation of this political debate that has been happening in Ireland in the last 12 months. I propose after that briefly to document why I think this quotation applies. First, the quotation. I am quoting from page 101 of Markings by Dag Hammarskjöld:

Respect for the word—to employ it with scrupulous care and an incorruptible heart-felt love of truth— is essential if there is to be any growth in a society or in the human race.

To misuse the word is to show contempt for man. It undermines the bridges and poisons the wells. It causes Man to regress down the long path of his evolution.

I believe that the whole of the political debate that was initiated with brilliant PR skills by Fianna Fáil with the launch of their manifesto, that was carried on through the election campaign and has appeared in this chamber today is a perfect example [146] of the misuse of the word which, as Hammarskjöld says, “undermines the bridges and poisons the wells”. If there is cynicism and if there is even physically the desire to get to hell out of this place and abandon it because it does not seem to want to cure itself, it is because the level of honest debate has been so debauched in recent times; it was never high but by God we have plunged some depths in the recent past.

Let me give some examples. I said in the course of the election campaign that Fianna Fáil had taken off food subsidies twice in the past and that each time a Coalition had put them on again. I was assured in a public place by one Minister, and others were assured in a public place and in a newspaper by another Minister, that there was no way that Fianna Fáil, when they came into power, were going to remove subsidies from food. People on that side of the House ought to remember that. They know it is true. Cheese is a food and the subsidy was taken off. That was in violation of a promise given. How do people do that and retain the bridges without their being undermined and wells without their being poisoned? How do you do that?

Senator Murphy was very funny today about the manifesto and about the many analyses and the games that we can see people starting to play with figures. Senator Mulcahy says that jobs have been created. Already the cheating about the counting in the manifesto is going on. When Senator Mulcahy said the jobs had been created he was playing a game that was open, which I contemplated playing time after time during my period in office.

There are new jobs occurring. There are jobs being lost. There is a higher percentage of women looking for employment. There is natural growth. When one says he will reduce unemployment all those things have to be taken into consideration. When one says in reply to Deputy Cooney's figures, for example, that jobs have been created that is cheating. That is poisoning the well. That is lowering the tone of what ought to be a debate [147] where we edify and inform people about prices. We heard the chorus of what Fianna Fáil have done about prices. Because the coming to office of Fianna Fáil coincided with the rapid erosion in the rate of inflation all over the world, they are beating the drum and saying “We did it”. That is not true. Anybody knows it is not true. Deputy John Horgan asked my successor as the Minister for prices in the Dáil before Christmas to enumerate the things the new Government had done since early July pricewise and there was nothing to enumerate. They had not done anything. Of course a reduction in inflation has taken place. It was to be seen coming and it is to be seen in other countries. It is a worldwide phenomenon in the market economy world. But it is cheating to claim credit for it. It is dishonest.

I laughed—I have had occasion to laugh bitterly in the last few months— about the “Buy Irish” Campaign. In the four or five years up to my coming into office the spending on the whole “Buy Irish” area remained stuck at £20,000 a year and was therefore eroding in real terms. I put it up, both public and private money, because we arranged that the private sector would contribute too, between ten to 15 times, not 10 or 15 per cent but ten to 15 times. The ideas and personnel now being claimed by Fianna Fáil all over the country—at last we have a campaign of “Buy Irish” goods—are our personnel and our ideas. That is cheating. It is poisoning the well to claim that as an action of the new Government. That is hypocrisy. That louses everything up. That debauches public debate.

Mr. Mulcahy: Information on Noel William Mulcahy  Zoom on Noel William Mulcahy  Who claimed it?

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  The Senator did among others. If he reads his speech— on the record fortunately.

Mr. Mulcahy: Information on Noel William Mulcahy  Zoom on Noel William Mulcahy  I gave the facts. I credited the Coalition with stemming inflation.

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  The Senator did, and I thank him for it, but the inference behind the “Buy Irish” Campaign was [148] that it was an action of the new Government and there is no other way to interpret the Senator's contribution today. It is on the record. It can be checked. Agriculture is another great area. Senator Mulcahy said we needed a crash programme to train agricultural instructors. I worked in agriculture, one way or another, all my life. I believe in it. We have had a crash programme in agriculture in half-a-year.

Mr. Mulcahy: Information on Noel William Mulcahy  Zoom on Noel William Mulcahy  Seven hundred——

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  Let me tell you about the crash programme in agriculture in this period of office of the new Government. Phosphatic fertiliser subsidy removed. A case can be made against subsidies but what is a better subsidy than a subsidy for men to put manures on their ground? Think of a better one than that. That is removed. Cheese subsidy. I listened to Senator Mulcahy about added value and I agree with him, but the bit of Europe, or almost of the whole world, that is most like Ireland is Normandy. With Brie, Camembert and Port Salut and so on there is incredible added value in speciality cheeses. We eat very little cheese and because we do not have a sophisticated home market for cheese we have borrowed the Common Market cheeses. We have not developed speciality cheeses where we could have a huge added value. We know our cheese consumption is low by European standards. We know it is a great area for added value. We know we ought to have a cultivated home taste. What do we do? We take the subsidy off cheese. It is stupid from the consumer's point of view, and dishonest because promises were made it would not be done. It is also stupid from the farming point of view.

Then there is an incentive for big farmers to keep people in employment or to employ more people with a remission of rates, depending on the number of people a farmer has working for him. I share Senator Mulcahy's concern about employment. But there is a subsidy on employment. It is nice to have our whole structure of financial incentives and taxation, and so on, geared to getting more people to work, [149] to think of it not simply as a money gathering mechanism but as an economy managing mechanism. There is a case for once in our spectrum where it encourages people to be put to work. It is abolished in six months. So there has been a crash programme in agriculture, totally retrogressive.

I should like to go on to talk about the two areas of general budget management and what used to be my own area of ministerial responsibility. I would offer one thought more before going on and that is about what Senator Whitaker said yesterday and what Senator Mulcahy said today. It would be vastly presumptuous for me to take on the defence of Senator Whitaker because he is so much better able to defend himself than I am. I offer only one thought. Senator Mulcahy said that what Senator Whitaker said yesterday was damaging confidence. At one stage the phrase was it was damaging and at another stage it was undermining confidence. This leads me to the question of general budget management. If a man points out that a house is on fire it is unfair to blame him for starting the fire. The people who look at our economy, from inside it and from outside it—the bankers, the industrialists of the world, as well as our own population—have various levels of expertise and knowledge, but it would be wrong to consider them to be idiots. It would be wrong to believe that they could not have spotted what is being done to our economy and our borrowing without Senator Whitaker having told them. Of course he is articulating something that prudent and knowledgeable people know. He is not introducing anything new. But the source of the damage to confidence and the source of the undermining of confidence is not the word of one Senator, it is the actions and promised actions of Government.

I was in a Government that ran very severe deficits. Senator Mulcahy gave it. If one looks at the evolution of percentage of GNP, it rose and it came down again. We hated this rise but we were in the middle of the worst recession since the early thirties. It would be convenient to forget that, [150] as was obvious, if one listened to the speeches from the Fianna Fáil side today. But it was true. We brought our economy through that period in better shape than comparable economies. We ended up with extremely bad timing, from the point of view of cuteness, electorally. We ended up losing power in the middle of 1977 when inflation was declining very rapidly, when industrial exports were doing extremely well, when all of the fundamentals were very good indeed, when we had succeeded in reducing borrowing and when we were set fair, had we been returned to office, to continue on that path because we considered it was not a time to borrow. If somebody presents you with the alternative, should you borrow or should you not, it is a question without meaning. There is something in the Old Testament that says there is a time for everything: there is a time to love and a time to die, there is a time to borrow and a time not to borrow.

Mr. Mulcahy: Information on Noel William Mulcahy  Zoom on Noel William Mulcahy  You will not grow without it.

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  I am not in the abstract. It is a question of tactics. If you force me to take a fundamental position I would have to say the fundamental position must refer to decades. If you are going to ask me to refer to decades then you must not borrow because you have to take the ups and downs level. It is permissible as a tactic to relate recessions to booms but it is not permissible as a long-term fundamental. I am not an economist but I have been impressed by the economic arguments that I do not quite understand but they seem to be real and certainly the process they measure and describe is real. When you get balance in a budget you seem to get an extra stimulus that cannot be accounted for in formal ways. In general, I am totally against widespread borrowing with a long-term perspective. We did it. I defend our doing it. I would not be breaking Cabinet confidences if I said we were in a hurry to get borrowing down and we were glad with the direction of evolution. We were not pleased because [151] it was not going fast enough towards balance. It is a question of timing. It is a question of seeing the long term trend in the economy, seeing when it goes above in boom, when it goes below in recession, and trying to use borrowing and all the resources of the State to level out those things. What happens when borrowing is pushed up by any real measure in time of relative boom? The first thing is that the economy is overheated, so that it becomes inflationary again. I beg the economic journalists to do something. The best statement about journalism is that facts are sacred and comment is free. But facts are never simple. I beg them to make comparison not from quarter to quarter, or from year to year, but to make comparisons down the years, five years at a time or ten years at a time, with comparable countries, to see when we were doing worse and when we were doing better, and what were the trends, taking one and two years and reasonable periods of time together.

If one isolates small numbers of facts, nobody would question that they were correctly arrived at by honourable statisticians but one can skew the truth. One must have a longer period in time to make comparisons. I would beg economic journalists, not politicians because politicians will always skew it and will always pick the facts that are favourable to them, to make the most cold blooded, long term, serious analytical comparison not alone between the performance of different Governments within Ireland but to make a comparison between the performance of Ireland and other EEC and non-EEC countries, because we have to measure ourselves. We have to have serious economic debate and not the sort of poisoning of the wells that passes for economic debate here.

