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Committee on Finance. - Resolution No. 3: Tax in Respect of Certain Goods (Resumed).

Thursday, 16 June 1966

Dáil Éireann Debate
Vol. 223 No. 5

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Debate resumed on the following motion:


(a) with effect as on and from the 1st day of October, 1966, a tax, to be paid by such persons and in such circumstances as may be specified in the Act giving effect to this Resolution, shall, subject to the provisions of that Act, be charged at the rate of five per cent in respect of goods sold within the State and goods imported into the State;

(b) the said tax shall not apply in respect of food, drink, tobacco, medicines, clothing, fuel or hydrocarbon oils, or such other goods as may be excluded by or under the Act giving effect to this Resolution.

—(Minister for Finance.)

Sir Anthony Esmonde: Information on Anthony Charles Esmonde Zoom on Anthony Charles Esmonde The speech of the Taoiseach yesterday highlighted the fact that, although he levelled some very severe criticism at the main Opposition Party, he is prepared to accept advice from that Party and, in fact, that the Government are prepared to do so. This mini-Budget indicates that they are now accepting the principle of selective taxation in relation to their turnover tax. If Deputies cast their minds back, they will remember that we introduced an amendment suggesting that the Government should not impose the turnover tax on food and essential articles such as medicines, clothes, and so on. That was rejected by the Government and we voted on it. It is a welcome volte face that they are now accepting some of the principles we adumbrated here in relation to taxation.

The Taoiseach also levelled an attack against all and sundry who are criticising the Government. Is it not [687] the function, and the principal function, of an Opposition Party to utilise opposition for the purpose of airing their views and to try to rectify some of the extremely stupid errors the Government have made and are likely to make in the not too distant future? They have made so many mistakes that I suggest to members of Fianna Fáil, who were so delighted when they heard the Taoiseach's statement yesterday that there would be no general election until 1970, that this statement is very likely to be at variance with the facts. It will not be too long, if they continue at their present rate of making mistakes, until the country is called on to give a decision as to whether they want to be led by the Taoiseach and his Ministers into national bankruptcy.

If my recollection serves me aright, the Taoiseach yesterday sat down about 5 o'clock. The Government at the time were negotiating, or had negotiated a loan to the amount of £5 million, according to Telefís Éireann. Apparently Telefís Éireann are privileged to get this information as a recompense for the services they gave the Government in the Presidential election by withholding any news in relation to the activities of Fine Gael, before Dáil Éireann is privileged to get it. It would seem to me that that £5 million is to be put to some purpose which the Taoiseach does not wish to be discussed by Parliament. It is certainly an insult to an Irish Parliament that they should be told nothing about negotiations which are going on while the Taoiseach is making a speech on national matters.

There is no doubt that all our difficulties, industrial unrest and the spiral in the cost of living, have their origin in the turnover tax. The Taoiseach talked yesterday about the difficulties in the administration of a selective tax. I do not think that the Government are having any difficulty with the turnover tax as it is. The Taoiseach spoke of discussions with the interests concerned. The interests concerned are the business people in this country and, in actual [688] fact, there are no discussions with the business people in relation to the present turnover tax. Instead, the country is honeycombed with inspectors and every shopkeeper is being approached by some junior official who comes down to him and has the power to take away his books. Because of this, business people are unable to submit their books to their auditors for auditing.

These officials then send down a peremptory demand for so much turnover tax, and if the trader does not pay at once, a writ is issued straight away. People in my constituency have had four and five writs, and if they cannot produce an itemised account, which they have neither the staff nor the time to produce, they are going to be brought into court and fined £20 on each charge. There is no appeal against that fine. It is mandatory on the district justice to impose such a fine and there is no appeal against it. I am beginning to think that this is another way of obtaining revenue for the Government. If they round up every businessman and force him to produce itemised accounts, they are going to have a pretty rich harvest of fines of £20 all round.

Some Government speaker should give some clarification of what the Taoiseach meant when he said that discussions are to take place with the parties concerned. If they are using such arbitrary methods already, I fail to see what discussions they can have in view with regard to the new selective tax. All the troubles in which this Government find themselves, the industrial unrest, the spiral in the cost of living, the forcing of small business people out of business, are due to the turnover tax and to nothing else. It is unsuited to this country.

It is all fine for Government speakers to bleat about Government expenditure. They say that every tax they put on is to increase social welfare payments but what about the money they have wasted? What about the hordes of officials they have all over the country who are falling over one another? Expenses are going up all the time and the plea is that the Opposition are voting against increased taxation because [689] they are trying to do the social welfare classes out of their lawful due. The Government have gone wild in their spending of money: they have wasted money. I do not want to mention names but there is a firm in Dublin which is supposed to be building aeroplanes and it has not yet put an aeroplane in the air. That company got a lot of money from this Government, certainly more than £1 million. Certain industries are being subsidised to keep them in existence, industries that were never solvent, and the Government would need to take another look at their policy in this regard.

Another difficulty in which the Government find themselves is entirely of their own making. They are short of capital, shorter perhaps today than in any time in the past. There may be certain reasons for that. Perhaps money is difficult to borrow at the moment, due to the fact that there is heavy pressure on the different areas in which it may be borrowed, the hard sterling area and the dollar area. Both of these areas have heavy commitments, and in the hard sterling area, one has to be able to put up a very sound security to get a good loan or to get a loan on reasonable terms. Apparently that area is not open to us now, which means that we have to look for money from other sources.

In the past, this country was largely dependent for its borrowing on the savings of the people. Perhaps some member of the Government would now explain to me why we are short of these savings. I am going to give the reasons why I think we are short and if there is anything wrong with my reasoning, I would like to hear it corrected from the Government benches. As a rule, national expansion in most countries is dependent on small savings. More is got from them than from any other source. In fact, most countries have built up their economies on the small savings of the people. Today our small savings are practically non-existent. I forget what the actual figures are which were issued some time ago. They showed our small savings have considerably dwindled. That is one source entirely cut off.

[690] Why are there no small savings? The reason is that the people who could save are taxed out of existence. Further, when they come to the time at which they might be able to avail of State benefits, such as old age pensions, they are promptly cut off from them. If a person saves a few hundred pounds, it is immediately taken into account in a means test and he does not get the pension. There is no encouragement to save for the type of people, be they white collar or manual workers, who in the past saved their money in the Post Office or bank. That money was used for the purpose of national expenditure and development here. It is non-existent now. I suggest to the Government that they relieve such savings from a means test in any shape or form so that at least we may get back to the original small savings of the people, which will constitute a considerable sum.

If you look slightly higher up the financial scale, you find the people who save through building their own houses, insurance policies, annuities and other small investment in the country itself. They constitute, shall we say, business and professional people. The revenue from them is down too as a result of legislation, and retrospective legislation, the most dangerous and deflationary form of legislation. Anybody who buys his own house or has an annuity or an insurance policy will find it absorbed in death duties now. That is one of the things we cannot realise in this Parliament. Just because someone at the beginning of the century introduced that system here, which was suited to the United Kingdom at the time, we have accepted that. That is one of the things militating against saving.

The small sums we save by docking people who draw a State pension or social services to which they are entitled, or the relatively small sum we get from estate duty create inhibitory conditions. Until we get back to a firm basis of national saving again, we will not have any real production here. We will not expand national production by travelling around Europe looking for loans at a high rate of interest or by floating big national loans every year.

[691] This country owes £714 million in national loans already. What has the country got to show for it? We have a dwindling population, with emigration and unemployment growing every day of the week. That unemployment is offset in official figures by the fact that the people just up and go off to England. Recently, due to some of the financial regulations made effective here, production in certain firms in Dublin has been considerably reduced. Those people have been forced to leave the country. We are not on a fundamental economic basis.

Before I conclude I should like to say a few words on the Common Market. A journalist from this country recently went to Brussels and investigated the situation there from a news point of view with regard to the Irish application for membership of the Common Market. We have been led to believe—if anybody believes the somewhat wild and woolly statements the Taoiseach gives in reply to Parliamentary Questions here—that Europe is waiting to welcome Ireland into the Common Market. This journalist who made this exhaustive research in Brussels, was right when he dispelled the illusion that everybody is waiting to welcome Ireland in. He also dispelled the illusion many people have that it is only a matter of time before the United Kingdom goes into the Common Market. Further, he dispelled the illusion—and this is the point—that if the United Kingdom get into the Common Market, the door is wide open and we will go in the next day.

I do not think this Government have ever seriously made any attempt to prepare for the Common Market. It is true they made a recent Trade Agreement with the United Kingdom with the idea of showing that we were preparing ourselves for free trade. It is crystal-clear that if the United Kingdom goes into the Common Market, that Trade Agreement goes overboard straight away. Where are we then? What preparations have we made to face whatever comes? What trade have we to look for to offset the trade we will lose with the United Kingdom? I do not accept that the be-all and end-all [692] of our trade is based on sales to the United Kingdom. Anyone with any sense must realise we are largely dependent on what trade we may have there. But we have placed ourselves in rather a parlous condition in that we have never seriously looked for trade anywhere else.

Trade is wide open in the world today. We are not the only new country. We have a national Government now for over 40 years. Many other countries have come on the scene since then. Their number runs into three figures. They have concentrated on searching for markets. They have not adhered solely to the original colonial power, which may have been the United Kingdom or France, or whoever it was. They have gone out into the world and looked for trade here, there and everywhere. That is what this country ought to be doing, instead of having these negative statements from the Taoiseach that it can be assumed we will be in the Common Market by 1970.

This country ought to be out at political level looking for markets, as every other country is doing. It is the only way you will get negotiated treatment and agreement and bring about a better balance of payments. There is no use sending civil servants abroad. I have nothing against civil servants. They do their job as well and as thoroughly as they can. The embassies do their job as well as and thoroughly as they can. But they have no negotiating power. On the continent of Europe, where we want to look for trade, the people who count are the elected representatives. A backbench Deputy in Europe carries more influence and standing than the highest civil servant. The Government should wake up to this. Unless they do we are going to be left. Our economic and fiscal condition at the moment is not a happy one. If we suddenly find there may be revolutionary changes in the composition of the Common Market or if we suddenly find that the United Kingdom is in the Common Market, where is our Trade Agreement or the special arrangements we have with them? We know the answer; we have had it [693] twice in the past two years. We got it with the 15 per cent impost which they applied to rectify their balance of payments and every political correspondent acknowledged that we had got the hardest knock from the percentage view than anybody else. On top of that, we had the restriction of credit which the Minister for Finance denied was going to have any material effect on our economy. However, the other day he explained that it was one of the things which had placed us in our present difficulty.

This Government want to start thinking quickly. Are they going to continue what they are doing, which is to try to collect money here and there, wherever it is, to stay in power and keep the wheels of commerce, such as they are, turning? They cannot go on in this way indefinitely. This country wants a new policy and a new outlook. In fact, it wants a new Government. According to what the Taoiseach said yesterday, the boys are going to be over there in those seats until 1970—but I am sure they will be over here—but I doubt it unless the Ministers of this Government come together and formulate a new policy. They will have to form a new policy in regard to agriculture—which is feasible at the moment because greater opportunities exist for agriculture today than for the past 40 years in regard to securing markets—and also in regard to our economy. If they do not do that, we are going to sink into chaos, with rampant, rapidly increasing unemployment, financial difficulties and industrial unrest which nobody will be able to put right.

Minister for Transport and Power (Mr. Childers): Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers I was interested to hear Deputy Sir Anthony Esmonde talk as though Fianna Fáil had no new policy. We have been steadily adapting our fundamental policy every single year to meet new challenges and to meet new situations. We have changed our agricultural policy very considerably in the past five years——

Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange By jove, you have.

Mr. Childers: Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers ——to provide new [694] grants, new incentives and new aids. We entered into an agreement with the British Government to provide a secure market for farmers' produce. We have never stopped adding each year to the total aid available to the farmers. I do not know what Deputy Esmonde is talking about. We never stopped adapting our policy to new circumstances. In connection with industry, we examined the entire field of industrial development and we have decided to emphasise the regional aspect of industrial development and to concentrate on the development of certain specific areas. That followed on the very evident success of the Shannon Industrial Development Estate, to give one example of a recent change in our industrial policy. We now have plans which are well advanced for a re-training policy to meet the needs of the Free Trade Area Agreement. We have a policy for providing minimum redundancy. pay for workers transferred as a result of the inevitable changes that will take place in the industrial pattern over the next five years.

No Government in the history of the country have displayed more inventiveness or a greater capacity to think along modern lines than the present Government. The proof of that lies in the fact that we have had the greatest advance in economic production, both agriculturally and economically, under normal circumstances since the end of the second World War. Naturally the members of the Opposition always encourage the public to think in the short term, to think only of current difficulties. Amid all the industrial strife that is continuing at present everybody seems to forget that this country is about one-third better off in real terms, after allowing for the increase in the cost of living, than it was in the last despairing days of the Coalition Government. With 95,000 unemployed and 14,000——


An Ceann Comhairle: Information on Patrick Hogan Zoom on Patrick Hogan The Minister has a right to speak without interruption.

