Dáil Éireann - Volume 284 - 23 July, 1975

Finance (No. 2) Bill, 1975: Second Stage (Resumed).

Question again proposed:

“That the Bill be now read a Second Time.”

Mr. Dowling: Before the Dáil adjourned I was dealing with the remedial measures being taken by the Government to deal with inflation, the promotion of job opportunities, reduction in the dole queues and so on. The brief statement read by the Taoiseach in no way serves as a measure which would save the nation from the disaster it now faces. I noticed a change from the situation with which we are familiar, that is, the financing of services. The Taoiseach said “the simple truth is that taxation is necessary to meet Government expenditure”, as if we did not know it. This is the first time we have seen such a statement. Previously it was said that there were other ways of meeting Government expenditure. Experience has shown that Government expenditure cannot be financed without difficulty and it is about time the government found that out.

Every measure before the House should be aimed at protecting the economy and this measure is not. We are unsure of this package. One day we are told it is on, and the next day it is not. Something more positive is required. At the moment more than 100,000 are unemployed. There is nothing in this measure to ensure that there will be a contraction of the dole queues. There is nothing in it that will bring relief to the large number of school leavers looking for employment. They have no hope for the future. If we add the 50,000 leaving school to the 100,000 unemployed, the professional [253] people unemployed and those who are being retrained we will see that the unemployment figure is very substantial.

Between June, 1974, and June, 1975, there was an increase of 46 per cent in unemployment. There are also 5,458 people on short-time. What have these people to look forward to? There is nothing in this measure which will bring relief. This situation must be tackled efficiently and effectively and in a way which will bring relief to the needy sections of the community. Twelve months ago the Parliamentary Secretary to the Minister for Social Welfare told us that there were 25,000 people living below the poverty line. What figure has that group reached? Is it now 35,000, 45,000 or 55,000? Where do the people on the dole and the school leavers go from here? Does this package give any hope for the future? We must again examine statements by Ministers on the problems as they existed before June last, when these remedial measures were introduced.

I compliment the Minister for Labour for being in the House now. During this important debate this morning we did not have one member of the Labour Party in the House. I hope my words before the adjournment were responsible for the Minister being here now. Perhaps a member of the Labour Party will now add his voice to that of the Taoiseach, who this morning sat in the deserted seats of the Government benches. I notice that the Minister for Labour is sitting alone now. Is this an indication of the lack of support by Government backbenchers for Government policy and the remedial measures being introduced?

I hope that before this debate concludes I will hear from many Government backbenchers, especially members of the Labour Party, because a very exacting burden has been placed on the shoulders of the trade union movement. This Government package depends on certain action being taken elsewhere. The Government are not stating positively that this is the way we should go. I am positive that responsible trade unionists will respond effectively to every crisis as they have [254] done in the past, conscious of their responsibility to the nation and to those on the labour exchange. There is nothing in this measure to suggest that there will be any relief for the thousands who are helpless at the moment.

Some people argue the dole queue may reach the frightening figure of 200,000 in the near future. We hope this situation will not develop. We hope the measures taken, admittedly too late, will prevent that desperate development. Day after day the Minister for Local Government, Deputy Tully, when questioned about the building industry, insisted that there was nothing wrong. This is one of the most important industries we have, providing employment in the industry proper and in ancilliary industries, such as carpet making, fabric manufacture, cabinet making, furniture and a variety of others. We were led to believe that there was no need for stimulating the industry, that houses were being built by the thousand, houses of which there was no trace except in the Minister's mind. We knew the builders' providers could not get rid of their stockpiles. Yet the Minister insisted houses were being built by the thousand, apparently without bricks and mortar, without timber and all the other items essential to the building of a house. Nobody knew where the houses the Minister for Local Government was building were to be found. The construction industry told the Minister on many occasions he was misleading the House and the country. Last June the Government, exercising collective responsibility, considered it necessary to inject capital into the building industry. Apparently every Minister, except the Minister for Local Government, knew there was a housing crisis prior to June and realised it was necessary to stimulate the industry. Either the Minister for Local Government was out of touch with the Government or the Government were out of touch with the Minister for Local Government.

When measures were suggested by this side of the House to relieve the situation in the boot and shoe industry, the textile industry and other industries, [255] we were told there were no problems. All we met with were the sneers of the Minister for Industry and Commerce, of the Minister for Local Government and of Deputy O'Brien. The economic problems were highlighted time and time again by Members on this side of the House and we got the same answer every time, a sneer. The Minister for Industry and Commerce has told the Parliamentary Labour Party to damp down the fires, to hold their political nerve because this situation will blow over; we have no more money but do not let the boys on the other side of the House know that.

The Government must come clean and indicate what the factual situation is. Only then will we know what the remedial measures should be. There have been so many changes of mind it is difficult to know what the true position is. We had an increase in value-added tax. Now that has been removed. We had an increase in CIE fares. Now they have been reduced. An increase in ESB charges was allowed and a few weeks later certain relief was given in another budget. These are but some of the items. I could give a long list of measures introduced one day and repealed the next. All this shows the utter confusion within the Government in relation to the problem as a whole.

We hope there will be an improvement in the coming months. It will not be engendered by Government action. The Government are depending on oil finds, gas finds and mineral finds. We are told that in four or five years when gas begins to blow and oil begins to flow everything will be all right. In the meantime there will be a great deal of human misery. There is not much hope if we have to wait for oil and gas. The remedial measures taken will not be sufficient to cure the situation. The Parliamentary Secretary to the Minister for Social Welfare has told us on many occasions that many people are living below subsistence level.

The first prerequisite is to create confidence. Industrialists will not come in here to establish industries if they have no confidence in the Government. [256] That is the situation at the moment. I asked this morning if the Minister for Finance is a member of the administrative council of the Labour Party. He is certainly not the man who holds the job in this House. We have had plenty of statements from Ministers, plenty of taxes imposed, plenty of promises, plenty of bluff and far too much unemployment. The incompetence of the Government has allowed the situation to deteriorate to the point at which it is now a national disaster. There is the upward spiral in prices. Some of the items from which value-added tax is allegedly removed are much dearer now. Blankets were mentioned here. They carry 19.5 per cent, almost one-fifth in tax.

We are told that VAT has been removed from essentials. VAT has not been removed from blankets which people need to cover children but VAT has been removed from mink coats. Of course the average housewife cannot buy a mink coat. Perhaps Ministers can and perhaps it is more important to have VAT removed from mink coats than it is from bed clothes. The Government would need to get their priorities right.