We have had a marvellous respite from inflation and we hope it will continue. The likely coming together of a number of forces, however,— nobody can say whether they will coincide in time—would be extremely dangerous in 1979. The other reason that the heavy borrowing, the high risk, the gamblers' strategy, is so dangerous, [152] is that economic life is made up not of a single phenomenon but of an infinity of phenomena and in the end the gambling concept applies to a single horse race or a single throw of the dice. It is no use gambling over thousands of phenomena because the law of averages applies and sometimes one wins sometimes one loses. In the end it comes out pretty much on the average.

If one takes high risk what does one do? If one finds world trade sharply contracting, if one finds a major political disruption, if one finds that our inflation rate, because we have stoked up the economy at home, goes two or three percentage points above the UK rate, what does one do then except suddenly to stop the economy? The stop and go, the jerkiness, the lack of the possibility of calm, or the lack of the possibility of conquering an economic height in a way that it can never be taken back, erodes confidence. The concept of calm is the greatest builder of confidence. The confidence of world investors, of world bankers, of domestic investors, and of Irish house builders, are all profoundly important, but it is not built purely by a high risk approach. It is built by the opposite approach. We agree totally about the goal of growth, about the goal of jobs, but we take the view that one reaches that goal by mechanisms that are orderly, deliberate, calm and irrevocable—confidence generating rather than confidence undermining.

Mr. Mulcahy: Information on Noel William Mulcahy  Zoom on Noel William Mulcahy  We told you how we are going to do it. They are the facts.

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  We are pleased to be told how you are going to do it and we will compare performance with promise. There is a good saying in Ireland and in other places that says “fool me once, shame on you, fool me twice, shame on me”. If the Government does not deliver the people may very well say that. They were extremely impressed by the manifesto. When a reasonable time like four years has elapsed we can have a fair comparison of promise and performance.

I awaited the White Paper on [153] National Development with enormous interest. I heard Deputy Martin O'Donoghue the Minister for Economic Planning and Development, talk in public and in private about this and I thought that this was going to be something. I am able to recognise from the internal evidence, apart from having seen a few of them before, when a document or a White Paper has been prepared hastily and inadequately. This one has been prepared in a hasty and inadequate way; but I do not mind that. I am concerned with the essence of it, and what is serious in it. My sense of unease with it is because there is so little. Of course, we are promised later documents that will flesh it out. We will await them.

Whatever fleshing out is subsequently promised and however well that may be done, we will still have a very basic defect in it. This relates to the strategy of how we develop our economy. We have had debates and we will have them again in relation to how much public sector, how much private sector, how much foreign investments and how much Irish investment. I have offered a thought before, that we need foreign private investment, and whatever people would say about me they would accept that I worked hard to get that when I was Minister. I am taxed with inconsistency for doing so. I do not see any inconsistency. We need foreign private investment and we need indigenous private investment, but we also need a public sector, and most exciting of all, we need to pioneer the ways that the public sector and the private sector are mutually aiding and strengthening each other. It should be approached in practical not ideological terms of saying how do you get growth, how do you get money into the sectors that have been neglected and how do you make things happen? Let us leave the ideologies aside and say instead that we want things to happen. People go to work when things happen. The symbiosis between the public and private sectors is very exciting. A strong public sector is necessary without making ideological choice and without bashing the private sector. One does not bash the private sector or the foreign sector.

[154] One just does the things one has not done before on the whole of the job creation perimeter.

We have not helped small Irish indigenous people enough, and many of the entrepreneurial ideas the drum has been beaten about now came out of the IDA in my time. They are not new and there is no argument about them. I am glad they surfaced. We must help the small Irish and the big Irish. We have to help the foreign. We have to help the private and the public. We must put the bits together symbiotically and not counterpose them against each other. That seems to be what planning is about. Then there is a structure for planning which is not just fact-gathering and projection-making. It must be a structure which brings into reality the projection that you make.

I do not wish to go on too long; in fact, I promised I would not. The point I am making is that in this there is no serious commitment to a public sector; there is no thinking that there will be planning of the kind that I and social democrats all over the world mean. There is no thinking about the relation between the private sectors and the public sectors. I do not say this pejoratively or abusively but rather descriptively: we just have to make a good environment and trust the private sector to create the jobs. I hope that is a fair reading and I am trying to convey it fairly. That has worked very well for Hong Kong. With very low taxes, almost no social services, nearly no housing, no IDA, no grants, they just let the private sector rip and you will get some jobs. You will get some social frightfulness, but in certain contexts you will certainly get jobs. We are saying that the private sector will create the jobs, but how can we reconcile that with the sort of borrowing programme and social programme that we have? We cannot take the taxes down and we cannot dismantle the social democratic type of social systems for humanising our society that have been built. You cannot take your borrowing down. So you cannot go for the private economy solution in a pure sense. There seems to be a contradiction between the expenditure side on the one part and [155] the revenue-raising side on the other.

They suggest borrowing. It is not a question of whether you are credit-worthy or not, and sometimes the less credit-worthy you are the more people rush to thrust money on you. Of course, some bank somewhere in the world would lend us money. The real problem is that at a certain stage when you borrow money you pre-empt all your growth to pay the interest before you start paying it back. In other words, you may get the growth but you do not get it for yourself, you get it for somebody else. If there is not sufficient generation of capital for borrowing indigenously and not sufficient saving, you borrow overseas, and then the somebody else is not even an Irish banker or an Irish capital owner and you are moving the interest repayments out. You could have magnificent GNP growth performance figures and no improvement in the lives of the people whom we represent and with whose wellbeing we are concerned. We get trapped in that. I am being paid the compliment that Senator Mulcahy is rising. He will have the chance to come back on this because I hope that it is a real issue. This seems to be a basically wrong strategy.

I would like now to refer to the areas of industry, commerce and energy. That, inevitably, is going to bring me to our relations with the European Community. I am worried about the way those relationships with the Community are going. I very much wish success to my successor—that is bad English but people will understand it—in the sense that I identify so much still with the tasks that he is doing. I very much wish to see them done well and brought to a successful conclusion.

Let us talk about an Irish steel industry because there is a real debate here and a real difficulty. Irish Steel became a State company not from an active decision to create a public sector but from the talking over of a private sector firm that was bankrupt. It was not dynamically or well run for a long time—let us be fair about that—but it was there and there were many people working in it. Steel is a marvellous thing. As with a stonemason [156] perhaps, or even a certain sort of woodworker, people working with steel fall in love with the material. Steelmen love steel. They feel very strongly about it. It calls for courage and physical hardihood as well as skill. It is a very basic technology. We have both a right and a need to master that sort of technology in this island. If I accept Senator Mulcahy's characterisation of drag, one of the ways you defeat the drag is not by exhortation but by becoming good at things. Metal is a very fundamental thing in human evolution and human society, and to be good at metal is psychologically very important.

Of course there is a surplus of steel in the world. Of course, there is dumping. Of course, it is high cost, capital intensive. Of course, there are risks. I do not deny any of those things; I do not deny any of the difficulties. But it seems to me that now there is such a divorce between ownership and management that you cannot choose qualities of management saying there is bad management of the public sector and good management of the private sector. You can get good management whichever sector you are in. If you are calm, analytical and rational you can make reasonably good management decisions most of the time. In that context steel is viable for us, more than for many of the old areas, because one must remember that the crisis in steel has come up from the change in technology. Originally if you found some iron ore and some coal together that was fine and you moved it out by rail. But the whole tendency, leaving Ireland aside, is for the new mills to be in places like Bari in Italy, Fos outside Marseilles at the mouth of the Rhone, and Dunkirk. In other words you need to have deep water. Places that are inland and depending on old resources early developed are very difficult to keep efficient and productive. All over the world it is the same. There are remarkable steps in productivity and technology in Japan located beside deep water. You can bring the stuff fairly long distances in bulk carriers provided your facility for handling it extremely efficiently is close to the good, deep-water harbours when you get it there. So, in fact, Cork is a [157] good location. I have spoken elsewhere of the concept of the balanced development of heavy industry. We are getting a chemical industry there. We have shipbuilding. We get some heavy engineering associated with shipping. Steel seems to be a natural part of that. I cannot accept for our industrial evolution that we can give up any skill that we possess. It is high risk, it is difficult, and we must get the best management; but we can improve it. That is the first thing.

The second thing is that it is not in the right nor is it in the power of the Community to say yes or no. The Community can brandish a finger. The Community can talk to us about the possibility of European Investment Bank moneys. They can even huff and puff at the member states who might be supplying the basic equipment for the export credit guarantee schemes of those member states and say to them “Do not help these Irish to create surpluses”. But there are other people in the world with very good steel technology. The Japanese are a case in point. They are superb. The Austrians have a small country but they have superb steel technology. There are other places from which we can get money if we want it. But let us be clear about this. The Community may huff and puff, but they do not have the power to forbid it. Let us not hide behind the Community. There is no Community veto on this. The Community could make it a little more difficult or a little less difficult, but it is our decision. We can do it if we want to, but what seems to me to be very dangerous is that we get off a hook by saying the Community will not let us. It is particularly dangerous when it is not true, because we must not have a circumstance where we let the people in Brussels push out the boundaries of their power into nation states in a way that goes beyond their own legal possibilities. We must not say the Community would not let us so we cannot do it, because it is not true. But it would set a precedent for them telling us how to run our affairs in all different sorts of ways. So let us not have that precedent.

That leads me straight into another [158] area which is now, I am glad to say because it is logical, the responsibility of my successor. Energy has been put along with industry and commerce. My own conviction is—and I had the good fortune to attend a Council of Europe seminar and to be rapporteur on the energy question in November; it was immensely exciting and helpful for me—that energy problems are grossly underestimated in the developed world and there will be huge crunches in the energy area in the next 15 years. We are cavalier and foolish about fossil fuels. When I say that, the real dilemma is about nuclear development. I am various sorts of a biologist. I do not know what hat I wear at this stage, but when I was young I did a degree in physiology and biochemistry, and I did research with isotopes. I published isotope research in the Fifties. It does not make me an expert. I have forgotten it in the intervening 20 years, but it makes me know as much about it as most of the people who comment on it.