Mr. Childers: Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers The Coalition were rattled out of office because they were [695] not prepared to face the difficulty they had——

Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange Three hundred thousand emigrated in the past six years.

Mr. Childers: Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers We are prepared to meet the difficulties. Members of the Opposition speak as if we were the only country in the world facing inflationary difficulties. Unfortunately there is a fairly common occurrence of a rapid rise of inflationary growth in the cost of living and a balance of payments difficulties to be found everywhere, in all continents and among all varieties of national economies. It can be found in respectable democracies, such as the Netherlands; it can be found even in the great giant of West Germany, which made almost record progress since 1949; it can be found in South America and even in the richest country in the world, the United States of America. The United States have far greater internal resources than we have. They have immense internal resources and their foreign trade is somewhere between three per cent and eight per cent of their total national production. Nevertheless, never a day passes, never a week passes, when one does not read in American magazines of President Lyndon Johnson's anxiety over the state of the economy, because he fears that at long last serious inflation has arisen and what is he going to do about it? Is he going to apply taxation before the election at the end of the year, or is he not? Tens of thousands of words are written every week in America on exactly this problem.

There is no use the Opposition creating a scare among our people, as though inflation could not be seen elsewhere, in countries with hundreds of years of independence and with a form of economic development and analysis which has only been in operation in this country for about 15 years. It is no help to us in this crisis to have scaremongering talk as if this country was going bankrupt, going bust. Deputy Dillon is not serving any good purpose either to the nation or his Party by constantly alleging that we are [696] bust. As has already been indicated the import and export trends for the first part of this year show an improvement. Although we should not cease to guard the position because of this improvement, nevertheless it shows that the measures taken by the Government are becoming effective. The seamen's strike is naturally going to affect the position.

Another point is that the Opposition are talking as if all our difficulties were derived solely from our own internal economic situation. Members of the Opposition know perfectly well that there has been credit restriction in the United States and in Great Britain and for emerging countries and developing countries, the world shortage of money is something which inevitably affects the developing economy of a State such as ours. No mention is made of these difficulties at all.

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay Nor of Suez, 1956.

Mr. Childers: Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers No mention is made of the fact that the British, with all their accumulated experience, are going through a very difficult crisis and that the Minister of Economic Development there has set a headline apparently for the Irish Labour Party by telling the British people that there should be an almost complete limitation on wage and salary increases and has recommended an increase of about 3½ per cent this year. His advice is not being taken by anybody. The policy is not succeeding. It is very interesting to note that the Labour Party's colleagues in Britain are advocating a policy of a holding operation, of following what has now become a sacred economic law, understood and accepted by Socialists and Conservatives alike, that incomes should not rise above the rate of growth of productivity. The Labour Party, with their hysterical nonsense, might well say that they condemn everything said by the British Labour Party. But we are not like that. We would not dream of being as conservative as that.

Mr. Treacy: Information on Seán Treacy Zoom on Seán Treacy They are operating in an economy of full employment.

Mr. Childers: Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers Or they might continue——

[697]Mr. Treacy: Information on Seán Treacy Zoom on Seán Treacy They are operating in an economy of full employment.

An Ceann Comhairle: Information on Patrick Hogan Zoom on Patrick Hogan Deputy Treacy has not spoken yet. Surely he should not interrupt others.

Mr. Treacy: Information on Seán Treacy Zoom on Seán Treacy I do not like odious comparisons.

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay Would the Minister consider talking about Ireland?

Mr. Childers: Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers That is actually the Deputy's trouble. He does not like international comparisons. He does not like the debate to be carried on in its proper context.

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay The Minister started off very badly in the context of 1956-57.

An Ceann Comhairle: Information on Patrick Hogan Zoom on Patrick Hogan Deputy Lindsay should allow the Minister to speak.

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay It is very difficult to allow propaganda——

An Ceann Comhairle: Information on Patrick Hogan Zoom on Patrick Hogan It may be difficult——

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay ——in respect of economic facts.

An Ceann Comhairle: Information on Patrick Hogan Zoom on Patrick Hogan ——but the Deputy should allow another Deputy to speak.

Mr. Childers: Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers So far we have had nothing but wordy claptrap about our economic difficulties, clotted nonsense, and not the faintest idea of providing an alternative policy.

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay Which you provided in 1956.

Mr. Childers: Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers Everything said by the Opposition simply encourages the public at large to indulge in purely superficial thinking about what is happening today or what will happen tomorrow, or what my particular wage packet is in relation to somebody else's wage packet. Everything said by the Opposition discourages the right kind of thinking, the kind of thinking in which we should face our economic problems, not only on a [698] short-term basis but on a long-term basis. If anyone imagines it will be possible easily to arrest immediately the pressure of the demand for increased salaries and wages, which began long before the introduction of the turnover tax, as far back, indeed, as September 1961, by this kind of hysterical talk, then he is making a very big mistake, because this kind of talk will not solve what is a very serious problem. If any of the Opposition happened to be in power at this moment, they could not reduce taxation by any noticeable amount. They would not have the faintest hope of repealing the turnover tax, this tax which is supposed to be the cause of all our ills. Has any Deputy in Opposition suggested how the money could be raised? About £16 million.

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay Why does the Minister not increase it?

Mr. Childers: Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers About £16 million. A penny a gallon on petrol brings in about £500,000. The recent increase in income tax will bring in another £1,500,000. Would someone in the Opposition have the honesty to get up and say: “We propose the following substitute taxes for the turnover tax”? Of course, members of the Opposition completely ignore the fact that when the turnover tax was introduced, one-third was passed back in the form of increased social welfare benefits and that extinguished its effects on a very considerable part of the population. That, of course, has been completely forgotten. The turnover tax is regarded as having been spread over the whole community at large and no part of it re-allocated to people with large families in the form of increased children's allowances and social welfare payments. The Opposition do not mention that because they want to make everybody feel what a dreadful thing the turnover tax is.

A tax on expenditure, by itself, covering all items is regarded as taxation inevitably affecting people who can least afford to pay it; but, if an expenditure tax is accompanied by reliefs for those with large families and those less well off, it is not generally considered to be taxation of an anti-social [699] character and the only argument is whether enough of the turnover tax imposed is redistributed in the form of social welfare benefits. The members of the Opposition know this perfectly well and they might as well know that in Norway, a country governed by a Labour Government for nearly 30 years—the Government changed just recently—have a ten per cent turnover tax. We were virtually the only country in Europe without some sort of sales tax at the time we introduced the turnover tax in 1963. How anybody can imagine the present industrial disputes and the present economy of the country can be affected by a tax which brings in some £16 million a year, a country with a gross national income of £1,000 million a year, I cannot imagine. It is just sheer airy-fairy nonsense.

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay A member of the best cabinet in Europe should have no difficulty.

Mr. Childers: Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers Of course, it is really an excuse because the Opposition have to say something. They have no alternative policy to offer. The Opposition could not reduce expenditure, if they came into office, by any large measure, by any noticeable amount, without creating unemployment or interfering with the Second Programme. The sort of ludicrous nonsense to which we have been listening was well exemplified by a Deputy last night who gave as an example of the extravagance of the Government the fact that I did not interfere with CIE when they decided to adopt a new livery, a company with a turnover of £23 million. The new livery is simply the repainting of the rail and road stock of CIE in the normal course of maintenance. It is very typical Opposition talk. It is a perfect example of the kind of frivolity we have to face at the present time from the Opposition. The Opposition talk tuppenny ha'penny nonsense. I heard the same kind of nonsense about the shields on the fronts of the buses during the 1916 Celebrations. Rumours were spread all over Dublin in public houses by members of the Opposition that [700] the shields were costing something like £17 each. In actual fact, the total cost was something between £500 and £800, and that was out of a turnover of £23 million. That is the kind of cheap talk we hear from the Opposition.

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay What member of the Opposition said that? It is a cheap accusation.

Mr. Childers: Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers The suggestion has been made that the fact we have operated a scheme of borrowing capital from abroad is something wrong and something which implies a serious economic situation, something which is anti-national, something which is unusual. International foreign borrowing is becoming quite universal, and the Opposition know that. The actual fact is that the savings of the community, referred to by Deputy Esmonde, in relation to total production started diminishing long before our recent economic difficulties. They started diminishing because there undoubtedly has been a very large spending spree arising out of the growth of our prosperity and well the Opposition know it. Until the community start saving more from their income and until their consumption expenditure includes a sufficient amount of saving, we shall have to rely on foreign borrowing, and we may have to continue to rely on it, even if the savings increase, as part of our normal development. The Opposition know that, too.

There is not a single suggestion from the Opposition about a brand new formula for combating inflation. The fact is that during the past six years the worst inflators in this country have been the Fine Gael and Labour Parties. From the time that the prosperity of this country started to grow, they have spent hours and hours in this House begging us to spend more money on this or that, jeering at us because we were not spending sufficient they continued to bleat about taxation money on this or that, and never suggesting where the money would come from. Every time taxation went up and to demand still more and more expenditure.

[701] If we had followed the advice of the Opposition in the past five years, we really would be bankrupt. We would not have a leg to stand on, because, except when a Budget involving increased taxation arises, the Opposition say we are only tinkering with the problem of the amount needed to be spent by the Government. They never speak of the taxpayer. You will never hear a member of the Opposition say here to a Minister in charge of a certain Department: “We, on behalf of the taxpayers, would like to suggest that you tax more heavily the people in order to provide a much greater service of development for the agricultural community.” You never hear them say that. The money is supposed to come like pie out of the sky so far as the Opposition are concerned. Then when we raise taxation in order to provide greater benefits for the community and in order to continue the economic programme, they complain about taxation. That is the position, and it is just as well to recognise the facts.

A great deal of what has been said by the Opposition on this Budget is simply fomenting strife within the industrial community with the idea of defeating the Government at any cost. Most of it is irresponsible talk that cannot contribute to a solution of our problems and will only aggravate them. It is creating a kind of envy between one group and another. I listened to members of the Opposition and I did not hear any of them refer, for example, to the facts stated in one of his articles by the Fine Gael Senator, Senator Garret FitzGerald, in which he made it perfectly clear that there is a very big problem in that the white collar workers and the manual workers are trying to exceed each other's income. The white collar worker's group wish to go further ahead of the manual worker's group, and if the white collar worker's group get an increase, the manual workers claim they are in parity with many grades of clerical workers. You have the status increases, many of which were deserved, inflaming that situation, and you have, at the same time, the agricultural community asking for income increases, [702] quite naturally, which will relate to the income increases of the rest of the community. As Senator FitzGerald stated, until somehow there is a moment's peace and we start to think on this whole problem on an intelligent basis related to the economy of the country, this industrial strife will continue.

The situation is mainly due to this perfectly human change, this perfectly human agitation which is taking place as a result of increasing prosperity. There may be other causes as well, but that, as everybody knows, is one of the principal causes: the inevitable moving up of the salaries of one group and the wages of another group, each group wanting to maintain the same differential.

It is very hard to ask anyone to accept modern job evaluation analysis. Scientific job evaluation is accepted in certain countries, and it has been accepted by certain trade unions in other countries. When I say “scientific”, of course it involves human thinking, but I am using the word “scientific” in the general sense and not suggesting that it is purely a mechanical arrangement. When you can get an understanding of job evaluation and have it accepted, then you can get an end to leapfrogging and to constant demands by one group to exceed another group's income by a given amount and the other group determined then to catch up with that particular group. Everybody knows this is going on, and it is a very considerable cause of the present industrial agitation. It is very human and natural. I hope that after a certain period we shall be able, at least for the moment, to get stability so that we can think of the problem on a national basis and the Congress of Trade Unions and the Federated Union of Employers can get down to what one might call more long-term discussions of what is going to be a very serious problem in relation to inflation if it continues.

I am saying something which is completely non-political. Nobody can dispute that this is going on, and an intelligent attitude towards the problem will have to be found if we are to solve it. It is one of the major causes of inflation [703] and all of it is due to the fact that we did have a record increase in real national income over the past eight years and people are, very humanly and naturally, claiming a higher standard of living all the time for themselves and their children.

I have heard references to the suggestion that the amount of taxation is now at a staggering level. The Government do not like to increase taxation. No one likes to increase taxation. It is absolutely true that the percentage of national income of the whole people taken in taxation because of this inflation is slightly and marginally above what we published in the Second Programme for Economic Expansion. We shall have to have a very serious look at the whole position in the next five years, but the fact is that if there are inflationary pressures, taxation inevitably increases because the costs of government go up. That is the truth and it is no good disputing it because it is there to see.