A very serious situation has developed. Irish workers are most reasonable people and they will respond to a call to ensure that this nation survives just as they have in the past but they will not respond to political blackmail or the waving of big sticks. Intimidation will not be a deciding factor but common sense will prevail as on every occasion in the past. If the Government are trying to beat people into submission they have made a mistake. They have created a feeling of distrust. They did not rely on the goodwill and the common sense of the workers and the workers are far more anxious to see the nation survive than apparently the Government are. I hope the budget will in some way stimulate confidence but I am sure it will not bring about the desired results. I had hoped that the Government would introduce something more positive, even if more difficult to consume. I am sure every person would be willing to respond to a nation in difficulty.

What is required is confidence. A great burden rests on the shoulders [257] of the people in authority and the Taoiseach in particular. I believe he is being pushed and shoved around by other sections of the Government. The policies that have been presented and the way in which they have been presented is a clear indication of the pushing and shoving that has gone on. I hope that at some stage a more positive approach will be made. The Government change their minds by the hour. Every meeting of the Government brings a new decision and every meeting of the political parties in the Government brings another decision. We have seen this in the case of the CIE fares, the ESB charges and a variety of other matters. I hope this budget will make some small contribution. I am sure the people will respond willingly in order to ensure the survival of the nation. The Government are responsible for allowing the situation to deteriorate over a considerable period before they took any measures and the measures they have taken are too late and too little.

Mr. Nolan: I am sorry the Minister for Labour has left the House but I am very glad that the Taoiseach is here to listen to what I have to say. A couple of weeks ago I raised the problem of the 50,000 young people coming on the labour market at present. I am speaking of graduates from our universities, from our colleges of technology, our vocational and secondary schools. The Taoiseach is an ex-Army man who was in the military college at the same time as I was. He will remember that we were told there that when we went back to our units we would have a platoon of 42 men for whom we would be responsible. When you went back you discovered that there was a number sick, a number on fatigues, a number on guard duty, a number resting off. You ended up with possibly 15 men for training and you got the idea that what you were told in the college was all cod. Our young people today do not have the employment opportunities they were told they would have by social workers, by their parents, by presidents of colleges and headmasters. It is a pity the young Minister for Labour has left the [258] House and I must thank him for his reply to my question of two or three weeks ago. I asked him if he could bring in a temporary, voluntary retirement scheme. In the public service and in private industry there are a number of men who are ill but perhaps not ill enough to be certified for national health. They may not be capable of performing their duties but they must hang on. Perhaps the Minister could introduce legislation whereby such people could retire. This would make room for some young people at the lower end of the ladder.

I was glad the Minister said that if proposals of that kind were made to him by the unions and employers he would give them favourable consideration. I said that surely it was the Minister's duty to put that proposal to the employers and the trade unions. I cannot understand that type of attitude on the part of the Minister for Labour and the type of reply we are getting to questions in this House. In other words, Government must come from the bottom instead of the Government taking action. I am satisfied that a number of people in employment in every sector would be prepared to retire if they had three years added to their normal service. This would make jobs available for our youth.

Before the last election the Fine Gael Party had posters all over the country saying: “Do not blame the Government. Change it.” The people changed the Government, not because Fianna Fáil lost votes—we increased our first preference votes— but because of PR and because people voted Fine Gael and Labour. If the Taoiseach has any of those posters left in Fine Gael Headquarters in Hume Street he should send them over to me or to 13 Upper Mount Street and we will use them in the next general election.

The Taoiseach—and I admire him for it—said at an Árd-Fheis that the major part of the problems were of our own making. We cannot keep on saying that inflation is caused by the Arabs, or the Indians, or the Americans, or other outside sources. [259] As Deputy Dowling said, the Labour Party has not been represented here today during this debate.

If you are in business in O'Connell Street and you have a competitor in business in Grafton Street, and another one in Middle Abbey Street, and the cost of running those businesses increases by 8 per cent in each of those places, and somebody else is in business in Dame Street and the cost of running his business increases by 28 per cent, the man in Dame Street will go out of business. That is what is happening to the country. The cost of running our business as a nation has increased by 28 per cent. In Italy, Germany France, Britain, Belgium, Holland, Denmark and all of the Nine they are keeping their inflation rate at a reasonable level.

I would like somebody to define what inflation means. To me it means the cost of producing articles in this country has increased by 28 per cent as compared with 8 per cent in other countries. Therefore, as a nation we are heading for bankruptcy. There is no doubt in my mind about that. The heading of the editorial in today's Irish Times is “Jobs”. It states:

The EEC Commission's report on the Irish economy, published yesterday, shows up starkly the magnitude of the economic problems facing this country even when the present recession ends. It calculates that, to achieve full employment by 1986, 30,000 extra jobs need to be created each year over and above the number required to replace jobs lost through redundancies.

At the end of the editorial it is stated:

Hence, unless the EEC is prepared to make substantial grants available to this country, full employment simply will not be achieved.

The Irish Press has an article on the report, and the editorial in The Irish Independent demands that the EEC should give us substantial grants and financial help. When 83 per cent of [260] the people voted to enter the EEC I got the feeling that the people felt that that was the end of the story, we were in the EEC, and everything was lovely. The Labour Party who opposed our entry—and I congratulate them on that—now realise that outside the EEC we would be gone under the water long ago. They realise that we should be in the EEC.

Many people do not realise that the EEC will not help Ireland like a father. I am speaking now as a member of the European Parliament. We have got more money from the Community than any other member country. The Minister for Foreign Affairs put the figure somewhere in the region of £200 million. That includes subsidies we would have to pay towards agriculture, and so on. The Agricultural Credit Corporation got a loan from the European Investment Bank. The ESB got a loan there. Many private firms in manufacturing industry got money from the EEC. Surely we do not expect that we can all go on the dole and Europe will look after us. If that is the attitude of the Government, God help Ireland. The Government are called the National Coalition. I call them a national disaster. If we do not look after ourselves Europe will not look after us.

I want to pay a tribute to the press men who made a synopsis of the EEC Commission's Report. I brought the report to bed with me last night and I read it. It is fairly lengthy but I picked certain things out of it. For example, it says that between 1961 and 1972 the number of net jobs— and “net” is the important word— created in this country was 3,000. That would mean that in those years about 33,000 extra jobs were created here. They referred to the fact that in 1973-74 the net loss of jobs was 4,000. Everybody knows what the figure is for unemployment at present and we know the problems we have to face in this regard.

Fianna Fáil in the last election gained in the region of 20,000 extra first preference votes, and we were defeated because of the fact that under PR Labour second preference [261] votes were transferred to Fine Gael and Fine Gael second preference votes were transferred to Labour. After all the celebrations the new Government got on the Titanic and had wining and dining. They had the band playing, “Nearer my God to Thee”, or something like that and they went cruising until 1973 giving hand-outs all over the place. The National Coalition were unsinkable, and they floated along rudderless and captainless, but at the end of 1974 they discovered that they could not do all these things. The result was that we had the biggest budget of all times and this brought in £37½ million. The tax on petrol was 15p per gallon. In the following year there was an increase of 80p in the contribution by the employer to the insurance stamp and an increase of 40p on the amount paid by the employee and this brought in about £50 million. In the budget there was additional taxation imposed on cigarettes and beer and since then we have been having a budget a day.

