Dáil Éireann - Volume 293 - 03 November, 1976
Economic and Social Policies: Motion (Resumed).
 Debate resumed on the following motion:
That Dáil Éireann expresses satisfaction with the Government's economic and social policies.
—(Minister for Labour.)
Mr. O'Malley Mr. O'Malley
Mr. O'Malley: Before the luncheon interval I was speaking about some of the views expressed by the Minister for Industry and Commerce here in this House on 11th December, 1973, about planning that he was starting and the counter-measures against economic difficulties he was about to take. I read two short quotations and I should like now to read one more sentence from column 1336 of the Official Report of that date. Talking about solving economic crises and economic problems he said: “When I say ‘solve’ one can either react courageously, vigorously and with foresight or one can fail to react”. Those were stirring words but that is all they were, words. I should like to ask where is there evidence of the courage and vigour about which the Minister spoke nearly three years ago. Where is there evidence of the plan about which he spoke? Where is there evidence of reaction to difficulties? Where is there evidence of the counter-measures taken to resolve the difficulties that arose? I cannot see any evidence of any reaction, other than short-term expediency to try to maintain the popularity of the Coalition Government.
This process of Coalition Government was described at the time as open Government. I should like to ask the Minister for Industry and Commerce, whom we so very rarely see in this House, to what are the Government open? In his case Government seems to be open to nothing but vacillation and lethargy. We have had no example of anything except these qualities over the past three years. We had this man whose whole life's work ever since he graduated from that well-known academy in Pembroke Lane seemed to be dedicated to planning. We heard him on the “Late Late Show” on Saturday night last  saying that planning was now a thing of the past. It was impossible if people had not the will for it and there was no point in trying to devise a plan. Is there ever a man who has given up all hope and shown every indication that he has given up all hope of tackling, let alone solving, the grave problems that beset the country and its economy today? I do not think his failure, his unwillingness or his inability to face up to these problems are unique to him. They are shared, unfortunately, to a greater or lesser degree by all his colleagues.
Before the luncheon interval I was talking, of necessity, unfortunately, in a confined debate like this, in very general terms about the long-term strategy that we as a country seeking to develop our industry would have to follow and I was recommending that, in spite of the fact that over the last few years we have had an unhappy experience in regard to industries based on our primary natural resources, nonetheless the only secure long-term development for our industrial expansion must be industry based on the processing of the natural resources we have in abundance and they are primarily our agricultural resources. It is tragic to see the failure to add value to these extremely cheap, by world standards, resources.
Agriculture is and will remain our primary natural resource but there are other natural resources happily available to us, resources of which unhappily we have failed to take advantage. The one that most obviously springs to mind is the huge zinc and lead mine to come into production in, I understand, a matter of months in Navan. That is the richest zinc mine in Europe and one of the richest in the world. We have two other small zinc mines which will probably run out in the foreseeable future but the mine in Navan has a life of between 20 and 30 years, possibly 35 years, depending on the rate of extraction allowed. What prospect have we of adding value to that ore? We have none in the foreseeable future. Despite the fact that we have 108,000 unemployed we have not seen fit as a nation over the past three years or so to make the necessary  plans to have a smelter built to process at least a good proportion of the ore. That ore, the property of the Irish people, will be going abroad to have three-quarters of its ultimate value added to it in South Wales, in the Ruhr, in France and other parts of Europe.
Last April the Minister for Industry and Commerce finally decided he would instruct the IDA over the 12 month period ending 31st March next to have discussions and receive proposals from interested parties with a view to building a smelter. It is common knowledge the building will take at least four years. It cannot be done in less time. The contract cannot be given out before at the earliest April, 1977, and we cannot, therefore, have a smelter in operation before the summer of 1981. Indeed, it would be surprising if it could be in operation even at that time. It is likely it will be some years later. At that rate five years or one-quarter of the ore output of the Navan mine will have departed these shores without any value being added to it by Irishmen and without any value being obtained for it other than the price of the ore itself and the concentrates. For that to happen at any time would be a tragedy. For it to happen at this particular time is inconceivably tragic. It is an appalling indictment of the man or men in Government who have allowed this to happen.
There is another natural resource happily available to us. There is natural gas in reasonable quantities off Kinsale Head. What are we doing with it? Are we using it for what it is, a cheap source of highly efficient power to develop industry and give industry advantages it would not otherwise have? Not at all. We are not doing that. We are turning it into electricity by a process in which it loses two-thirds of its calorific value. If we had unlimited supplies, some might be used in this way but we have one moderately-sized find and the bulk of that moderately-sized find will go into the production of electricity. A source of cheap, efficient power is being converted into an inefficient and  expensive form of energy.
We have hopes of the discovery of oil off our coast. There has been no commercial discovery and the indications are that, if oil is discovered in commercial quantities, it will be discovered off the west coast in waters varying in depth between 1,500 and 2,500 feet. It is also known and cannot be denied that the whole question of the commercial recoverability of such deposits of oil in that depth of water is a long term proposition. If a discovery were made next summer it is unlikely that this country would get any benefit from the recovery of the oil within a period of about 12 years because the whole technology for the recovery of oil in such circumstances is only now commencing and the ability to land it and refine it is, unfortunately for us, a distant prospect.
The Minister for Industry and Commerce and the Government laid great stress on the likelihood of an early discovery of oil in commercial quantities in situations from which they are commercially recoverable. It is disturbing to know that, after our finest summer and the calmest seas, in perhaps 50 years and a very long exploration season as a result, there has not been a single discovery this season which began in April and ended last month. Added to that is the fact that in the comparatively shallow and sheltered waters of the Celtic Sea quite a number of blocks have been handed back to the Government by companies who are entitled to explore those blocks, because they felt there were no longer any prospects in them.
I am afraid the fond hopes of the Minister for Industry and Commerce and the Government that the terrible debts which are now inflicted on this nation can be paid in some vague way by those oil discoveries in the very near future are but fond and pious hopes. The evidence is not there, unfortunately for us, to show that we will be in a position to do that and thereby rectify the errors that have been made over the past three years.
I wanted to deal with the IDA but unfortunately I have no time to do it. I want to do two things in the one breath: I want to pay tribute to them and I want to sympathise with  them. They are doing the best they possibly can in shocking circumstances for them because the rug is constantly being pulled from under them by the Government who should be devoted to helping them to the fullest possible extent. The Government are creating a climate in this country which is inimical to industry of all kind, whether it be foreign or domestic. I want to draw the attention of the House to the fact that such industries as have opened over the last three or four years seem to be very predominantly foreign industries. They are here for one principal reason: because we, as a result of the protocol which Dr. Hillery negotiated on our entry into the EEC, are still able to offer them tax free incentives on their profits up to 1990. That is a wasting asset and every year that passes it becomes less attractive. The IDA, the Government and all of us will have to realise that we cannot continue, as we have been, attracting industry on that rather artificial basis.
When that started back in the fifties it was a strategy which was very valid in the Ireland of that time with virtually no industry. We have to change our direction now in the attraction of industry and we have to concentrate on our own people. We should not concentrate on the type of industry which is coming here to maximise its profits in order to minimise them in other countries where it would have to pay tax. We have to concentrate our attention on the solid things we have here—our natural resources of agriculture, minerals, gas, oil and whatever else we may be fortunate enough to find.
We had a long speech today from Deputy Halligan who blames, first of all, the world crisis for all the difficulties facing the country and the Government today and blames the Fianna Fáil Party, in particular, for leading this country into free trade in the Anglo-Irish Free Trade Area Agreement and the European Economic Community. How does Deputy Halligan think that we, as a nation of three million people, can give our people the standard of living to which they are entitled and to which they  aspire if we are to go back to the days of the thirties, look inwards and have protection and not free trade? The man must be mad in blaming the world crisis for all our problems. This is in stark contrast with the views expressed by the Taoiseach of the Government which Deputy Halligan now supports, who told us just a year ago that, while the world crisis had a certain influence on our affairs, we are primarily responsible in this country for our problems? How does Deputy Halligan square what he is saying in support of the Green Paper, and what he calls the economic and social successes of this country over the past three years, with the sentiments of Deputy Barry Desmond who condemned virtually every aspects of the Government's economic policy of the past few years? Those things do not stand up. The sooner we get the opportunity—now that the Coalition have funked fighting a presidential election against us—of fighting a general election against them, the sooner will we start to get some place.
Mr. F. O'Brien Mr. F. O'Brien
Mr. F. O'Brien: I am glad to have an opportunity of participating in this debate. It is important that from time to time we discuss exactly where we are going and give the Opposition time to put forward policies. To date however we have seen very little of those policies. The position of our economy has been outlined in detail in recent publications, and there is not much point in going into their findings. A proper analysis of the cause of the problems and the remedies which might be prescribed is needed now. It is simplistic to lay the blame completely on the Government or to say that the fault lies with external influences only. Our economy could be put on an even keel reasonably easily if either of those things were true. The unfavourable external influences cannot be underestimated. It is well to remember that this is not a new thing but has been going on since the late sixties.
This is one of the reasons which tempted the now Leader of the Opposition to go quickly to the country in  1973. He was then aware of the economic problems that would beset the country. He tried to buy time by having a general election in February of that year and get re-elected so that he would have five years to play around with. He misread the situation. He lost the election. Solutions to our problems will require clear thinking on what we want from our economy. People must decide to what extent they are prepared to make some sacrifices now to achieve a higher standard of living. In times of economic troubles it is necessary for us to make certain sacrifices to ensure that the future will be better, that there will be a favourable climate for industrial and agricultural development.
It is essential to realise that, in comparison with many European countries, Ireland is relatively underdeveloped in regard to economic structure. Along with this there is a demand for Government services and wages on a basis comparable to larger economies. We feel we must be in line with the wealthier nations in their welfare services, educational standards and wage structures. That is not possible unless we match those nations in productivity. If we are not prepared to match them in productivity, then we must tailor our expectations accordingly. Without higher productivity, increased wages are a mirage and are not a reflection of higher living standards; they will raise the cost of living and inflation, and will in time undermine our whole economy.
To improve living standards there must be structural changes in agriculture and industry. Investment is required to provide further employment. I am glad the Minister for Finance said yesterday that the emphasis will have to shift towards greater investment in the agricultural industry. There is a great potential, now that we are in the Common Market, for development of our agricultural industry. The market and the profitability are there. It is a question of the Government providing the necessary incentives and encouragement to ensure that the agricultural  end of our economy expands. A greater emphasis must be placed on the spin-off industries from agriculture so that we get the greatest return from them by way of jobs and money.
The same must be said of industry. We are an emerging industrial nation. Industries have been protected for too long and are now feeling the full blast of free trade. This is one of the reasons why there is such high unemployment, that when free trade came industry was not sufficiently geared to meet it.
Deputy O'Malley spoke about our natural resources being dissipated or not being used to the full. It is time the smelter was got under way. However, the Fianna Fáil record in the field of mining leaves a lot to be desired. At least this Government have structured the tax mechanism to get quite a large slice of profit from the mines for the people of Ireland. We must contrast that with their performance when they were in Government, when they gave such enterprises a tax-free holiday for 20 years, when after 20 years there would not be a trace of ore left in the ground. When one listened to the last speaker pontificating about this despite their own performance when he was a Minister in that Government, one had to doubt his credibility.
The messages contained in recent independent reports have been repetitive: competitiveness must be improved; a greater quantity of goods must be sold to achieve growth in the economy and to reduce unemployment. However, this message does not seem to have got across to those engaged in determining pay policy. The extent to which it has been ignored is alarming. The unions appear to be more anxious to push selfishly for short-term gain. The unions as well as all other associations have an obligation to the whole of society not just to their members. The unions in particular have an obligation to the unemployed, to the people who were working and who, because of economic trends are no longer working. It is not good enough particularly for the stronger unions who have many members in protected employment to push demands that cannot be met  without creating further unemployment. Everyone has a role to play and I am not knocking the unions as such. Most other pressure groups in the nation are lecturing the Government on what they should do, but they themselves do not appear to feel that they have any responsibility to the country and lay the blame completely and continually at the doorstep of the Government. The Government have of course a responsibility to give leadership, but these groups in society also have a responsibility to ensure that what they are doing is in the best interest of everybody.
The major problem in our economy is a tendency to fossilise in its existing way of doing things. Even if the economy is only to maintain its present progress, it must be made more willing to adapt to change. Other nations have been more adaptable and flexible in their production methods. If we are to remain competitive we must meet this change. I must pay tribute here to the Government for the moneys being allocated to AnCO for the purpose of industrial training. This is a further proof of the Government's aim to provide manpower for the expansion in our industrial output and in the economy generally when it comes.
We cannot overstress the importance of improved productivity. If we want to maintain and improve our standard of living we must be prepared to change and to make sacrifices in order to ensure that we can gear ourselves to a course of higher productivity. It is important that wage restraint be considered. If we pay ourselves too highly we will price ourselves out of the markets we have. The world, the EEC and our neighbours across the water owe us nothing. We must be competitive. Great markets with tremendous potential are there, now that we are in Europe; but we must change our attitude and style so as to avail of them.
The fact that we have discovered natural resources and that we shall have gas available in fairly substantial quantity will make a great difference in our economic life, but it will only  be effective if we plan and develop our resources properly. It is time that the smelter proposal got under way. It will give a further stimulus to industry because I would see resulting from this smelter a new metallurgical industry. The possibilities are great. In planning for the eighties we must plan along the lines of our natural resources. This would mean that we do not have to import at high prices since we have the resources at home to manufacture, develop and export goods.
One can see tremendous possibilities in the areas of agriculture, natural resources and our industrial arm. These must all be developed. We must decide where we are going and what we want to do. Our entire industrial package needs to be examined regarding improvements in terms of market research so as to find out exactly where markets exist for what we can produce. This is a tremendous field. I must pay tribute to the various Government agencies in this connection. They have done a good job but, like all agencies, they must be examined from time to time to ensure that they are measuring up to and meeting the needs of our situation.
The future need is investment to provide jobs. One of the major problems which we cannot escape is unemployment. It is a cancer in our society that we must strive to eradicate. The Government must provide the props, the leadership and all the aid it can give. If these aids and props are not availed of by industry, by the unions and other bodies concerned our efforts will not succeed. It is up to free enterprise to take the initiative. The Minister for Finance said yesterday that the growth rate this year will approach 4 per cent. That is encouraging but we must not consider this adequate. We must now build solidly for the future.