In the year of disemployment and high emigration, 1956-57, the Coalition Government were taking 22.7 per cent of the people's income in rates and taxation taken together, and this year we reckon it will be something between 26 and 27 per cent. It is no good for the Opposition to pretend that the country is ruined, that people's lives are going to be appallingly affected by an increase from 22 to 27 per cent. That is nonsensical talk. It is still one of the lowest percentages in Northern Europe. Although we regret having had to increase it beyond the figure that was mentioned for this particular year, which was to be 24 or 25 per cent, this is due, as I have said, to inflationary pressure for which we were not responsible. As the House knows, a great deal of the money raised in taxation was redistributed to the community in services of various kinds. One would think from hearing the Opposition talking that the proceeds of taxation vanish into thin air, whereas, in fact, they are redistributed.

I want to say more about this futile allegation that all our problems began with the turnover tax. It is an interesting [704] allegation because one can draw this conclusion, this ludicrous conclusion, that if the Government, instead of establishing the turnover tax, had collected the £11 million in that year by a mixture of income tax and taxes on drink and tobacco, we would have no economic problem whatever. The fact that wages and salaries had increased steadily above productivity, the fact that we had to face the foreign difficulties I have mentioned, all that would mean nothing, if, at the last moment in 1963, we said: “It will not be turnover tax. It will be income tax and taxes on petrol, oil, tobacco and spirits”, that everything would be well and that we would not be having the present supplementary Budget and any strikes, the concept is so ludicrous that it is hardly worth debating.

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay Please continue.

Mr. Childers: Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers The facts to contravene it are there beyond all doubt.

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay What are they?

Mr. Childers: Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers The inflationary troubles began in this country in the September, fourth quarter of 1961 and they have been going on ever since. No serious member of the Opposition questioned the fact in the document Closing the Gap, published in 1963. An examination of the whole of the economic development of this country shows that from 1958 to 1961 the economic programme operated almost exactly according to plan. Workers' wages and earnings went up and they retained virtually all the increase because the cost of living did not go up appreciably. The cost of living did not increase by any noticeable measure during that period—in fact, by 3.1 per cent over a period of four years. Because the earnings of the workers increased at the same rate as the growth of productivity in industry and agriculture, the workers kept virtually all their increase. Their increase in earnings during that period was virtually the same, except that it was started on a lower base than before, for the second period from 1961 to 1964. I challenge any member of the Opposition to deny these facts. [705] The inflation began largely because of the considerable expansion in production and the growth of personal incomes of a record character that had never been seen in this country since World War II ended and, in fact, at any period of our history.

If you take the two periods from 1958 to 1961 and from 1961 to 1964— I shall not go through all the figures— if you take the volume of production and the volume of agricultural output, the value of production and the value of agricultural output, the growth of earnings of workers—take any figure you like—you will find that everything shows that the difficulties we now face began in the last quarter of 1961. In his speech on the Budget in 1962, long before the turnover tax was imposed in 1963, the Minister for Finance warned the entire country that inflation was beginning. He warned of exactly what would happen if it proceeded. He warned the entire country that, if incomes exceeded the growth of production, the cost of living would go up, the cost of government would go up and that, while we might continue to progress, while our exports and growth of production might continue to progress, while we might be able to give more employment to people in industry, if this process continued we should eventually get ourselves into serious difficulties from which we would no doubt emerge, but the difficulties would be there.

I offer the speech by the Minister for Finance on the Budget of 1962 as a piece of permanent historic evidence that the Government were quick enough to see the change that was taking place. Within 12 months, they saw the approaching inflation and gave full warning as to what would happen if it continued. It has nothing to do with the turnover tax at all. It was a typical inflationary growth that can be seen in many other countries. When people, for their own human reasons, demand a higher standard of living and simply refuse to accept the golden law prescribed by the NIEC and signed by nine of the leading trade union leaders, accepted by Mr. George Brown, accepted by the Labour Governments of Sweden and Norway, the moment incomes [706] grow faster than productivity, there will inevitably be trouble. It can be corrected and put right but the trouble is there. Those are the facts.

I shall not trouble the House by reading the speech made in 1962 by the then Minister for Finance, Senator Dr. Ryan, before the turnover tax came and before any of these industrial strikes. It could be read out today by me in this House and it would serve even the present situation. It was a classic piece of economic warning given by a devoted servant to this country. He warned the country of what people would have to face.

Mr. Treacy: Information on Seán Treacy Zoom on Seán Treacy It is pathetic.

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay He is improving.

Mr. Childers: Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers Another thing the country and the Opposition ought to be warned about is that even if people choose to criticise the Government for their actions and if they dislike increased taxation, they will not do themselves any good by hitting out wildly in every direction and demanding higher and ever higher incomes to meet whatever they think may be the punishment imposed on them by the Government. It will not get them anywhere. That is one of the facts that perhaps we on this side of the House have not sufficiently stressed.

I think perhaps people do not like to tell certain crude facts about our economics. When the Government impose increased taxation, it is not the intention of the Minister for Finance— he said this publicly a number of times—that the people attempt to reward themselves by demanding higher incomes. If we collect more taxation, it is with the intention of spending the money among the people. It is not meant to be taken away from the Government again in the form of a demand for higher incomes. That is another classic and hard-boiled truth that everybody has to accept. What happens? If the public, because they resent taxation, choose to raise their incomes in order to meet it, they are simply again increasing the cost of government and raising the cost of living and will get nothing out of it.

If the blind attack upon the Government, instigated and deliberately encouraged [707] by the Opposition, for increasing taxation and blaming the Government for industrial strikes and everything else will be reflected in what might be described as retaliatory action of one kind or another, then the consumer will not benefit by lashing out against the Government in various ways. It will merely have the effect of still further increasing the cost of living. The Opposition know this but it does not stop them from almost deliberately fomenting strife among the public by the way they talk. It is well that these facts should be known.

Another fact I tried to stress, as did also the Minister for Finance, is that, no matter what the public of this or any other country may do, in the end they will not get any more money they can spend on a higher standard of living than what is represented by the growth of productivity. To the extent that they ask for higher incomes than the growth of productivity, it will inevitably all be taken away from them in increased living costs or by the fact that the Government have to tax more because the expenses of government increase. That has taken place right through these years of development from 1958 to 1961. The people got, in increased incomes, exactly what was represented by the growth of production. After all the terrific growth in gross earnings —28 per cent from 1961 to 1964—the public only got, in the end, what was represented by the real growth of production in that period.

Therefore, one asks the question: what is the use of disobeying the golden law suggested by the nine trade unionists and the employers in the NIEC report that incomes should rise in relation to productivity? If at the end the only result is that industrial costs increase and taxation increases, then nobody is the better off. It is true that one group can start climbing on the back of another. You may get some startling increases in a particular group and they may keep a good deal of that increased gain but it all comes back to roost eventually, either in increased living costs or increased taxation, or a combination of both.

[708] A lot has been said about the effect of the status increases on our national difficulties. Many of the status increases to certain branches of the Civil Service were fully justified. It might look now as if they could have been given over a more extended period.

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay Or more publicly.

Mr. Childers: Information on Erskine Hamilton Childers Zoom on Erskine Hamilton Childers The total annual increase is about one half per cent of the national income and to suggest that this should create such a hurricane of industrial strife and contribute in a big way to our economic difficulties is obviously ludicrous, unless we accept the fact that people are not going to behave intelligently in regard to the right kind of an incomes policy. In the period when these status claims were rising at the rate of £4 million per year, non-agricultural income rose by £61 million between 1963 and 1964 and £24 million between 1964 and 1965. How the status claims could have the effect of weakening the national economy I do not know.

There has been propaganda all over the city and country in the past three years which suggests that the profits and the earnings of self-employed people have risen so gigantically in the past four years that ordinary salaries and wages are lagging far behind. People have asked how much must the greedy capitalist be punished by having to pay higher salaries and wages. There is not a word of truth in all this propaganda. The whole increase in the profits of industry in 1963 as compared with 1964, on the assumption that they did not need to make any profits, that no capital needed to be remunerated, which is a ridiculous argument in any country, even in a country with a Labour government, would increase the wages of the workers in that year by 4/- per week all round. You have propaganda of that kind which suggests that there are whole groups of millionaires in this country who are exploiting the workers. In this country there are fewer than 1,000 people whose income tax is assessed at over £10,000 per annum. This Bolshevik talk will get us nowhere. What we need is to increase the number of people who receive [709] incomes of between £4,000 and £10,000 a year and so see more industries established.

In the whole of the period since Fianna Fáil took office in 1957 and developed the Second Programme for Economic Expansion, profits have gone up by nine per cent and remuneration has gone up by 9.6 per cent. It is impossible for me to analyse the relation of profits to capital which has enormously increased in the period but profits did go up by nine per cent. That figure is quite a reasonable one and it does not show that the Government have allowed a gigantic class of profiteers to grow up in this country to use and exploit the workers. The Government introduced price control to prevent prices rising excessively and there is no evidence that profiteering has grown to a point where the salary and wage earners can say that there is gross exploitation at their expense.

We are not a rich country. There are only a few thousand people in this country who have incomes of over £2,000 a year. The Labour Party know that but they do not talk that way. They are trying to inflame the minds of enormous groups of people who are continuously looking over their shoulders at other people who they think are earning more than they are. That is a natural thing to do particularly in a country with a history such as ours. It is natural that when a country progresses economically after experiencing so many difficulties, people should look for a higher standard of living and for better times all round. There is nothing wrong with this country that a combination of commonsense and a willingness to work to enable us to overcome our economic difficulties in the next year or two will not solve.

There is nothing that can possibly prevent those in receipt of salaries and wages from eventually getting their reward. These people know all the facts. These facts will be published from year to year so that every year the growth of production will be shown to the community, and if there is evidence that the Government are parsimonious in their attitude or that the National Industrial Economic Council is suddenly showing a more [710] conservative attitude, it can always be corrected the following year. Is anyone going to suffer because there may be a delay of a year or two years in increasing workers' incomes with a view to ensuring the country's progress on a sound economic basis?

It is true that there are groups in the community who receive very low pay. That fact has been referred to by the Government and the Government guide lines which were issued when it became obvious that the advice of the NIEC, on which the trade unions are well represented, was not going to be accepted, did emphasise the need for providing some of the increased income of the country for the lower-paid workers. Whenever one makes a statement of the kind I am making now, one recognises that there are exceptions. It would take too long to give all these exceptions and to point out the reasons for them. One can only make a general statement and point out that it is always possible that there may be exceptional cases that require special treatment.

We have at present this solution of the £1 per week advocated by the Labour Court and followed by the Government in the hope of ending or mitigating industrial strife. Nobody ever talks about the reservations made by the Labour Court and repeated by the Government. It is an interesting example of the trend of thought in the country at present. You just look at the first paragraph of the statement and do not go through the rest of the statement of the Labour Court, which must have been made with very great seriousness by an independent body representative of employers and workers. Among the reservations, there is the suggestion that there might be a phasing of payments over a period, that in industries where there were likely to be excessive price rises, care must be taken, and particularly in industries that are going to face a 20 per cent reduction in tariffs within the next 13 months.

I mention that because the fact is that in the end what will be achieved in the way of real increase in incomes for the nation at large will be the real growth of productivity, and the rest will disappear as it has disappeared in [711] other countries. The NIEC, supported by nine of the leading trade union leaders in this country, warned the public that for a ten per cent increase in incomes, there would be a six per cent increase in the cost of living. I do not know what the £1 will bring in in its general application. It might bring in an increase of five, six or seven per cent in total earnings. But the nine trade union leaders and employers on that body warned the public what the effect of this will be.

The difficulty is, as I have said, that both in this country and other countries, people appear to take a very long time to accept these facts. They are not accepting them in Great Britain at present. The British people are behaving very like the Irish people in regard to this whole matter. They do not like to listen to the facts as revealed to them by people of independent character who are not associated with any political Party. There are other countries in Europe where for years and years these general facts have been accepted. The economy mounts steadily; there is no great increase in the cost of living. However, it can be a relief to us with our peculiar problems to know that there is practically no country where the system does not occasionally break down. Sooner or later, there is a sudden surge forward in incomes or a big increase in the cost of living. Then the Government Ministers start making speeches exactly like that I am making now, but particularly applied to their own countries, warning the people that the system has broken down. I suppose there must have been several thousand speeches made exactly like mine in the countries of northern Europe, indeed all over Europe and in America, all on exactly the same subject and almost in the same terms.

What we hope is we will be able to secure an understanding of the position as soon as possible so that once more we can continue to grow in economic strength on the intelligent basis of not trying to earn more in incomes, salaries and profits than is justified by the actual growth in production. In our case this process has [712] been going on since the September quarter of 1961 as compared with the next quarter. It has been mounting apace. It has been going on for a fairly long time. It has gone on in other countries, too. But sooner or later there must be a deceleration of this pace of inflation with a common understanding by the people of the problem we face. We hope to be able to see that.