The most serious thing facing this country is the £241 million deficit we will have towards the end of this financial year. I would support the Minister for Finance if he wished to borrow £241 million for the provision of houses because he would get the money back in that case, but by the end of this year we will have borrowed £241 million to pay wages, salaries and debt charges. Where will that money come from? I believe we will have another budget in October because money will have to be found to pay for the social welfare increases to be given then, but where will we get the money to pay the deficit? Are we going to strike oil? Even if we strike oil it will cost twice as much to get the oil out of the sea as it costs to get it out of the sand. The Government should not give the impression that if we strike oil our industries and our motorists will get it cheaper.

When the Government talk about the GNP and external assets the ordinary people do not understand. However, a lot of people are beginning to realise what is happening in regard to the spending of money in the current account and the capital account. [262] I am sure Fine Gael Members at branch meetings are being asked where the Government hope to get this £241 million. When I am asked I always give the example of the small businessman whose profits must be sufficient to pay his employees, pay the cost of transport and of his travellers. In the case of that businessman it is not necessary for him to pay in any one year for a new van he may have to purchase or for an extension to his store. Such a businessman can borrow that money from a bank and pay it back out of the profits over a number of years. However, a Government cannot do that. It can be done for the capital programme but it cannot be done with the current account programme.

In the next budget the Minister for Finance, as well as providing for an increase in benefits, must also make allowances for the paying back of the money Richie got from the Arabs in his little bag. It reminds me of a businessman who has a few credits in the various shops and when things get tight he sends a member of the staff off to see if he would get a few pounds from those people. Richie has been the same; he has gone to the oil-producing countries looking for money.

Acting Chairman (Mrs. Hogan O'Higgins): The Deputy should refer to the Minister by his title, the Minister for Finance, and not by his christian name.

Mr. Nolan: The Minister for Finance has been to the Arabs and will probably go to Russia next. Things must be getting tight because he is travelling so often now that people are wondering if the amount of money he is getting is sufficient to cover his air fares.

Fianna Fáil introduced the pay-related benefit scheme for the purpose of cushioning people who would become unemployed and who may have a car on hire purchase or an SDA loan. The scheme was to help them during the period they were unemployed. It has come to my notice during the last few months that because of the recession towards the end of 1974 the pay-related benefit is based on the income they returned to the [263] Revenue Commissioners. If a person was six months unemployed and six months at work the six months he was at work is taken into consideration in calculating the amount of unemployment benefit. The amount they get on the unemployment benefit is not added to their total salary to make up the average weekly earnings. As a result many of those unemployed do not receive pay-related benefit. This matter should be considered by the Government.

Regarding the availability of money for SDA loans I noticed a statement in the Kilkenny People a short time ago to the effect that there was lots of money available for this purpose. Every public representative has occasion from time to time to inquire as to what is the position regarding a loan facility for a constituent. I was approached by a man who, with his family, is living in a flat and who is anxious to acquire a loan in order to buy a second-hand house. Thinking there would be no problem because of the big allocation from the Minister for this purpose I telephoned the housing section of Kilkenny County Council only to be told that because of the shortage of capital they had decided that no loans would be made available for the purchase of houses that have been occupied previously and that, furthermore, there was such a shortage of money for SDA loans that they were considering making loans available only to applicants who had families and who wished to purchase new houses.

I know that there are some honourable people on the Government benches. Nevertheless, I would say to the Government that while they may fool some of the people some of the time it would not be advisable for them to try to fool all of the people all of the time.

We are in a serious situation. It is obvious that the farmers have no faith in the future of our economy. Proof of this is the reduction of 40 per cent in the purchase of fertilisers. This indicates that farmers are not prepared to buy the necessary fertilisers for the production of crops and of grass for [264] beef and milk production. What we need is to instill confidence in the people and not to tell them that we would be better off if we were not in Europe, because if it is the opinion of the Government that we would be better off outside the Community they should withdraw from it. The EEC, I am sure, would be delighted by any such move on our part because our withdrawal would mean a saving to the other member States of something in the region of £2 million to £3 million per year. Where, then, would the Minister for Health seek money? I have always been a committed European. If we had not been members of the Community during the past two-and-a-half years all of us here, in addition to the 120,000 unemployed and the estimated 180,000 who will be unemployed in a few months would be on the dole.

Mr. Callanan: I shall be brief because most of the points I wish to make have been made already. As Deputy Colley said, this Bill is an emergency measure and to that extent it is welcomed by all of us. Since I came to this House after the last election Deputies from the Opposition have been issuing warnings as to the danger of our inflation rate running so high and as to the seriousness of the budget deficits, but we were told that everything was all right, that inflation would create employment. As one who was merely trying to balance his own budget, I began to wonder whether we were wrong, but we have been proven right. The Government should know now that the budget of a country must be balanced in the same way as one would balance the budget of a business. During the past few days the Taoiseach and the Minister for Foreign Affairs have spelled out the seriousness of the situation. However, if such speeches had been made from these benches six or eight months ago we would have been accused of creating panic.

The country is in very bad shape. With a budget deficit of £241 million we are heading for bankruptcy. Any Government which a few years ago would have dared reveal a deficit of that order would not have had any [265] chance of survival. I do not blame the Taoiseach personally for the situation because I consider him to have his wits about him but I blame the Government as a whole. While some of their spending was justifiable they overspent in some areas. One would not need to know a lot about economics to realise that it is not possible to spend any more that what one's purse allows. Down through the years Fianna Fáil had been developing the social and health services in accordance with what the country could afford, but this Government have been spending more than the economy has been earning. The result is the present situation. I hope that the package being offered will be accepted and that the situation will improve. It is no consolation to anybody on any side of the House to know that the country is in bad shape.

Everybody will freely admit that the country is in a state of emergency. I think the whole question of inflation began in Europe. Were we not in Europe at present we would be in a very bad state, but I maintain that the policies in Europe caused inflation. Our inflation commenced in anticipation of a honeymoon that did not come off. Because of a general recession, Europe did not prove to be our fairy godmother in the way it had been presented. I remember, on the farming scene at the time we were entering Europe, people saying to me: you do not know at what price per hundredweight cattle will sell in Europe. I knew in my own way that, in anticipation of our entry, our prices had gone almost beyond European ones.