The major cleavage today is not between the white collar and the blue collar workers, between the skilled and the unskilled, but between those in secure jobs and those in jobs which can and may disappear. It is easy for people in secure employment to demand high increases. They feel they  have the muscle with which to get big increases at the expense of employment in competitive fields. We had the case of the building workers and the banks. The banks were trying to justify large increases but they operate in an area of protected employment and had the wherewithal to pay regardless of what the ultimate cost might be to the community generally. In the case of the building industry, basically they are only in competition with each other. They sell houses only in the home market and this industry is a type of closed shop, in my view. They do not price each other out of business. So, it is easy for these businesses to look for large increases. In both cases the employers wanted to give the increases because it would not affect their business to any great extent. But what about the large number of businesses that are in competition abroad? They cannot afford vast increases and if they are forced into conceding them it results in further closures. This is why it is imperative that we come up with some sound incomes policy. When people talk of an incomes policy they conjure up all sorts of sanctions being applied. I think the only way to get a satisfactory incomes policy is by negotiation and agreement. There are talks between the social partners and the Government going on at present. I wish them well and hope they will succeed in reaching a fruitful conclusion. The outcome of the talks will affect our economic development. If agreement cannot be reached in this area it will be very hard to plan for the future. It is desirable for the social partners not only to consider the thousands of people they are bargaining for but also the thousands of unemployed and those who might be unemployed if an equitable settlement is not reached.
The Government should give an incentive to industry to create the right climate for profitability. Industry must make profits in order to reinvest for expansion. That is an important aspect of any fiscal policy. People go into business to make a profit. There is nothing wrong with that. Indeed, it is man's primary motivation. Man is a  selfish animal and only looks for gain. If we do not give industry a profit motive people will invest their money in non-productive areas.
There should be a more trusting relationship between private and public enterprise. Some extension in Government activity is inevitable in view of our economic difficulties. Great play is made of our high unemployment figure. In the past we had the buffer of the emigrant ship to keep unemployment at a low level but that is no longer the case today. A new outlook in education will have to be adopted to help our young people. In times of scarcity it is necessary to direct resources into more productive channels More money should be spent on technical education and the time has come to have a technical college on the north side of the city. When this country emerges economically and industrially stronger more technical skills will be required in order to avail of our opportunities. There is no point in having to import expertise. It is important that the Government should come to terms with our economic problems. There has been a lift in the economy but we must plan for the future. We must develop markets in the EEC with a view to creating the maximum number of jobs. The time has come to plan for the eighties. People are not fools; they know that our economic problems will not disappear overnight. One sees the potential of this country. But we must provide a plan, we must ensure that the industrial and agricultural part of our economy is exploited to the full.
The future for this country is very bright. In the teeth of a world recession and economic disaster in other countries, under this Government the ship has sailed reasonably steadily. That is something we should remember. Had the Opposition been on this side of the House during this economic recession—when one looks at their performance about giving away our mineral rights and how they would have taken on any other aspect of our economy—one must give credit to the Government and be thankful that we did not have the Opposition here at this time because their performance, as an Opposition, during this period of  economic problems has been pathetic. What would their performance in Government have been like? I have no doubt it would have been even worse than it has been in Opposition.
Mr. J. Gibbons Mr. J. Gibbons
Mr. J. Gibbons: I suppose one could do worse than take the penultimate sentence of Deputy O'Brien's contribution as a text because it seems to be the key note of Government speeches in this debate, such as they have been. Deputy O'Brien said that the ship of state is sailing steadily on. Then he quoted the hypothesis that the situation would have been a great deal worse than it is now had the Fianna Fáil Party been in Government. This is an unsupported statement of Deputy O'Brien. I did not have an opportunity of hearing the Minister for Labour yesterday but I did hear the Minister for Finance for some time. Putting the reports for the Minister for Labour's speech along with my hearing of the Minister for Finance it would appear that these two Ministers also feel that things on the whole are fairly good in the country. The Minister for Finance yesterday referred repeatedly to some prediction made by some unspecified economic expert of the expectancy of a 3 per cent growth rate in the coming year. Then gratuitously he said there could very well be a 4 per cent growth next year, and that was very good. I do not know what is the basis of this expectation. The Minister did not enlighten me as I listened to him.
This morning we had the Minister for Agriculture and Fisheries. He, naturally, and I suppose rightly, dwelt fairly heavily on agricultural matters. He did seem also to share his Government's belief that there is really no problem of any great dimension in the country. All of this begs the question: are the Government living in a world of unreality? Are they totally unaware of the running-down of industry, of the rapidly growing problem of the employment of young men and women leaving schools and colleges? I should imagine it would not be an over-statement to say that there must be at least 100,000 of these unregistered unemployed looking for jobs that are not there,  in a country where jobs are diminishing rather than increasing. In spite of that three Ministers and Deputy O'Brien seem to think that, for some obscure reason, about the nature of which they did not enlighten us, there will be this growth rate of 3 per cent, and possibly 4 per cent, in the coming year. Perhaps before the debate ends we will hear the source of that confidence.
I was hoping that the Minister for Agriculture and Fisheries in the context of this expectation and indeed in his area of influence on agriculture, would have made particular reference to the Government's Green Paper published recently postulating a growth rate in agriculture of 6 per cent per annum. I had hoped the Minister would have dwelt somewhat on that matter in his contribution, most of which I heard this morning. But, I regret to say, he did not. Like Deputy O'Brien, who has just left the House, he unburdened himself of a number of platitudes to the effect that it is necessary to apply fertiliser if one wants to produce more grass; it is necessary to have more cattle if one wants to increase meat and beef production; and certain other observations of that kind which one would have thought were fairly widely-shared objectives.
I would have thought that possibly one Minister or backbencher in supporting the Government, would have had something to say about the increasing unprofitability of work in Ireland and the increasing tendency to tax the diminishing work force in order to support the increasing number of unemployed. There are extraordinary abuses and anomalies in that area. I would have thought they were a matter of such importance that some member of the Government would have dealt with them and told us, first of all, with regard to the question of abuses of unemployment benefit, what measures the Government proposed to rectify the situation where the increased taxation of the work force is being used to subsidise this type of abuse and thereafter tell us what expectancy we might have that the situation might revert to its former  position, which it ought to be in all the time: that the reward for working will always be greater than that which people get either for being deprived of their employment through the closure of their workplace or for electing personally to remain unemployed. Anybody who thinks about the affairs of this country knows that this is so, especially in the case of the lower-paid workers who are severely taxed in income and other taxes while, in a great many cases their unemployed neighbours may be drawing a great deal more. But it is forgotten that the money which unemployed people draw is taken, in the first place, from workers generally, including the lower-paid. I had hoped that that situation would have been clarified a little by some Government speaker but it has not been touched on at all.
I want to come to the Minister for Agriculture and Fisheries' contribution to this debate this morning. His speech seemed to have been prepared three weeks ago because embedded in the middle of it was an idiotic claim, a parrot-like repetition of the bonanza story that hit all the headlines of the newspapers and was heard on the radio and television news bulletins after the Minister for Agriculture and Fisheries had attended the meeting of the Council of Ministers at which the Irish green £ was devalued. We have become accustomed to this when the Minister for Agriculture and Fisheries goes to Brussels or Luxembourg. The Minister told us this morning that this bonanza was worth £40 million put into the farmers' pockets. A moment's thought would have told the Minister that as far as trade with Europe is concerned the situation with regard to monetary compensatory allowance is now far worse than it was before 2nd October when the devaluation took place.
I should like to put the figures on record. On 2nd October the MCA for exports to Europe was £6.47 per cwt.; or, in the case of a 12 cwt. bullock, about £77.52 taxes on each bullock. As a result of devaluation, in the first week these MCAs dropped by £5.88 per cwt. to £70.56 per head for the 12 cwt. bullock. On 16th October, two  weeks later, the MCA per cwt. on these exports was back to where it started, £6.46 per cwt. or £77.52 per head export taxes. There were other taxes also. It stayed stationary for 14 days and on 30th October it had risen to £7.32 per cwt., almost £1 per cwt. more than it was on the day of devaluation. That meant that the MCA taxes on the same bullock would then be £87.84. Next week the situation will be that the MCA will have risen to £8.40 per cwt. or £100 MCA tax on a 12 cwt. bullock. That is the “bonanza”.
I should like to add that, because of the failure of the British Government to devalue at the same rate as we did, there is a residual benefit provided we export to the United Kingdom. The Germans, or the Danes, exporting cattle, as they do intensively at present, will get an export refund, money handed into their fist by the EEC, at the rate per lb. deadweight of 28p. We must compete with that with our 5p gained by devaluation of the green £. A German farmer gets £17 per cwt. export refund if he exports to the United Kingdom market and a Danish farmer gets the same, but an Irish farmer gets £3. This morning the Minister was still talking enthusiastically about that as the bonanza, the El Dorado. Last week the Minister for Finance in Luxembourg, contemplating this bonanza, said the time had come to tax the farming community more heavily because of the increased wealth they would be gaining from this phantom. Later he denied he had made the suggestion and later still he denied that he denied it. I am waiting to see whether the Minister has yet settled and reached the earth and whether the denial of the denial denial is the final position. The Minister for Finance seems to share the relief of the Minister for Agriculture and Fisheries that the ephemeral effect of the devaluation of the green £ was a thing that should be taxed. I should like to tell the Minister that the Government have been subsidising the Irish consumer for the last three years at the producers' expense by failing to get a realistic devaluation of the green £. The Minister for Agriculture and Fisheries was this morning talking about the restoration of confidence and our incapacity to advance unless we  had a restoration of this confidence. But I should like to suggest that the way to restore confidence is to pay the producer the price he is entitled to, the price that his French, German and Dutch colleagues get in Europe.
Our reference price, apart from the United Kingdom, has been the lowest of the other member states. It is not fair or right to compare our situation to the situation in the United Kingdom, because they are large net importers of food. On the other hand, more than any other country in Europe we live by exporting food, and it is reasonable to say that the more we get for the food we export the better off the country is.
If farmers' incomes rose sufficiently to derive benefit from the real value of exports, the Minister for Finance might talk sensibly about taxing farmers' incomes. For the Minister for Agriculture and Fisheries not to understand these matters is something I find hard to believe—I do not expect the Minister for Finance to understand them. It was clear this morning that the Minister for Agriculture and Fisheries had only a hazy idea of what had happened since the glorious victory of 2nd October. It is a fantasy that is put on for the benefit of the press. The view appears to be that if one gets the headlines the first day what happens afterwards is really not important.
In my view the Minister for Agriculture and Fisheries is being held back by his socialist colleagues in Government who want to have the situation continue that the food producers will continue actively to subsidise the price of food by forfeiting the profit they are entitled to. The Minister is too loyal a colleague to say this, but he must know it. He established one thing in Luxembourg: that it is no longer necessary for us to follow like sheepdogs behind their masters; it is no longer necessary for our green £ and the British green £ to keep any sort of steady relationship. Having done that the Minister should now go for a realistic devaluation of the green £ and then he will get the restoration of confidence, the rebuilding of the herds that he was talking about this morning. In talking about  it the Minister was conceding that the Irish herds—cattle, sheep or pigs— have been decimated in numbers and in health since the arrival of the Coalition Government.
I suspect that the speech, which was dated, was written by a civil servant who was unfamiliar with the world. The Minister innocently spoke of free access to the European market. How can he say that when if you want to send a bullock on the hoof to Germany next week, it will cost you £100 to pay the MCA before it gets on the boat? The real effect of this change in the revaluation of the German Mark, the continuing slide of the British £ and the puny devaluation of our green £ is that we are excluded almost totally from the European market, where we must build. Britain is very rapidly reaching a condition of self-sufficiency in red meat. The Irish agricultural economy must of necessity develop rapidly in the markets of the mainland. The effect of the smallness, weakness and short-livedness of the Minister's famous victory is to exclude us almost totally from the European market.
The Minister, talking about the need to reconstruct the cattle herd above all, got the message from this party. It is slowly beginning to penetrate his mind that the greatest resources this country has is the cattle herd, in spite of the fact that during the last couple of years we have seen the wholesale slaughter of breeding stock and the sale of calves and this is still going on. If the Minister got a realistic devaluation of the green £ this need not go on. It would not pay an Italian to come here to buy calves. Perhaps the Minister had not the permission, the vision or the will to go for a realistic devaluation. In no other way will the Irish producer get the reward to which he is entitled and, having got it, he is entitled to talk to the taxman. That is the situation as I see it.
The Minister must know that the downturn in livestock numbers of all kinds, cattle, sheep and pigs, has been largely the result of the mismanagement by the Government of which he is a member. I hesitate to  blame him solely for this because there is such a thing as collective responsibility. As he is the Minister for Agriculture and Fisheries he is the man who must take the blame. Within the Government itself he is the victim of unfair pressures. While he might recognise the vital steps that must be taken for the restoration of the cattle herd, he will not be allowed to do it, just as the various EEC schemes, most of which are contributory, have become stultified and made a nonsense of by the reluctance of the Government to make a sufficient contribution to render them worth while. I am talking now of such schemes as the disadvantaged areas scheme or the retirement scheme under Directive 160. The Government do not want these schemes because if they worked the Exchequer would have to make a subscription. In the case of Directive 160, I think, it is a 65 per cent contribution. They would have to make a similar contribution under the disadvantaged areas scheme. The Government do not want to pay, so the retirement scheme is not working at all. That is the way the Government want it.
I keep hoping the Government might recognise the vital necessity for the restoration of the suckler herd. There were 750,000 cows in the suckler herd three years ago; there are so few now that they are not worth talking about. They were slaughtered in 1974. In order to keep a floor under the calf market and rebuild the numbers in the herd, it is absolutely vital that we re-establish the suckler herd that was wiped out by the inaction of the Government. I suggest that the beef incentive scheme be resuscitated because it is necessary for the country.
The Minister alluded this morning to the price of the land and described it as a mixed blessing. That is very bad for farmers, especially small farmers, because it has the effect of wiping the small man out of the land market altogether. The price of agricultural land at present bears no relation to its economic value as farm land. The victims of the speculator  scales are the small farmers, the farmers aspiring to development status which they cannot reach unless they get extra land. How can they pay £1,500 an acre? Where will they get that money? It is simply not on. There is no protection for the small farmer from the speculator. If the Government do not do it, we will. Any responsible Irish Government must carry out their responsibility to their people on the land. If the people are not there what good is the land? I do not know if these points were perceived by the Government or any member of it.
I am glad the Minister has joined us because I want to refer especially to the small farmers in all areas, but especially the western areas. He said this morning that they should put out of their heads forever the notion of trying to be cattle farmers on 50 acres because it will not work. There are two things that will work, apart from horticulture, and they are milk production and pig breeding. Fattening pigs should be done co-operatively, as it is done in many areas. The breeding of pigs can be done on a fairly large scale by people with very little land. I would prefer to see smaller farmers, especially in the western areas, being assisted in this highly skilled business and we must provide that skilled assistance. We are all talking through our hats about saving the west—it is still worth doing—unless we adopt the necessary means to do this. Keeping a medium-sized breeding herd of pigs can improve the fertility of the holding and the farmers can make a living from the project.