It is interesting that the Government were able to maintain the position over four years. There was nothing the Government did in 1962, no action they took, no change in taxation methods, no change in their attitude towards national income or the application of Government expenditure— there was absolutely no shock administered to the people in either 1961 or 1962 to cause the beginning of this inflationary movement. It was, as I said, quite inevitable. To my mind, it was human that because of the growth of income that had taken place, everybody started to look for higher incomes and to increase their standard of living more rapidly than it had been increased during the first period from 1958 to 1961.

I note in connection with the national incomes policy, which is a very difficult thing to administer and requires a great deal more thought, that there is occasionally a quiet, secretive bleat from Fine Gael on this policy. The Fine Gael Party have not given us any detailed statement about it. They have not indicated how they would apply it in the present situation. They spend their time attacking the Government but they have not given any widely publicised message to the people. They have not shown how they would present the case if they happened to be in office. They have not demonstrated to the public that they are capable of asking for discipline, for careful consideration of economic facts, for a careful assessment of the national position, for a contribution by each person in the community towards the nation in his work and attitude to his daily life. There has been nothing of that from them, but merely a few, quiet bleats on the need for a national incomes policy.

If they have such a policy, why do [713] they not devote a whole debate to it? Why do they not tell us how it affects the current position and what they would do about it? I take it that if they have an incomes policy, they agree with the general statement made by the NIEC about national income, or how far do they disagree? Do they think it too extreme or do they think it too conservative? The Government intended that the statements of the NIEC were really to be guide lines to guide the whole community. It is supposed to be an independent institution. The Government have taken its advice in regard to a whole number of matters in relation to retraining, industrial planning and adaptation councils. They have taken all the advice they can from it. They were quite willing to continue recommending the programme of the NIEC in relation to incomes until it became evident that nobody else was paying any attention to that body in regard to this particular matter. We need to have more solid consideration of that sort of problem in this debate. The debate goes far beyond just merely attacking the Government for increasing taxation.

As the Taoiseach said yesterday, there is no reason why we will not be able to resume the national advance, apart from any international effects upon our economy for which we are not responsible. Assuming that these are not too serious, there is no reason why we should not be able to continue our economic advance, provided we have intelligent thinking on how production can rise in relation to our incomes and intelligent thinking on how everyone in the community can co-operate, with better communications between workers and employers, a further advance in agricultural production through the use of modern methods and of the grants and aids given by the Government, and also the use of all the other grants and aids which are offered and which if utilised by the people, should enable us to re-establish the advance we began in 1958.

I might add that there are few countries in which there have not been temporary halts in economic advances. These halts are inevitable, but they [714] should not result in frantic propaganda which will get us nowhere, or frantic attacks on the Government, or short-term thinking on fundamental issues. If we are to resume the advance, it must be on the basis of intelligent thinking and action. The Taoiseach outlined the course of our action in his statement after the Presidential election and he again spoke about it in considerable detail yesterday. I do not intend to refer in detail to what he said but the great expansion which we induced in the community by our policy was largely achieved by the public co-operating and showing a dynamic endeavour. We provided the guide line and the financial aid and the people carried out the job with the aid of foreign capital and technical advisers.

As I said, we can continue the advance, provided we keep on adapting policy to meet new needs and provided there is an intelligent attitude towards the extent to which the people at any one time can increase their incomes. That must depend on national production and whatever the income increases are going to be this year, or next year, the only amount that will be really earned by the people and kept in the form of money which they can use to increase their standard of living will be just what can be measured by the growth in production. That has been the case since 1951 and will be the case in the future. It is a lesson all of us, apparently, still have to learn.

Mr. Treacy: Information on Seán Treacy Zoom on Seán Treacy I listened to the Minister for Transport and Power for the past hour and yet I cannot decide whether this man continues to live in his ivory tower, from which he emerges on occasion to pontificate, or whether he has deliberately come here this morning to try to put up some kind of facade before the appalling spectacle which the Government present today. He has said that there is nothing but propaganda and scaremongering and that people are doing a lot of superficial thinking. Of course, the Minister has come in here today to tell the people the facts. One of his statements will go down as the understatement of the year. He had the audacity to boast [715] that no Government in Europe have shown more inventiveness or clear thinking than the Fianna Fáil Government. Any Government incapable of planning ahead for even six months without having to resort to the introduction of two Budgets is manifestly a bad, inefficient and irresponsible Government, clearly bereft of any policy. Their economic plans have come to naught and after 30 years of office, they have dragged this land of ours and its people down to a new financial and economic low. Yet, this Minister has the audacity to say that there is nothing fundamentally wrong, and he compares us with the great nations of Europe and even America, countries in which there are full employment and rising standards of living, countries in which men, women and children are cared for.

One would imagine, listening to the Minister for Transport and Power, that this financial difficulty landed in his lap only a year or two ago. I do not know of any Party in any democracy who have been allowed to govern for so long and who have done so little good and such irreparable harm to a small community like ours. It seems to me to be a mockery of the celebrations of the 1916 Rising, and the hopes and aspirations of these great men, that 50 years afterwards, we should be sitting here in an Irish Parliament finding that we are still not free politically or economically and that we had won for ourselves the name of a vanishing race by reason of the fact that thousands of people have been scourged out of the country by the Government since 1922. It is a mockery of the principles enshrined in that Proclamation behind which this Government have hidden for the past few weeks in a shameful endeavour to win the Presidential election. That Proclamamation contains in it the noble words of equal rights and equal opportunities for all our children, cherishing all the children of the nation equally.

I appreciate that my remarks should be in respect of this second Budget, the second within ten weeks. Staggering though this Budget is from the point [716] of view of the vicious and indiscriminate manner in which it imposes additional taxation on people already overburdened by taxation, I believe our people would accept it with a degree of resignation and calm if they could be assured or given any real hope that the agony and the crisis they are enduring, and have endured over the past 12 months, would come to an end in the near future. If they could be assured that the uncertainty and anxiety they have suffered and are suffering would come to an end, then they would accept with resignation this vicious additional Budget.

Such an assurance would come as a relief to us all. It would certainly help people to face the future with a little more confidence. The great tragedy is that this Budget does nothing whatsoever to restore confidence and to promote the social and economic climate so necessary for economic advancement. Instead of seeking to correct an already bad situation, the Budget will make things progressively worse. Instead of creating confidence, it will add to the already existing confusion.

A previous leader of the Fianna Fáil Party intimated, before he was elevated to another office, that, where taxation was concerned, we had reached saturation point and no further impositions could be sustained. Successive Ministers for Finance and the Taoiseach himself have also intimated that many of the recognised methods of raising revenue were no longer suitable because saturation point, from the point of view of taxation, had been reached and further impositions could no longer be relied upon to bring in additional revenue. That was one of the reasons given for the introduction of the turnover tax, a tax spreading the burden over the whole range of goods, services and commodities.

Instead of raising the living standards of our people, as a Budget is primarily intended to do, this Budget degrades our people, very many of them, to a mere subsistence level. I speak in particular of the lower-paid working classes and those dependent on the miserly, niggardly social welfare allowances doled out to them by this Government. I believe that, as a result of [717] this Budget, many more thousands of our people will simply give up the struggle and get out.

Instead of stabilising prices and doing something to maintain the value of our £, this Budget has, of set purpose and deliberate policy, introduced new taxation which will have the effect of increasing the price of practically every commodity, with a few exceptions. This Budget, of set purpose and deliberate policy, will increase the cost of living still further. It surely makes a mockery of the £1 increase in wages, which was so hard fought for, against such desperate opposition, and at such great consequence to the economy of the country. This Budget, instead of bringing about stability in prices, which is something we all desire, will precipitate a further demand for wage increases, despite the admonitions of the Minister for Transport and Power.

This Government cannot expect the Irish labour and trade union movement to stand idly by and see the standard of living of our people deliberately depressed by an irresponsible Tory Government. I believe our people would have accepted this additional crushing impact, the second within ten weeks, if they were given any assurance whatsoever that the credit squeeze would come to an end. There is no indication that this vicious credit squeeze, which is causing such havoc in all sections of our community, will ease in the slightest degree as a result of this Budget. The credit squeeze is holding up the implementation of many desirable schemes and depriving our people of essential services. I use the word “essential” advisedly.

Housing is held up; so are health, education and social welfare. Those of us who are members of local authorities know well that our county managers have no more money. Neither have they any hope of getting more money from the Exchequer, from the Minister for Finance, or the Minister for Local Government, and certainly they have no chance whatsoever of getting financial accommodation from the banks. It is no wonder this Government are displaying such indifference and such utter complacency in respect of the bank strike which is [718] going on for so long. It is a well-known fact that this Government would be anxious, by reason of their present dilemma, to see this strike continue indefinitely. I wonder what kind of situation we shall have to contend with when this bank strike ends. There is a feeling there will be a great many people declared bankrupt.

The question our people are asking specifically is: when is this going to end? Why do the Government not come out and be honest with the people and indicate to them what they think of the present situation, how they are treating it and when it is likely to end? This Budget we are now debating, which should have been the yardstick for measuring the present state of the economy and giving the signposts ahead, has done nothing whatsoever to ease the present situation of uncertainty and unrest. We have no evidence whatsoever that the corrective measures are being taken to deal with this situation. The Government have not even had the moral courage to give us even what they consider to be a diagnosis of the economic situation. Despite the facade which the Minister for Transport and Power tried to create here this morning, the fact is—and even the youngest schoolboy or school girl in our community realises this— this country of ours is withering and decaying before our very eyes.

We should like to see an honest appraisal of the situation. We should like to see the Government facing up courageously to the issues involved and not shying away in such cowardly fashion as has been evidenced here in the past few months. The Government, instead of facing the real issues at stake, are bullying, blundering and bluffing their way through the situation. We have had a colossal demonstration of that here this morning by the Minister for Transport and Power, and we have had the bullying and the bluffing here yesterday by the Taoiseach himself.

The Taoiseach fails to realise that the young generation of Irish men and women are thinking for themselves. They have minds which God gave them to use and they are not going to be influenced by what their fathers and [719] mothers do. Many of them have come to the conclusion that there is no future for them in this country. I assert that the vision and leadership of the Fianna Fáil Party have gone and that responsibility has been abandoned by them. This, too, is a Government who always maintained that full employment, rising living standards, price stability and equilibrium in the balance of payments were the main planks in their policies and in their programmes.

We have had one programme for economic expansion which operated under the Fianna Fáil Government from 1958 to 1963, and inherent in that policy programme was the stipulation of near full employment. “One hundred thousand jobs” was the slogan from all Fianna Fáil platforms and at cumann meetings during that period. The promise of one hundred thousand jobs must surely have won one hundred thousand votes for that Party. However, the statistics are incontrovertible and at the end of the First Programme for Economic Expansion, 1958 to 1963, it transpired that 170,000 people had left the country in that five-year period. So much then for their plans and their programmes.

We now have a Second Programme for Economic Expansion, and economists were loud in their praise of this plan, too. It was going to provide 78,000 jobs by 1970, but at the present time there are 8,000 people fewer in employment than there were even two years ago. There is no hope whatsoever of the targets set down in the Second Programme for Economic Expansion being realised. That programme is not worth the paper on which it is printed: it is in tatters. Even the Minister for Transport and Power admitted today that the taxation figures contained in the Programme were already exceeded by this vicious Budget. Unemployment is rising steadily; so also is the haemorrhage of emigration; unemployment stands at approximately 50,000, and it is felt that the emigration figures are not less than 30,000. We have, too, a yawning gap in our balance of payments of some £35 million.

The Labour Party believe in [720] planning. The intelligent, organised planning of our economy has always been a fundamental principle of Labour policy. We were pleased when we saw this Government take on some semblance of planning, but the planning they have been doing is mere—to use economic jargon—indicative forecasting, not so much by economists but by people to whom an ex-Minister of this Fianna Fáil Government, Deputy MacEntee, referred as the soothsayers and the astrologers in the Civil Service who drafted these plans, and took no positive steps to implement them. They were merely pious hopes of attaining economic salvation without taking the necessary steps to achieve it. We should like to see these plans changed to more positive measures designed to ensure that the targets fixed are in fact reached. It is not good enough to fix certain targets for economic expansion by way of an increase in employment, an increase in productivity, and all these things, and to hope that, by exhortation and persuasion, the various facets in our economy will co-operate. To implement a positive plan for the rejuvenation of our economy, any Government must take the necessary steps to see to it that the plan is specifically adhered to and must put into operation such machinery as is necessary towards that end.

It is truly amazing to those of us of a younger generation and in this modern age to see what is happening around us in the world through the media of television, the radio, the press, the speed of travel, and so on. Despite the unrivalled opportunities in this world today, despite the unparalleled advance in human knowledge and scientific achievement, when two great nations rival each other to be the first to land a man on the moon, is it not a cause of wonder and of particular shame and disgrace that an Irish Government have done so little with the precious independence, admittedly partial independence, which they acquired? Is it not surprising that they could not learn something from and emulate the work of the great democracies of Europe and Great Britain which emerged after [721] being devastated in two World Wars, from the latter of which this country escaped?