There is no attempt being made in Europe to curtail inflation. I believe the Community is not being run efficiently. It seems to be merely a question of keeping prices up. If consumer subsidies are granted both at home and in Europe, giving subsidies directly to people not receiving sufficient for their produce, it might constitute some easement of the problem, rather than driving prices upwards with consequent inflation and so on. The important problem to be tackled at present is how we control [266] inflation. We are 12 months too late endeavouring to control it here. We practically led ourselves into the belief that there was nothing about which to worry. I began to think I was of another generation and it was silly of me to speak about balancing budgets or housekeeping; that it was a case that everything was going fine because we were led to believe, in Government circles, there was no worry at all with regard to borrowing; continue to borrow and one will be all right. I know from experience over the years that if one continues to borrow for non-productive purposes, one does not know where one will finish. That is as true today as it was years ago.

I welcome this measure as an attempt, even at this late hour, to stop the roaring inflation bringing this country very near to bankruptcy. At present were it not for the man now sitting in the front benches over there, the Parliamentary Secretary to the Minister for Social Welfare, there would not be so many people living on social welfare, thanks to the good job he is doing. They have no other means available to them except social welfare benefits. Fair play to the Parliamentary Secretary, while he is able to get the money he is certainly doing a good job. That is the reason that there is no terrible anxiety being felt as yet because everybody is managing all right. But people are beginning to ask: will this continue? That is the kernel: one can continue to pay while one continues to receive the money but eventually there comes a close down. That is when hardship is imposed on people, when they realise that they cannot continue and, unless some attempt is made at controlling inflation such people will be placed in a bad position.

For instance, taking the present unemployment situation, were it not for the amount of pay-related benefit and redundancy payments being made, such unemployed people would be in a dire situation. But if any of such benefits ceased we would be confronted with a very annoyed community. At present everything is being done to soften the blow for [267] those people unemployed. The point I make is that it is doubtful whether we will be able to continue such benefits unless there is bestowed on us another fairy godmother.

If we continue borrowing abroad, at very high interest rates, where will we end up? It must eventually lead to bankruptcy unless it is curtailed. Those are simple, ordinary housekeeping facts. I believe the Government have not made a good job of the housekeeping of the nation. There is lack of confidence in industry, in the farming community and particularly amongst the smaller farmers. There are the people who are not now utilising artificial manure, which shows a drop of 40 per cent, and which must interfere with production.

Then there is the plight of the person who is engaged in calf production and who had to almost give them away this year, leading to a drop in the cattle population. I hope that, in a couple of years' time, we may have a scarcity of cattle here.

I have always believed that it should be the policy of any Government to balance the economy. We have been inclined over the years to say: you cannot produce too much of such and such a commodity. For instance, there is at present a danger of a pile-up of milk powder and products. Only a few years ago we were told we could not produce sufficient milk. Immediately there was an abundance of it and we were told then to change over to beef; then back to milk; you will be quite safe in doing so.

No matter how one manages an economy the old saying obtains today just as it did years ago—do not put all your eggs in one basket; rather the balancing of the economy should be the policy of any Government. For instance, if it pays very well for a short time to produce a certain type of commodity, be it sheep—I should not even mention sheep at present they are so bad—but whatever may be the commodity, do not rush madly into its production at the expense of other lines. I am a believer in direct subsidies being given always. I am against [268] driving up prices, leading to artificial prices for commodities. Rather I believe prices should be allowed to find their own level and, when they go below a level that is economic to the producer he should receive a direct subsidy. That would not affect the cost of living, so eliminating the possibility of inflation.

I believe that policy will have to be introduced in Europe. Instead of expending a lot of the money to maintain artificially high prices, funds should be created in Europe for the subsidisation of a particular commodity when it falls below a reasonable price to its producer. Everything appears to have been done in Europe in an effort to ascertain the millions that would have to be fed and the amount of money needed if those people were to continue eating the same type of food. But no attempt was made to study consumption. Therefore, when one permits prices to go beyond the means of the ordinary consumer, consumption of that commodity drops. I am surprised that the European Economic Community, with its Council of Ministers and the European Parliament, did not ensure more control of that market. One would imagine they would have been able to predict fairly accurately production and consumption within that market but seemingly they have been unable to do so in any accurate way. The speeches delivered by the Taoiseach and by Dr. FitzGerald after the recent Summit Meeting were not hopeful. Had any study been undertaken of production and consumption within the market, surely it would have been possible for somebody to come up with a solution to the present crisis. As far as I can see —and again it is an old saying—there do not appear to be any readymade experts in this country, in Europe, or in the world for that matter. If there were, some people could get wealthy very quickly. If a person continues to spend in excess of his earnings he is bound to go to the wall. If he borrows for productive purposes, for capital expenditure to expand a business that is all right, but where a person borrows for other purposes he is [269] on the wrong road. Eventually he will have to pay back the money in addition to the interest.

We all hope that the package now being offered will be accepted and that the action being taken will curb inflation. When we were discussing the budget I said that no one, irrespective of his political views, wants to see our country going the wrong way. It does not help any one if the country is not in a prosperous state. There is more at stake at the moment than scoring political points. We are in an emergency situation and we must get this across to the people. People were under the impression that Fianna Fáil were creating the atmosphere of emergency for political purposes but now the Taoiseach and the Minister for Foreign Affairs have admitted that Fianna Fáil were right and that there is an emergency. They have told us that if certain actions are not taken the country will not survive. On a radio programme last Sunday the Minister for Foreign Affairs issued a very strict warning and did not hold out much hope for a change in the near future. It is no use our telling the people that everything in the garden is rosy because that is not the situation. At the moment we are spending money and hoping for the best. We are not getting an adjournment debate and, therefore, we must take this opportunity of stressing the seriousness of the situation.

The Parliamentary Secretary to the Taoiseach said he was fed up listening to me talking about farming and silage but if he knows a little more about these matters some good may have come out of it. I have heard very little discussion about the smaller farmers in the west. I can assure Deputies I will keep them informed of what is happening to the people I represent. When I first came into this House I found that most Deputies knew nothing about the way of life of the people in the west.

People in my area are getting a rough time at the moment. The year 1974 was one of the worst years for the smaller farmers. I am most interested in these people and in the [270] workers. At the moment the workers are hard hit, so far as employment is concerned, but at least they can get some help from the Department of Social Welfare. However, there is a major worry whether the money will continue to be available. If it does not I shiver to think what will happen. Irrespective of their political viewpoint, it is not in the interest of anyone that things should get more serious. Even at this late hour I am glad the Government have told the people that there is an emergency and that certain action must be taken. It should have been taken 12 months ago. We are now trying to steer the ship away from the rocks——

Mr. Crowley: They are waiting for Fianna Fáil to take the country off the rocks.

Mr. Callanan: The Deputy is quite correct. Last January one did not need to be overflowing with intelligence to realise that this package was needed before the national wage agreement was negotiated. I will not dwell on that aspect because I do not wish to say anything that might prejudice acceptance of the package. It should have been obvious then that action was necessary but none are as blind as those who do not want to see. It is regrettable that it is only now the Government have explained the situation. They have made statements I would be slow to make; I would hesitate to paint as gloomy a picture as was done by the Taoiseach and the Minister for Foreign Affairs. After hearing the latter on the radio programme last week people asked me if the situation was really so bad. I explained that while I might not go so far as the Minister the situation was serious. The pity is that people were led to believe by Government propaganda that everything in the garden was rosy but anyone with common sense must have known that was not the case.