This morning on the general question of the glad new dawn the Minister spoke about the desirability of using fertilisers. There are two infallible markers as to the condition of agriculture. One of these is livestock numbers—we have been talking about those—and the other is the use of fertilisers. Since 1973 fertiliser use has been cut in half. It is necessary to bear this in mind when the Minister for Agriculture and Fisheries or any of his colleagues is talking in a rather blithe way about the 6 per cent per annum expansion expected. In the context of  diminishing flocks and herds and of the diminishing use of fertilisers it must be admitted that the cost of raw phosphate or of any other phosphate has quintupled since the Coalition came to office. It is true also that the profits to which farmers and food producers are entitled have been filched from them by the failure of the Minister to get a sufficient devaluation of the green £ as the £ sagged during the past three years. If the farmer were receiving the profit to which he is entitled he would be buying the phosphate and the potash, dear as they are. Unless there is sufficient use of fertilisers the Minister cannot hope to get the increased production he talks of.
There is another factor in soil fertility to which the Minister did not allude. I refer to the use of some form of calcium carbonate, the price of which has trebled since this Government came to office. While I cannot say exactly what are the usage figures of this product, I know that they have dropped dramatically. This is a very important factor in the context of the western areas in particular because the lime content of the soil must be kept right. Most of the poorer soils are very acid and cannot be used for production purposes unless the imbalance is corrected.
After the ill-treatment in the area of the cattle herd in the past three years, its rebuilding will be complicated out of all recognition by the battle that went on for two years between the Department and the veterinary profession. We now have a situation in relation to TB and brucellosis in animals very much akin to that which existed before we embarked two decades or more ago on the TB eradication scheme. Any Deputy here who has any knowledge of brucellosis will know that the country is rampant with the disease. Yesterday two farmers from County Meath came to see me here. Both of these men are in liquid milk production but their herds are suffering a brucellosis storm at present. I understand that the Minister for Agriculture and Fisheries told one of these men personally that he has nothing to offer him but £85 per head on the  sale of the reactor animals. The man I am talking of has 90 cows on 105 acres and unless he can be given greater assistance than that which has been offered he and his family will be forced to leave agriculture.
Mr. Clinton Mr. Clinton
Mr. Clinton: Why not tell the whole story? This man brought in 20 cows from the North, all of which went down.
Mr. J. Gibbons Mr. J. Gibbons
Mr. J. Gibbons: I shall not dispute that with the Minister, but he and I know that a brucellosis storm is something which may strike at random. When that happens the milk as well as the calves are lost. The cows, too, are lost because they become infected useless animals that have to be disposed of at scrap prices. The two farmers I am speaking of are merely isolated cases. No disease eradication scheme will be worth anything unless the compensation offered is realistic.
I concede that the Government have a serious problem in this area. The farming community must not wash their hands of their responsibility in the matter because they, too, have a responsibility to their neighbours. The £85 scheme will not work. Let us not waste any more time because the disease is running through the herds of the country. The Minister has a very good case to take to the EEC in this regard. They have offered £38 for cows and half that amount for steers; but, as the Minister knows, that is no good.
Under the Lomé Convention the EEC at the same time are permitting the importation of cattle from such countries as Botswana, Swaziland, Zanzibar, and Madagascar. I should like to know what is the disease status in these countries. While that meat is admitted into the EEC without any great problem Irish TB reactor meat will not be admitted under present regulations. I suggest that it must be possible to devise a scheme involving the private storage of reactor meat for which rather substantial EEC grants are available. In good faith I suggest to the Minister that we must strain every finger in using every tactic available to us to  get a reasonable compensation price. Unless the compensation is worthwhile we will not get the reactors from the farmers. Some herdowners, although they identify reactors, are not prepared to sell. They are harbouring disease. They become a menace. I urge the Minister to look at this.
It is my opinion—but it is something I have not researched—that taking the headage payment offered already by the EEC as well as propositioning the Community regarding a deal involving private storage grants and assistance in sale to third countries, should that be necessary, we could do better. If the Minister looks for this we shall support him in every way.
In his continuing series of victories, the Minister referred briefly to the victory of his colleague on the fishing front. As usual that achievement was heralded as a great breakthrough. Incidentally, I might mention here the Minister's press release which contained the longest single sentence I have ever seen. It comprised half a foolscap page and had only one full stop. It was rather unintelligible. However, on reading the fine print we discovered that we would have the blessing of the Community if, during the next four years, we doubled our fishing fleet and catches. I trust that either the Minister for Foreign Affairs or some other Minister can tell us how that is to be achieved.
While we are attempting to double our fish catch in our own waters in the next four years we can be quite certain that there is nothing at all to stop the trawlers of the other member states of the Community from fishing within our limits because there is no inclination on the part of the Community to concede what we must get and what the fishing industry has been looking for all the time, namely, a 50-mile exclusive limit. The public and the fishermen were confused recently by the proposal of British Members of Parliament that a 50-mile conservation zone be established, embodying quotas for pelagic fishing. This also got the hero's  treatment to which we are becoming accustomed. It was, of course, a fraud; and I am very much afraid the Minister for Foreign Affairs' most recent outing, which he is trying to sell as a famous victory, was at best a conceding of ground and the abandonment of vital territory without which it will be impossible to fight effectively.
Earlier I was talking about this business of taxing farm incomes and the difficulty into which the Minister for Finance had got himself, having first of all to deny that he had said farmers should be taxed and then having had to deny the denial. This all evolves around what seems to be the manifest intention of the Government to impose extra taxation on farmers and to pin that on something or other. The Minister is pinning it on to the £50 million bonanza won by the Minister for Agriculture and Fisheries, something which never happened. As far as exports to the Continent are concerned, the position is now a great deal worse than it was before devaluation and it is that worse position the Minister for Finance proposes to tax. The reality, according to the IFA, is that instead of the Central Bank's assertion that farm incomes were up by 50 per cent on 1974, if one takes 1973 as the base year there is a real drop of 8 per cent. It is true the price of livestock is very good at the moment and I hope it will hold. I am afraid it will not because there is every danger of oversupply on the British markets, which is the only market now. There are also heavy exports from Denmark.
I support the Minister in his resolve to deal with the growing problem of high fructose corn syrup. It is absolutely vital to preserve this.
Government speakers spoke of the free availability of credit to farmers for development purposes. I know one farmer in Kilkenny with 1,000 tons of silage and a large quantity of feeding barley. He has a very modern silage lay-out. He cannot get money anywhere to buy cattle. The ACC have turned him down. It is not that easy to get money for development.  I want to end by telling the Government that their assertions that all systems are going, that things are not too bad, that we are around the bend, coming over the hill, all that jazz, is just not true. There are at least 100,000 school leavers looking for jobs and there are no jobs for them. The best thing the Government can do for the country at the moment is to go and go as quickly as they can.
Minister for Industry and Commerce (Mr. Keating) Justin Keating
Minister for Industry and Commerce (Mr. Keating): I want to talk first about the mood that seems to be in the country because it is very easy, for good or ill, for prophecies to become self-fulfilling. It is also true that commentators and the public at large can lag behind reality. They do not keep up with it. They follow after the event without changing as quickly as events change. It is easy for one side in the House to say everything is quite dreadful and for the other side to say that everything is getting better. It seems to me that the correct thing to do is to say exactly what the reality is and I want now to take a little time to try to indicate statistically what the reality is and then go on to talk about the future.
It was, I think, Keynes who pointed out that there is an irrational element in any sort of economic life which depends on what people think will happen and, if our people think that our economy is in chaos, they will hold off their investment decision and thereby contribute to its difficulties. If people think their real standards of living are declining rapidly they will be less inclined to come to rational solutions necessary for future growth. You do not make problems go away with words, but you can create problems with words. To some extent that is happening here.
I shall not go through the contributions of the various Opposition speakers but I want to quote just one sentence from the leader in today's Irish Press because this sentence seems to me to sum up all the wrong emphasis and all the wrong understanding of what the position is: “For manufacturing industry the lesson of the past four years is that it has declined,  is declining and has no future”. That is a value judgment. I can equally say a great many positive things but what I want to do is simply to quote some facts because what one is referring to is important.
The world has seen an enormous recession, the worst since the 1930s. It is true that, if you take the year 1975 and compare it with 1974, there was a decline in the volume index for manufacturing industry of 6.5 per cent. That is comparing now the whole of 1975 with the whole of 1974. If you compare the second half of 1974 plus the first half of 1975 with the second half of 1975 plus the first half of 1976, in other words, not calendar year on calendar year but still one year intervals and coming up to the second half of 1976—we do not have detailed statistics after that—then the volume of output has grown by 3 per cent. It has not declined by 6.5 per cent. The quarterly volume index, which has the base year of 1953, in the second quarter of 1976, stands at the highest level that it has ever been, 308 unadjusted and 297.3 seasonally adjusted. If you take the volume figures for the second quarter of 1976, the most recent quarter we possess, and compare this with the same period in 1975, then the increase in the volume of manufacturing industry is 13 per cent.
I will not make much comment about those figures because I wish people knew them. If you take the most recent quarter for which we possess figures for manufacturing industry, the quarter, which ended in mid-summer, and compare that with a year ago and you find that the increase is 13 per cent—we have to assume that the statistics which come from the CSO are reasonably neutral and nobody tweaks them or badgers them politically and they say this is what the researchers reveal it to be—how can you reconcile that with saying for manufacturing industry the lesson in the past four years is that it has declined and is declining? The Irish Press leader says that manufacturing industry is declining. How can those things be reconciled? I do not think they can.
 This is an example of the sort of move which goes in the adverse direction, far beyond the reality. It is fair, not because I feel defensive about the Government in relation to industry or about my role or my Department's role in relation to industry—I do not— but because working as close with industry as I have done for three-and-a-quarter years now I identify with industry as a whole, to say that those sorts of accusations make me cross for industry.
I want to try to put the thing into context not just for the most recent quarter of 1976 against 12 months ago but into the European context and the OECD context. I will list 18 countries in a ranking order. The source for this is the OECD main economic indicator. The percentage change in industrial production from the second quarter of 1975 to the second quarter of 1976, the most recent figure we can have for all of these countries, Ireland included, shows that of the ranking of 18 countries that one can make, using the OECD's statistics, Japan is first, Italy second, Belgium third, Luxembourg is fourth and Ireland is joint fifth of that 18. Australia, Canada, the Netherlands, Spain, the UK, Switzerland, Sweden and God knows where else are all behind us. That is listing up to the most recent quarter. The percentage change in industrial production, taking it over two years from the second quarter in 1974 to as late as we can go, the end of the second quarter of 1976, twice the period I have just given, shows that the ranking order is that Ireland is not in joint fifth place but is in third place of the 18, exceeded only by Greece and Italy.
When one takes the percentage change over a longer period, one which is relevant to the responsibility of this Government, we find that with the percentage change in industrial production from 1973 to the most recent figures we have, the end of the second quarter of 1976, then the ranking is Greece, first, Spain, second, Italy, third, Ireland, fourth, Belgium, fifth, Austria, sixth, Sweden, seventh, Netherlands, Norway and Canada, joint eighth, France eleventh, Germany  twelfth, Japan thirteenth and so on. I will not go through all of the 18.
This is all a bit statistical. I am not emoting and I am not offering opinions or judgments. I am quoting figures. If, taking it over one year, two years and then taking it from 1973 to the end of the most recent quarter, and if over those three periods we rank joint fifth, third and fourth out of 18 of the OECD countries, how can that be said to be a circumstance in which our manufacturing industry has no future? Is that fair comment? It is not. It is comment that does harm because it tends to bring about the circumstance that does not currently exist but that it describes. That sort of pessimism is very bad for people's investment decisions.
I want to talk about facts in regard to employment and unemployment because the most horrible guesses are bandied about on that subject and we have good statistics in the country. No two statistics of different countries are comparable. We have suffered very severely from the recession and we have unemployment at an unacceptably high level. The figures reveal the stabilisation which has occurred since mid-1975. We are now in November, 1976 and we ought to be noticing changes that have existed for 12 months or so. The fact is that employment in manufacturing industry has increased by 2,000 people seasonally adjusted, and by almost 3,000 unadjusted between March and June, 1976, the most recent quarter for which we have detailed figures. Some of those increases occurred in areas which we are told are disaster areas, like an increase of 500 in textiles. One sees the stabilisation of the employment situation and one sees much later than the increase in production but worryingly small, in the manufacturing section, evidence of a small growth in employment.
I am not commenting here. I am begging people to listen to those figures, not to make things either better or worse than they are because neither euphoria nor needless gloom  are helpful to us. It is helpful to us to tell it like it is. There are figures that are still very depressing and there are some figures that are very good.
I should now like to come to the area of exports. I want to give the figures first and, although I have not been commenting very much, I want to comment then. I am especially concerned, through my Department, with the export of manufactured goods. These, in the table of our exports, are sections five to eight. There is a tot of those sections offered separately in the table of exports which is published every month. If you compare January to the end of September for this year with the same period last year, you find that the value of exports is up 38 per cent. That is not standing still. When there are different rates of inflation in different market places in which we sell, it is hard to relate that increase in value to the increase in volume, but it is a fair and reasonable and neutral estimate to say that the increase in volume of manufactured goods exports for the first nine months of this year as compared with the first nine months of last year, making allowance for inflation, is between 15 and 20 per cent and is nearer to 20 per cent than to 15 per cent. That is a figure I am very proud of, not for me as the responsible Minister or for this Government. I am proud of it for Irish manufacturing industry and for Irish exporters and indeed for the promotional agencies, for Córas Tráchtála. It is a very fine figure in difficult times and an especially fine figure for the reason that half our exports go to the United Kingdom and the United Kingdom's market is currently sluggish. So the vast majority of those gains have had to be made in other market places. Taking the figure for January through September this year for exports to the United States it is up by 65 per cent on 12 months ago and that is a tremendous figure. Exports to Japan are up by 178 per cent, exports to Belgium 42 per cent et cetera.
Certainly we see difficulties and points of weakness but so do we see some real progress, particularly in the  most recent months. It is necessary that we see those economic indices which have now been accumulating for 12 months as they are; not better than they are, that there are no difficulties, but not worse than they are, to say there is no sign of improvement. I wish that economic news in Ireland was as interesting to people as political news. We have good political reporting. We have good what I would call business reporting, analysis of firms and news about companies and that sort of thing. We have good economic statistics, but the general presentation of broad economic statistics to the public so that we understand at any given time where we are so that we spot changes in direction is not really well enough done in Ireland. I do not apportion blame for that. If the public wanted it more and were interested in these indices, the media would cater to that want. I do wish that the level of knowledge in that area was higher than it is.