We contend that what is happening in this country is simply that we have had bad Government. Mismanagement by Government is solely responsible for the situation in which we find ourselves today. Despite the efforts of various Government spokesmen, you cannot convince the people otherwise. I am pleased the Minister for Finance has returned to the House.

Mr. J. Lynch: Information on John Lynch Zoom on John Lynch After performing onerous duties during the course of the morning.

Mr. Donegan: Information on Patrick S. Donegan Zoom on Patrick S. Donegan They are onerous enough at the moment.

Mr. Treacy: Information on Seán Treacy Zoom on Seán Treacy I have no doubt that the Minister was otherwise actively engaged in his multitudinous affairs. I did not wish to cast any aspersions on his actions, I can assure you.

Mr. J. Lynch: Information on John Lynch Zoom on John Lynch It was no harm to interject, anyway.

Mr. Treacy: Information on Seán Treacy Zoom on Seán Treacy We, in the Labour movement, have come to the positive conclusion that a deliberate attempt is being made by the Government to create the impression that the trade union movement in particular and the workers of this country are, by and large, responsible for the present adverse economic situation. We have had these inferences, these hints, from various Ministers. We had it in the Minister's statement the other day and we had it, in very good measure, this morning from the Minister for Transport and Power. It seems to us that this Government are madly groping for some kind of scapegoat to which to pin the appendage of irresponsibility and so divert the attention of the people from the present bad state of the economy which they, themselves, brought about. As a Labour Deputy, I want to repudiate the dirty inference that the trade union movement or the workers of this country have in any way been responsible for the economic crisis, the industrial unrest and the feeling of insecurity as to the future which prevails in our country today.

[722] I believe our workers have proved to be very tolerant, having regard to the impositions of this Government. We all attribute the economic malaise which has now set in to the implementation of the turnover tax in 1963. We admonished the then Fianna Fáil Government that the turnover tax would increase the cost of living, that it would send it spiralling high and that there would be resultant demands for increases in wages to maintain living standards. The Government rejected our pleading on that occasion. The result was that before the turnover tax was introduced, various merchants and traders in our society decided to increase the prices of commodities allegedly to cover the cost of this kind of service. When the increase was, in fact, implemented, prices rose still higher. Then we had demands for wage increases but, instead of a 2½ per cent increase in the prices of commodities and services, we had what is now acknowledged to be an increase of between seven and 11 per cent in prices.

The fact is that the Government gave unbridled liberty to every exploiter, usurer and extortioner to exploit our unfortunate people. We could not get this Government to bring in the necessary price control. It was always a dirty word with them and, according to them, it would serve no useful purpose whatsoever. Only latterly were they compelled, by public indignation, to bring in price control but it came too late. Since the ninth round increase in wages, granted in the spring of 1964— the 12 per cent increase—it is a statistical fact that the cost of living has increased by over 11 per cent and that is not taking into account at all recent increases in the prices of commodities approved by the Prices Advisory Body. It does not take into account the increase in the price of drink; the pint went up in price on the eve of the mini-Budget.

At a time when an understanding had been arrived at for £1 a week increase in wages, especially for the lower-paid worker, the Minister comes in with proposals for a further imposition of taxation. Apart altogether from petrol and cigarettes the prices of all [723] household utensils and essentials and other essential services are being increased. This is bound to send the cost of living spiralling still more. Do the Government expect workers to suffer these attacks on their livelihood without taking remedial measures?

Trade unions do not take strike action lightly. It is only after the most protracted negotiations and after every avenue has been explored with a view to agreement that the unions take strike action. This Government and the employers must examine their consciences also to see to what extent they have contributed to the industrial unrest we have experienced in recent times. We lay the blame for this industrial unrest at the feet of the Government. We blame them for interfering with the machinery of the Labour Court and of the employers' organisations with the kind of admonitions and strictures they have laid down, the ridiculous condition of a three per cent increase being all that the country could afford at a time when the standards of the working classes had fallen below the 1963 level.

These admonitions are taken up by the Labour Court and consequently we have a clash of interests. We have resistance from the Labour Court and from the employers which the unions must face up to. We all remember the ease and grace with which the ninth round was conceded when there were two by-elections in the offing. The Taoiseach informed the public at large that the 12 per cent increase was all right and immediately the Labour Court and the employers' organisations conceded this increase. It is Government interference that has caused this particular unrest; it is a lack of co-operation with the trade union movement that has brought about this particular clash of interests.

There is much that could be done to improve labour relations in this country. I would like to see this Government take a greater interest in creating an atmosphere which would lead to the better relationship we all desire. It is true that we have unrest here. No one can deny that fact. It is true that the figures for man-hours [724] of whom are on strike, as extremists, lost in this country are excessively high. The Government and the employers' federations cannot excuse themselves for the contribution they have made to this situation. Despite the allegedly Christian society in which we live, workers in this country have no rights whatever. The employers' reserve the right to hire and to fire. Workers have no right to a say in management, to a say in the profits of industry. There is a great void between workers and employers which must be bridged.

In times of difficulty, the instructions issued by employers to employees are issued in a dictatorial fashion, a final fashion leaving no room for negotiation or compromise. We see no desire on the part of the employers to consult with the workers. By and large, the capitalist dictum of the profit motive prevails. The worker is a commodity to be purchased at the lowest possible price, a cog in a machine or a number in a book, having no other right than to be paid his weekly wage. The employers should realise that it is in their own best interests to have proper negotiating machinery.

Unions do not like having to bludgeon increased wages or fringe benefits out of employers. Concessions given as a result of strike action make for bad blood and bitterness and workers have long memories. Many of the concessions given after strike action could have been given much earlier and so avoid the disruption of goodwill and co-operation which was lost in the process and which takes many years to regain. I want to assert that to seek to blame the workers of this country for the present situation is to perpetrate on them a very great slander which is wholly unjustified. I repudiate the inference sought to be created by Government spokesmen that there are insidious elements in our society—extremists, anarchists and communists—who are deliberately creating trouble.

Mr. Moore: Information on Seán Moore Zoom on Seán Moore A member of your own union said that last week.

Mr. Treacy: Information on Seán Treacy Zoom on Seán Treacy He did not say anything of the kind. I know what he said. No one would describe the white collar workers of this country, many [725] certainly not the bankers who have now been on strike for some weeks or the honourable farming community who marched up and down outside this House some weeks ago looking for a better deal. No one would have the audacity to describe them as communists. The fight going on at present by the Irish working classes and the Irish trade union movement is nothing more or less than a fight for a living wage and for the maintenance of decent standards. These labels are doing a great disservice to the Government and a greater disservice to the workers who, given a fair opportunity and treated fairly, can be the best in the world.

Mr. Dowling: Information on Joseph Dowling Zoom on Joseph Dowling Maybe you can tell us who the Reds are he was referring to?

Mr. Treacy: Information on Seán Treacy Zoom on Seán Treacy You might know them; I do not. I have yet to see them. I know the Fianna Fáil Party are trying to create this kind of image. They are trying to find a scapegoat on whom to pin responsibility. When it suits them, they can concede wage claims and pretend the increase was given by the generosity of the Taoiseach.

I want to refer briefly to the actual items of increased taxation in this second Budget. I deplore the imposition of this selective tax. I want to ask the Minister if he regards certain items of household utility as luxuries? Take the following articles: furniture, cups and saucers, tablecloths, floor coverings, towels, dishcloths, glassware, household utensils of all kinds, brushes, electric machines, washing machines, refrigerators, electrical appliances of all kinds, detergents, boot polish, floor polish, cosmetics, shaving soap, toothpaste, stationary, pens, pencils, bicycles, scooters, prams, toys, papers, magazines, school-books, wallpaper, adhesives, abrasives, tools, etc., etc. Is it seriously suggested that all these commodities are in fact luxury goods that our people can do without? What would a home look like if we were to rid it of all these items? Did the Minister not realise he was imposing a particularly unfair burden on newlyweds who have to put up a home together?

[726] We believe that this will have the effect of increasing the cost of living. Moreover, it has caused shock and dismay throughout the country, not only among the ordinary people who will be affected directly but among traders, wholesalers and manufacturers who are concerned that the Government should have had such a blind swipe at such a vast number of commodities. All the indications were that whatever happened, nothing should be done to worsen what was already a bad situation by increasing the turnover tax. The turnover tax was responsible for all our troubles. This is the turnover tax increased by five per cent. Instead of 2½ per cent on this wide range of goods, we will now pay 7½ per cent. By the time the profiteers have ended with it, you may be certain this increase will be around ten or 12 per cent. I cannot see what the Minister's price control machinery as at present applied can do to prevent that kind of trend. It was a deplorable admission of bankruptcy to have to do this. I feel the Minister did a lot of soul-searching before he implemented it.

The Government must realise that an imposition of this kind will have serious repercussions. I would be prepared to concede there are luxury lines. Many of them were designated by the Minister for Justice when he spoke on the turnover tax in the initial stages in his constituency. He said luxury goods were jewels, fur coats, speedboats, expensive scents and cosmetics of various kinds. We assert from the Labour benches that our people are entitled to as good a standard of living as any people under the sun. They are entitled to modern homes and amenities. We sense a begrudging attitude on the part of the Fianna Fáil Government, and especially among higher civil servants and county managers, that the workers are too well off and must be cut back in their living standards. This will certainly cut them back.

Is it suggested that a television set, a radio or a car is a luxury? Is a car a luxury today where men must travel to get to work? Is it not a necessary of life? Does not every community in the world with any standard whatever [727] enjoy automated homes with refrigerators, clothes driers, television and all the other modern appliances? All these labour-saving devices, created by the ingenuity of man, are things to which our people are as much entitled as any other—and the devil thank the begrudgers in the Fianna Fáil Party who try to deny them these things in this age.

Before I conclude, I want to refer briefly, because I will have another opportunity of dealing with it, to the Taoiseach's statement about the creation of a Ministry of Labour and the manpower policy programme of the Government generally. The Labour Party are pleased at this death-bed repentance of the Taoiseach who now sees the creation of a Ministry of Labour as necessary and desirable. For a long number of years Labour spokesmen have been explaining the need for this distinct Ministry, the function of which would be to organise the development of our economy, the provision of full employment and of job security, to provide rising standards, stability in prices and incomes, and take care of the shocking problems of redundancy, under-employment and unemployment with which we have to contend in a situation in which thousands of men and women are standing idle—50,000 of them at present—and some 30,000 emigrating, not taking into account the thousands of boys and girls leaving school every year who are frantically looking around for jobs. If we did this work properly, we would have to provide 150,000 jobs a year.

Every progressive country has a Ministry of Labour and we are glad that the Taoiseach has recognised the wisdom of our pleading. The Ministry of Labour, to which he referred in the most castigating terms in the past, as being unnecessary, undesirable and useless in our particular system, he is now grasping with both hands. We welcome that because it is an indication that the policy this Party has been preaching was right from the start. The policy and the philosophy of this Party have been tested in the best Parliaments of the world and can [728] be proved to be right and can be proved to be fruitful when implemented. May I say in passing that the Taoiseach chose a happy moment for the creation of this post because this is the anniversary of the 1916 Rising and we should have remembered that the Provisional Government of 1916 to 1921 saw fit to include in its Cabinet a Minister of Labour? That person was no less a personality than the woman who was one of the greatest heroines in the world, that noble lady, Countess Markievicz. It is only fitting that we should remember her work and her aspirations for the workers and what she did to enrich Irish manhood and womanhood. It is fitting that we should have such a Ministry as she commenced, to implement the hopes and aspirations enshrined in the great Proclamation which she helped to write in 1916.

I had hoped to advert to the Common Market situation and to the Industrial Training Bill, but I understand that I will get an opportunity to discuss these matters within the next few weeks. I must say, however, that this has been a bewildering year for our people with the introduction of two Budgets within ten weeks and still no hope of a solution to the predicament in which the country finds itself. The Minister would help the people to carry this burden of additional taxation with more resignation if he could say when this situation is to end, when we shall see an improvement in living standards, see stability in prices and an end to this vicious credit squeeze, and also if he could tell us when the local authorities will be given again the revenue so urgently required to continue with the provision of essential services.

These are questions the people are asking and if he can throw some light on these matters, he will have done something to end the allegations which are rightly made that the Cabinet are behaving in a most cowardly fashion and are seeking to bully and bluff their way through an economic crisis of their own making and out of which they alone must get. If they are to get the co-operation of this House and the people, they must [729] be honest and give us the facts. That co-operation will be readily forthcoming if we can see any real signs of the leadership, the vision and the courage which we expect from a Government in the 20th century.