The farming community have no confidence in the Government. Daily we read of workers being made redundant. I am lucky that in my town two factories are doing very well and one is expanding its business. An [271] attempt is now being made to help the shoe industry; it will be a very difficult job and it is another area where action should have been taken long before this.

We have a habit of locking the stable door after the horse has bolted. This is very bad policy. There is a serious situation now regarding the French and the lamb trade but the action proposed should have been taken much earlier. It has been a disastrous year for the sheep farmers and it is dreadful that the French who are signatories to the Treaty of Rome should violate the principles of that treaty. As I said before, we support fully any action being taken. The only trouble is that all the Government actions are taken too late. They are prepared to let matters go too far and hope for the best. Decision-making is of vital importance but the Government have not accepted their responsibility in this area.

In conclusion I hope we have not gone too far, that this Bill will be passed by the Dáil without opposition and the package accepted. For the sake of the country, I hope things take a turn for the better.

Mr. McDonald: I would like to avail of this opportunity to speak very briefly on this Bill. I was rather surprised to hear my colleague and friend, Deputy Callanan, speak of agriculture and repeat many times that the farmers have no confidence in their future. I cannot understand how any progressive farmer who thinks for himself can feel insecure or lack the confidence necessary for a viable business. One has only to look at the facts. Over the last three years the price paid by the creameries has almost trebled, from 11p to almost 31p this year, and the farming industry enjoy guarantees they never had before. The guarantees to the whole Community under the guidance section of FEOGA Fund this year amounted to approximately 52,000 million units of account. Our farmers, in common with the farmers in other parts of the Community, have access to this fund and have benefited from it.

[272] Mr. Crowley: How many have benefited?

Mr. McDonald: Practically every farmer in one way or the other. In the last year the intervention paid over £100 million for beef here.

Mr. Callanan: Who got it?

Mr. McDonald: It was paid by the EEC to the Department and——

Mr. C. Murphy: To whom?

Mr. McDonald: To practically every farmer in the country. The figures are there to prove that the money was paid. More cattle were sold over the past couple of years than ever before and the prices paid were greater too.

I hope the new increase for the price of milk announced by the Minister for Agriculture and Fisheries this week, which will come into effect later this year and was the result of the 5 per cent devaluation of the representative rate of the Green £ will be passed on by the processors to the farmers.

The last time I inquired I was told that we were not placing any powered milk or milk products into the intervention system. Many of our competitors in the Community are putting considerable quantities of skim milk powder into the intervention. If the figures show that the price paid to the Irish farmers is 2p or 3p per gallon less than anywhere else in the Community, and if our partners can pay a higher price for milk and still put the finished product into intervention, there is no reason why our processing industry should not do the same. It is reasonable to accept that the cost of production will be lower here than in any other EEC country. Therefore the farmers can expect to get the full increase which was won for them by the Minister this week directly into their pockets.

Over the last few months in every debate in this House, no matter what new measure was announced or how high the expenditure, there has been a sustained cry from the Opposition benches that this was an effort to keep [273] abreast of inflation and was no use to the ordinary Irish citizen. This is where the lack of confidence lies. People are being told day by day that there is a lack of confidence and a dim future ahead. We must look at the positive side and face the problems squarely. Even though there is a recession all over the world, and if we compare the progress made in the Community with the rest of the world, and compare the level at which our Government have managed to keep the economy with even powerful economies in the Community, we will see that this Administration has succeeded to an extraordinary degree. It is not really fair to compare our economy with the economies of member states, because that is not comparing like with like.

When we joined the Community we guaranteed ourselves a good bargain because for the £5 million or £7 million we contribute per year, we get back many times that amount. In addition to the £100 million we got by way of intervention last year, through other channels we must have got another £100 million. This has been of tremendous benefit to the economy.

Last week the Minister for Local Government announced a sizeable increase for SDA loans. In my county he has provided £660,000 for loans this year compared with £150,000 last year. The only salute it got so far was that it did not keep abreast with inflation. The Government are making a tremendous effort.

Mr. Crowley: Is it not a ridiculous statement?

Mr. McDonald: The Government have provided finance for houses in a very determined and successful way, despite the rising prices of imported raw materials. They have provided this opportunity of keeping the industries moving.

If we take each line of agricultural husbandry and go through them one by one we will find that many farmers last year may not have been able to show a very significant profit. Nevertheless prices have been increasing. Farmers during the transitional period are endeavouring to produce the lines [274] and products on which there are guarantees. This is one problem where the smaller farmer is at a disadvantage. While the medium-sized and big farmer can switch, the smaller man is unable to do that. He must sell his yearlings. This is a pity and every effort should be made to encourage the small farmer to keep on his cattle until they are the right size and weight to qualify for intervention. Last year realistic prices were not paid. Would it be possible for the Department of Agriculture and Fisheries to pay intervention premiums in respect of the actual carcases on which the factories paid intervention prices?

Mr. Crowley: The Leas-Cheann Comhairle is being very generous.

Mr. McDonald: The Minister for Agriculture and Fisheries is to be complimented on the progress he has made in regard to sheep. A large nation like France is naturally interested in protecting her own primary producers and that results in our Minister having to take on a nation of some 60 million people, not a very easy position to find oneself in. This situation is nothing new. It has existed for many years. However, significant progress has been made. It is true that the action of the French Government is not in accordance with——

An Leas-Cheann Comhairle: I am sure the Deputy will appreciate that, while the debate is to some extent wide-ranging, he is going very far indeed from the Finance Bill. Details appropriate to Estimates ought not to be introduced. The debate is confined to taxation measures.

Mr. McDonald: I was merely dealing with the matter in passing. Previous speakers made an issue out of this question of sheep and I was pointing out that our Government have worked very hard on it.

An Leas-Cheann Comhairle: I know the Deputy appreciates, just as well as the Chair does, that these details are not appropriate to a finance measure of this kind.

[275] Mr. McDonald: I was merely pointing out that the Government are not getting sufficient credit for tackling a difficult situation with dynamic measures designed to turn the tide of inflation and bring prices down by the introduction of subsidies and the removal of value-added tax. The budget and this Bill show the very progressive positive thinking there is. This is a step in the right direction though all we hear from the Opposition is that the remedies do not match the inflation. Of course, that is not true.

Mr. Crowley: It is true because they definitely do not match the inflation.

Mr. McDonald: People should look at the problem in a positive way and co-operate with the Government in tackling it.

Mr. C. Murphy: What problem? The Deputy said a moment ago there was no problem.