I want to say something about the facts of inflation. The reality and the expectation of inflation have an immense effect on investment decisions, on wage settlements and on a whole lot of things. One can work out a figure for a month which many countries do and they publish an inflationary figure for every month and these figures hop up and down a good deal. We publish figures quarterly and we have annual figures. The annual figures relate to a period, say, between 15 months ago and three months ago because there is an inevitable lag between collecting and publication of the figures and annual figures are always a little bit out of date. We had frightful inflation of more than 20 per cent and it is right to affirm that and to declare how desperately serious for our economy that situation was. We also have the figure of the most recent quarter, that is up to mid-August, which was 1½ per cent for the quarter. I do not pretend that it would be a fair argument to multiply that quarter by four and say that we are inflating at the rate of 6 per cent a year. It is not fair to do that to reduce it any more than it is fair to play tricks out of the past to increase it. It is fair to  try to make a reasonable guess as to where it is.
We have seen the use of the figure 18 per cent in a lot of this debate and in the media recently to express a rate of inflation which, I say with an enormous sense of relief, no longer exists. That is an out-of-date figure and is higher than the current figure. If you take it month by month or even quarter by quarter, you get an odd figure. I wish it was 6 per cent. It is not. It is higher than that, but the point that is important to make, for the sake of investment decisions, of expectation of workers in regard to wages and social welfare recipients in regard to the real purchasing power of what they receive from the State is that there has been a very considerable slowing in the rate of inflation. It is fair to say that too.
Since it is my Departmental responsibility, I want to talk about the work of the IDA. The basic industrial thrust of this country is built around the IDA. There is national consensus on it among all parties. The basic ideas were generated by my Labour predecessor in the Department of Industry and Commerce, the late Deputy William Norton, during the second Coalition, but they were not brought to fruition in his time. They were carried on and expanded and strengthened under Fianna Fáil, and three and three-quarter years ago when we had Coalition Government again we did not challenge those policies or end them or undermine them. We expanded them more. There is national consensus about the thrust of our industrial investment policies which have been going on for some years under two Coalitions and 16 years of Fianna Fáil Government. It is a very strong, involved, sophisticated and skilful programme, one of the best programmes of industrial promotion in the world. It is widely admired and, indeed, copied and that is not a matter of a political football between two sides. I will talk later on about other things we have done in regard to our commitment to it and expressed by the way we have funded it during difficult times.
 The most recent events industrially in Ireland and overseas indicate that we believe that the 17,000 job approvals target which had been the IDA's target for 1976 will be reached and may be exceeded. We said some months ago that we did not think in the economic circumstances as they were then developing that it would be possible to reach that target. Now it has become clear as the inquiries, decisions and commitments come in that we can look a little higher than we were able to look four or five months ago, that we believe that we will reach the target set a considerable time ago and we hope to be able to exceed it.
I refer also to the number of serious inquiries from overseas in the pipeline, and the percentage of those being processed through to completion, to fruition, as a mature project. That is a very sensitive index to the relative position of a country in comparison with other centres of investment and of any international decision-making process in regard to industrial investment anywhere. That pipeline has filled up again in the recent past after difficult times in 1974 and 1975 and, indeed, early this year. In two areas of relatively new initiative we have been able to over-fulfil targets and will over-fulfil targets this year. One of those is the service industries programme of the IDA which was initiated during my period in the Department of Industry and Commerce. The basic argument is that a service job in something like banking or insurance is as well-paying and satisfactory and produces as socially useful and good an end product as manufacturing industry. What we have done is to end the restriction of our promotional efforts to manufacturing and extend it into services. In general, services is a fast-growing area, faster than manufacturing industry if you take it world-wide. Because of our location, our communications and our language we are very well advantaged to be a major service area and I am glad to state that for this year the targets set by the IDA and the service industries programme will be substantially exceeded.
There is another interesting area  which has been of particular concern to me during the years, namely, the small industries programme. If we are able to attract the inflow of foreign funds with big companies there is always the danger that we may forget about and neglect our indigenous base and the small entrepreneur who can get off the ground now with a project and who, given luck, courage, brains and vigour, will be the large industrialist a couple of decades hence. The current year job approval of the small industries programme will significantly surpass the targets set. We will have a record level of job approvals in the programme at the end of this year, even though it has been a difficult year with the continuous drag on us of the level of the British economy.
What is happening in the small industries area is especially welcome because I have felt there was a weakness in that area. The improvement in the proposals in this area is mainly in response to the growing opportunities that exist in the Irish economy for linkages between small firms and major new industries. In other words, we are getting a kind of downstream effect from the coming in and establishment of the big industries. Small industries are being established or expanded; for example, they may provide either specialist components or specialist services for the major export-oriented firms. This year that sector of the IDA's work will significantly surpass the target and we think it will get to a record level. Of course we are not out of the wood; but is what I have pointed out not good news? It is not a matter of a Government; it is a matter of an agency and of a reflection of a whole economy. In that sector of our economy there is courage, initiative and an expanding level of activity.
It is fair to put into context the scale of the effort by this Government in the industrial sector during a very difficult period. I am now going to give the funds for industry in the public capital programme. In the year 1971-72 it was £36.3 million; in 1973-74 it was £34.23 million; this year it is £119,500,000. Of course there has  been inflation but nevertheless we must note that in 1973-74 it was just over £34 million while for the calendar year 1976 it was over £119 million. That is a very dramatic increase. In the last year in office of the previous Government the IDA got £24.7 million; this year they are getting £53.5 million. SFADCo got £2.79 million in 1972-73 and now they are getting £5.52 million. The case of the ICC is interesting because, while Governments can create an environment, in the end it is the entrepreneur who creates the jobs. The ICC had a budget of £4.61 million in 1972-73 but it is up to £29.3 million this year. In the area of loans, of the budgets of the IDA, SFADCo and in various other areas there is a very dramatic increase in the sums of money being spent not alone in actual terms but in value terms when adjusted for inflation.
I hope I have not made exaggerated claims for the ending of problems. I have tried to give a fairly large amount of information, which is on the record of the House, to indicate that the statement for manufacturing industry—that the lesson for the past four years is that it has declined, is declining and has no future—is exaggeratedly gloomy, is unfair and does some harm. As I have said before, the essential thing is to tell it like it is.
I wish to deal with some of the topics in the Green Paper which relate to my own area of responsibility, to talk about what I see as the strength and pitfalls for the future and what I see as the essential conditions we have to fulfil if we are to take advantage of what seems to me the basically sound fundamentals of our economy.
First, we are beginning to have a real contribution to our economy from the natural resources area. We have made the commitment in the Green Paper. I wish to quote from paragraph 2, page 37 of the Green Paper:
Mianraí Teoranta will be revived to undertake directly on behalf of the State exploration and development of mineral resources in parallel  and in co-operation with the private sector.
There are a number of things to be said about that. It was a pity it was not continuously sustained and developed and built into a powerful organ, but we are in the course of doing that and it seems to me the correct thing to do. I wish to draw attention to the part of the sentence which says “in parallel and in co-operation with the private sector” because traditionally in the polemic of various political points of view we are presented with a situation which I can only call “confrontational”, that either one says one can have a State sector—for example in regard to minerals—where the State must do it or that the State must stay out and the private sector must do it.
One must look at the realities of success in parts of the world where there is success and where there is the maximum benefit to the population. What is necessary is to avoid the confrontation and to structure the co-operation of both sectors. It seems to me in regard to Tara, Bula, Mianrí Teoranta and in regard to our smelter proposals when they emerge—and I can tell the House that we are thorough, meticulous and careful in the preparation, as we have been in the case of oil and gas; we have gone through extensive feasibility studies, we have had submissions and we are fairly close, within a matter of months I think, to a public position in regard to the smelter—the task is to use the expertise, both technically and financially, of the great companies and in marketing. Also, because there is a State sector that can co-operate with an indigenous private sector, it is essential to see that you do not get ripped off by the great international companies who possess such great power and expertise.
It seems to me possible to balance the interests to mutual advantage. In the area of the minerals on land they are now providing worthwhile employment and will have a worthwhile effect on our exports and on our balance of payments in the near future. Soon after that they will provide downstream industries when we process the metal  into things made from the metal. This will have a beneficial effect on the entire industry and on our financial position. That is something that is moving along quite steadily. The statistics are there and it is a welcome addition to our economy. It is something that has a good future.
With regard to oil and gas, the situation is that this year has been disappointing but it is also true that the existing gas field is being developed rapidly. We have advanced the date on which we want the participants to bring it ashore, and they seem to be able to do that: to meet an advanced date. By the first half of 1978 we will actually be seeing the product, be it electricity or fertiliser. Already that is having a beneficial effect on investment and employment, and it will subsequently benefit our balance of payments and our exports position and ease our imports position, which is just as important in the final tot.
These sectors are moving along, and as I believe there has been unfair criticism in regard to the licensing conditions for oil and gas offshore, I want to say two things: perhaps I should say first that a Minister as an individual is identified with the small print of these matters. Of course he sets the atmosphere and determines the guidelines, but no one individual is able to carry out that work by himself. Some of the abuse that in the past was hurled at me for tardiness was, in fact, by-passing me and impinging on people who were working far beyond the call of duty and who are now recognised internationally—and I have heard it in different parts of the world—to have done an extremely good job in an almost unbelievably short space of time. I emphasise it was not I—I am not praising myself—but staff in my Department, and that the final result was the absolute maximum that could have been obtained for this country, that it is a final result which nonetheless got us a very significant drilling programme this year, which was carried out, and we still have a very significant drilling programme next year.
This year we did not get an oil field or a gas field, but we do have the undiminished  interest and the determination to continue with this programme by the companies. You never have oil or gas until somebody pokes a bit into the reservoir and it is actually there. That has not happened to us this year. All we have is the one gas field. However, it is as wrong to think that it will suddenly solve all our problems as it is wrong to be unduly pessimistic. The balanced opinion of the experts—the geologists and those who assess the results of the drilling, look at the cores, the logs and the wells—is that their expectation as a result of this year's drilling is not diminished in regard to the potential of our Continental Shelf. I have in the past spoken out against undue euphoria and the belief that it would solve all our problems; I think it fair now to speak out against undue pessimism.
I want now in the time that remains to me to say I believe that, because of high world food prices and because of the EEC circumstances, our farmers are now at last beginning to make some money and they are re-investing that in Irish agriculture. The mid-term prospects for agriculture are that it will make a very significant contribution to our national wellbeing and to our economy. My reading of the experience of the recession over the last three years, since the October war, since the oil embargo and since the shortage of imported raw materials, is that Irish industry—while I understand the gloom, the pessimism and the restless mood that now exists—can be proud of itself for having, in a little, open economy, come through a desperately difficult time with so little real damage, in fact, in some areas having grown stronger and become consolidated.
Very interestingly the figures show in the last 12 months and longer that there has been a considerable reequipment of plant, so that the quality, the up-to-dateness and the productivity of plant in much of Irish industry are better than ever. Let us talk about the things that threaten our economy. As regards agriculture, we are in a community situation where the basic decisions are made outside this country, but the fundamentals for agriculture are good and are likely to remain good  for some time. I believe that if we do certain things that I will try to enumerate, the fundamentals for industry are good too. They are also good in regard to natural resources, but we are suffering desperately from the point of view of tourism and quite immeasurably from the point of view of investment through the violence in our society. Romantic people say: “It is a pity that people get shot, it is a pity that bombs are let off, but that is not really doing us frightful damage. We are compensating for the damage and we are overcoming it.” However, as one who travels a great deal promoting industrial investment, I know the extent of the pre-occupation in the minds of potential investors as to whether the violence will spill over, and I would commend to the House, if people have not seen it, an interesting, frank and very good report on the Economic and Industrial Strategy for Northern Ireland which issued very recently, the so-called Quigley Report. That shows the immense damage that violence has done to that economy. The sluggishness of the Northern economy spills over on to us. Were it dynamic it would be a help to us. The evidence of the de-industrialisation there is a hindrance to us. Therefore the violence is something that jeopardises our future economically as well as politically. It has diverted immense amounts of money in lost tourism, lost investment and increased security expenditure that we could well have used in other ways.
The other threats seem to me to be three: that we do not master inflation, that we allow our cost structures industrially and throughout all our economy to explode, and that we do not maintain an environment where people make positive investment decisions. I believe the basic strategy of deficits and of overseas borrowings to bring us through the desperate hardship and the worst of the recession was correct, but I do affirm that it is not possible to go on borrowing on that scale—It is not possible or economically correct to build up overseas debts. It is not possible or economically correct to divert larger and larger amounts of GNP into current social consumption. If you do that you are  eating the seed potatoes, because you are consuming your future expectations for the sake of present satisfaction. We must try to control certain elements of inflation. Let us again try to tell the truth about inflation, because some parts of it, like the tremendously high interest rates in London or the down-float of the £ that increases the price of every raw material we take from the non-sterling area, are not our fault and we cannot do anything about them. The components of wages and public expenditure we can do something about. Those are the areas inside our competence——
Mr. Tunney Mr. Tunney
Mr. Tunney: The Minister is changing his own arguments. He said earlier inflation was not that bad at all.
Mr. Keating Mr. Keating
Mr. Keating: I certainly did not. I quoted figures about inflation. What I said is on the record. I want to finish by saying——
Mr. Tunney Mr. Tunney
Mr. Tunney: The Minister is making a very bad case.
Mr. Keating Mr. Keating
Mr. Keating: ——that the controlling of cost structures, the controlling of those elements of inflation that we can control, the controlling of the level of taxation, the controlling of the expansion of social consumption, the controlling of the amount of GNP that we devote to current consumption, the building of an environment where people invest, those are areas where the Government must give leadership. I believe that the Green Paper is an area where the Government can and must give leadership. But the doing of those things requires the concurrence of the whole population. If the people will not agree to forego some current consumption, then those policies, set out in outline in the Green Paper but not in detail, cannot be set out in detail until there is a consensus, because you do not have the wherewithal to do it——
Mr. Tunney Mr. Tunney
Mr. Tunney: The Minister is running away from——
An Leas-Cheann Comhairle Denis Francis Jones
An Leas-Cheann Comhairle: The  Minister should be allowed to make his speech without interruption.
Mr. Tunney Mr. Tunney
Mr. Tunney: The Minister is telling us the people are the Government.
Mr. Keating Mr. Keating
Mr. Keating: The doing of the things I have outlined and which seem to me essential and would seem to me possible requires a social consensus, and that a Government can call for but not compel. The reason I wish for an economic debate that tells the truth is that if people really understand the facts as they are, not optimistic, not pessimistic, but truthful, then they will see both the possibilities and the need for the social consensus.