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay This has been a great day for the country and a greater day for this Parliament, and one for which we should be deeply grateful, because early in the debate this morning, we were honoured by a sacred and inspired visitation from the Minister for Transport and Power who, on his way here from the Olympian heights of poetic diction to which he has become accustomed in recent times, dropped in, on that ethereal journey, on the statesmen of the world, found out what they were talking about and was profoundly pleased to discover that all the statesmen of the world were saying exactly the same thing as he himself intended to say, and in fact did say, in the course of his provocative and audacious address here this morning. God help the States of the world if the statesmen of the world are as inspiring as the Minister for Transport and Power who is so fond of declaring on so many occasions that he has no functions in matters affecting the Ministry over which he is supposed to preside. The only function he now appears to have left to him is to be sent into this House—I say “sent”— to deliver one of these pseudo-Olympian sermons.

I know it is difficult for the Minister for Transport and Power really to be of us and, as he would probably describe it, to get down to our level. He is, of course, the passenger in this Government and, in order to qualify for his non-paying seat in this Cabinet, he must be sent in on occasion to make one of these super-intelligent speeches on productivity, on labour relations and on the duties of an Opposition, in particular, to a Fianna Fáil Government. He has been accused by Deputy Treacy of audacity. Audacity, of course, is a commodity of which the Minister for Transport and Power is never in short supply. It does not bear the remotest resemblance to the railway lines, for which he is responsible, [730] the buses which he runs, the Bord Fáilte grants, of which he is in short supply, the losses in the B & I on one year under his stewardship, and all of the other affairs for which he is supposed to be responsible, but in relation to which, in referring to day-to-day transactions, he repeatedly tells us he has no function.

His function here today in disseminating propaganda on behalf of his Government is, of course, his way of paying back for his seat as a passenger in this Government. In fact, it is common knowledge that one of his colleagues in this Government privately boasts that the greatest attribute of the Fianna Fáil Party is its capacity to carry Deputy Childers, Minister for Transport and Power, with it. Mark you, I do not think he is far wrong.

He talked here today of the need for intelligent thinking, implying of course that the only intelligent thinking, or the only persons with a capacity intelligently to think, are on the benches which he occupies as a non-paying passenger at the moment. He wants from the Opposition plans. He wants their views. He wants constructive opposition. He does not want anybody to criticise, and particularly to criticise adversely, any of the matters which glaringly demand adverse criticism. He mentioned the crisis in 1956 and 1957. I asked him, but he did not answer, what sort of constructive criticism we got then from the Fianna Fáil Party occupying the benches at that time from which I now speak. The only thing I can remember still, with a horrible patriotic fear, is the frothing of the saliva of hatred from every member of the Fianna Fáil Party here in these benches at that time. They had no constructive Opposition then to offer or, if they had, they did not offer it.

The Minister for Transport and Power told us today that the inflation, which, he says, is the cause of our trouble, is not of the Government's making, that it is world-wide. He discovered that in his great roundabout ethereal flight this morning in communion with the statesmen of the world. He says it started in 1961 or 1962 and that we were warned then [731] by what he called the great financial wizard of those days, Deputy Dr. Ryan, now Senator Dr. Ryan. My recollection is that we were well warned of inflation by members of the Fine Gael Party, led at that time by Deputy Dillon, who was constantly talking about the dangers of inflation. He talked about it during the general election of 1961. The Taoiseach then, as in the last election, was able to pursuade the people that it was not inflation, that it was real prosperity, and the prosperity, in particular, created by this Cabinet, which, he says, is the best in Europe. He said that yesterday during the course of the debate. If this is the best Cabinet in Europe, Europe must be in a sorry state. I should love, if it were not such an invidious pastime, to try to ascertain what makes this Cabinet the greatest Cabinet in Europe. The Minister for Justice will be disappointed because I will not say a word about it, but I think he will readily concede that this is an average, a very average, Cabinet of very average people, not the least of whom would be the Minister for Justice himself. Now, is that not a nice little aperitif before the Minister's lunch?

We have a Minister for Transport and Power who sits third in line here. Maybe I had better deal with the second first—the Minister for External Affairs. We rarely see him. He is drafting resolutions and plans for the settlement of all kinds of things all over the world. We really do not know very much about what he does. I do not suppose he is bothering very much about whether or not we worry at all. He is an unhappy man, very unhappy. We have not heard of him lately either at home or abroad. In fact, we have not heard anything from him at home even when we expect to hear something.

The Minister for Transport and Power is of course, as I said, the non-paying passenger in this Government. Goodness knows, it is a great achievement to have been able to carry him all along the line. However, I suppose there are certain penalties attaching to power and certain obligations which [732] people have because of some curious anomalies in the growth of political Parties. When the Minister for Transport and Power begins to lecture us on responsibility, on intelligence and on the proper way to think, he looks solemnly at the “Ceann Comhairler” when giving these exhortations, reminding the “Ceann Comhairle” that the people in Opposition have no particular right to indulge in criticism of any kind, because the thinking has been done, according to him, and has been done properly, and done intelligently, under the aegis of this great man who descends occasionally from his Olympian heights to talk to the common people on both sides of this House. He can be dismissed as a passenger in this Cabinet and I hope in the reshuffle, if there is one thing the Taoiseach does—he says it will not be a major reshuffle; we do not know whether it will or not—that he will get rid of a few of the passengers. I would be delighted to see him having the courage to get rid of them, and particularly the Minister for Transport and Power. I think it would do his image a good deal of good.

We have the rest of them then. We have the Minister for Social Welfare. He is a sort of executive officer who gets in a bit of money from taxation and pays it out again in various ways and tries to get it back in other ways. Generally speaking, it is a rather cut-and-dried performance. We have the Minister for Lands, who takes time off occasionally to rant about the Ascendancy and people with double-barrelled names, assisting the Minister for Social Welfare; he spends a great deal more time doing his own particular private practice as a solicitor than he does in the Department of Lands.

I have a great piece of stuff here from my old friend The Western People of Saturday, April 3rd, 1965, and I shall be dealing with that when I come to talk about my special province in politics, the west of Ireland, and the way the West is being ignored or excluded from Government policy generally. When there was a crisis in 1956-57, we got no credit other than that it was our own bungling, as was alleged at the time.

[733]Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan You scuttled.

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay I am not going to be drawn by the Minister for Justice. I thought I might have kept him quiet by ranking him as an average member of his Cabinet but, as my friend, Deputy Dillon, would say: “I want to warn you,” that we did not scuttle anything. The terms of trade went against us, the balance of payments became bad, and the Suez crisis intervened.

Mr. B. Lenihan: Information on Patrick J. Lenihan Zoom on Patrick J. Lenihan Why did you not stay in Government?

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay We gave the people the opportunity of deciding what to do, and the people, as has happened many times in the past 30 years, were fooled into the belief that this best Cabinet in Europe was the right Cabinet to have. They have them now and, goodness knows, it would be very hard to begrudge them to them. Government, in my view, is nothing more or less than the business of statecraft, of household management. The management of the nation is nothing more, except on a far bigger scale, than the job of the housewife who receives the family income and plans what is to be done with it.

We have the terrible situation that the Government have not been able to plan, obviously, for any longer than about 90 days. They run into trouble and then they have to introduce another Budget. I am not satisfied with the Taoiseach's assurance yesterday that there will not be any more taxation for the remainder of this year. We have had such assurances before and they did not work out. The Second Programme for Economic Expansion has just not worked out as planned. Of course, the Fianna Fáil Party do not believe in planning. They do not believe in an incomes policy. The Taoiseach in talking about an incomes policy the other day said: “whatever that means.” They do not believe in these things and it is very hard to implement something in which one has no faith. I am never too happy about a plethora of documents, whether they are called “Second Programme”, “Closing the Gap”, grey books or [734] blue books. All this is side-tracking the real issues. We were doing better in the days before our civil servants were commanded to spend a considerable amount of their valuable time and their intelligence preparing booklets on this and booklets on that, instead of doing the job in hand and being allowed to act as what they really are, the bulwark between the Government and the people. Surreptitiously, day by day, as a result of the machinations of the Government they are falling into the position of being Government propagandists. When the day is reached that civil servants are used—whether against their will or not is another matter, because they have no say in it—as propagandists for Government policy or for Government Departments, instead of being the bulwark between the people and the Government, then we are on the wrong lines.

The Minister for Transport and Power talked today about responsibility. That is a new word. He has dropped “dynamism.” That used to be the great thing; now it is “responsibility.” In my view, and I have held this view for a long time in relation to affairs in the country, the two greatest evils that ever hit this country were the Famine and Fianna Fáil. I repeat that now, with the addendum in respect of this “responsibility” quest of the Minister for Transport and Power, that irresponsibility began with Fianna Fáil and it will end only when Fianna Fáil end as a force in political life here.

This great Cabinet, this greatest Cabinet in Europe, has a Minister for Local Government who has a line of patter but no money. He has no money to build houses. He has not enough to meet the commitments of the local authorities for last year. He has less to give this year. There is a promise of some kind of supplementary allowance which emerged at Question Time yesterday. I do not know what this is, but we wait anxiously to see how far it will go and how much it will do.

It would be better to say: “We have not got the money; we are in trouble” instead of trying to argue, [735] to bluff their way by saying: “We have built more houses. We have houses and flats ready, and the situation is not as bad as you people allege it is.”

The Minister said the other day when he was looking for this extra taxation, that we should all step together, as it were. This “step together” business is a new concept. It is only to be operated when Fianna Fáil are in Government, but when they are in opposition, they are entitled to be as free as the flowers in May to indulge in any kind of tactics about putting the country in pawn, selling out, scuttling and all the other expressions that are used when they are in Opposition. However, it is all wrong and contrary to the principle of “Don't rock the boat” when they are in Government.

This is due to the indoctrination within the Party itself that they and they alone have the monopoly of patriotism and that they are the only people to whom this country could be entrusted at any time. The Taoiseach gave expression to that viewpoint away back in 1948 when he said: “Be sure that you give the country back in the same good state in which you found it” to the national trustees, the Fianna Fáil Party. Everybody knows that is not so.

I now come to what I regard as my principal business here, that is, to speak on behalf of the people of the west of Ireland, which is also the business, I am glad to say, of the Minister for Justice representing a constituency in the West, part of which is poor, the Leitrim part, and part of which is not so bad, Roscommon. I think he shares with me the joint responsibility, whether we are in Government or in Opposition, to see to it that the people who have had the hard times in the past are not going to have any harder times than we can afford to save them from.

The way things have been, with depopulation, with emigration, with these small amounts of industrialisation, comparatively speaking, we have no ground for being wildly jubilant. I know the difficulties, being far away, the lack of ports and, indeed, the lack [736] of railway lines for which the little man who was here today is responsible. I am concerned primarily about our people in the west of Ireland vis-à-vis taxation, vis-à-vis expenditure and all the matters that affect them, whether small farms, assistance, advisory services, hotels, guest-houses, hill sheep farming, grants for sow farrowing, or anything else. I think that what must be guarded against more than anything else is the promotion of a cynicism amongst these people, and particularly the young people. The situation has now been reached, and I think quite frankly we must face it, that the young people, particularly in rural Ireland, and more particularly in the west of Ireland, are not inclined to believe any of us, either the Government or the Opposition. That situation has been brought about by perpetual promises without adequate implementation. There is no doubt that things were tried from time to time and efforts were made but more was claimed on behalf of the effort before it started than the result justified. That is where I think our great trouble lies in that promotion of cynicism and its perpetuation, namely the making of statements for which there is no basis in fact and the promise of something the implementation of which is always doubtful and simply never comes off.

Every Deputy, I think, from the Province of Connacht was on a deputation yesterday, with the exception of the Minister for Justice, and I can well understand why he was not there. It was a deputation to the Parliamentary Secretary to the Minister for Finance, Deputy Gibbons, about the merging of minor employment schemes and bog development schemes with rural improvements and then the overall drop in the Vote by approximately one-half. We were all there, Fianna Fáil and Fine Gael Deputies from all the western counties. With us were four men, two from Galway and two from Mayo, whose lives were very seriously affected by this change of policy. “It is a change for the time being,” was the best I could get out of the Parliamentary Secretary, Deputy Gibbons. [737] Those four men must have gone away very disillusioned in spite of our best efforts and the efforts of Deputies from Fianna Fáil and our complaints about this change in policy in relation to the Board of Works. These four men could not but be disillusioned by the manner in which the Parliamentary Secretary to the Minister for Finance had to conduct the interview.

He pretended that the matter was not permanent. He pretended that it was not as bad as in fact it was. He recited a litany of things such as drainage being done, hill-farm sheep, a pilot station at Athenry and everything and anything except what these four fathers of families wanted to know, namely: “What will be our position?” One man, in fact, said: “I have come up here from the west of Ireland to find out the truth of all this and I want to know what to say when I go back”. He has gone back. If he was able to separate the wheat from the chaff, he has gone back with the knowledge that the minor employment schemes and bog development schemes, as we know them, are gone and that the total of the Vote—rural improvement schemes, bog development schemes and minor employment schemes—has been reduced by approximately one-half.