If I were asked now should we go ahead and build an atomic power station in Ireland, I would not know the answer. I do not know. I see the fossil fuel crunch coming up on the one hand, and I see how cavalier and light-hearted engineers have been about real dangers on the other hand. The materials of engineers are metals, but the materials of politicians or of biologists are humans and are vastly more delicate. Down the decades—and this worries everybody—we have had many accidents in the nuclear area, and we have had them always pooh-poohed by the engineers. We have had the minimising of dangers quite wrongly. Great risks have been taken and those risks become more serious as the industry gets bigger. I cannot say we can contemplate a non-nuclear future. Neither can I say we must embark on it automatically. There are technical, energy and financial reasons why it is difficult. To my knowledge—and I was away quite a bit for various reasons and I did not attend every Government meeting but I have looked back on my papers—no decision about an Irish nuclear reactor was taken by the Coalition Government. I do not believe [159] such a decision has been taken by any Government.

I do not want to be jollied along by the technologists and the bureaucrats past the point of no return. I want a decision made with our eyes open as a result of a mature and serious and informed debate. I am a bit disappointed that that debate is not taking place right now. I simply make this plea. I will not pursue the nuclear question now. It is very difficult and I proclaim my own uncertainty. I would hope to reach a conclusion at the end of a debate rather than at the beginning. We set out with certainties and hopefully sometimes we arrive at uncertainties. I would like to arrive at a certainty at the end of a debate. It is very difficult, but please let us have a debate on it, and please let it not be done behind closed doors in secret. Please let it not be done by technologists who underestimate the dangers.

I mention that in the context of the EEC because I see we are being urged by the Commission to go ahead and build a reactor. Bless them; they are nice people, very high-quality bureaucrats from all over Europe, very well educated, but as prone to be biased as any other group of bureaucrats. That is not something bureaucratic. It is simply saying that a good mechanism evolved over a long time is that you have the great uninformed, partisan, prejudiced, ignorant, territorially-oriented public representative answerable to the people who put him there, and you have the bureaucrat. Let them kick it around between them and trade it off and, hopefully, the truth and the balance will emerge. I do not want to hear the Commission telling us what we should do in a nuclear sense. Their input is all right but, between them and our own technologists, I know the answer we will get. I am not satisfied that it will be the right answer and I want a public debate on it. It is not their business to do more than express an opinion. Let their opinion not be used as an excuse for doing it here, when we do not currently have a decision and when we ought to have a serious debate before we have a decision.

[160] This raises the question of our general relations with Brussels. I was going to mention something about Ferenka in this context, too, but probably on balance I will leave that, not that it is not an interesting question to be debated. Oddly it has not been debated. It had a bit of a go in the Dáil but the real stuff did not come out. There is still hope of a rescue. I want to leave Ferenka for the moment, except to give these two thoughts which are related. I am talking about the question of my successor's relations with Brussels, with companies, with the workforce, and so on. All I would say about Ferenka is this. I understand that, in private, my successor was fairly abusive to the promoting company. It is certainly widely believed that he was, and I believe it is true. I know that in public he was fairly abusive to the workforce. I can understand the embarrassment of Ferenka but, if we are in the area of confidence, then I do not think in the effort to deflect responsibility, or deflect public attention, one ought to start laying about one light-heartedly. In truth, when a lot of facts are ultimately known, it will be seen that there were faults and errors and responsibilities on all sides. At a time when the auction for worldwide investment is such as it is, I do not think the finding of scapegoats either among a workforce or among an investing company is the line to go for, particularly when I do not think it represents the balance of the truth.

Mr. Mulcahy: Information on Noel William Mulcahy  Zoom on Noel William Mulcahy  The Senator is not blaming the Minister for that surely?

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  I will make no reply to that interjection and no doubt the Senator's interjection and my failure to reply will be on the record.

Let us talk about our industrial incentives in the context of the EEC and in the context of the Minister. Our industrial incentives are an extremely valuable weapon. During all my time as Minister, there were rumblings in the Community saying: “Oh, we cannot go on like this”. It never surfaced, never. When the Community have a serious regional policy that transfers well across national boundaries, then [161] they can tell us what we should do, or should not do in regard to promoting our own industries. If we are willing to forego taxation revenues that we could use for consumption to fuel industrial investment when they have no regional policy, then let them not dare to try to stop us. That is an argument they understood. That is an argument which stopped them in their tracks over and over again. They have not got a regional policy.

If by a rather remarkable act of the national will, we devote so much of our scarce revenue to industrial grants, it is our right to do that until we get some alternative. It is an act of will that has the consensus of all parties. It is quite wrong, because it is a lot of money and we need that money for other things. The question of our industrial incentives and whether we could continue them should never have surfaced in Brussels or in the papers and, in my view, need not have done. This is what worries me about so much of our relations with Brussels. I know the corridors quite well in a number of ways. One way is that I am the Irish representative on the Bureau of the Social Democratic Parties of the Nine and, of course, there are Social Democratic Commissioners and right through the Berlaymont there are party structures from the national parties. I have been a member of the Council of Ministers and a member of the European Parliament. Our relations with the Community in all aspects will be very important over the next four or five years and I am anxious that people should get them right.

The Community was so over-sold in Ireland at the time of the referendum that the attitude of the Brussels people is: “Those idiots in Ireland believe we are marvellous, so we do not have to do anything for them. They think we are lily white”. I claim to have very good relationships—and I never concealed the fact of my past criticisms within the Community—through the Berlaymont and in the other places.

You have to be simultaneously friendly and tough, and it seems to me that at present—I took this up in Brussels and in other places—our relations [162] permeating that machine are not good enough or subtle enough. Things are happening that need not happen. The document about Irish Steel could have been switched off by a telephone call if somebody had phoned and said: “Do not let it happen”. That examination in public of our industrial incentives need never have happened. The document said we should go ahead and build a reactor—and that is our business.

When I was a Coalition Minister I had the experience of working with a Commissioner from Fianna Fáil. He behaved impeccably. It was no barrier to the good interchange of information. I have never heard it suggested, and I have no reason to think, that there is not an impeccable exchange of information between the Irish in Brussels and the Fianna Fáil Government. My former colleague, Dick Burke, is a member of the Fine Gael Party and this is a Fianna Fáil Government. I have never heard it suggested that he is not behaving correctly and that there is not a free exchange of information. When you are that many miles from home party difference does not make a barrier. I would pay tribute to the man who is now our President for the way he performed when in that office.

Mr. McGlinchey: Information on Bernard McGlinchey  Zoom on Bernard McGlinchey  Dick Burke has never been knocked by the Irish Government as the Irish Commissioner was by Ritchie Ryan.

Mr. Keating: Information on Justin Keating  Zoom on Justin Keating  That is a long way from what I was saying. However, the record will show the Senator's intervention. The point is this: it is very important that we do not let the Community take decisions that are properly ours. It is very important that we are both tough and friendly with them. It is very important that we permeate all those buildings and structures. It is very important that we have an early warning system. Most of all, it is important that many things never surface because our relationships are good enough to switch them off in advance. What worries me is that it appears presently that those relationships are not good enough. If one seems inclined to pass the buck, to be petulant, to be unreasonable, to try to find scapegoats, [163] to blow up and lose one's temper in difficulty, then this delicate mechanism will wither or will never come into existence. I hope our contact is very intimate, but I worry about it and about the quality of the inter-relationship at this time. I have given some evidence of areas where I believe unnecessary things happened and where we tried to hide behind the Commission when it was not necessary to do so, indeed when it was dangerous to do so, and where it set a bad precedent.

This is the first occasion in the Seanad where we have had a debate on the management of the economy. I have said sharp things and so have my colleagues. It is a debate that is beginning and not ending. This is really the first party political debate on the economy in the Seanad since the new Government took office. It is the marking of the end of the honeymoon. I must emphasise that the concept of growth, the total commitment to growth, and the recognition of the demographic difficulties and the need for job creation do not belong to any party, they belong to all the parties. They belong to people of no party. They belong to anybody with a stem of mother wit, whatever his politics. We have no option but to go for growth and job creation and this debate is about the best methods. For the Government's part they may be very ready, as they have been in this debate, to say we are undermining confidence, damaging confidence, and by our criticism and by our action making the end we shall desire more difficult to attain. That is a natural cry for a Government, particularly when they think they may have promised more than they can deliver. I should say in fairness that I can remember thoughts of that kind in my mind and if one searched the record no doubt one could find utterances of that kind in the things I said—when I was a Minister. The cry of “do not rock the boat” is natural and easy to make. It is made on all sides and emerged here today.

What I want to emphasise is that we all desire the object. The whole thrust of our criticism is not that we believe there should not be difficult and [164] arduous targets, of course there should be. They are good for people; they are moral. It is right to stretch and to try to attain the maximum thinkable. It is right to be daring. I agree with all that. The whole thrust of the debate is and will be first, about the honesty of the objectives and secondly, about the appropriateness and the correctness of the methods. This is a debate that is now opening and will certainly endure for the life of the Government

Mr. Donnelly: Information on Michael Patrick Donnelly  Zoom on Michael Patrick Donnelly  This debate is necessarily very wide-ranging and very expansive. I would like to concentrate on one particular aspect of the Appropriation Act, that is the appropriation to the prisons which forms part of the Department of Justice expenditure. We are dealing here with a problem which is very complex and was raised in part in the debate last night. Senator Robinson referred to the problems of vandalism and violence and related problems particularly in the young. It is a problem which is exceptionally complex. That is only part of it and there are many ingredients in analysing the problem. There are no simple solutions and there is no single solution.

First, there is the problem of the injury and the injustice inflicted on innocent victims of crime and related problems on their families and their dependants. There is also the self-inflicted injustice and violence which those who perpetrate crime and its related matters and its effect which all this has on society generally and on the standard of values.