An Leas-Cheann Comhairle: Order.

Mr. C. Murphy: I was merely helping the Deputy.

An Leas-Cheann Comhairle: I am sure Deputy McDonald will manage without the Deputy's assistance.

Mr. McDonald: This Bill should be well received by both sides of the House. I have not heard any dissident voices raised against it except by those Members who have spoken on the Opposition benches. I believe people appreciate this determined effort by the Government to bring prices down. New hope has been given to the people because they have been shown that it is possible to do this. Again, this Government have given very many reliefs to the lower income groups and to those dependent on pensions and social welfare. Very moderate increases are asked for under this Bill and I believe that taxpayers as a whole are prepared to meet these increases. By and large, the bulk of the people are prepared to support the Government and cooperate with them in ensuring that the country will emerge from the [276] international depression in due process of time.

I support the Bill and I compliment the Minister for Finance on introducing new thinking into legislation. I trust the legislation will get the cooperation for which the Government have asked.

Mr. Crowley: One wonders, listening to the last speaker, why the Taoiseach and the Minister for Foreign Affairs found it necessary to make the statements they did over the past few days pointing out the desperate plight in which the economy finds itself. The Taoiseach at one stage said we were living on borrowed time and on the goodwill of our creditors. That is the position and it is native for anyone to come in here and pretend no problems exist. We face a very grave economic crisis, a very grave unemployment crisis and a very grave inflation crisis.

The Government have taken some action but as usual they have taken this action too late. All the time of the Dáil in this session has been taken up with wealth tax, capital gains tax and in the Seanad, the Criminal Jurisdiction Bill. There have been very few positive Bills introduced here to try to attack the problems facing the country. I wonder are the Deputies on the Government side aware of the fact that the farmer, the small farmer especially, has had the worst two years in his history almost in the last two years, that we are fast becoming a dole-ridden society, that we have more people drawing social welfare benefits now than we ever had in the history of the State, and that we have the highest rate of inflation of any country in the Community. That is because of mismanagement in Government.


Mr. Crowley: The reason for the social welfare increases is that there were so many people unemployed. Their silence is being bought, but there is a limit to how long that silence can be bought. The people will eventually demand from this Government positive action for the [277] creation of new jobs, for the attacking of the inflation spiral that is continuous. The people are asking the Government to show that they are the Government of the country and that no outside body is running the country. We are asking our Government to govern. This Government got into power on many promises but the basic promise was an economic one, a pegging of prices. They promised that they would ensure that not alone were prices pegged but in some cases reduced. We all know what has happened to that promise.

The middle income group are again being asked to bear the burden of the Government's mismanagement. The easy way out is to shove more taxation on to the middle income group. They are carrying the burden anyway and they are fast becoming the poorest members of our society because they get nothing for nothing. They must pay for medical care, they must pay interest on their mortgages and they must pay full prices for everything. They get no hand-outs from the Government. They are the people we are crucifying and we are not even taking the smallest step towards alleviating their plight.

We have the Minister for Posts and Telegraphs around the country talking about television channels——

An Leas-Cheann Comhairle: Let us keep to the measure before the House.

Mr. Crowley: ——in order to cover up the dire economic crisis we have in the country, to divert the people's attention away from what are the essentials—taxation and the economic plight of our people. We have more money being spent on the Government Information Service, again to attempt to cover up. We have changes in personnel of the Government Information Service for the same reason.

An Leas-Cheann Comhairle: That does not arise.

Mr. Crowley: It arises very much because they are all being paid for by the taxpayer.

[278] An Leas-Cheann Comhairle: If that were the case the Deputy could take in everything.

Mr. Crowley: Deputy McDonald went into detail about sheep, about FEOGA grants, about intervention beef. I think we should be allowed the same latitude, but if that is your ruling we must obey you.

An Leas-Cheann Comhairle: The Chair is trying to keep the debate within the terms of the measure before the House while allowing latitude in regard to these things.

Mr. Crowley: I am trying to show that because of the fact that we have various socialist Ministers going around pushing for the type of legislation that, in my view, is unnecessary in this House the major obstacles facing the advancement of our economy are being neglected. “Tax the Wealthy” is a great slogan. Everybody agrees with it. But who are the wealthy? Where are they? I do not think they are in this country in the numbers that some Ministers seem to think. We are not going to make the poor richer by taking from the people who, through their enterprise and their initiative, would be creating more employment. Because we have introduced capital taxation at the rate we have done we are deterring people from risking their money in order to create more employment.

I am sure the vast majority of the Members of the Government feel as I do on this and I hope the day of hand-outs and of socialist cliches is gone. We must get down now to the nitty-gritty of creating employment. How do we do that? We certainly do not do it by extra taxation. The best way we can go about encouraging people to come in here and set up industry is by making this country a less tax-burdened country. In other words, rather than introducing new taxation Bills we should be reducing the taxation burden the people bear. If we did that people, especially very clever and astute businessmen, would appreciate the fact that this was a place to invest their money. That is what we want. We want investment in our country not just by way of people depositing [279] money in our banks but by way of people investing their skills and technological know-how for the benefit of our people.

It does not give any of us any pleasure to say that the country is in a bad state, because it reflects on all of us, but the Government should pay heed to the fact that we want Government from them. We want them to govern, to get down to the business not of increasing unemployment benefits but of creating jobs for people. I believe that nobody enjoys being paid unemployment benefit. Most people have the dignity to want to work and earn their money. However, we seem to have a pathological urge at present to encourage people not to work, to pay more to people for not working than is being paid to people who are working. Surely no country can afford to carry on with that type of ridiculous philosophy. Eventually the buck has to stop and somebody must pay the piper. We in this House must get down to the very serious business of creating more jobs for our people and of ensuring that we are benefiting to the maximum from our membership of the EEC. Deputy McDonald tried to show that membership of the EEC was advantageous to every farmer and that they were all paid grants as a result.

Mr. McDonald: I did not say that.

Mr. Crowley: The Deputy said every farmer benefited from schemes paid for by the EEC. I am totally committed to membership of the EEC and I would like it if that were true, and we were benefiting from our membership, but unfortunately that is not the case. The reason is that people who are now members of the Government led the campaign against the EEC and they are sabotaging any of the benefits we could get from the EEC.

Mr. McDonald: The Deputy knows that is not true.

Mr. Crowley: If it is not true the Deputy should prove it to me. I should like to know what is the attitude of the Minister for Industry [280] and Commerce. Is the Deputy speaking for the Minister?

Mr. McDonald: Ask him yourself.

Mr. Crowley: I have asked him on several occasions in this House. It would be very interesting to get a reply from him. That is what is wrong with the country at the moment. We are not gaining the advantages from membership that we should gain because there are people in our Government who oppose membership of the EEC.