Mr. Tunney Mr. Tunney
Mr. Tunney: Washing your hands of the mess.
Mr. Keating Mr. Keating
Mr. Keating: This sort of silly interjection does not help.
An Leas-Cheann Comhairle Denis Francis Jones
An Leas-Cheann Comhairle: Deputy Gene Fitzgerald.
Mr. Tunney Mr. Tunney
Mr. Tunney: The Minister talked himself into a very healthy economic state.
An Leas-Cheann Comhairle Denis Francis Jones
An Leas-Cheann Comhairle: Deputy Fitzgerald's time is now being taken up.
Mr. Tunney Mr. Tunney
Mr. Tunney: It was a very academic presentation of the case for a country that is on the brink of disaster.
Mr. M.E. Dockrell Mr. M.E. Dockrell
Mr. M.E. Dockrell: The Deputy was not here to hear most of it.
Mr. Tunney Mr. Tunney
Mr. Tunney: I was here for all of it. Do not tell lies.
Mr. M.E. Dockrell Mr. M.E. Dockrell
Mr. M.E. Dockrell: Then the Deputy did not understand what was said.
Mr. Tunney Mr. Tunney
Mr. Tunney: I do not understand lies, academic presentations of nonsense. Let him go to the people in business. They would tell him the fix they are in.
Mr. G. Fitzgerald Mr. G. Fitzgerald
Mr. G. Fitzgerald: My sympathy went out to the Minister as one from whom so much was expected and who promised so much three-and-three-quarter years ago. One sympathised with him for the weakness of the case he was trying to present tonight. One  must give him credit for making the best of what he, more than anybody else, knows to be a hopeless case. Like the Minister for Labour last evening, he also was trying to tell us that, bad as things are, they could be worse.
It is inevitable in a debate on the economy at the present time that we should come to the employment situation. I was shocked and amazed last evening when the Minister for Labour in opening the debate spent so little time giving hope to the unemployed who would dearly love to get a message from him, to the many thousands of school-leavers who are disappointed and frustrated in seeking employment. No message from any Government speaker in this debate has given them the hope they deserve from the Government. At all times, blame has been laid on the recession abroad. The Ministers opposite stand indicted for neglecting from the very beginning the employment situation and the job creation and retention that was so necessary if we had this dreadful recession that has been offered as an excuse for so long.
The Minister for Labour glossed over the unemployment situation. He referred in glowing terms of percentages to the improvement in manufacturing industry. He took quarters ad lib. He took a quarter at the end of 1975 and a quarter at the beginning of 1976 and spoke of the great improvement there had been. I, too, am very pleased when I see any improvement but the Government must maximise any improvement they can claim and must not cod people or induce false euphoria. This is what the Minister for Labour was doing or trying to do. I heard him being scoffed at by people in the streets this morning because they could see no evidence of what he was saying.
Yesterday's Irish Times carried a report from the Confederation of Irish Industry which referred to an improvement in manufacturing industry but added a note of caution concerning the greatest evil and problem in our society, unemployment. The paragraph to which I refer said:
Nevertheless, the Confederation  points out that although output is back to pre-recession levels, employment is not, due to the fact that the recovery in output is partly attributable to new capital-intensive firms which came into production in the last two years.
The Minister for Labour could be accused of misleading the House when he gave those figures and told us in typical Coalition style that the good times were just around the corner, something we have been hearing since February, 1973.
I submit that there is in the Government, as there has been from the beginning, an attitude towards enterprise and effort that has only the result of stifling them. The Minister who has just spoken has shown a complete about-turn from the time when he was in Opposition. I am not sorry that he is at last showing a certain sense of responsibility. I was interested to hear him refer tonight to the entrepreneur. A few years ago that was an evil word with the Minister's party. The person who had the courage to tackle life himself, set up a business and, as a result, create employment was scoffed at and frowned on by the Minister and his party and every effort was made to curb his activity and criticise it. Some members of the party refer to the entrepreneur as the “fast buck merchant”. I have no time for the “fast buck merchant” but the vast majority of these people contributed their share to the economic growth of the 'sixties so successfully led by the Fianna Fáil Government when a climate was created for that growth. Compare it with the flourish of trumpets that saw this Government come in with budgets designed to stifle opportunity and to prevent the expansion we need for job creation. The Minister for Labour mentioned that many of our school-leavers in the late 'sixties went on to further education, a pattern that had not been there until the education scheme introduced by the Fianna Fáil Government came into operation. That is a consideration that should have been taken into account long before now.
I want to refer to the employment figures. The 108,000 that are unemployed  according to the live register is a figure that bears little relation to the true unemployment figure at present. There is no point in Ministers opposite saying that the statistics are the same now as when Fianna Fáil were in office. Many thousands of people were not included in these statistics, people who were not around seeking employment when Fianna Fáil were in office.
I am not denying that the statistics are the same now as they were then but the statistics as they are structured do not fully represent the true figure of unemployment at present. Two weeks ago we heard a report of an EEC survey which showed a figure of 180,000 in regard to unemployment, a report which was emphatically denied by the Minister for Posts and Telegraphs and the Parliamentary Secretary to the Taoiseach. Before the report was mentioned in the Irish papers I had seen it in an English paper. That figure is nearer the truth. After the schools closed this year I said that the real figure was 180,000 to 182,000. The figures for school leavers this year are 15,000 at first level who did not go further; 48,500 at second level, and 8,000 at third level. That totals 58,000 school leavers.
Last year's figures show that 30 per cent returned to the same level of education because of lack of employment opportunities. If we take it as a third, we can expect that 40,000 are still looking for jobs in addition to the many thousands who left school in 1975 and in the previous year. That point has been completely overlooked by the Ministers who have contributed to this debate. It is the greatest evil facing our society. Not alone is there a lack of employment opportunities but there is the suffering mind of the young person who has worked hard at school, probably at considerable expense to his parents despite free education. There are Ministers who seem to ignore this problem and the social evil it creates. Some members of our Government have publicly committed themselves to Marxist and  socialist policies and have said that this country is not yet ripe for their policies. Maybe there is some satisfaction in the fact that there are so many frustrated young people in whose minds it would be so easy to sow the seeds of discontent.
If any Minister in this Government deserves to be charged with neglect it must surely be the Minister for Labour. I will give an instance of the Minister's negligence in answering a question concerning the National Manpower Service, a service which was set up by the man we are proud to have as our presidential candidate, Dr. Hillery. Question No. 35 on today's Order Paper reads:
To ask the Minister for Labour the number of persons at present seeking employment under the National Manpower Service in the following areas: Dublin, Cork, Limerick, Waterford, Galway and the rest of the country; and the number of persons who were seeking employment on the same date last year.—Gene Fitzgerald.
The Minister replied:
The reply to the Deputy's question is in the form of a tabular statement and I propose with your permission, a Cheann Comhairle, to have this circulated with the Official Report.
In a supplementary question I asked the Minister to give me the total figures. All I got was this tabular statement which I can place on the record of the House if necessary. The table shows the number of persons registered on 3rd October, 1975. There was no reference in it to the first part of the question. I beg your pardon. There is a reference in it to the number of persons registered for employment with the National Manpower Service on 1st October, 1976, and 3rd October, 1975. There is no reference in it to 1st October, 1976. The cities and towns and the figure for October, 1975, are quoted. If that is not misleading a Deputy of this House I do not know what it is. It shows absolute neglect and a careless approach by a Minister to a question in connection with a service that is inundated with  requests for employment at present. The staff of this service are working at their maximum capacity to try to facilitate the large number of job seekers. In regard to employment, I could go further with today's questions and instance another reply. Deputies are entitled to better treatment than that. It seems that some Ministers have lost their drive and enthusiasm and have adopted a negligent attitude towards their responsibilities.
The second question I wish to instance asked the Minister for Labour the number of schemes at present in progress under the youth community projects and the number of persons employed in each. The Minister answered that there were 37 projects in progress at present and that the number engaged in individual projects can vary from four to 13—again, a deliberate attempt to withhold information from a Deputy. Under pressure, the Minister gave the total number as 332 although his own forecast many months ago for this scheme was 1,000. This is another area where there has been absolute neglect of creating job opportunities for young people.
I appreciate that there are difficulties and that many areas had to be sorted out. The trade unions, naturally and rightly so, had a very important role to play because of the large number of unemployed skilled people they had. But why, oh why, has it taken so long to provide only 332 jobs? I asked the number of people made redundant by local authorities and health boards. Fifty-three was the figure given, not a large one, I admit, but 53 by public bodies at a time when we so badly need employment. Not only that but there is so much work to be done by every public body in every single sphere of their activities. There have been cutbacks in our health services. How can we have redundancies there too? We were told two health boards had made people redundant. There has been neglect in that respect—those are instances of it—and a lack of interest among some Ministers in regard to their specific responsibilities.
The Minister for Labour referred to the redundancy situation. Last evening he mentioned that the figure this year  would amount to only 70 per cent of the previous year's. What did he think he was proving there? Nineteen-thousand people were made redundant in 1975 and because approximately 70 per cent only of that figure would be made redundant this year he felt he was achieving something.
This is an economic debate. I know we will be criticised for being too critical of the men who should be responsible for the state of our economy, for not making positive statements, explaining what we would do and how we would do it. But the reality is that we did introduce an economic document designed specifically to help our country back on its feet, to get the wheels of industry moving and our people back to work. The Government issued their Green Paper. Although the power of the civil service was behind the Government, because agreement could not be reached around the Cabinet table, the mid-summer promise became an end-of-September one and then only rushed to overtake the document Fianna Fáil had issued. There is no need for me to refer to the Government's Green Paper. The Minister's colleague, Deputy Barry Desmond, a responsible member of the Labour Party and assistant Whip of the Government parties, regarded it as a worthless effort achieving nothing, saying nothing, and going nowhere. It is not necessary for me to elaborate on that. Suffice it to say that if Deputy Barry Desmond, such a strong supporter of the Coalition, can be so absolute in his condemnation of the Green Paper—about which we heard again this evening from the Minister for Industry and Commerce—then there is somebody codding somebody.
It was explained again to us this evening what benefits there were for us in that Green Paper. I believe that the policies of the Government contributed largely to our present difficulties. There is the danger that the incentive to work is lost because of excessive taxation. I remember making this point on the very first budget of this Government. There is no incentive to a person today to work overtime, of benefit to himself and to the firm in which he works. Personal  taxation on the working person is excessive. Our Leader has gone to great lengths so often to point out that, at a time of recession and job losses such as we have at present, instead of adding the cost of employment to the company by way of an increased social welfare stamp at least portion of that increase could have been subsidised. The overhead cost of employment is high and certainly helps to reduce job creation or the possibilities of expansion.
Profit was looked on as a dirty word by the people across the way; one should not have profit. In places like Russia and some other communist or socialist countries they have another word for it and it is “surplus”. I submit that, for the vast majority of people profits in this country basically were surpluses ploughed back into those companies to modernise machinery, buy additional machinery, improve the factory building and, above all, create more jobs. I would have no objection to excessive taxation on profits if they were being used for reasons other than expansion and job creation. But the attitude of the people on those benches over there was that profit was a dirty word, we must at all cost stop that company from making profit. God knows it took them a long time to realise the mistake they were making, which was illustrated by the turnabout this evening by the Minister for Industry and Commerce. They realise it now. Let us hope it is not too late. I believe that in regard to our economic level at present we need a good doctor. We do not yet need an undertaker but unless the people there prove to be better doctors than I think they are the sooner they leave and hand over the reins of government to a party that has the courage, leadership, ability, concern and who are closely connected with the ordinary people the better.
There is another item to which I want to refer in regard to job losses. We have seen a huge number of receiverships, liquidations, companies getting into difficulties and jobs being lost as a result. I believe the day is  long past when, as a nation, we could afford to see such companies wind up. I know the number given in reply to a parliamentary question not too long ago was frightening. There are other companies still in danger. I believe that the simple process that has operated up to now of a receiver being appointed merely to sell off the assets at whatever price he can make to satisfy his clients is gone. That is not sufficient any more with regard to such companies. The emphasis must shift from the repayment of the debt to increasingly seeking the revival of that company, or part of it. The social conscience—and we hear an awful lot about social conscience from those benches over there—with regard to workers and the economy at large demands this shift of emphasis. Many jobs could have been saved in the past, many jobs in so many different industries.
In his usual meticulous way today Deputy Faulkner pointed out the way in which the building industry has suffered, the number of people unemployed in that industry, despite the empty claims from those benches. Deputy Faulkner, who ably handled the local government field, pointed out that the employment potential was enormous, if used, or if they could be advised how to direct the money properly with beneficial results for our people instead of making people redundant. There is only one problem here and that is that every move of the Government's has been politically motivated. Decisions were never taken on the basis of what was best for the country or our people but on how the Government could gain or regain or hold a few more votes. That is disgraceful but that is what is happening.
I am not advocating a motorway plan because it is too soon for one, but we all saw the gymnastics performed by the Minister for Local Government a few years ago on the brilliant idea of his of providing motorways and then the complete somersault a week or two ago by the same Minister for the sake of cheap vote catching in parts of Dublin city. I agree it is too soon for motorways  but it is not too soon for a decent road network. What has the Minister for Local Government done about this need? Last year he cut back on the allocation of road fund grant to every county and I believe he will do that this year again. The fall in applications of more than 50 per cent for SDA loans proves how negative Government policies are. The Ministers who are members of the Labour Party are happy to see our young people unemployed; they are happy to see the seeds of discontent being sown so that they can, in their own devious way and in their own time, advance the marxist policies they never abandoned, as they stated publicly. They will wait until the climate is more favourable to advance those policies.
I am surprised at the Taoiseach, a decent man in many ways, allowing himself to be trapped in this awful situation. However, on his shoulders must rest firmly and squarely the criminal negligence of the Ministers I have referred to. Another area where we see job losses is in the public service. At least one Department in recent weeks laid off 25 temporary workers. At a time when we need jobs so badly that is very bad. Time is running out for the Government; the country dearly wishes to see the end of them but it appears to be impossible for them to do the only honourable thing left to them. The damage to the economy is the fault of the Government. Their recent disgraceful shenanigans are to their eternal discredit but, like people who know they have done wrong, they are afraid to face the people who elected them on false hopes and promises more than three years ago. The promises were not fulfilled; they are broken and shattered.
The attitude adopted by the Minister for Labour last night, that the situation was not as bad as it might be, was adopted again tonight by the Minister for Industry and Commerce in regard to inflation. He referred to the fact that the rate of inflation had grown but on the shoulders of the Government rests the responsibility for the high rate of inflation we have experienced since 1973. I would love to have had the time to go back over  the many speeches made by that Minister when he was appealing for everybody to be responsible. This party have always been responsible but the parties who make up the Government long ago shed that responsibility. Unless we can persuade the workers, encourage them by easing the burden on their shoulders, and unless we can encourage business and industry by easing their burden, as spelt out in our paper, we will not make progress. I look forward to the comments Deputy Colley will make on those matters because since the Government introduced their first budget he heralded the warning signs. He repeated those warnings when other budgets were introduced and the Taoiseach or the Minister for Finance cannot say but that they were warned in time.