A phrase was used last night to which I would like to refer fairly briefly and not in any partisan sense. Senator Robinson felt she detected what she described as a type of right-wing backlash among the public to this type of problem. I believe that is not a correct assessment of the situation, or an accurate assessment of the public concern about this problem. However we may approach the problem, or whatever solutions we see, either for Government or for voluntary action— I believe there is a role for both, though more substantially for the Government—one ingredient is going to be [165] absolutely essential, that is that we have public understanding and public support for tackling this problem. To get that we must understand the public's concern and realise what is happening and why this anxiety exists. Seeing it as a type of right-wing backlash is not at all accurate and could be counter-productive in seeking the type of support we require and the type of informed comment and debate we will need in the public.

We must understand the problems of people who are the victims of violence. Innocent people, particularly the old and infirm, as well as their families and dependants, can be left with physical or mental scars for the rest of their lives and, worse than that, a continuing anxiety. The public have a right to protection from this threat and from the fact of violence and related matters. They have the right, where they suffer from this, to full understanding of their problems. Just in passing, I would think that in terms of protection a very welcome development has been the more obvious presence of members of the Garda Síochána on the beat, physically obvious and present in the community generally.

The solution has many parts and I refer at this stage to understanding public anxiety in the matter because of the necessity of having an informed public opinion and having the required public support for some of the solutions which will be required because some of these solutions will require public participation and approval of the expenditure of a great deal of money.

The solution has many parts to it. Employment is an essential element in prevention and also an essential element at a later stage in the field of rehabilitation. Employment as a subject for debate has formed a large part of the discussion so far yesterday and today, discussed as an objective in itself from a social and economic point of view. Its role in the prevention of violence is self-evident and to that extent in relation to this problem the Government's policies for the controlled expansion of the economy and [166] the improvement of job opportunities naturally have a very important part to play in this area of prevention which obviously is the first area to attack in the whole problem. It is not exaggerating to say that if we were to try to find something that is common to people who get into trouble or find themselves detained in institutions, more than anything we could say they were deprived people or, very often in an obvious respect, poor people. That is not to say that people who are deprived have a natural tendency in this way. The point I am making is that there is definitely a very strong element of economic deprivation running through the case histories of most people involved in crime, violence and these matters. Obviously emphasis on employment and an expanding economy which will raise all levels and create opportunities right across the board are an important element there. That has been debated over the past two days.

I would like to turn to the secondary side of the problem, that is, the question of rehabilitation. In particular I would like to quote the figures of the appropriation under the prison section which comes to £7.7 million. The most essential part of that expenditure in the work of rehabilitation comes under the welfare services which in 1977 amounted to £107,000. I suggest that that in itself illustrates what may be wrong and has been wrong in the priorities. Of a total expenditure of £7.7 million in the prison services, an expenditure of £107,000 on the welfare services is somewhat disproportionate and to that extent neglectful of the vital role the welfare services play in this whole problem. They play a role in the prevention of crime.

I would like to have a look at what is referred to as the problem of recidivism, that is, the rate at which people who are in custody return to custody because of falling foul of the law or because of some crime as a result of being released. I believe I am correct in saying this rate has been as high as 60 per cent in the immediate past.

Not all these crimes of violence and vandalism can be laid at the door of [167] people who are released from custody. Not by any means. But when we consider that we have probably around 1,000 people in custody at any one time and we have a return to custody of those released at a rate of 60 per cent, obviously if we can make progress in that area we can make progress in the overall problem as well. That follows fairly automatically. This is where the welfare services of the prison department come in. Again I suggest an expenditure of £107,000 in a total expenditure of £7.7 million is disproportionately small, and leave it at that.

I would like to develop the point by analysing some of the figures which appear under that heading. To be fair, in 1977 under the heading of assistance for voluntary bodies there was an increase in this area of £18,000. That is a very welcome development. There is a very distinct and rewarding opportunity for co-operation between the Department, the welfare services and voluntary bodies.

I would like to discuss another aspect of this expenditure. A very small item, and that is my point about it because it is so small, is the assistance towards the travelling and subsistence of people particularly children. It was £4,000 for 1977, showed no increase at all over 1976 and incredibly showed a reduction on what had been provided in 1975. It is very small money but it is dealing with a very big problem.

One of the essential elements about rehabilitation, and in this context the effect which that has in reducing the level of crime and violence, is the preservation as far as possible of the family unit, family contacts and the role and influence of the family on the unfortunate person who is in trouble. In many cases there are very serious economic problems for relatives, particularly children, to keep in contact with members of the family who are detained for some reason or other.

I would regard it as an essential part of the welfare work and an essential initial step in the work of rehabilitation that everything possible should be done to facilitate as many contacts [168] as possible and as natural as possible. This type of expenditure is not dealing with the problem at all. I assume it is correct there is a reduction on the amount of money spent between 1975, 1976 and 1977, that we have been cutting back on the service. It is a very tragic state of affairs if this essential type of family contact which is probably the greatest single influence in helping in this problem should be reduced in that way. When one allows for inflation one can measure just how badly that has been reduced. I am happy to note, in the Estimates for 1978, just circulated, the total expenditure under the welfare service appears to indicate an increase on 1977 of about 40 per cent. That is very much to be welcomed and is obviously a step in the right direction.

I should just like again to refer to the expenditure on assistance to voluntary bodies. This has a successful record to date and has great potential for success in the future. There are many areas for mutual co-operation. First of all, as a general point, it would be true to say that voluntary bodies can provide a flexibility, a type of on-the-spot relief which State organisations and Government Departments may not always be able to provide through no fault of their own. In itself that is an important reason for preserving and developing this type of co-operation.

An essential area is that of accommodation, that is, the provision of hostels, or half-way houses as they are sometimes known, something to provide a base, an initial start for recently discharged former offenders with no family, no home or accommodation. People in this position obviously are totally vulnerable. In most cases they can look forward to nothing more than almost immediate resort to some form of crime and a quick return to prison. In other words, in that case we see the problem in practice: that is exactly what happens. No matter how we feel this policy should be conceived, whether from the point of view of the injured and innocent members of the public—who I believe should be the first consideration—often the point of view of the perpetrators of these crimes and [169] violence—no matter how one sees that —it makes sense to do something about this problem, to re-examine what has been the approach in the past and examine how this can be improved because there are no winners in a situation in which violence and crime continue. If as I believe the figure of 60 per cent returning to prison is right that surely indicates that, to some extent, the system is failing. There must have been a substantial element in our thinking over many years geared towards rehabilitation apart from the punishment of offenders. Nobody benefits in this type of situation. There is an almost unending cycle of distress and destruction to the public and to the individual. Accommodation, to which I have referred, is an essential first step but is not by any means the end of the story.

I have referred also to the problems in the area of prevention of successful expansion of employment. In the case of rehabilitation, after the event, we have to adopt special measures. Perhaps, in the future we could examine the role of Government as an employer and see in what way they can, through various Departments or agencies, make an effort to provide outlets and employment opportunities for people who simply cannot look after themselves, and probably cannot compete in the market place for employment.

We should also develop a policy of encouraging private employers to consider this problem more fully, to see how they can assist without any cost at all, in many cases, to themselves, in supplementing what may be done by State agencies in this regard, playing their part in the overall work of society generally in helping to combat the problem. The level of consciousness about this problem must be raised if we are to get this type of reaction in the private area. Of course, that raises the question of public support. For that reason it would be wrong to overreact, misrepresent or in any way mistake the genuine, understandable and natural concern of the public at an escalation in crime and violence.

There is much evidence to show that, when introduced to the problem, when it is explained, debated and presented [170] to them, the public, far from being engaged in a right-wing backlash, are quite sympathetic and progressive in their attitude, willing to help and, very often, seeking ways to help. Development of public debate on this type of problem, on an informed basis, can only help us because I believe the public will respond and there is sufficient evidence in past years to show that that is what they have done. There is quite an amount of debate on this subject at present. There are differing points of view concerned with different aspects of the problem. Anybody, or any organisation engaging in this should ask themselves two questions: is this doing any good to offenders or former offenders? Is this in any way helping their case and is it doing any good to protect society? If it is not really achieving anything on those two fronts it is not getting us very far.

Some public comment and agitation on this point has been counter-productive to say the least. Any impartial examiner or observer of the performance of those entrusted with the care of people who are in institutions, prison staff and welfare officers, will conclude that the trust placed in the officers is well placed and that they carry out their job with a great deal of responsibility and humanity. It is important to say that because comment which is mistaken and which misrepresents them is not only an injustice to them but is also counter-productive in focussing public attention on the real issues and an analysis of the problems with a view to formulating policies capable of being pursued and effected.

The time has come for us to examine, first of all, whether we should have some new kinds of places of detention. I made the point that the rate at which people are returning to institutions at present following release indicates there is need for a re-examination, that it has not worked as intended. In this regard we should face up to examining the type of people who are sentenced, the nature of their problems without in any way closing our eyes to the fact that they have transgressed because, no matter what course of action is pursued, no matter [171] where they are sent they will go through a rough time, they will pay a high price in terms of restriction of their freedom and many other problems.

An analysis or some form of examination of the type of people who fall into that category is called for to see if the problem of rehabilitation could be advanced better by greater variety in the types of institutions available. There are some offenders who would benefit, who would probably extricate themselves from the problems of the past, to their benefit and that of society generally if there existed a type of institution where there was supervision, control and a degree of flexibility so that, in their work and training, they could preserve normal living attitudes to some extent with a greater degree of contact with their families, with those who influence them naturally, probably to their good mutually. In raising this point I realise that one is talking of a great deal of money. However, the anxiety felt by the public in this regard warrants this type of new assessment and appraisal.

I must acknowledge that a great deal of progress has been made on training units over the past ten years; it would be foolish not to acknowledge that. We are aware, however, that the problem has also escalated. It is part of a worldwide trend from which we also are suffering. Existing training units and any future ones must incorporate more of the natural attitudes to living generally, more contact with families, extension of hours in the evening to permit more cultural activities, helping to preserve a contact between the type of life to which we want these people to return and that which they are forced to live through in an institution. We ought to bridge that gap. We should try to ensure that the programme of rehabilitation begins the first day they are sentenced, not on the first day after their release.