An Leas-Cheann Comhairle: Information on Cormac Breslin Zoom on Cormac Breslin I feel that these would be matters more appropriate to the Estimate than to the Finance Bill.

Mr. Lindsay: Information on Patrick James Lindsay Zoom on Patrick James Lindsay I am talking about the prevailing cynicism. I regard this as appropriate because yesterday, on this particular deputation, all the Deputies there who support the Government declared that, in their view, these schemes should be brought back and that the Government decision to change the system should be reversed. We, here, have now put down a motion—whenever we get it discussed —and we shall test whether these Government Deputies think and act the same in public or in the lobbies of this House as they do in the comparative secrecy of a deputation room.

When taxation is imposed, whether at the beginning of the year or piece-meal [738] as we are having it now, it is bound to affect the old, the pensioned, the unemployed, the small wage-earner and the small farmer more than the person more adequately cushioned to bear the impact of such legislation. To quote the Minister for Transport and Power, that is a simple and irrefutable truth to which we must face up. As such, these people from the small farm areas, the small wage-earners, the people affected by these minor employment schemes, rural improvement schemes and bog development schemes, are hit straight away. What is their remedy if they have no employment or if their income is less than their capacity to deal with the situation? It means, simply, what I said in this House I think on the occasion of the removal of the food subsidies in 1957 that not alone would more families in the west of Ireland have to emigrate but that they would have to go younger in order to try to send home the money. That has been the pattern. I regret that I was correct in my assessment at that time of what would happen. It did happen and it has been happening with alarming rapidity and alarming results.

I have talked here before about Government policy and its effect on the people of whom I speak. I have talked about its result in the closing of houses and of entire families going away. The Minister for Lands may talk, until he reaches his characteristic frothing at periods and as long as he likes, about his Land Act. We are not seeing any great effects from it, so far, in the west of Ireland. When one looks around the sweeping Irish countryside, one sees all the houses there. Every one of them has been built with State aid either by grant or by loan and they are now derelict. This is all the result of not following up the national investment with appropriate ways and means to keep these families static in one community. I think the proper thing to do would be to try to keep one's people on the land or busy at whatever work they choose to do.

The Government have fallen down flat on the fishing industry. It is true that they are making certain strides in Killybegs, County Donegal, but that is [739] due to the local people themselves and the opportunity they got. If one wants to ascertain where there will be major fishing ports, one finds one's hands tied before setting off. They had to select large centres whereas there were plenty of places of adequate depth, berthage and size where, for an expenditure of far less than has gone down the drain on other less worthy projects, they could have started virtually a new town or an extension of an old town. But that, of course, has not been done.

I want to remind the Minister for Finance and the Minister for Agriculture of some of the things the Minister for Agriculture said before the last election. I am glad the Minister for Justice is here as he will be particularly interested in this. The Minister for Agriculture was giving a final fillip to flapping affairs in the constituency of North Mayo and he is reported as speaking at Belmullet on April 3rd, 1965. In that speech he says something with which I have no quarrel. He said:

The West, however, as we know it, will disappear unless we win the battle of the small farm, unless we succeed in giving the Western farmer the means to provide himself and his family with a comfortable and adequate standard of living on his farm and create conditions under which this could be made to happen. This we intend to do.

That was a year ago and with the exception of some minor relief schemes, nothing has been done to help the West. That speech runs to about three columns in the newspaper and further down under the heading “Solemn Assurance,” the Minister for Agriculture says:

We regard this as a national, not a local problem, and I give you a solemn assurance that no other matter will receive more unremitting and determined attention from the new Fianna Fáil Government than the economic revival of the West.

There is another quotation, one in which the Minister for Justice will have a great interest. It is under the [740] sub-title of “Drainage” and in it the Minister states:

Drainage is of fundamental importance to the farmers of the West. The first step in dealing with the problem of arterial drainage is being pushed ahead as rapidly as our resources will permit and as the major catchment areas are completed the smaller rivers are being tackled

The Shannon Basin affects a great part of the West of Ireland and at the special request of An Taoiseach, Mr. Donogh O'Malley, who is in charge of the Board of Works, has prepared a special crash programme to get this work started immediately. By the use of revolutionary techniques he has been able to get the time taken on preliminary work very substantially reduced so that actual construction work can begin much earlier than we originally thought would be possible.

There has not been a word about the Shannon since then. Deputy O'Malley has moved from the Board of Works into the province of Health where he has projected great things for the health of our people but has deferred the benefits until the end of 1967. In the meantime, we are all to die and be buried without the help of the benefits he has promised.

Anybody who says we are living in a period of prosperity simply has his head in the sand. I cannot use that phrase in connection with the Minister for Transport and Power because he has his head in the clouds. Does anybody visit pubs; does anybody talk to the people; does anybody meet people at wakes or funerals; does nobody go to fairs any more? I was recently at a fair in Crossmolina. The Minister for Justice was there, too, and neither of us was contributing very much to the productivity of the nation. At that fair, two men told me that prices were the worst since the Economic War. That cannot denote prosperity. Prices are down and we are not now hearing very much about the Trade Agreement which comes into force on 1st July. I can see that we may be suffering under the great [741] impact of the British seamen's strike and that the Government must find some of their difficulties stemming from that.

By and large, our present difficulties are due to the fact that this Government have no plan except day-to-day planning. They do not believe in planning. They have said this. The Taoiseach, at Mullingar, threw dirty water on planning, on price control, on an incomes policy. And so we find ourselves in the position we are in today. Having brought in a Budget earlier than usual this year, within three months we find that we have not got enough. When is it going to end and where is it going to stop?

Now we have the wholesale selective tax. It is interesting to hear the Minister for Transport and Power trying to get rid of the idea that the turnover tax was responsible for the spiral into which we have been put. He said that if we had put the extra taxation on wines, spirits and tobacco, it would have interfered with the cost of living in the same way. That is not logical, reasonable or a fact. When you put a tax on food, you are going to increase the cost of living much more than if you put a tax on luxuries such as drink or tobacco. One must eat food but one need not drink. One must wear clothing but one need not smoke. The simple truth of the matter is that the chickens, the turnover tax, plus the 12 per cent increase which the Taoiseach instituted for the special purpose of buying the electors in two constituencies, as he successfully did, but more shame to him than to them, are now coming home to roost.

We now find ourselves in the desparate situation of having no money at home, of having moved in on all our reserves, of having exhausted our credit abroad and are now traipsing from New York to Germany and from Germany to the Bank of Nova Scotia to borrow £5 million, just a pittance, presumably, to pay something urgent at the moment. In spite of that miserable spectacle of the economic situation, we find the Minister for Transport and Power in here talking about prosperity. I hope the Taoiseach, in his Cabinet reshuffle for the purpose of [742] appointing a Minister for Labour, will find for the Minister for Transport and Power a soft landing on the moon or somewhere out of the Cabinent where he cannot be the propaganada menace he is and the non-productive head of a Department.

Mr. Moore: Information on Seán Moore Zoom on Seán Moore To even the most patriotic citizen the imposition of taxation is not very welcome. That is all the more reason why it must be justified. There are two aspects of the present Financial Resolutions which stand out more than any other. Some of this money will go towards giving Government workers the £1 increase already given to industrial workers in general. It seems strange therefore that in this Assembly we should have both the Labour Party and the Fine Gael Party opposing this. They have attacked the Government for having the audacity to make provision for these payments. It is particularly strange for the Labour Party, who claim to be the guardians of the workers, who get up on their platforms day after day and say they are the champions of the workers' rights. Yet here, in order to make some political capital or perhaps only to embarrass the Government, they vote against these new measures which will give the £1 increase to the workers in the categories I have mentioned. I hope the attitude of the Labour Party and Fine Gael will be made known through the papers to the people concerned. I refer to the Labour Party particularly because people expect that attitude from Fine Gael.

Some time ago the Minister for Industry and Commerce said no country had a God-given right to prosperity. That is a thought that must strike each of us listening to the debate here. At present every country in the sterling area is having a tough time financially. We had no reason to expect we would escape. Were it not for the measures taken by the Government, the position would be ten times worse. Great tribute is due to the Government for the fact that, beset by difficulty, they have not done as their predecessors did on two occasions, and run away. The Taoiseach in a very fine speech yesterday said the [743] Government had no intention of running away but were prepared to face the difficulties confronting the country at present. The least we could expect from the Opposition is that they would not try to hamper the measures taken to better the lot of the people as they are doing in the case of the £1 increase to workers. At election time we will remind these people of their high-sounding phrases about the rights of workers. Yet they seek to put a wage limit on workers by denying this increase of £1 per week. This morning a Deputy said the Government had an anti-worker bias. Here is an anti-worker bias. If these people succeeded in a majority vote, these workers would not get the £1.

I listened to Deputy Cosgrave yesterday. All I can say is perhaps the speech he made was not of his own composition. It was written by the grey eminence of the Fine Gael Party, who pontificates in all the Sunday papers, writing one article for the readers of one paper and another for the readers of the other. In Africa, these fellows are called witch doctors; in Ireland, we call them economists. The mistake these people make in writing these articles, and the mistake made by those who follow them here, is that they underestimate the intelligence of the Irish people. In the last election the people returned the Fianna Fáil Government. I have no doubt that with the lead given by the Taoiseach yesterday, the people will see who has been defending the rights of workers in this House over the years, will know the Party which had to convert the Party opposite from cutting the old age pension. Examine the record of the Coalition Government in regard to social welfare and compare the measly increases they gave with what Fianna Fáil have given.

Deputy Cosgrave bemoaned the fact that the housing situation was not as well as it could be. We all agree with that. In this city we have 4,000 families awaiting houses. That is something we must face up to. The Government have faced up to it to the best of their ability. We know that within the next five years Dublin will have about 8,000 [744] new dwellings. That will still not be enough. When a Government come in here to impose taxation to build houses, it is criticised, as if a Government could print money for building houses. The only way a Government can get money is by taxation. The sooner that is realised by the people opposite the better. There is no magic path to prosperity and better housing conditions. They have to be paid for by the people. The people are willing to do this and I think it is the desire of the majority that the last of our bad housing be swept away.

I do not want to go back to 1957 but Deputy Cosgrave's speech forces me to do so. He contrasted the situation then and now. At that time the builders of this city refused to accept Corporation contracts unless we put the money on the table for them. We had to drop schemes which were restarted only two years ago. The reason was that we had no money. I admit the then Government had difficulties. Many of them were of their own making and some were caused by outside influences. But Deputy Cosgrave tried to tell us that when they were in power the housing drive went ahead. It did not. In this city there was complete chaos due to the mishandling by the Fine Gael Minister. On one occasion the Minister told the Fine Gael members of the Corporation that he had given the Corporation £1 million. That was quite true. But at the time we owed at least £1½ million. When we paid what we owed we were still short of money.

The housing drive is a heavy impost, but one which must be accepted. We must provide the money. It is a cause of the cynicism which Deputy Lindsay referred to that the Opposition cry for more houses and better social services but then refuse to provide the money for them. There is no good underrating the intelligence of the people. We are as intelligent as any race in the world. The Opposition have been making all sorts of promises and stupid statements that there is some easy way to prosperity, which they know to be untrue. The effort must come from the people led by a good Government.

[745] Go back to 1957 again. We woke up one morning and found a whole list of import levies imposed. Again, the people recognised that there was reason for the import levies but, because of the manner in which the Government put them on, thousands were thrown out of employment and forced to emigrate. Building workers left the country and many never returned, despite the appeal of the then Taoiseach to come back to work in the building industry. We have kept the building industry going at the very highest level, and even in Dublin city, it is going today at a very high level with about 5,000 dwellings under construction. I believe the people appreciate this Government's efforts in the field of housing. We will go ahead with our plans for housing until the last of the slums in Dublin has been swept away.

The time has come when the Opposition must adopt a more responsible attitude than they have adopted. Simply to decry the efforts of the Government and try to place all the blame on the Government is utterly ridiculous and is not succeeding with the people. The people know that vague promises are no substitute for good Government policy. Over the years, on this side of the House, we have kept faith with the people. The people realise that despite the difficulties, they have honest government. One type of dishonesty which we have had is the type which we saw this morning when a Deputy on my left stated that it was the Taoiseach who gave the 12 per cent wage increase. A few minutes later he said the Government had an anti-worker bias. That type of argument certainly confuses me and I am sure it confuses the people more. The 12 per cent wage increase was negotiated both by the unions and the Federated Union of Employers. The Taoiseach's part in it was merely to hope that this 12 per cent would be worked out and absorbed by the economy and would give workers a higher standard of living without raising the cost of living too much.