Mr. Colley Mr. Colley
Mr. Colley: Naturally enough, this debate has centred mainly on the economic situation but it is right to note that the motion put down by the Taoiseach goes further than that. It asks that Dáil Éireann express satisfaction with the Government's economic and social policies. I suppose one should admire the Taoiseach's approach in this matter where he has determined that he is going to drag into the lobbies behind him, protesting loudly in public but going in to vote behind him, the various Labour Deputies whose hearts have been bleeding in public in regard to aspects of social policy. If their public protestations are to be believed in all honesty they cannot express any satisfaction with the Government's social policies. At the outset I should like to say something about the Government's social policies in respect of which the House is being asked to express its satisfaction. We all know that the Government are under a great deal of pressure on many fronts but we also know when pinned into a corner what they will come up with whether from the Fine Gael or Labour Parties. It is that at least they have done something worth while in the social welfare field. I suggest that that is as untrue as all the other claims we have heard from the Coalition.
 In this connection I have a table which was worked out by one of our Deputies, Deputy Ciarán Murphy, based on information received on foot of a Parliamentary question. That information showed that £1 in March, 1973, when Fianna Fáil left office, would now require £1.75 to purchase the same amount of goods here. This is independent of the effect of changes in other currency values; it relates solely to the Irish púnt and the Irish consumer price index.
This table sets out 16 items of benefit under social welfare; unemployment benefit, contributory widows' pension, retirement pension, contributory old age pension, injury benefit, unemployment allowance, non-contributory widows' pension, non-contributory old age pension, first qualified child's allowance, second qualified child's allowance, each additional child's allowance, deserted wife's benefit, blind persons' pension, maternity allowance, maternity grant and death grant.
It shows the amount paid in respect of each heading in 1973 when we left office, the equivalent amount today that would be needed to be paid simply to maintain that value, and the actual amount being paid. In every case, except two, the amount which should be paid now, merely to keep pace with 1973 Fianna Fáil levels, is below what is being paid. In some cases the difference is quite substantial. In the only two exceptions where the present allowance actually paid exceeds the amount which should be paid to maintain Fianna Fáil social welfare standards, the difference is 20p per week. In all other cases the actual amount being paid, according to the Government's own calculation of the value of the Irish £ over the period, is less than would be needed to maintain Fianna Fáil standards of social welfare.
That is eloquent of how much trust may be placed in the claims of the Coalition even in this area which they have tried to take as their own. But there is another aspect that bears a little examination, that is the shambles  —and that is the only word that adequately can describe what went on a little time ago—in regard to the necessity to increase the social welfare payments from the 1st November. When the budget was introduced it was made clear that the social welfare payments being provided for would be reviewed later in the year. For that reason they were not attacked, as they might have been, for being grossly inadequate in relation to the cost of living. But the matter went much further than the Minister for Finance in the budget.
In this connection I should like to quote from what was said by the Parliamentary Secretary to the Minister for Social Welfare, who is responsible for social welfare, speaking in this House on 11th March, 1976, as reported at column 1822, Volume 288, of the Official Report. He said:
The Government have also decided that those April rates will be reviewed in the light of the trend of inflation during the year and that appropriate adjustments will be made—as was the case last year— to guarantee the recipients against the erosion of the purchasing power of their benefits and allowances.
That was quite clear and unequivocal.
Some interesting questions arise. First, when the Parliamentary Secretary said that the Government had so decided, was he misleading the House? Was he misleading the public? We are entitled to know if he was. If, on the other hand, he was speaking in good faith and was not in any way attempting to mislead the House or the public, why did the Government decide to change and only under great pressure from this party, the Irish Congress of Trade Unions and many others, eventually and half-heartedly give increases to approximately half the recipients of social welfare, leaving something over 400,000 people to survive as best they might in face of enormous inflation with no attempt made to keep pace even with the inflation which was largely induced by the Government.
If the Government decided to change their decision, quite apart from the hardship created by that, one is entitled  to ask why and if there is any basis of truth in what was being said here by members of the Government, such as the Minister for Labour who led off, the Minister for Finance who followed, the Minister for Foreign Affairs and the Minister for Industry and Commerce. They all painted a picture of an economy which has taken off. The Minister for Labour said that “a major recovery is under way”. The Minister for Finance called Fianna Fáil Rip Van Winkles for not recognising that this had been going on since autumn of last year. If that is so, what possible justification could there have been for the Government to go back on a decision which, according to the Parliamentary Secretary, they had made to review payments of social welfare and to adjust them in line with inflation?
We are entitled to ask that question and to expect an answer but judging by other and more recent experience, we may be left expecting an answer. However, the Taoiseach and the Government will learn soon enough, when the people get the opportunity to pass judgment on what they are doing, that it is not good enough to treat this House with the kind of contempt they have been showing, the contempt that is expressed by refusing to answer reasonable questions of this nature which are put to them and to which the public are entitled to an answer. I could dwell at some length on other aspects of alleged social policies of this Government, but if we could get the matters I have raised clarified we might have achieved something in that regard.
I turn now to the economic aspect of this debate. It seems quite clear that the Government have taken an irresponsible decision to pretend that, as the Minister for Labour said yesterday, a major recovery is under way. Anybody who heard the Minister for Finance will recognise that he was not satisfied with that. He had to go much further. Maybe it is just the way he is made. He does not seem to be able to say anything with any degree of moderation but other Ministers who took part in this debate have taken the same line.
I thought, and most people thought,  that we had at last reached the stage where there was at least agreement on how bad the situation was. This Government decision—I say “decision” because clearly various members of the Government would not have come in taking the line they did unless such a decision was made—is irresponsible, because if the picture is as good as was being painted by members of the Government, with no real restraint having been exercised in the past few years, why should people agree to exercise restraint in the future?
This is a fundamental question. How can the Government reconcile their stance in asking for pay restraint and for restraint in demands for services of different kinds from the Government and the Exchequer generally with the picture being painted by some of their members in this debate? It is impossible to avoid the conclusion that the economic picture as painted by Government members changes as an election becomes likely either in the fairly near future or in the somewhat longer term. That situation may be understandable in terms that are purely party political in the worst sense of that phrase but it is not understandable in terms of a Government with any semblance of a claim to responsibility.
Yesterday the Minister for Finance claimed that we in Fianna Fáil were Rip Van Winkles because we had not noticed the great upsurge in our economy, an upsurge which according to him began in the autumn of last year. If that is so, we are not the only Rip Van Winkles in the country. There must be many others, including the NESC, the ESRI and almost all economic commentators and not only those but the Government themselves. Speaking in Sligo on September 29th last the Taoiseach said that we are now generating most of our inflation here and that other countries have rates of price increases that are only half or a third of ours. I am not disputing that statement. But how can it be reconciled with the kind of picture we have been getting from the Government during this debate, a picture designed to suggest that, without any restraint or effort, a major recovery  is under way? How can people be expected to respond to claims for restraint when there is that kind of irresponsibility from those charged with the responsibility of managing our economy?
In the Government's Green Paper we are told that it must be a cause for concern that, while other countries are now moving towards what could be a sustained return to growth, there is a distinct possibility that this country could fail to join them if the required action is not taken in areas that are within our control. Again, that is a statement with which I would not disagree, but I am trying to place it in the context of what we have to listen to from the various Ministers who spoke during this debate.
It is clear that an irresponsible decision has been taken by the Government for their own party political purposes so as to distort the picture of what is happening in our economy and without having any regard to the very serious consequences that can flow from that decision. I suggest that this situation should be put in perspective. To this end we on this side of the House are prepared in the first place to acknowledge that there has been a slight improvement in some figures and some indicators; but those improvements have had no effect and of themselves will have no effect on the unemployment situation, on the inflation situation or on the Government deficit situation. There are two main reasons for the improvements in some economic indicators. First, there is the question of the sinking £. This has an immediate effect on the ability of our industrial exporters to sell their goods abroad. If that factor were not reflected in our industrial exports our position would be catastrophic, but to some extent it has been reflected. The same factor and others have affected agricultural exports, too. The Minister for Foreign Affairs was honest enough in dealing with this matter to acknowledge that the sinking £ has the effect of improving our industrial exports performance but that it also produces a problem in relation to inflation. The Minister for Finance was claiming  credit for the Government for the increase in industrial exports while ignoring the enormous problems that are building up for us as a result of the sinking £ in regard to inflation and the effect of imported inflation on our already enormously high inflation rate.
Furthermore, the major reliance by the Government on indicators showing an improvement in the situation was based on figures for industrial exports and on an increase in industrial exports this year compared with last year. To put this matter into perspective it is necessary to recall that in 1975, for the first time since we embarked on our programme of industrialisation, there was a drop of 4 per cent in the volume of our industrial exports. Consequently, the improvement that has occurred this year is an improvement on a situation which had deteriorated last year to a situation that was worse than any we had had since industrialisation begun here.
I do not wish to be misunderstood in this regard. Any improvement in our industrial export situation or in any area of our economy is to be welcomed heartily, but it is grosssly irresponsible to take a situation like that and to play it up for all it is worth in order to pretend that a major recovery was under way.
Another factor which is contributing to such improvement as has occurred is very interesting because it is due to action on the part of the Government in their second budget of 1975. Speaking in another place on the 15th May last the Minister for Finance told the Confederation of Irish Industry that, due to the measures taken in the budget of June, 1975, to curb price increases and to boost consumer expenditure, the last four months of that year witnessed a dramatic recovery in consumer demand when the volume of retail sales increased by nearly 5 per cent on the corresponding period for 1974. This, said the Minister, contrasted with the volume fall of 6 per cent recorded in the previous eight months.
That is all very heartening, but what are the facts of the situation? That budget involved substantial reductions in certain VAT rates and in subsidies  on passenger fares, gas, and electricity. Was not this course urged continuously by us in the previous autumn? But the Government failed totally to respond to our urgings in the January budget. Instead, they responded belatedly in June, 1975, and produced the dramatic results of which the Minister for Finance spoke. Then, in January this year they undid the good work by going back to the previous policies he had been following in budgets, adding on more and more taxes, pricing more and more goods out of the home and foreign markets and pricing more people out of jobs.
I suggest there is a lesson here for the Taoiseach if he is willing to learn it. We put forward these proposals and the Government did not listen. When eventually, belatedly, they listened after the national pay agreement had been concluded and all that involved implemented, we reached the middle of 1975 and got a dramatic recovery, to quote the Minister for Finance, in consumer demand. The message is: listen to what we are saying now. Listen to the proposals we are putting forward and do not implement them too late. The Taoiseach can rest assured that if our economic proposals are implemented quickly, which means no later than the next budget, he can confidently look forward to even more dramatic improvements in our economic situation.
Incidentally, while dealing with the various strange statements made by the Minister for Finance, might I say that he repeated yesterday something I thought we had killed off but, apparently, not for the Minister for Finance? He claimed credit for the very satisfactory economic performance in 1973. He specifically claimed that it arose out of the budget introduced by him in 1973. I have put on the record of this House a number of times, and I do not propose to do it again, both the facts and the economic indicators in 1973 and quotations from various independent economic commentators. What it all adds up to is that in the first half of 1973 this country had the greatest growth it ever experienced but tragically that growth fell off and, indeed, in some instances began to go  back after the middle of 1973.
There were very good reasons for this happening and not the least was the effect of the budget brought in by the Coalition for which the Minister for Finance was yesterday claiming the credit in regard to the results in 1973, results which can be clearly shown and have been clearly shown to have arisen in the first half of that year. We have consistently since this Coalition came into office detailed our criticisms of what the Government were doing wrong and indicated what the consequences would be if they persisted. It would be much too tedious now to reiterate these but the Taoiseach knows as well as I do that they are all on the records of the House. However, it is no harm in this context to recall that we now have a public acknowledgment from the Government of how right we were, and I refer to the Green Paper issued by the Government. I am quoting the first paragraph at the top of page 26:
To sum up, the key features of the projection of existing trends are continuing high inflation, mounting balance of payments deficits, drastic cuts in public expenditure, a non-acceptable level of taxation, an impossible borrowing requirement and growing unemployment—in short an intolerable situation.
That is a statement from the Government of what the present situation is and what is likely to happen if the Government persist in pursuing the policies we have consistently pointed out to them were leading to this situation. We were actually derided for doing so.
One extremely important matter— in fact, the most important matter— in any consideration of the economy as to what is happening and what is likely to happen is the question of jobs. I have noted that speakers on behalf of the Government like, when dealing with this matter, to take figures back over a long period. They may go back to 1960 or even further. They will take the figures for unemployment and the figures for emigration and they will lump the whole period together and try to suggest that there was a great failure of  previous policies in regard to job creation and, by implication, suggest that emigration had been going on until the present world recession.
Quite apart from any question of party political advantage that may be involved in this, this is a very misguided approach because the facts are quite different. If it can be shown that certain policies in the past were successful then it is only right that attention should be drawn to them and we should concentrate on continuing these policies and hopefully producing different and additional policies to meet the gap that arises in regard to job creation. The facts are that emigration finished. It had dwindled to almost nothing, according to the statistics, in 1970-1971. Between 1961 and 1971 there were no fewer than 110,000 new non-agricultural jobs created. There were more, of course, subsequently under Fianna Fáil in 1972 and 1973. It is important to understand that from 1961 to 1971 no fewer than 110,000 new non-agricultural jobs were created.
These were counterbalanced to a considerable extent by what we used to call, and still do, the flight from the land, but that has been dwindling and, towards the end of the period, it had dwindled considerably. The figures for the last few years show it to be even lower than the projection in the Green Paper. The projection up to 1980 is 3,500 per annum. The loss has not been that high in the last few years. The significance of this is that, if we are to continue the policies followed in the 1960s and the early 1970s, accompanied by, as everybody expects, a considerably reduced rate in the flight of people from the land, the net effect is the creation of a large number of new jobs and increased employment overall. To quote figures back to 1960 and ignore the trend up to 1973 is to distort the position and mislead people into thinking the policies followed then will not do us any good now or in the future. I think it is quite clear that had this Government followed the right policies the drop in the numbers  leaving the land would be considerably reduced and there would be a considerable improvement in our situation.
What are the facts? Unfortunately in non-agricultural jobs, where we had been having this increase of 11,000 a year approximately, under this Government we find there has been a drop, a loss of 66,000 non-agricultural jobs between 1974 and the estimate to the end of this year.