I accept that there are many people for whom the existing form of detention is necessary. I do not wish in any way to imply that we should soften up in dealing with our problems and our fight against crime. What I am saying [172] is that we probably have sufficient experience now to stop and analyse the problem a bit further; to see if we could break some new ground, try some new ideas, because on the basis of figures, I think it is clear that everything that has been tried up to now has not been entirely successful. I do not think that is an overstatement by any means. This, of course, is to everybody's advantage. There are no winners, as I said, in this problem. As regards society, particularly the members of society who fall victim to this type of activity, violence and its related matters and the individuals themselves, we are talking about the problem of unhappiness and usually human misery.

If some of the points I refer to are examined, I acknowledge that they will require a great deal of money. Even where they do not involve capital expenditure it will still require a tremendous increase in the type of expenditure we have seen in the past year—although it would appear that we shall have a 40 per cent increase over the coming year. Nevertheless, if the level of public debate and consciousness on this matter is raised, I believe there will be support for this type of expenditure which would be in everybody's interest. Common sense, common interest, can indicate the way to the solution if we approach it properly, and I would suggest that compassion should inspire the solution.

Mr. Markey: Information on Bernard Markey  Zoom on Bernard Markey  Any review of the Supply Services and purposes for which public moneys have been allocated in 1977 must take cognisance of the fact that there have been two Governments in office in the past 12 months. In that context it was inevitable that the administration of one should have a bearing on the administration of the Government following. Knowing the political context thereby involved in such a period of 12 months, I am rather surprised about what appears to me to be the lack of tribute from the Government side of the House to the moneys which have been expended in the past seven months on fulfilling a number of promises which were held out in their manifesto. I wonder whether there is in [173] this reluctance some realisation that the colourful Utopia which was envisaged in that manifesto is not at hand, as it then appeared to be. There is general agreement among all economic observers that the economic climate throughout 1977 was favourable. In that year there was a dramatic cut in the rate of inflation and a very significant increase in productivity and in growth of our exports. That it continued through 1977 means it must have had to start somewhere and it must have been influenced by decisions of some Government somewhere along the line.

There is, I think, general acceptance —certainly the Central Bank Report and the Irish Banking Review have no hesitation in saying it—that that improvement was forthcoming towards the end of 1976 and continued right through 1977. It is also generally accepted that the budget which was introduced by the previous Minister for Finance just 12 months ago had a considerable bearing on that improvement throughout 1977, the tax concessions which were given to private individuals and to industry. Also, improvement can be attributed to the national pay agreement which was formulated for the past 12 months. Seeing that the climate has been favourable during the past year and is still so, it is rather surprising that there have not been repercussions in a significant reduction in the amount of unemployment in the country. This poses some questions, first, as to why this should be so, and secondly—and this is a more critical question—how long can we depend on that favourable economic climate continuing. Just as any economic recession has an end, so a buoyant period in the economy of any country cannot be indefinite in its duration.

Any review of the past year must dwell on the state of the economy at the transition of Government. There is no doubt in this respect that not even Fianna Fáil have attempted to state that there was anything but a good economic environment at that changeover last June. It is interesting to see what has happened to Fianna Fáil in [174] the past seven months. A comparison between what they set out in their manifesto and what they have said and the terminology in which they say what they have to say in the White Paper presented to us last month, is, I think, the best way to highlight this change. It is the change in mentality and a change in attitude towards the situation which we must dwell on. It is no harm to give a few examples of this change. Page 6 of the manifesto promises a crash programme on the job front. On page 10 we are told that there are tens of thousands of secure jobs only waiting to be created. On page 24 of the same manifesto we are told that Fianna Fáil will initiate immediately suitable employment schemes for school leavers and other young people. Senator Keating earlier referred to the meaning behind words. To me there can be only one meaning to the phrase “the crash programme”, to the sentence “tens of thousands of secure jobs only waiting to be created” and only one meaning to the words that “immediately suitable employment schemes will be created”. In the White Paper which the Government have presented we see a significant change. No longer do they talk of themselves solving the problems confronting the country; instead we see that all sectors of the community must make their contribution. Page 11, for instance of the White Paper states that all sectors of the community must make their contribution, but, because such support may not always be forthcoming, and so on, the proposed forms of Government action have to be conditional.

On page 65 of the White Paper we are reminded for the umpteenth time in the same paper that the Government approach is conditional. So, we find that whereas in the manifesto, Fianna Fáil were to depend on nobody but themselves to solve problems, in the White Paper we find that so much also depends on the social partners— the same social partners to which there was so little reference in the manifesto, yet the requirement that those social partners should co-operate in this plan is repeated ad nauseam in the White Paper.

[175] The effect of such a paper on, initially, the private sector, on which Fianna Fáil seem to be depending so much to solve the unemployment problem, and on the trade unions, is important. If I remember correctly, the initial reaction of the Confederation of Irish Industry to the White Paper was, briefly, that it was an ambitious plan. No more was said by the confederation. Does that reaction breed confidence that private industry will be able to deliver on the jobs that are required? Can we depend on private industry to make either satisfactory or adequate investment to ensure that productivity increases sufficiently to cater for the massive unemployment problem?

On the trade union front, I wonder what the members of those unions will make of the hints at cutbacks in social spending which are mentioned in a number of instances in the White Paper. It is always important to distinguish between the pre-June situation as regards Fianna Fáil and their changed attitude. I quote from page 17 of the White Paper to show how trade unions may expect a cutback in social expenditure:

... public resources will nevertheless be under tight constraint. Increasing attention will therefore have to be given to cost effectiveness in public social expenditure....

Page 68 states that containment of the growth of public expenditure is important to identify spending areas where the economic and social advantages gained are no longer commensurate with the cost. These hint that the trade unions can expect cutbacks where they will least expect them. How, therefore, can there be confidence between the social partners?

One can go on in that vein. There are numerous instances where this change in attitude is highlighted in the manifesto and in the White Paper. There is one thing which is quite plain: if there were 160,000 people out of work in June, as stated by Fianna Fáil, very little has happened to make any reduction in that figure. If one takes account of the school leavers at the end of the summer, one can say [176] that that figure of 160,000 could well be a minimum figure at the present time.

The moneys which the Government have spent since they went into office have been spent to an alarming extent on non-productive measures. That expenditure has done little, when all is said and done, to ease the lot of the thousands of young people who were out of work last June. This was money which the Government had not earned. It was there waiting for them when the Coalition Government went out of office. It is very easy to spend unearned money but it must be chastening and, indeed, humbling for the Government to see that that money could well have been spent on more productive uses than it was.

I wonder if there is something in this which makes them so reluctant to pay tribute to the colossal expediture since June. I will suffice in this context to quote what the Irish Banking Review has to say about such expenditure:

Increasing State expenditure in non-productive projects... can provide only a temporary and limited rise in employment. Public expenditure is no permanent solution to our current employment problems and will—if continued for very long—deter growth by incurring severe budgetary financing problems.

Such measures of expenditure are always acceptable to people. I would be the first to admit that not having to pay rates on my house and not having to pay car tax is just as acceptable to me as it is to anyone else. But anyone who is in a position of Government must ask is that really what Government is all about—to take the easy option, to play the easy card, to gain popular support.

A truism in relation to Government expenditure is that all money spent has eventually to be met by the people. I would say to Fianna Fáil that if they continue spending money to the extent that they have been—and unearned money so far as they are concerned— they should at least try to put it to productive use where it will create jobs [177] for the young people who in the years to come will be the adults on whom the burden will fall to repay this non-productive expenditure. It has been apparent over the past months that there has been a halt in this expenditure by Fianna Fáil and that they have been frantically looking around to obtain revenues to meet the increasing cost to which they are already committed by their manifesto in the forthcoming budget.

The agricultural community have already seen that they are to meet some of these needed revenues. The imposition of VAT, the withdrawal of the subsidy on phosphates, and the levy of rates on certain agricultural holdings, all add to the costs of the agricultural community. In the field of local government, the abolition of rates on dwellings has, to a large extent, gone part of the way towards abolishing local government as we have always known it. We are becoming more centralised in that sense. Local authorities are being put into difficult circumstances to provide the needed services. The ordinary housewife has seen subsidies on cheese and gas withdrawn in the past couple of weeks.

It seems that chickens have now come home to roost. The dilemma is for Fianna Fáil because they are committed to a soft budget next week and yet they are urged by responsible economic observers to put money into productive and capital use now to create the jobs that will be needed in the future.

I would ask the Government not to put this country into hock for the sake of popular votes. Government is something more important than that. At least the Coalition Government faced their term of office by telling the people what the blunt facts were, despite the severe action that was needed to meet the very serious economic times. We all know—indeed, we all expect—that next week's budget will be a favourable one, but the price for that budget will have to be met sometime in the future. I hope that the young people who are now unemployed will at least have found sufficient jobs to meet the increasing repayments as a result of that soft budget.

[178]Miss Harney: Information on Mary Harney  Zoom on Mary Harney  One of the things that has surprised me about this debate so far has been the amount of pessimism that has come from some Members of this House. There are some people who think that after six months of new Government we should have Heaven on earth, as it were. However, most of us agree that there are tremendous social and economic challenges currently facing our country.

If I may quote Senator Keating's phrase, he said he wanted “to see things happening”. It was precisely because things were not happening that his Government were removed from office last June. The people of this country wanted a Government that had a coherent, economic and social plan and the expertise to implement it. They wanted dynamic leadership and it is only by giving them that leadership that we can help to solve the many problems that currently confront our country. The last Government had no plans and if we had had this debate three or four years ago we could not have been talking about any White Paper.

I was particularly pleased that after only six-and-a-half months of the new Government we can now talk about the White Paper and debate it. We can talk about the Government's plans; we can offer our remedies and make our contributions to building this better future. Nobody can be displeased with the amount the Government have done particularly in the field of education. I was very surprised when Senator Robinson said yesterday that education was not a priority of the new Government. Already, the new Minister has a scheme under way whereby 600 graduates are in training and will be in our schools next year. He is trying to cut down the pupil-teacher ratio to 40 and ultimately to 32. He has increased university grants and I hope that it will not be long before the eligibility levels will be increased so that no student in this country will be precluded from third-level education because of lack of money.