Today, while undoubtedly we have [746] industrial unrest, a Fine Gael speaker said that every strike is for increased wages. It proves that the Deputy does not interest himself in matters affecting workers and employers, because if he did, he would know that there are many justifiable strikes for better conditions, apart from wage increases. We must endeavour to get down to a realisation of our difficulties and have the co-operation of all classes and parties and work out plans for the standard of prosperity which is desired by all of us. However, we are not going to do that as long as we have people making irresponsible charges and trying to arouse one section against another. Thomas Davis once said: “Gentlemen, we have a country”. However, this has been forgotten by many speakers who for petty, political advantage will try to use one section against another, use employer against worker and use one section of the workers against another section. That is not going to pay off and the country as a whole is bound to suffer.

The Minister for Transport and Power referred to the clash between white collar workers and manual workers. I am not going to deal with that but I should like to deal with the case of the lower-paid workers who are having it hard at the moment. It would take a wizard to work out how to help the lower-paid worker and still keep the differential in relation to other workers. It would take a greater brain than mine, or of many others, to work this out. It is something that must be done and the lower-paid workers, whether urban or rural workers, must be given a proper standard of living. There is sufficient intelligence on the side of the Government, the trade unions and the employers' associations to recognise this crying need to uplift the man in the city who is earning £10 a week or less and to guarantee that he will have a dignified existence. I know that as soon as we start raising the lower-paid workers, the higher-paid workers will say that we must keep the differential, and then you are back where you were. A start must be made and if we got down to helping the lower-paid workers——

[747]Mr. L'Estrange: Information on Gerald L'Estrange Zoom on Gerald L'Estrange And you are giving £8,000 to Dr. Andrews.

Mr. Moore: Information on Seán Moore Zoom on Seán Moore ——we could then go on to better the lot of the other workers. I do say, with all the sincerity I can command, that this is something which must be done if we are to start to build a real prosperity.

Mr. Crotty: Information on Patrick J. Crotty Zoom on Patrick J. Crotty Deputy Moore has thrown a new light on this Budget. When the Minister was introducing the Budget, he said it was for the purpose of aiding the farmers and also for paying the increase to the Garda. Deputy Moore—I suppose because he is a Dublin man—said nothing about the increase for the farmers. Apparently it did not suit his constituents. He said that the justification of the Budget is the £1 increase to Government workers. It does not require a Budget which will bring in £8 million or £9 million to pay an increase of £1 a week to the workers to whom Deputy Moore referred.

When introducing the Budget, the Minister warned the country that there might have to be another Budget in the autumn if the revenue was not buoyant, or if there were extra and unexpected calls on the Government. I doubt if even the strongest supporters of Fianna Fáil thought that within ten weeks of the first Budget, we would have another Budget. I suppose if the first Budget had been brought in at the usual time, about May, there would have been less than a month before the introduction of this second Budget. The people were shocked by this. Of course, we had a nice new description for the second Budget. People in the country did not realise we were having a second Budget because what appeared in the newspapers was that we would have a “Financial Resolution.” That is a new name for a Budget. There was no question of having a second Budget but it was said that a Financial Resolution would be presented to the Dáil on the following Tuesday and the Dáil would be asked to pass it. That was breaking the news very gently.

If in the autumn the revenue was not coming up to what was expected, and if there were extra calls on the [748] Government, there might have been some justification then for a second Budget, but surely ten weeks was not sufficient time in which to judge the overall position of the country, to judge whether the Budget was having its effect or not? The extra calls could not come in that very short period of ten weeks. The only thing I can think of is that, financially speaking, the Government must have their backs to the wall and must not have a shilling in hands. That is the only justification there can be for coming in with a second Budget within 70 days of the first.

Also, if, as is the case, there was severe unemployment in the building industry and the Government decided that the decision which they took in the Budget to close down local authority housing, or the decision not to build any more county council cottages—which has happened in my own county and in every other county— was too harsh, if they had reconsidered it and had decided, in view of the results of the Presidential election, that possibly they had been too harsh in closing down the building industry, with the housing crisis as it is, and that they should loosen up and come to the House and say: “We are looking for more money in taxation but we will give that money out to provide local authority houses and provide the local authorities with loans to enable eligible people to build their own houses, or provide them with reconstruction grants”, then some case could be made for a second Budget. I am not calling it a Financial Resolution; I am calling it a second Budget. However, not one penny of that extra taxation of £7 million or £8 million will be devoted to the housing crisis.

If after a period the Government had reconsidered their decision to close the two-teacher schools, or decided to devote more money generally to education, then again a genuine case could be made for a second Budget. If the Government were to develop the health services, if they were to follow up the White Paper which has just been circulated and provide improved health services, then a good case could be made for a second Budget, or, [749] similarly, if they decided to increase the social welfare benefits because of the very high cost of living. The people, however, are to be denied these social services which are very badly needed but will still be called on to provide £7 million or £8 million for the Government because apparently they have no money available to them, although they have cleaned up every penny they could get from the banks, national loans, the funding loan, the Central Bank, the Post Office Savings Bank, Savings certificates and foreign loans. Apparently that is still not sufficient for the Government. They will carry on now with the new taxes.

The new taxes are going to hit every citizen very hard, no matter what his position. The increase of 2d a gallon of petrol will increase the cost of living. At present we all know that a large number of workers have to use cars to get to their work and farmers have to use cars to get to the markets and to the cities. Today motoring is no longer a luxury. The 2d on the packet of cigarettes will hit the ordinary man and he will have less money for the other purposes for which he requires it. However, worst of all is the increase in the turnover tax of five per cent. This will have the worst effect of all increases in either Budget. Apparently the Minister did not want to touch the turnover tax in the first Budget, except in regard to dancehalls. No ordinary person had any great objection to that. We thought it was the thin end of the wedge but we had no objection to the ten per cent because apparently there is no shortage of money for this and young people are able to make money available.

The introduction of this new five per cent tax is very serious. The original turnover tax was the greatest curse ever and at the time the Minister said that it had to be on everything, on clothes, medicines and fuel. He said that they could not separate it and that it had to be all or nothing, that they either had the tax on everything or on nothing. They were supported by the then Deputy Sherwin and then Deputy Leneghan, two of the [750] Independents. They supported the Government in their plea that it would not affect anyone very much. Although the Opposition enumerated the effects which a turnover tax could have, who would have believed that its effects could have been what they were? I do not believe that any Opposition member felt that the effects could have been so bad as they turned out to be. Even though we may have looked on the gloomy side it was still much worse than what we thought it could be.

Now, apparently, in 1966, three years later, the Department of Finance, have advised the Government that it is not necessary to have a tax on all goods and that they can have a selective tax, a tax on some goods and not on others. I should like the Government to consider this seriously: have they considered removing the 2½ per cent turnover tax on food and fuel, now that they have been advised that they can have a selective tax? The tax on food and fuel hits hardest at people in the lower income group and those dependent on social welfare benefits, or those living on small incomes. A greater percentage of their income is spent on food and fuel than is spent by those in the higher income groups. The higher your income goes, the less you spend, from a percentage point of view, on food and fuel.

One redeeming feature which I see is that this five per cent is not to be imposed until October. I would ask the Minister to consider, between now and October, completely removing the 2½ per cent turnover tax on food and fuel when he is imposing the extra five per cent on other things. We remember the Minister for Justice telling us at the time that only such things as furs and jewellery would be affected by the 2½ per cent tax but the people who bought these things were not affected by it because it meant very little to them. I would appeal to the Minister, and through him to the Government, to reconsider this tax on food and fuel and by removing it, provide some little redress for those people. It would be a good thing if they could say, in October, they were going to remove the tax on food and [751] fuel—I am not going to press for a removal of the tax on clothing. The Minister should make a strong case for the removal of this tax.

The Minister, when introducing this tax, unlike Deputy Moore, who said that it was to pay for the increase to the workers, said that it was to help the farmers in view of the bad season we had. Did the Minister not know in March about the long winter we had from November to March and that there were prospects of that continuing? If he was to give reliefs, that was the time to do it and that was the time to announce that he was going to assist the agricultural industry. Although the farmers were promised relief, the Minister regretted he could not give it to them. Eventually the Government were forced to give it to them. No thanks to the Government for giving the 2d per gallon for milk. The farmers came up here and marched. They were told once by the Minister for Agriculture when they held protest marches all over the country: “If you stop these marches, when the Budget is introduced we shall compensate you as far as we can.” But there was no compensation for the farmers. These people saw that it was only by action they would get results. They produced action, and action at a favourable time, action during the Spring Show, action preliminary to the Presidential election. The Government decided that whatever happened, they must not lose the Presidential election. The result was the farmers got an increase. We are all very pleased that the Government were forced to give this increase. Now they come in and try to make capital out of this and talk about giving aid to the farmers.

When speaking on the first Budget, the Taoiseach said that employment in the industrial sector would increase but that employment in the agricultural sector would go down, and that the overall employment position would not improve. Yesterday the Taoiseach said the reduction in employment in agriculture had been much more severe than he had envisaged for the past few months. [752] Who can be blamed for that reduction? Has Government policy over the past ten years not been leading to a reduction in employment on the land?

When Deputy Dillon came into power as Minister for Agriculture, he introduced a guaranteed price for feeding barley of 48/- per barrel. The first thing the Fianna Fáil Government did in 1956-57 was to reduce that price by 10/-. Ten years later, when costs have gone up by 200 to 300 per cent, even with the latest increase in the price of barley, we are still not back to where we were in 1957. The same applies to wheat. At the last harvest wheat was at the same price as in 1957 and was 10/- a barrel less than it was in 1954. At that time we had a surplus and were carrying two years' supply of wheat in the country. The price had to be reduced slightly in order to eliminate those people who were only gambling in it for the time being. Since that time, general costs have gone up, but there has been no re-assessment in regard to the price of wheat or barley. Is that not one of the principal reasons for the reduction in employment? The Minister for Transport and Power said today it was due to improved methods of production. It is not due to that but to the fact that the normal increases in the prices of wheat and barley have not been given.

What do we find in regard to maize and grain? Imports worth £17 million were bought in the past year. Is it not a frightening thing that the Government, in the present financial situation are paying out that large sum of money to foreigners to produce grain for us which we will not pay our own farmers to produce? If we paid our own farmers an increase in the normal way, we would have more than ample grain, as we had at the time we were subsidising it and selling the surplus grain outside the country. Is it any wonder the Taoiseach says there was a severe reduction in employment?

During the past year we have imported feed wheat from Germany and from France. At the end of last year, we went to Germany for a loan of £7 [753] million when we could not get it anywhere else. The Taoiseach said yesterday it was for capital purposes. That is not so. We want the loan to pay the Germans for the wheat we were buying from them. Is it a coincidence that we got a loan of £7 million from Germany and will require another £10 million, that is £17 million, the exact amount of money which is being paid for foreign corn coming into this country? There would be no necessity to go to foreign countries to raise capital if we produced corn here in 1966 as it was produced in 1956. Is it any wonder the people are leaving the land?

The principal idea I can see in this Government's policy is to close down everything in the country: close down the railway lines, close down Garda stations, close down two-teacher schools. The latest proposal from the Government is to close down most of the creameries in the country. My colleague, Deputy J. Gibbons, the Parliamentary Secretary to the Minister for Finance, speaking on agriculture, made a great case for the closing down of the creameries. There was to be only one creamery left in each county. For instance, Kilkenny city would have one central creamery to cater for the whole county; Waterford city would have one central creamery, and so on and the rest of the creameries throughout the country would be closed down.

Mr. J. Gibbons: Information on James M. Gibbons Zoom on James M. Gibbons Nobody suggested that.

Mr. Crotty: Information on Patrick J. Crotty Zoom on Patrick J. Crotty I heard the Parliamentary Secretary.

Mr. J. Gibbons: Information on James M. Gibbons Zoom on James M. Gibbons I did not say that.

Mr. Crotty: Information on Patrick J. Crotty Zoom on Patrick J. Crotty I did not interrupt the Parliamentary Secretary.

Mr. J. Gibbons: Information on James M. Gibbons Zoom on James M. Gibbons The Deputy should not misquote me.

Mr. Crotty: Information on Patrick J. Crotty Zoom on Patrick J. Crotty Deputy Gibbons asked could anyone imagine all the manhours wasted by people having to transport their milk to the creamery. Deputy Gibbons has been Parliamentary Secretary for only 12 months. Has he lost touch with the country in that 12 months? He has only to travel a few [754] yards now to see the lorries collecting the milk and taking it to the creameries. Very few single people deliver milk on their own to creameries. He was afraid that, though the farmers have an 80 hour week or a 90 hour week at the present time, they might lose an hour or that they might take an hour off. He said that thousands of hours were wasted by the farmers going to the creameries. He objects to a few farmers taking one hour off to deliver the milk to the creameries and does not realise that practically 90 per cent of the milk at the present time is being delivered by lorries to the creameries.

Progress reported; Committee to sit again.

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