I am taking those figures from the Government's Green Paper, Table 1, in case there is any doubt about the matter. Between 1974 and 1976 there was a loss of 66,000 non-agricultural jobs, industrial jobs broadly speaking, as against 11,000 new non-agricultural jobs every year for well over a decade. When I hear people on the Government benches, not least Deputy Halligan and the Taoiseach on another occasion, talk as though previous policies in the sixties and seventies were a failure in regard to job creation, I ask them to explain to us why they were a failure, having regard to the facts I have outlined and I ask them to explain to us how, during 1974 to 1976, 66,000 non-agricultural industrial jobs were lost.
I am not now going back over all the Government's mistakes in the past that we pointed out to them. I am dealing with the current situation which until this debate opened was agreed by everybody to be as bad as it was. If we take the Government's voice from the Green Paper or statements from the Taoiseach as representing their real view of the economic situation, what efforts have they made to deal with it? There have been two major prongs in their approach to it. One of those was the establishment of the tripartite talks and the other was the publication of the Green Paper. In relation to the tripartite talks I want to quote something the Minister for Finance said in a speech which he delivered on the 15th September, 1976, addressing the chief executives forum conference in Killarney. He said as follows:
The Government are committed to redoubling efforts to curb the causes of inflation generated domestically  and are about to engage with the social partners in unprecedented crucial discussions to work out an economic package to meet the realities of our situation.
There can be no doubt from that statement by the Minister for Finance that the Government regard the tripartite talks as of crucial importance. That being so, is it not surprising that we did not hear more from Government speakers about what has been the cause of the breakdown of those talks?
I know that some people will say that those talks have not broken down. They are adjourned and there is no day fixed for their resumption. In the meantime negotiations on pay are going ahead. If one wants to quibble whether or not there is a breakdown, then the effect is a breakdown. What hope can there be for a successful resumption of those tripartite talks having regard to this irresponsible decision of the Government to come into this debate and paint a picture of an economy in which a major recovery was under way.
Those talks could have been of great importance—I certainly concede that— but they were doomed from the start by the Government's attitude, particularly as exemplified in the Green Paper. One has only to think of the inordinate delay in producing the Green Paper and the mad scramble to rewrite it after the production of the Fianna Fáil economic proposals, which resulted in their producing copies of it to some people with the old table of contents, revealing in outline at least, what the rewriting had been, producing it on the Sunday before the talks began—they began on the Monday—supposed to be the basis for the tripartite talks. When one looked at the content, after all the delay and promising of the Green Paper, it was such a vague and uncommitted document that the surprise is that the tripartite talks went as far as they did.
We learned from newspaper reports, and eventually in this debate from what the Minister for Labour had to say, that in those talks the Government had, in effect, offered a cut in taxation of £50 million and an investment  programme of an extra £50 million for job creation. I suppose the Green Paper, its vagueness and its non-committedness is hardly a surprise since it is perfectly obvious that the Fine Gael and Labour parties cannot agree on a basic approach to the economy and they have to leave the whole thing vague. At least we have heard something now of specific proposals put forward. I will say a little more in a moment about those proposals in relation to the Fianna Fáil proposals.
It is necessary, firstly, to spell out again something which has been obvious from the Government almost from the beginning but has now become a refrain from almost all members of the Government: that the responsibility for decisions, particularly major economic decisions, does not rest on the members of the Government but on the trade unions, the employers, the general public and sometimes even on Fianna Fáil. We heard the Minister for Industry and Commerce recently elaborating on this thesis. We have had it from a few members of the Government again in this debate. I want to make it clear that, of course, a Government have to consult. Of course, they have to try to get concensus. If they are to get concensus the first condition is that they must give leadership. They must be prepared to commit themselves specifically to saying that this is what they believe should be done and then try to induce people to do that, or, if people can come up with improvements or better ideas, accept them.
The first condition is that the Government commit themselves. The Coalition Government have failed to do that. On every occasion the opportunity offered they ran away from it. The reason is obvious: inability to agree within the Cabinet on what line should be taken. They then pass responsibility over to anybody else they can pass it on to. I suggest seriously that in the light of the continued failure of the Government to take responsibility, to commit themselves to a particular course of action in regard to the management of the economy, there is a case for saying that the  country would be better off without a Government of this kind. At least the civil service would not have got us into the morass we are in now. As far as the economic situation is concerned in regard to management of the economy, there has been none. The Government and the Taoiseach must realise that the buck stopped with them, that is what they are elected for. They went on for the best part of four years talking about trying to get agreement from the social partners and now they have us coming to the end of 1976 in this terrible morass in which we are and still they have not committed themselves. We have speeches by the Minister for Finance and the Taoiseach and other people, in many cases making the right noises, but that is not commitment, that will not induce consensus. Real commitment where people know the Government mean it and are prepared to stand on something, will produce consensus.
We in Fianna Fáil issued very detailed proposals designed to turn around our economy. They do not purport and did not purport to be an economic plan; they are simply proposals which if implemented would get our economy out of the crisis in which it is and enable us to go on with long-term economic planning. One can waste a great deal of time engaging in academic discussion about the role of the State, the role of private enterprise and so on, and all the time the economy is getting further and further into the morass. We must first get the economy moving and then we can indulge in that kind of discussion. There are two major elements in the Fianna Fáil proposals, first, tax cuts for pay rises and, secondly, substantially increased expenditure on job creation. The reaction of the Government to these proposals was predictable, particularly that of the Minister for Finance.
Mr. Haughey Mr. Haughey
Mr. Haughey: The Minister is not always predictable.
Mr. Colley Mr. Colley
Mr. Colley: In this case the Minister was fairly predictable. The Minister gave us and the country to understand that it was a lot of nonsense.  The interesting thing is, that when the Government got down to some discussion in the tripartite talks, they came up with tax-cuts in return for pay rises and increased expenditure on job creation, so our proposals could not have been all that silly. What is the difference, if the general strategy of this approach is the same on both sides of the House? Part of the difference arises in relation to the amounts involved, the amounts of tax-cuts and the amounts of increased expenditure on job creation. Our proposals spelt out clearly and specifically what was involved and we projected forward on those figures in national accounts terms. It is very significant that the Government have failed to do this. If the Government were to take the proposals they put to the tripartite talks of £50 million tax-cuts and £50 million extra investment in job creation and projected them forward in national accounts terms and had a look at the results, everybody could compare one with the other to see if our approach is more sensible than theirs. They failed to do so and I venture to suggest that they will continue to fail to do so because they are not really trying to achieve a turn-round in the economy, they are trying to achieve something that will keep the wolf from the door, the voter off their backs and will keep the trade unions and employers from going into a revolution. If they were serious, they would have approached the matter in the way that Fianna Fáil did in their proposals. Incidentally, no Opposition in our history have ever attempted anything like the Fianna Fáil proposals with the degree of detail and precision with which they were worked out and put forward. Indeed, few if any Governments, with all the resources available to them, have ever attempted it, but we have put our heads on the block, we have not been afraid to commit ourselves as an Opposition. It is the traditional prerogative of an Opposition not to commit themselves on difficult matters of this kind. One of the reasons why we did so was that it was quite clear that you could wait until Tib's Eve for this Government  and they would never do it. Somebody has to get the country out of the mess. So taking on the duty of the Government, Fianna Fáil put their heads on the block, spelt out proposals in detail and projected forward over the next three to four years all the consequences of their proposals.
I suggest that faced with the alternatives to the Fianna Fáil proposals and the Government's Green Paper there is really no choice for anybody. If one throws into the scale, on the side of the Green Paper, the proposals subsequently put to the tripartite talks, in order to get any kind of comparison one still needs to see the Government's proposals projected in the same way as the Fianna Fáil proposals are. It is worthwhile that people should note the difference in approach, the careless and, indeed, incompetent way in which the Government have approached this major problem, as compared with the way the Opposition have approached it, the degree to which the Opposition were prepared to commit themselves and the degree to which the Government have run away from any commitment. Even if the Government were to attempt to implement the Fianna Fáil proposals, what hope would there be of their making them successful?
The Government half-heartedly accepted our advice much too late in regard to subsidies and VAT rates, and to quote the Minister for Finance —produce a dramatic increase in consumer demand at home. They have now apparently adopted the main strategy of the Fianna Fáil proposals in a half-hearted manner also, in the tripartite talks. On the one hand they are talking about taxcuts and increased investment, and on the other they are telling us that this cannot be done when Fianna Fáil proposes it. We proposed it in the full knowledge, that doing it will increase the national debt and in the first year increase the deficit, but we have been honest enough to spell that out and project it forward and show that we can achieve a substantial reduction in the Government's deficit, and a substantial rate of growth and a very great reduction in inflation and, above all, an  increase in jobs of 25,000 in our first year and, thereafter, another 50,000 over the next two years. We spelt out how precisely this would happen. We have provided also, in doing this, for a reduction on average of 20 per cent in the amount of income tax which would be paid by each taxpayer, a reduction in the employer's contribution to social welfare, in the second year abolition of rates on private dwellings, and a variety of other measures detailed in our proposals designed particularly to encourage enterprise and investment, especially in home Irish industry and to help small business people in regard to the simplification of VAT and various other proposals regarding tourism, and so on, which we have detailed.
Despite what has been said in this debate on behalf of the Government for short-term political reasons, the facts are, and they are agreed in the Government's Green Paper, that the country is in an economic mess. The real question that arises, apart from the question of whether we are in a mess, or how we got into it, is: how to get out of it? We on this side of the House, in an unprecedented move have spelt out precisely how we can get out of it, how we can get the country moving again. The Government, whose duty it is to do this, have run away from that responsibility, have produced this inane Green Paper, have set up the tripartite talks with a great flourish of trumpets. According to the Minister for Finance, these talks represented unprecedented, crucial discussions. And the talks have failed.
Much too late the Government paid attention to us before when we told them about the VAT costs and the subsidies, and it had a dramatically good effect which they undid last January. Clearly the Government have no ideas or they cannot agree on them, and they are certainly not prepared to make any commitment to any programme for tackling our economic crisis. They have failed in the announced approach which they had to tripartite talks. Given that situation, if they cannot bring themselves to get out and go before the people, let them at least adopt the Fianna Fáil proposals—not  half-heartedly, but fully— and implement them as long as they can stay in office, and we will be then at least on the road to recovery. Without an approach of that kind, without any worth-while approach spelt out in this important economic debate, what hope is there for the country as long as this Government remain in power?
The Taoiseach Liam Cosgrave
The Taoiseach: We have listened during the course of this debate to a variety of opinions and arguments. I suppose it would be expecting too much to anticipate agreement either on an analysis of the problems which face us or the remedies necessary to solve them. However, in concluding the debate, I should like to deal with a few facts and to get a few facts before the Dáil and before the country.
This debate has centred a good deal on the rate of inflation, on prices, on unemployment, on taxation and welfare. Therefore, it is necessary to realise that, while prices have risen here, they have risen less in some cases than the prices of what we buy and sell abroad. While unemployment has increased, the percentage by which it has risen is considerably less than in other countries with which we trade. If we compare the position in 1975, the Irish economy declined less than in most of the countries of Western Europe and the United States. This year economic growth has been at a rate six or seven times higher than was forecast earlier in the year and, indeed, may I say, higher than was forecast only six months ago, or less, when we had a debate in this House and when the Opposition were critical of some figures I produced.
I should like to deal with a few of these matters because I think these achievements are considerable, despite a particularly unfavourable world situation and at home a difficult security situation. What we buy from abroad is equivalent to approximately 50 per cent of our gross national product. What we sell to people from other countries comes to more than 45 per cent. In effect, therefore, foreign trade together is equivalent to about 95 per cent of the gross national product. Given the size of these figures and their  magnitude and significance, it is impossible for us to ignore the effects of international trade on our economy. Yesterday the Leader of the Opposition made this point when he referred to the effects on us of sterling devaluation.
As has often been said, geographically we are an island, but economically we are an integral part of the world around us. Therefore, it is necessary to examine the effects of this contiguity and the effect particularly on prices. Between 1973 and 1974, the price of what we imported went up by 46 per cent. Between 1974 and 1975, it went up by 21 per cent. The effect of these changes in prices in this country was both immediate and fundamental. They rose rapidly. Similarly, the price of what we export enters into the domestic price structure. Naturally, exporters will sell where they can get the best prices. In this way, export prices serve to determine the price of goods sold here. It is worth examining in what way they have gone in recent years.
Between 1973 and 1974, export prices rose by 24 per cent. Between 1974 and 1975, they rose by 19 per cent. In this sort of international environment with the price of so much of what we buy and sell being determined abroad, we have to examine the way prices moved here. Between 1973 and 1974, the consumer price index went up by 17 per cent. Between 1974 and 1975, it went up by 21 per cent. In other words, the index rose by considerably less than the indices for both imports and exports. In this economy, which in many respects is an uniquely open economy, we are deriving a great deal of our inflation from what is happening in the world about us. The fact that the consumer price index rose by percentages which were smaller than the percentage increases in both export and import prices is a tribute to the way in which the economy behaved and was managed in these years. It is important that we should recognise the point and accord credit where it is due.
Often people, and indeed Deputies or others wanting to score a point, tend to ignore the effects of international influences on our economy.
 The Government cannot do this and the fact is widely acknowledged by experts. In the course of this debate a number of reports have been referred to and quoted from. I refer to a report produced in 1974 by the Economic Policy Committee of the European Economic Community where they estimated the extent of the adjustments required in the different member states up to 1978 as a result of the increases in oil prices at the end of 1973. The report put the adjustment for Ireland at the equivalent of 15 to 20 per cent of GNP as it was in 1974. This range represented about twice the burden estimated to fall on the next two member states most severely affected, Italy and Britain, and compared with much smaller burdens of about 1 per cent or less which would fall on Germany and the Benelux countries. It was obvious, therefore, early in the period of increased oil prices that our economy was particularly vulnerable to its effects, and the report stressed this fact.
This can be further amplified and emphasised by another assessment. The Organisation for Economic Co-operation and Development has estimated the changes in the export markets of different countries by weighting the growth of imports into the various markets into which the exporting countries sell according to their importance to the exporter. These estimates indicate that in 1974 the growth in the markets to which we sell was less, indeed less than half in most cases, than the growth in the markets of the United States and of all the EEC countries for which figures were given. Again, in 1975 our markets declined more steeply than those of any of these countries. In other words, we were trying to sell in markets which were contracting, stationary or expanding less rapidly than those markets to which many other countries with which we are often contrasted were selling.
It is well, therefore, to examine what has happened to our economy over the period to which I have referred in the face of these difficulties.