He has given back the degree-awarding status to the NCEA. He has given the go-ahead to the Dalkey school project [179] and many more things, I hope, will come in the not-too-distant future in the field of education. One of the striking features in recent years in this country has been the increased public concern with matters affecting the rights, the needs and the happiness of the family and the individual in our society. Any laws affecting the fundamental values of society must change to reflect the reality of changing social conditions. Those of us in this House and elsewhere who want to maintain the role of the family in our society must ensure that the reform of family law is emphasised again and again in this House. The tragedy of marital breakdown must be approached with a degree of campassion and realistic remedies. There has been an increasing number of marriages breaking down over the last few years and, of course, legal changes of themselves are not sufficient to adapt families to modern social conditions.

There is a critical need for a complete reorientation of the educational system and the attitudes on which it is based in order to prepare our young people for the partnership of equals that must be marriage. I think in this area, as in many other social areas prevention rather than cure must be the answer. We must, in our schools, prepare our young people for the responsibilities that they take on when they get married and I think in this way we can help to solve some of the many problems that result from marital breakdowns—the problems of children without any secure future, the problems of the battered wife and in many cases the problems of husbands in this sort of situation. It is up to any Government to help people like these and, of course, no Government can provide just money; we must provide the social services; we must give people the necessary rehabilitation, the necessary aid and encouragement to help them along in difficult situations like this.

I would like to see this House highlighting the social and economic challenges that lie ahead and offering a contribution. Let us not be content with a Chamber that merely resembles [180] a leisurely debating society, but let all of us on both sides of this House help the new Government to build the caring, prosperous, pluralistic society on this island that everybody, north and south, Catholic and Protestant, male and female can identify with. The tremendous problems that lie ahead for the Government will not be solved in six months: they will not be solved in a year and, in fact, they will not even be solved in four years but this Government can lay the basis whereby they will be solved in the not too distant future and, in particular, ensure that our young people will be given some real prospect not only of a job but of a secure future in this land.

In concluding, I would urge our Senators to help the Government rather than criticise the Government that have been in office for six months. Nothing can be achieved in such a short length of time and the tremendous challenges that lie ahead for this country will not be solved in a short time either.

Mr. Harte: Information on John Jack Harte  Zoom on John Jack Harte  May I first apologise for beginning to speak at 4 o'clock because I understand there was an agreement—I happened to be absent at the time—that the Minister would come in at 4 o'clock. The only way I can co-operate now is by casting aside all my notes and trying to finish speaking in five or six minutes or so.

I agree with Senator Harney that nothing can be achieved in six months. That is not what the manifesto said. It said something could be achieved in six months. I think that was the point that was being raised on this side of the House. It is rather difficult and it is a bit much to expect that any great changes or developments would take place in a six-month period. However, my real concern is that there has never been any real serious, determined effort to mobilise the resources of our economy to provide employment for those who wish to stay and work in Ireland. The evidence of that is that we have one million Irish-born people in the UK, apart from any other part of the world.

Throughout all this century the Irish economy has been unique in its failure [181] to provide jobs for the natural increase in the population and for those leaving agriculture. Is it any wonder that a person like me would be sceptical about a detailed national plan that does not spell out the facts that it is a detailed national, economic and social plan. I have a right to be sceptical in that sense. Despite the terrible wars that have involved mass destruction and despite a profound economic crisis in the Thirties, other European countries managed to provide high employment and to avoid emigration. However, the Irish economy did not and the extent and intensity of Irish economic failure is probably without parallel when you look at the numbers of people who have had to emigrate, when you look at the situation in the Seventies when we were supposed to have a wonderful boom period. In 1960, there were about one million people at work; in 1970, there were still one million people at work; 135,000 had emigrated in the decade and wages were very good that year and also profits were very high. Our concern is not about wages and profits; it is about the whole redistribution of wealth. There is no use in saying that you can stand up and talk about the economy without criticising or talk about any aspect of Government and leave your prejudices outside the door. I do not leave them outside; I bring them in with me. So, it is natural that I will have a bias in the direction in which I feel the economy should be developing.

If we do not recognise past failures which still haunt us very much, and it does not matter which Government is is in, I fear there is no hope for a future solution. I am still sceptical that the private sector on its own can deliver the goods. They have not done it over the years. They have always been interested in the quick kill rather than getting into the growth situation and therefore that generates doubt in me as to whether in fact reliance on the private sector alone will do the trick. I was a little disappointed when I heard of the consortium of the Minister for Industry, Commerce and Energy because that looked like a rebuff to the trade union movement who have been advocating the setting up of a development corporation, which [182] would mean that the State would start getting itself involved in manufacturing industry so as to create jobs there.

Apparently, some vested interest does not want that. The evidence is that, in fact, it will be private enterprise and the State will be kept out of it. I believe the State is not capable of doing it. Even when Fianna Fáil went out of office there were still 73,000 unemployed and, in a decade, 135,000 had gone to England. There is no use in saying that the private enterprise system can do it. It has not done it in my lifetime and I am now into my 58th year. Unless the State starts to get directly involved, taking in the slack of people leaving agricultural employment and helping to absorb some of the natural population growth, we will not do the job. The willingness is not there for full employment. I am sceptical about it.

I had great admiration for Seán Lemass. He did a great job in trying to change the direction of the country when he saw the situation with agriculture vis-à-vis industry. He saw the need for certain development and he took the country in the right direction. Even he, despite my admiration for him, could not fulfil his 1957 general election slogan of “100,000 new jobs”. That never happened. We did not have them.

Mr. Colley: Information on George Colley  Zoom on George Colley  We did.

Mr. Harte: Information on John Jack Harte  Zoom on John Jack Harte  I doubt it.

Mr. Colley: Information on George Colley  Zoom on George Colley  Will the Senator look at the figures?

Mr. Harte: Information on John Jack Harte  Zoom on John Jack Harte  I doubt it. That promise was never fulfilled. It was fulfilled throughout a period when we had good external factors prevailing. It is true to say—again making a deliberate political point—that about three Fianna Fáil Ministers for Finance were in office when there was a drop in employment. That is another thing that makes me doubt if the real will is in the party to bring about full employment. The State is being kept out of it deliberately because there seems to be some sort of a vested interest there. I do not want to go too deep into that or I would be accused of all sorts of things.

[183] I am a bit concerned about social welfare. It is necessary for me, as a member of the trade union movement and of a socialist party, to make it quite clear that I make no apologies to society for spending heavily on social welfare and continuing the trend set by Deputies Brendan Corish and Frank Cluskey, with an all-out attack on poverty. It is a long job but the will must be there and the Government of the day must demonstrate their willingness to go after that.

During the period of the Coalition Government the old age pensions went up by 135 per cent, widows' pensions went up by 137 per cent, unemployment benefit went up by 132 per cent, unemployment assistance went up by 138 per cent and children's allowances went up by 197 per cent. There were increases also in things like allowances for unmarried mothers, deserted wives, prisoners' wives and people living alone. That kind of thing was developing in the right direction. It was, to some extent, an effort to redistribute the wealth. That is why I am very nervous when we talk pure economics that the social side of it is, in fact, liable to suffer. The Minister for Fisheries, Deputy Lenihan, speaking in a debate on one of the Appropriation Bills—I think it was in 1974—said that if they had been returned to power in 1973 they would not have gone so far as we did in the budget. He used words to that effect. I am open to correction as I am speaking from memory. He also said that Fianna Fáil would not have used the “catch-them-all” type of budget. He was referring, of course, to the developments in social welfare, health and so on. That makes me wonder if there is a full commitment to a redistribution of the wealth, particularly into the areas of social welfare and health where it is needed.

We live in a savagely unequal society. It does not matter what the Deputy O'Donoghue's in the world say; there will be too many pensioners this winter facing the tragic choice between food and heat, between a meal and keeping warm; there will be too many young parents desperately struggling to bring up children on low wages; there will [184] be too many chronically sick or disabled people who will be virtually prisoners in their own homes. I urge, irrespective of what differences we have or what points of view we express, that at least legislation in this area must be laid down in a solid framework and it must be aimed at alleviating the causes and effects of poverty. Deputies Cluskey and Corish made an attempt at it. They went very far in it. I hope the trend will be continued. People over 75 suffer most from poverty, ill health and isolation. Many more important things in the area of health care and accommodation remain to be done. The provision for these people is not necessarily cash but rather homes, day care centres and so on.

In the long term, the answer to poverty and old age problems can be resolved by better pension schemes, providing generous earnings, related pensions, fully protected against inflation. The Government should not heed the people who will tell them that the social welfare amounts are adequate. Many employers said it on the last occasion. They did it on the basis of alleged corruption. If anyone said to me that the social welfare benefits were more than adequate I would have to ask that person if he could live on those benefits. The answer would be “No”, but he would want somebody else to live on them. Let us be clear about that. The social welfare benefits are not adequate. I was born and reared in the tenements. I was born in the slums of Dublin and I know what poverty is. Do not let any employer try to tell me that the amount paid on social welfare is more than adequate. It is not. Therefore, we must all keep driving in that direction.

Minister for Finance (Mr. Colley): Information on George Colley  Zoom on George Colley  A number of points have been raised in this debate which I might describe as somewhat technical and dealing with a number of Departments other than my own. In such cases I am not really in a position to deal with the points raised just at the moment but I can assure Senators that the points made will be referred to the relevant Ministers or, in some cases, State agencies.

[185] However, apart from those, the debate has brought out several very useful contributions ranging in their subject matter from particular items of expenditure in 1977, which were covered in the Appropriation Act and to which the motion before the House refers, to the underlying financial and economic policies in 1977 and in the preceding years and their implications for policy in the present year and in the years to come.