It is very interesting for the Minister for Posts and Telegraphs to go around the country talking about BBC 1 or an RTE second channel. When you are discussing something like that, you are discussing something which is relatively unimportant, and you are diverting people's attention away from the fact that there are no jobs available for their children, that the economic future is bleak, that even the gate of emigration has now been closed because our neighbours across the water find themselves in an equally disastrous position because of Government mismanagement.

When all the tours around the country are finished and all the talk about the various TV channels and the technicalities involved in receiving the various television stations, we will still have to provide employment for our people, and feed our people. In any country where the priorities are right, every Minister of the Government of that country should be devoting all his energies to trying to solve these problems. With a few exceptions nobody in our Government is facing up to the realities of the situation. The Taoiseach and the Minister for Foreign Affairs have faced up to them, and they spelled out clearly the type of action we must take. I agree with the Taoiseach when he says the way the consumer price index is calculated is not in the best interests of everybody. We will have to have another look at that. We must have the courage and the guts to fight about it if necessary.

We want the Government to govern. It is all right to govern when everybody [281] is in agreement with you, but the real test of Government comes when there are people who disagree with you and who could put very serious political obstacles in front of you. The true test of good Government will be whether they can overcome and surmount these obstacles. As sure as night follows day, those obstacles are there and they will have to be overcome if the country is to survive.

I referred to the plight of the middle-income group. With the rate of taxation they are paying at the moment and the rate of inflation—and in most cases they are the least well organised in trade unions—they must cry “Stop” sometime, that they have had enough, that they cannot go on any longer, that the burden is too great. They are probably the least complaining and the most self-sufficient of any section in the community. It is unfair of the Government to burden those people with further taxation because they are not complaining, or because they have not got the channels for effective complaint.

We must refer to the plight of the small farmer. I come from a constituency in south-west Cork which has many small farmers, many of them on uneconomic units. These people are crying out for employment allied to agriculture. At one time Dunmanway was a thriving market town. Now the population is diminishing. The establishment of even a small industry there would be a great boon rather than having people queueing up at the unemployment office, signing on, and collecting unemployment benefit. The people of Dunmanway, and the people of west Cork in general, would much prefer to have employment available to them rather than hand-outs. If we had that type of development we would have a far healthier society which could not be described as a sponger's society.

We are becoming a dole society. We are also becoming a sponger's society. We sponge left, right and centre for everything we think we can get away with. This is encouraged by the Government. People are told about the fantastic benefits they can get for not [282] working. This is most unfair to the people who are working, the people who are endeavouring to keep up appearances, and pay their way, and give their children many of the benefits they did not have. We must get our priorities right. We have to get down to business. Deputy Governey may laugh. He may think the Government have their priorities right.

Mr. Governey: They have.

Mr. Crowley: If he thinks that cavorting around the country as the Minister for Posts and Telegraphs is doing at the moment talking about BBC 1 or RTE 2 is a proper priority he must rethink that one again. That is an act of complete irresponsibility by the Minister.

Criticisms are levelled at this side of the House because we do not say that everything in the garden is rosy or that the Government are doing a good job. We are told that we are sowing dissention. The Taoiseach, an honest man, came out with an unambiguous statement when he said that we have to straighten things out, we have to pull up our socks and face reality. One cannot have anything but admiration for a man who is prepared to state the harsh realities of the situation unambiguously. For a Member on the Government side to say that we do not have any problems, that we do not have an economic crisis, indicates that he is either stupid, naive or downright untruthful.

We must endeavour to ensure that inflation is stemmed and that the subsidies will have the desired effect the Minister envisaged when he introduced them. I am afraid this will not happen and we must keep at the Government to ensure that they do the job in a proper way. We have to keep at them to make sure that the £1 is not reduced in value by 50p within a few weeks. If this Bill makes the people aware of the problems and instils in the Government a desire to improve the economic situation it is worthy of support but we have had so many rosy promises from the Government that it is hard to believe that that is the case. In their 14-point plan which they presented to the electorate the National [283] Coalition promised to get rid of death duties, but they have replaced that system of taxation with three forms of tax. For this reason one cannot be blamed for viewing any Bill introduced by the Government with the deepest suspicion. We want this Government to act as a Government, whether they are socialists or Fine Gael, and we want them to use that platform to lead and direct the country in the proper direction so that our people can be guaranteed employment and a better standard of living.

Mr. Governey: I welcome this Bill. The last speaker was doubtful if the Government were facing the realities of the situation and if they had their priorities right. That speaker referred to me during the course of his contribution, but surely I am entitled to listen to any Member here. I should like to mention a number of interesting facts about the debate on this Bill. The Taoiseach drew the attention of the House to the fact that with effect from 1st July the zero rating of VAT will apply to personal clothing, footwear, certain clothing materials, electricity and fuels generally other than oil used in road vehicles. On two occasions in the last 12 months the Opposition introduced Private Members' motions expressing their concern about the position in the footwear industry but, in spite of the fact that the Minister for Finance has removed VAT from footwear now, the Opposition have not expressed any welcome for this move.

I have been a Member since 1961 and I make no apology for the priorities of the Government. We told the people that our first priority would be to ensure that the less well off in our society would be looked after. The Minister for Finance in the budgets he has introduced has given a great lift to the less privileged in our society, the biggest lift ever given to those people in the history of the State. No Government ever faced up to realities as this Government have done. They have shouldered their responsibilities in the last two years. Unpopular decisions were taken but they were taken for the benefit of the less well off. The [284] Government did not shirk their responsibility in regard to extra taxation, mainly because that extra taxation was to be channelled in the right direction.

During the past two-and-a-half years this Government have ensured that any taxation collected under the various headings was channelled in the proper direction and was used primarily to benefit those whom we undertook, as our first priority, to look after. After that priority, any taxation was channelled, under the direction of the Minister for Finance, in the most appropriate direction.

Having spent about 11 years on the benches opposite I know how easy it is to speak critically from the Opposition side in relation to the Government of the day. However, having regard to the legislation that has been introduced by this Government I doubt if anybody could honestly be critical of us. The previous speaker referred to the question of death duties. In the 14-point programme, Fine Gael, at the last general election——

Mr. C. Murphy: Are Fine Gael the National Coalition?

Mr. Governey: We are a National Coalition Government. At the last election we put before the people a 14-point programme which was agreed by both parties in this Coalition. Lest the Deputy opposite may be endeavouring to put me off my track I would remind him that we promised in that programme to abolish death duties. We have honoured this promise and, consequently, death duties have been abolished from 1st April last. Deputy Crowley referred to the replacement of this form of tax by three other forms of taxation. The Deputy has been in public life long enough to realise that death duties could not be abolished without their being replaced by some other form of taxation. Before the election we left nobody under any illusion regarding the abolition of death duties. While we said that they would be removed we emphasised that they would be replaced by another form of taxation. Perhaps the people opposite thought [285] we could not honour our promise. About two days before the election they announced a grandiose plan of removing rates from house property and, I think, all other property also. They were promising a bonanza for all. However, the electorate were wise enough to put their confidence in us and it cannot be said that we have failed them since coming to office.