Senators will, I am sure, appreciate that because next week I shall be making to Dáil Éireann my Financial Statement for 1978 I must reserve until then anything which might be in the nature of a disclosure of future policy. Likewise I may have to withhold in this debate reference to some general aspects of past policies which Senators raised and which will be dealt with, I hope appropriately, in my financial statement. This is in no way to depreciate the contributions of Senators in these matters, all of which I have noted carefully. Within those constraints I shall endeavour to deal with the major points raised.

First, Senator Harney in what in the circumstances was necessarily a brief but if I may say so without any condescension a very attractive maiden speech in this House, made what I consider a very important point when she said that miracles cannot be expected in six months and that even at the end of four years on the implementation of the Fianna Fáil manifesto we will still have many problems. She is perfectly right. Senator Harte and some other Senators before him suggested that that was not what was said in the manifesto but it was. The Government have done precisely what they said in the manifesto they would do in the first six months. Even assuming the full attainment of all the targets set out in the manifesto, at the end of the period concerned the Government would still be left with a substantial unemployment problem, and we said so. What the Government are trying to do is, as we said, turn the economy round to tackle unemployment and inflation in the way we said. It is very important that people should understand that, having achieved those targets, [186] only then are we at the point of take-off, I might use the analogy of the aeroplane taking off. That is all we shall have reached. We have not taken off having attained all the targets in the manifesto. Let nobody imagine that we suggested that the approach outlined in the manifesto for the attainment of the targets will produce E1 Dorado in this country. It will not. The situation is much too serious to imagine that one can produce full employment and either no inflation or virtually no inflation overnight or even in four years. That will not happen. We never said it would happen. The question that faced us when we produced the manifesto was what to do with the kind of situation which prevailed in the economy in the past few years and in particular in 1976 and early this year. How do we tackle it in a realistic way? We do not have a magic wand. What we are trying to do is to break down the problem so that we can examine what can be done within the resources available. In the process we try to get rid of, as intelligently as possible, the problems that can be tackled by the use of resources and to generate the confidence that will enable us, having done that, to go on from there. That has been and is our aim. That is what I am confident we will achieve.

In this context, a very important aspect of the whole approach to the problem is that it be planned. We heard a great deal of talk from our political opponents in the past about planning. We have heard a great deal of denigration of our efforts at planning in this regard, but it is important to understand, as Senator Harney said, that within such a short time we have produced a White Paper on National Development, 1977-1980. I want to make it clear to the House that my colleague, the Minister for Economic Planning and Development, proposes to arrange for a full parliamentary discussion on that White Paper at an appropriate time in each of the Houses of the Oireachtas. Accordingly, I do not intend on this occasion to deal in depth with the Senators' references to its content. I may, of course, touch incidentally on some aspects of it in [187] the course of my remarks. It is important to realise what has been done. It is important to realise the three phases that have been laid out in that White Paper. It is important to realise that the Government have committed themselves to produce a White Paper —in the way they have done—and then later in the year to produce a Green Paper for discussion, to engage in consultation with the social partners and then—this is vitally important— to produce the next White Paper which will represent the Government's decisions following that consultation, that examination, that public discussion of the issues involved and to continue doing this and updating the plan each year. That is a commitment on which we have embarked and on which we have produced the first instalment. That is a very important development in the economic management of our affairs.

Senator Cooney in the course of his remarks referred to the world economic situation and he expressed certain misgivings in that regard. I should like to say that Senator Cooney's misgivings were misplaced but I am not able to say that. It is important for people to realise that within the past 12 months the indications are, from a number of sources, that the world economic situation will not improve, certainly not to the extent that was anticipated not so long ago. I hope that it will not be as serious as some indicators suggest, but it would be quite an illusion to imagine that there will be some substantial improvement in the world economic situation in a relatively short time.

How does one interpret that fact? There are two aspects of it which are important. The first one is, our predecessors in office were faced with a very difficult world situation. Contrary to what has been suggested in some of the contributions here, nobody will find on the record any contribution during the past few years from any Member of the Fianna Fáil Party which attempted to suggest that the previous Government were not confronted with serious difficulties on the world economic scene. That was not our complaint. But, what was and still [188] is our complaint is the reaction to it. That is best epitomised by what my predecessor said on one occasion when he likened the Irish economy to a cork bobbing on the ocean and suggested that we had no more power over our economic destiny than the cork bobbing on the ocean had on the direction it would take. We do not accept that proposition. We did not accept it then and we do not accept it now. To the extent that our economic destiny is effected by external factors, there is all the more obligation on any Irish Government to exercise their control where they can exercise it in order to influence the direction in which our economy will go. I would suggest that that represents one of the basic differences in approach between the present Government and their predecessors.

Another aspect of this matter arises out of the references by a number of Senators to the White Paper, the projections in our manifesto and so on, as a gamble. That phrase was used by the Minister for Economic Planning and Development. To say merely that he said it was a gamble is obviously to take it out of context. Senator Robinson was one of those who referred to this and said that this was not good enough, that the issues were too important to be gambling with them. I single out Senator Robinson because she now professes to be one of those who believe in the importance of planning our economy.

To plan anything, to plan our economy, what does one do? Given that one is not blessed with the gift of knowing what the future will bring, that one is an ordinary human being, what does one do? One tries to set out the various influences that are likely to affect our economy; one sets out the resources available and how one is going to use them to the best advantage. But, no matter how well informed one is or how intelligent, in the absence of knowledge of the future one has to recognise that a number of things can happen which will affect the plans one makes. Anybody who does not recognise that fact does not know what planning is about. That is precisely what it is about. It is because [189] of these uncertainties that one has to plan. There are these uncertainties and it is in that sense that the Minister for Economic Planning and Development said that this was a gamble. There is a further addition to that with which I will deal in a moment.

This is not something new. Remember that, even before our manifesto was produced, we produced in September 1976 the basic format of our manifesto in economic terms. We were asked then and we were asked when we produced our manifesto: “What if it goes wrong? What if your projections do not work out?” A reasonable question. We said: “Of course there are factors that we cannot control and cannot foretell. If things change we have got to change our programme, that is what planning is about.” But given certain assumptions, which is the only way you can work out any plan—we set out what the assumptions were—this is the way it will go. To say that that is a gamble in a derogatory sense is, of course, to misrepresent the whole concept of planning.

There is another aspect of it, as I have said, and it is this. Faced with the kind of situation that existed in our economy when we produced our programme in the autumn of 1976 and later on in more detail in our election manifesto, one could, as I think the previous Government were seen to do, say that there is not anything much we can do about it. We can carry on as we are going but there are so many factors we cannot influence and we cannot do anything about. That is one approach. Another approach is to say that we will try to analyse the way we can go forward, knowing there are risks, and we will take that course. If the risks go against us then our programme will not work out, but if we do not take that course the alternative is just to sit there and wait for something to happen. We, in the present Government, chose to try to plan and go ahead on a certain course, knowing there were risks, acknowledging and saying publicly there were risks. To that extent it is a gamble. As far as I am concerned, I would choose at any time the course where you try [190] to the best of your ability to influence your own destiny. You have an obligation to do so and a Government in particular have an obligation to do so. That is the course we have chosen. That is the course we are embarked on. I do not think that we need make any apology to anybody for chosing that course as against the course of hoping that something would turn up, which was the one followed by our predecessors.

In this connection, one of the fundamental issues that was raised in this debate was the question of budgeting for a deficit. It was raised specifically by Senator Whitaker and raised by other Senators not quite so specifically, although I should say that I found a certain wry amusement in listening to Senators representing the Coalition interest telling us about the enormity of the borrowing we were contemplating and the difficulty of repaying the borrowing and even the interest on it.

It is worth dwelling for a moment or two on this whole question of deficit budgeting. As Senator Whitaker correctly said, I was the first Minister for Finance in the history of the State deliberately to budget for a deficit. I did so in 1972. And as he correctly said, he, in his then capacity as Governor of the Central Bank, pointed out to me some of the risks and perhaps undesirable aspects of this. The facts are that I then budgeted for a deficit for purely economic reasons and the outrun for that year showed that I was thoroughly justified in doing so. It had precisely the effect we had planned and was of considerable benefit to our economy at that time.

In fairness to Senator Whitaker he was talking about deficits on the current budget and not on the capital budget, where clearly in our circumstances we must have a deficit. On the current side there is ample economic backing for the idea of deficit budgeting provided that it is done as carefully as possible for economic reasons. I was very conscious in 1972, when I did this, and I have said this publicly, and this was adverted to by Senator Whitaker, that I was running a risk, not in economic [191] terms, but that I could be succeeded in office by an irresponsible Minister for Finance, aided and abetted by an irresponsible Government, who would engage in budgeting for a deficit for political purposes in order to avoid the difficult political decisions that would have to be made if they did not go for a deficit. Unfortunately we were succeeded by a Government which did act irresponsibly in this sense.

In case I am misunderstood, I would like to put on the record again that I have always fully accepted, and accept now, that the Coalition Government were faced with considerable difficulties arising outside their control. I also accept that, given the circumstances which arose, there was justification for deficit budgeting on the current side in the term of office of the Coalition Government. I never, at any stage, questioned the propriety of that. What I questioned and what I question now, is the extent and purpose of the deficits created at that time. I suggest that the purpose of those deficits should have been to try to create employment, not simply to make it easier for the community to pay, say, higher social welfare benefits.

One may say that is water under the bridge. To some extent it is, but I have inherited this situation in which we have enormous borrowing and an enormous deficit. I am faced with the economic difficulty of getting the country moving, of trying to provide employment, a reduction in inflation and trying to get the State's finances into order. They are the three major problems with which I am faced as Minister for Finance. I have not got time now to go into the arguments for what we propose to do. We went into them in considerable detail during the election campaign and we spelt them out in our election manifesto.

Our first two priorities are inflation and unemployment. This is not to say we are ignoring, because we cannot afford to ignore even if we wanted to, the appalling state in which the State finances we have inherited are. I say that advisedly because there is a danger of a certain euphoria in thinking that it does not matter that we have this [192] huge deficit and huge borrowing. It does matter. We cannot go on indefinitely doing it but, for economic and not political reasons, we have planned in our first year to increase the borrowing as a percentage of GNP and for the reasons and the purposes spelt out precisely in our manifesto. We have also spelt out in our manifesto constraints on borrowing applying this year, a greater constraint next year and a still greater constraint the following year.

There are many people who would like to forget that and they are not all on the Opposition side of the House. It is very easy to pick out the nice things in the manifesto and grab them. There are people in various walks of life, including some trade union leaders, who tell us we promised to do so and so in regard to income tax cuts, and so on, but they do not want to advert to the other part of the manifesto. That manifesto was a totally integrated package and I am not just saying that now. We said that when we launched our manifesto. We were questioned closely by newspaper reporters, on television and radio: how do you think you are going to get the people to accept wage moderation? How are you going to keep your borrowing within those limits you have laid down? This is not something new that we are producing now that we are in office. It is there in black and white. We were questioned closely and we said “This is an integrated package. If it is to work, you cannot just pick the good things. You have to use the whole package.” That is what we are doing.

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  Are the parts of the package conditional on each other?

Mr. Colley: Information on George Colley  Zoom on George Colley  What we have said is: “This is a package.” If it is to work as we projected then you must have all the package. If you do not have all the package it will not work as we projected it would. We do not want to be told by people: “We do not want that bit of the package. Why have you not reached your targets on this bit?” They have no right to say that. If they want to pick one part of the package they need not ask us to try to fulfil another part, particularly with [193] regard to employment. Nobody should be under any illusion about this.

Mr. Cooney: Information on Patrick Mark Cooney  Zoom on Patrick Mark Cooney  Does that mean that if the 5 per cent wage agreement is not reached the tax concessions do not follow?

Mr. Colley: Information on George Colley  Zoom on George Colley  I think the Senator had better wait until next week and he will hear a little more about the tax package. The fact is, and it is very important that people understand this, that it is a package. We said that before the election. We are still saying it and it is still true. I believe, while it is understandable, that I cannot accept, and am not prepared to accept, from representatives of the former Government attacks on us saying we are now producing this story. For instance, Senator Alexis FitzGerald, a man for whom I have a very high personal regard, referred to the “goodies” we talked about before the election and that now we are talking about—he used an unusual phrase— the sermons and the soda-water. He is not the only one to say this. It has been said one way or another by many Coalition representatives. That is their alibi for losing the election. They are trying to pretend that we put before the people a whole lot of carrots and that that was all there was to it. That is not true and it is important for the record that people should understand that it is not true. The people are not so stupid and so gullible as to imagine that a party who go before them and say “We will give you this, that and or the other,” and do not indicate how they are going to tackle the economy, how they are going to pay for it and how they are going to get support. They are not going to get it and let nobody try to malign the people by suggesting that. The facts are that the people had clearly explained to them what was involved in our manifesto and they voted for it. The Government now have the obligation to implement that manifesto. We are implementing it and we intend to continue implementing it.

All those who would now like to pick out the bits that suit them, and ignore the rest, should recall that not alone would doing this have very serious [194] consequences for our economy but that they are, in doing so, trying to defy the will of the people as clearly expressed in the last general election. There is, of course, room to manoeuvre on various aspects—not a great deal, but there is some. The basic concept was endorsed by the people. This Government's obligation, which the Government will carry out, is to implement the basic concepts of that package that was put before the people and endorsed.

Senator Robinson raised quite a number of points. I will deal very briefly with a few of them. I wish to comment on Senator Robinson's speech, because it is typical of certain kinds of speeches to which we are subjected from time to time. The Senator spoke eloquently and very learnedly on a number of very difficult existing social problems. There are probably few other people in this House who could not speak equally learnedly and passionately about other considerable social problems that exist. I am not doubting her commitment in this regard, but it was very notable that in all that she said, and she spoke at considerable length, she did not once advert to overall economic policy, or to where the money is to come from to pay for remedying these various undoubted social ills.

The reality for any Government and for any Opposition who aspire to be in Government, is that it is not enough to be a bleeding heart; important and impressive as that may be it is also important to be realistic and to say how it is to be done, where the money is to come from and in what proportion will resources be devoted to this and that. This Government when in Opposition did precisely that and ran considerable political risks by doing it. How often before have an Opposition come out and said that there has to be wage moderation and spelled out what it has to be, and have said that there has to be a precise form of constraint in borrowing? It never happened before.

We know how to govern. We did not pretend in Opposition that one could avoid these issues. If a Senator [195] speaks at considerable length on various problems and does not once advert to where the money is to come from, or to an overall economic plan as to how these might be attacked, that contribution lacks a credibility which it might otherwise have.

While there were a number of reasons why our predecessors were defeated in the election, one of the important reasons was that the people got the impression that that Government contained too many people and too many supporters who were very good at pointing out how the money should be spent but were very silent about where the money should come from; who did not, in fact, give a damn about where the money came from. A Government cannot operate on that basis.

This Government have to face the problems involved in finding money for those things in priority. There is no way that all of the problems that we face can be tackled together, but there is no way at all that any of them can be tackled unless we can generate the kind of wealth that will enable us as a Government to collect the taxes to pay for the various services required. In that connection another fundamental issue raised was the question of the reliance on the private sector in this regard.

Our economy is a mixed economy. It is not a completely free enterprise economy, nor of course, is it a completely Government controlled economy. Contrary to what has been said in this debate, and to what has been said outside, it is not true that in the past the private sector has failed to perform. Senator Harte talked about the late Seán Lemass proposing the creation of 100,000 new jobs in 1957. Senator Harte is not aware that over 100,000 new jobs were created. The problem was that at the same time we had the flight from the land which was reducing, to some extent, the number in employment. That fact should not be forgotten. It is important when we are thinking in terms of achieving the targets that we are trying to achieve to remember the success we had in the past, to remember that by [196] 1970-71 an end had been put to emigration despite the flight from the land. The jobs were created.

We have to create jobs at a much greater rate than ever before and there will still be flight from the land. Certain steps could help to reduce that. But nobody from this side has ever suggested that the attainment of the targets we have set out, which, even if achieved fully, will still leave us with a substantial unemployment problem, will be easy. It will not be easy. They will be achieved; they can be achieved.

Some Senators made the point, and there have been other comments, as if it were something quite new, that the Government are embarking on expenditure in the creation of jobs in the public sector and so on, that in the longer term this cannot go on, because it is uneconomic. We know that and we said that when we produced our manifesto. We said specifically that it was in the first year we were going to do this because we could not get the response fast enough from the private sector, other than primarily in the building and construction industry. We have concentrated on the public sector and on the building and construction industry to create the jobs in the first year. It is working. Before the end of 1977 we created over 5,000 new jobs between the public sector and the building and construction sector. We have laid the foundation for the creation of many more jobs this year. I will have more to say about this matter next week in the budget.

Listening to some comments, one gets the impression that all the teachers, all the gardaí, the nurses and all those who have been recruited are either middle-aged or old, as though we had not created any jobs for young people. When one thinks about it for a moment one realises that that is not true. Apart from that there are certain other specific things related to the employment of young people, which are coming forward, which will be announced within the very near future. I will be making reference to some of them next week. Senators will appreciate that in the time available I have [197] had to choose between dealing with a number of specific points raised or with the major issues raised in the debate. I have chosen the latter course.

There is one other matter, not a major fundamental issue, referred to by Senator Whitaker—which I suppose to some extent makes it of some importance—which requires me to reply and that is the question of the Irish Trust Bank. I appreciate Senator Whitaker's concern in this regard. The Irish Trust Bank was the first licensed bank in this country which went bankrupt. I hope it will be the last. I understand Senator Whitaker referred to the arrangements in the United States whereby depositors with up to $20,000 would be reimbursed. I understand that the amount has been increased recently to $40,000. There are arrangements in other countries. One recalls what was done in Britain within the last few years when certain banks were going under. It is important that the good name and reputation of our financial institutions be protected.

I had evidence available to me which suggested that if we did not take action such as we did, then the good name of our financial institutions could be adversely affected. The legislation which we are bringing forward is arising out of the experience of the existing legislation and how it is worked. Incidentally, I was responsible for the existing legislation under which the Central Bank operate, but experience has shown that there are loopholes in it. We do not have a scheme for reimbursing depositors, large or small, at the moment, so we were pleased with this ad hoc situation. We backed it not generously but, I think, honourably and we backed it in the interest of our whole economy and our financial institutions. We have made it clear that it is an ad hoc operation that nobody can expect to be repeated. We are bringing forward arrangements to try to ensure, by tightening up the regulations, that this kind of thing will not happen again, or if it does happen that there will be a scheme, certainly not as generous, which will protect depositors.

One of the things that will have to [198] be considered in connection with the new legislation is the extent to which a bank may engage in activities which raise doubts like the offering of excessively high interest rates or suggesting to would-be depositors that the bank has the backing and guarantee of the State or of the Central Bank. If that kind of thing is engaged in, of itself it should be enough to bring into question whether it should be allowed to continue. We did not have the experience, so we did not have the opportunity to legislate in that regard. We were faced with this specific problem that arose and we dealt with it. As Senator Whitaker said, there is room for argument and difference of view about how it should be approached. I believe that in the general interest, not only of the unfortunate depositors— and there were very many real hardship cases—but perhaps in the long term, more importantly in the interest of the good name of the financial institutions of this State, we took the right course, and what we are doing as a follow-up to that will help, hopefully, to ensure that such a thing cannot happen again.

I thank the House for the debate on this matter. I am sorry I have not had an opportunity to deal in more detail with a number of the points raised but I shall endeavour to ensure that on specific points that Senators have raised and if I have not dealt with the points concerned, the Member is either communicated with individually or the matters are referred to those Ministers or State bodies responsible.

I have one final point which was raised by Senator Robinson in relation to the Pringle Report. That reached the Minister for Justice late in December. It came before the Government in January, was passed, it is with the printers and as soon as it is printed it will be published and the Minister for Justice will, in due course, bring forward proposals in regard to implementation.

Question put and agreed to.

The Seanad adjourned at 5.03 p.m. sine die.


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