In conclusion I trust that the House will agree to accept this Bill and will realise that any action taken by the Minister is in the best interests of the country. There have been problems. We still have the problem of inflation but as the Taoiseach said this morning inflation must be reduced to a reasonable level. This is the objective of this Bill and, therefore, I trust that in the interests of all sections of the community both sides of the House will agree on this measure.

Mr. C. Murphy: Before the previous speaker leaves the House I should like to advert to a couple of points he made. He mentioned that this party had introduced a Private Members' motion dealing with the state of the footwear industry. As a constructive Opposition it was our duty to introduce that motion. Deputy Governey seeks credit for this Government for their action in removing VAT from footwear and he contends that this will result in saving the industry. However, I wonder if the Deputy realises that VAT is being removed also from imported footwear so that, to that extent, there is no benefit for the Irish footwear industry in this measure.

The Deputy referred, too, to the 14-point programme of the Coalition. I thought that programme had gone to dust but I admire the Deputy's courage in endeavouring to raise it at this stage. Obviously, he was not sure as to who were its authors. I should have thought that it was the duty of a Government to look after all sections of a community. Perhaps the poorer sections needed greater attention but one would have expected a Government programme to include all sections.

Deputy Governey said it was easy to [286] be critical when in Opposition. Will he not agree that there is not one economic correspondent, not one politician who would contradict that this Opposition were correct in their economic forecasting? While Deputy Colley's forecasting was right, the Government's was hopelessly wrong. At this stage we are in need of an uplift to pull our people together to take on the mammoth task. A government giving a lead would have to provide the correct atmosphere for our people in which to tackle that task. Has that atmosphere been created? Our people look to this House for a lead. What have they discovered? Merely burdens and more burdens. We merely have to look at this Government's history— three budgets which were a flop and nothing more.

I remember the Minister for Finance saying here that he had inherited a deficit of £5 million when he assumed office and mentioning that he could not find the £30 million we had received from the EEC. A few short months afterwards I recall the Minister for Agriculture and Fisheries coming in and acknowledging the fact of those £30 million. Even at that stage we could foresee the type of government we would have—a government without direction pulling themselves like a whirlwind. Certainly that whirlwind has built up from a first budget, with a deficit of from £60 million to £70 million which included the famous claw-back on the children's allowances, to the second one, when we saw that claw-back removed and when the deficit rose to £125 million. Of course, in between we had increased postal and telephone charges together with a further imposition on the social welfare stamp, all constituting a terrible burden on our people wishing to pull the country out of the fire. They are continuously being oppressed by measures taken here. For example, what about the 15 pence on the price of petrol? Then we progressed to the third budget which was short-lived. We have now reached a stage of having a deficit of £241 million. Along with that there have been the financial measures such as wealth tax and [287] capital gains tax. Where is the climate or incentive for our people to work? When will the Government realise our people expect a lead? We have known for many a long day that there is no Messiah in their midst. We wonder what they will do next as a government; where they will go?

The Minister for Finance has adopted a spoiled boy attitude—if the package does not work we shall have the big stick taken to us. In my opinion he was the first flop of the Government on television. Even the famous Government Information Bureau and all its backup men could not bolster him up to face that Sunday afternoon interview when, in a few short minutes, he changed his mind two or three times. The crack had come very much into the open.

Who leads the country? Let us examine what this financial measure endeavours to do. It is to reduce the cost of living by 4 per cent. What did the last budget do? It raised the cost of living by 4 per cent. The damage had been done then and this will undo it. We are merely reverting to the “stop, go” method of operation. There was one famous week in which we had Ministers shuffling around the country announcing good news. Suddenly the big change came about. The Minister for Foreign Affairs came out shouting that something was wrong. The Minister for Finance then came out with the statement that all in the garden was not rosy. When was all in the garden last rosy? I would suggest it was early 1973.

There have been many problems created by the Government. The question can rightly be asked at present: who leads the country? Is it the Taoiseach or is it the unions? Our people no longer rely on this House; they are waiting on the unions to come to a decision whether they will accept this package. I wonder are we wasting time discussing this Finance (No. 2) Bill when the Minister has said that if the package is not accepted it will be withdrawn. Let us remember all the time the Government have wasted in this House peddling along. This measure is supposed [288] to be a step forward. I very much doubt that. Rather I regard it as merely a baby step. We have had the spending spree. Under the Estimate for the Department of Transport and Power we had to make more money available to CIE. The blunt reality was contained in the Minister for Transport and Power's brief when he spoke about the lack of return on carriage of bulk cement. Yet we have statistics on houses and buildings. Where? One Minister says we have them. Another Minister says the carriage was down.

The farming community are worried. On Monday last I met a deputation from the East Wicklow milk producers who were very worried about the wealth tax. I am glad the Taoiseach is hear to hear me. They are very worried and have no confidence in the Government. I could say many more things with regard to farmers but I want to allow a colleague an opportunity to speak.

Mr. Andrews: In his brief speech Deputy Governey said the Government have faced up to reality. Of course, the realities are that, at every given opportunity, they have distinguished themselves by placing their political pals in any vacancy that might arise, either on the Bench, in the semi-State——

An Ceann Comhairle: This is very far removed from the Finance (No. 2) Bill. It is not relevant at all.

Mr. Andrews: In the history of this State they have surpassed any Government with the placement of their pals, friends, relations——

An Ceann Comhairle: I am afraid the Deputy will have to relate his remarks to the Bill under discussion.

Mr. J. Gibbons: Brothers, widows—

Mr. C. Murphy: Nepotism out and out.

Mr. Andrews: Yes, for sheer nepotism, and for introducing——

[289] An Ceann Comhairle: These matters are not relevant.

Mr. Andrews: —— this politically corrupting form of placement which was exceeded only by our former British masters in the last century when a question of who one knew and not what one knew was the criterion for positions in this State. Who blames people becoming cynical about politics when one sees this ruthless exercise of power by the Government? Those are some of the realities Deputy Governey forgot to articulate when he made his short contribution.

When speaking on the Bill itself we must recognise that as a responsible Opposition, we have a responsibility in the present economic mess in which the country finds itself and that anything that we might say in the course of this debate should not harm the prospects of any agreement that may be reached on wage agreements. It is as well to insert that preamble before one contributes to this debate.

It is very difficult to appreciate that the budget we are now considering, and which gave rise to this Bill, was introduced on the 26th June, 1975, which is almost a month ago. It was the intention of that budget to reduce the cost of living by 4 per cent. Would a parliamentary question elicit how much the cost of living has increased between 26th June, 1975 and 26th July, 1975?

Debate adjourned.