 When I spoke here with others in the Adjournment Debate last June I said that in 1975 national output had declined by 1 per cent, and I tried at the time to put this into perspective. It is important now to give the figures so that the picture can be understood and appreciated. What we achieved in 1975 was among the best performance of countries of the European Economic Community. In Germany, often held up as an example of efficiency and economic success, the decline was 3.4 per cent; in France, it was 2.4 per cent; in Italy, 3.7 per cent; in the United Kingdom, 1.6 per cent; in Belgium, 1.4 per cent; and in the Netherlands it was 1.3 per cent. Only in Denmark was the decrease less than in this country and there it was 0.8 per cent. If we look further afield to the United States, we find that they suffered a decrease of 2 per cent in their GNP. The figures are published in the July issue of the OECD publication, Economic Outlook.
It is true, of course, that part of our achievement is due to the remarkable growth of agricultural output last year. However, if one examines the statistics of industrial production, the results are far from providing evidence of any unique ineptitude. We experienced a fall of just over 6 per cent in industrial production, or about the same as Germany and Denmark, and a great deal less than the 9 per cent decreases suffered by France, Italy and the United States, the 10 per cent fall in Belgium or the quite remarkable special case of the 22 per cent decrease in Luxembourg.
The figures for unemployment provide a similar picture. Over generations the rate of unemployment here has been higher than in almost every country with which we deal. This is a problem basic to our history and to the structure of our economy. No Government have ever succeeded in getting our unemployment down to a rate comparable with other countries in Europe. When the recession of recent years hit us our unemployment figures rose, but the percentage by which they rose was considerably less than in the countries with which we  trade. I mention this because it is important, and no one wants to minimise the significance of unemployment or to suggest that the situation here is not a serious one. It is indeed probably the single most serious economic problem we face, and the purpose of our discussions on the economy is to maintain jobs on the one hand and to provide more on the other.
So far I have been talking about what happened last year and the year before. I would like to come now to matters of more immediate relevance. I think it is important to mention these things because, regarding some remarks made in the course of this debate and some of the concluding remarks made by Deputy Colley on behalf of the Opposition, it is well to see—I will be dealing with some aspects of this later —how effective were the Government policies we adopted in the budgets of recent years and to contrast these decisions which were taken with the advice given by the Opposition at the time.
I want to advert again to what I said a few moments ago. When I said in the Adjournment Debate of June last that I expected that the growth for the year would be in the range of 2 to 2½ per cent I was accused by Deputies opposite of misleading the country, of not knowing what was contained in a report published only that morning, or, if I did know it, of not disclosing the facts of the report by the Economic and Social Research Institute. I wonder now will Deputies be as eager to quote that report in the light of the facts as they have now emerged and the growth that I said was likely to happen this year—and I did not exaggerate. The report at that time forecast that the growth in GNP this year would be no more than ½ per cent. Of course we cannot be expected to comment on every report or every forecast and anything I say now should not be taken as a criticism of the work of the ESRI. They do valuable work and I neither quarrel with their activity nor question their objectivity. When they prepare forecasts they must, like others, do so with caution. Indeed, the very issue to which one Deputy referred  on that occasion said and I quote: “In using the forecasts it should be remembered that economic forecasting is an exact science, subject to many uncertainties”. Perhaps he did not heed the caution.
I quoted from the official statistics prepared in the Department of Finance. I am not suggesting that the other forecasts are necessarily inaccurate but I think I can claim that during the years the figures produced by the Department of Finance have been reasonably close to the mark. The official forecasts now show that the growth this year has gone up and will not merely reach the level I suggested in June but will exceed it. I understand the Commission of the European Economic Community have made a similar forecast—I think it was 3½ per cent. The British National Institute for Economic and Social Research in its August, 1976 Economic Review considered that the official figure of growth this year was realistic. At this stage I should say I have not seen the issue of the ESRI quarterly commentary that normally appears in August or September or the autumn bulletin of the Central Bank. All of these will be awaited with interest.
I suppose that Deputies are not so much interested in the varients in the different forecasts; their concern is with what has happened. The figures will show that the growth this year has been more than was predicted and compares well with what we believed was a reasonable forecast at the time. It is important to examine the position that existed when the recession was at its nadir in many countries. At that time we had a lower rate of decline; but now that the recession is, hopefully, ending we may not achieve the same rate of growth as that of other countries recovering from an even deeper recession than ours.
I have listened to and read the accounts of the proposals of the Opposition to deal with the present situation. Fianna Fáil are always good in Opposition at promising plans for this, that and the other. A few minutes ago Deputy Colley said he did not think it was necessary to go back  too many years and I suppose it is not, but I always have a recollection of plans and proposals made in opposition. On the occasions when Fianna Fáil were in Government these plans did not achieve the aims. The only one that worked partially was one we left behind at the beginning of 1957. They put that into operation but the other plans were dropped or abandoned in midstream——
Mr. J. Lynch Mr. J. Lynch
Mr. J. Lynch: Is the Taoiseach serious?
The Taoiseach Liam Cosgrave
The Taoiseach: Let us consider the programme they have advanced and contrast that with what was said at the time of the last two budgets. They said we were spending too much and borrowing too much but now, when there is a serious inflationary problem, they suggest that we borrow more. They suggest that we cut taxes but they do not say how we can get the money to pay for the services they say should be provided. They tried to misquote or to misinterpret a speech I made recently in Sligo. The Leader of the Opposition referred to it yesterday. I said we could not sustain the increase in borrowing in recent years in conditions appropriate to a recession and I referred to the effects of inflation on the rate of increase in the cost of public services. Fianna Fáil now suggest we should have more Army personnel, more gardaí and more public officials, even though they failed to provide for this when they were in Government and when circumstances were much easier. They did not provide the gardaí or the Army personnel that were necessary. Therefore, one must ask: where is the money to come from?
They want an extra £100 million for capital projects. They say they would cut taxes by £100 million and transfer to the Exchequer the cost of derating private houses—at a further cost of approximately £60 million at the likely 1977 level of rates. The policy with regard to the rates was produced on the eve of the general election in contrast to a report prepared only two months earlier in which, as part of a Government White Paper, they proclaimed that the rates system  would have to continue for a long time, probably for the foreseeable future. That policy is now being produced again. It is somewhat like a promise made about housing rents during the recent election in Dublin South-West.
What would this programme mean? It would mean a programme of additional money for welfare. The proposals would cost an extra £50 million in addition to the £300 million by which the servicing of debt and other Government expenditure will rise in 1977. In effect we have a programme of tax reductions and additional expenditure totalling perhaps £600 million.
In the light of some remarks made by Deputies, it is no harm to refer to what this Government have done with regard to welfare. Fianna Fáil expressed concern that there was some delay in announcing the October increases in respect of social welfare, but we must remember that under Fianna Fáil there was only one increase a year, never two. When I give the House the relevant figures they will appreciate what I am saying. In comparison with 1972-1973, the total provision for health and welfare services and payments from the social insurance fund has increased between 280 per cent and 290 per cent. This is due partly to the introduction of new benefits and the widening of the categories of those eligible but the main factor has been the significant increase in the rates of benefits and assistance payable. I will give a few examples.
A person drawing disability or unemployment benefit has had an increase of 96 per cent. A person in receipt of a retirement pension who has an adult dependant below pensionable age has seen his pension increase by 101 per cent and a widow with a contributory pension with three children has enjoyed a similar increase. The urban rate of unemployment assistance where the recipient has a wife and four children has increased by 117 per cent. An old age pensioner and his or her adult dependant now has 212 per cent more than in March, 1973. During that time the  consumer price index has gone up by 76 per cent and, as Deputies will see, this increase is less than the increases for the social welfare categories. All the benefits under Fianna Fáil were relatively lower; they were paid once a year and not twice as has been the practice in recent budgets.
Where is this money to come from? We are told it will come from borrowing from home sources. No matter how confident we are in the ability of home resources to supply the necessary funds, it is worth examining the proposal. This means an extra £600 million next year. This figure alone is between a quarter and a third of total Government expenditure at present, and if I may give a further comparison, in 1975—and this is a significant figure—the total savings of the country were estimated at almost exactly £600 million, the same as is now suggested by the Opposition can be raised from home resources. It is reasonable to assume that the figure for savings next year will be greater than in 1975, but if it is greater, this would represent a considerable proportion of the total. This means that the State, through absorbing this, would withdraw money that is essential for all other areas of the economy; it would withdraw the money that is necessary for investment in agriculture, manufacturing, building and service industries by both persons and firms who are, on their own initiative, working without Government intervention.
That is not the only consequence. This extra £600 million borrowed would require probably £100 million annually for the debt service in addition to the £340 million that it is now estimated to cost in the current year. When these facts are put before the Dáil, Deputies and the country can see how easy it is to produce paper proposals from the Opposition, no matter how detailed or exhaustive or how far they are projected, to use Deputy Colley's phrase, into the future.
I think it is important to note that those who advocate higher public expenditure, usually at the same time as they recommend or promise—because  it is the promise that is the attractive part—to reduce taxation, always advance the argument that it will create greater revenue buoyancy. This is so to a limited extent, but in our economy much of the expenditure is directed into either imports or domestic inflation and while extra economic buoyancy will produce revenue, it must be hard for even the most optimistic to see how it would materialise when the State would be channelling through its own agencies and institutions almost every pound of the free savings of the people. On the figures I have quoted—and these figures are based on the actual returns for 1975 —and giving a slight margin for an increase for this year, there would be no money left in private hands for investment into productive enterprise as firms and industries see it, and this is where so much of the real buoyancy comes from.
We are not against borrowing. In fact the criticism that was levelled against us in 1974 and in 1975 and even in the earlier part of this year, was that we were borrowing too much, that we were spending too much, that instead of restricting, as was advocated at the time by the Opposition, we spent because we believed that, however difficult this recession was, whatever problems it created, we had to gear our economy and channel as much as was possible into capital development, and that in order to do that it was sound in the circumstances or at least preferable to the large-scale unemployment that would be created if we did not borrow to the extent we did. If we look back over the last three years there can be no doubt that what we did was beneficial and has been reflected in the outcome of the economy generally.
Over the past few years we have increased public expenditure at a rate unparalleled in the previous history of the State. We did this because we recognised that world conditions then required it. We have tried to ensure that this increased expenditure went into areas which would strengthen our economy in the medium and long term.
This is probably seen most clearly  in the amount of money spent on building up our industrial capacity both in the public and private sectors. The capital provision for aid by the Industrial Development Authority, the Shannon Free Airport Development Company and Gaeltarra Éireann has increased from £29 million in 1972-73 to £69 million this year. This increase represents massive investment in plants incorporating the most modern technology. It has strengthened and diversified our industrial base. Last year alone the total investment on foot of which grants were paid by the Industrial Development Authority amounted to £106 million. Presented coldly or just in a debate of this sort, the figures probably do not convey the full reality of what has been happening. There has been massive investment in textiles, pharmaceuticals, electronics, engineering and other industries by firms from this country, Britain, the United States of America, Germany, Sweden, France, Japan and even Australia. These firms see the real advantages which this country possesses for investment and they have backed their judgment with their money.
In the public sector, we provided £37 million this year towards the building of NET's fertiliser plant in Cork which will ensure self-sufficiency in our nitrogen requirements until well into the eighties—and could well provide the basis for substantial other industries of a highly technological nature. This is in addition to the substantial additional capacity commissioned at Arklow over the last three years. Other public companies have also undertaken or are undertaking to modernise and adapt their plant and equipment.
There has been a remarkable quickening of the tempo in the provision of the infrastructure without which industrial investment cannot take place. There is very little glamour in the construction of a main drainage scheme—or even a road, but these facilities and the infrastructure proposed are as essential as land, for modern factories and service industries. This year we provided £19 million for water supply and sewerage  facilities for housing, industry and other developments. This compares with just over £8 million spent on this vital service in 1972-73. We have allocated £50 million for telephone development in the current year, an amount little short of treble that spent in 1972-73.
The trebling of the capital provision for development by An Bord Iascaigh Mhara and a continuing programme of major improvements at fishery harbours have been significant factors in the expansion and upgrading of our fishery fleet. The investment aids provided under the EEC farm modernisation scheme have promoted the modernisation of our farming sector necessary to take full advantage of the expansion opportunities opened up by EEC membership. The Department of Agriculture and Fisheries have sanctioned projects under the scheme that will involve an investment by farmers of £100 million by the end of this year. Funds provided through Bord Fáilte have assisted renewal and improvement of our stock of accommodation and recreational amenities which should help to put our tourism in a position both to attract and cater for increased numbers of tourists if the Northern Ireland situation and the cost factors become more favourable.
Preparations are well advanced for the mining of the Navan orebody on a basis that will maximise the benefits to the country. Off-shore natural gas will be flowing next year and arrangements have been made for extensive exploration over the next three years.
In all this we have not overlooked the importance of providing our work force with the modern skills needed in today's industry. During previous periods of growth and expansion in the economy there has been ample evidence of a lack of skilled manpower. We are anxious to avoid a similar situation arising again. This is shown by the amount provided for industrial training. The State grant to AnCO has increased from just over £2 million in 1972-73 to £8.5 million this year. When the contribution from the European  Social Fund is added to this the total amount at AnCO's disposal this year comes to about £14 million. The increased financial allocation will enable AnCO to train over 10,000 persons this year compared with 7,500 in 1975 and 2,500 in 1972-73. This figure represents about 1 per cent of the labour force and was originally a target for 1978 but was brought forward in the light of the current unemployment situation.
I do not want anybody to imagine from what I have said that I regard higher public expenditure, in itself, as a good thing. In some respects it is not, because it creates some problems. Unless the expenditure creates or fosters self-sustaining employment it is of no permanent benefit. It is in this context that I want to give some figures, because I think it is important that this should be understood both by the Opposition and everybody else. The total expenditure of Government and local authorities, together with the capital expenditure of semi-State bodies, is now equivalent to approximately £2 out of every £3 of the GNP. It is obviously one of the most potent sources of our inflation because much of it must be financed by borrowing abroad, which does not represent or call into existence any increase in the total productive capacity of this country. This borrowing must be critically examined and certain limitations are being suggested in the guidelines that have been laid down by the responsible authorities from whom we have to seek it. This raises the question of our ability to increase our borrowing further. The funds could not be obtained and we could not sustain the burden of principle and interest repayments. Already this year these are costing us almost one-third of total tax revenue and, on some forecasts will continue to absorb this proportion of revenue until 1980.
This borrowing was justified when it was incurred to maintain employment and services at a level which would not have been possible without it, but now that things are returning in some respects to normality we must move towards a more appropriate  degree of balance in our public finances. If we do not, there could be massive increases in unemployment and inflation at a rate far beyond anything we have so far experienced.
One of the most urgent tasks facing us with the ending of the recession is to ensure that demand by the Government on total resources does not inhibit the flow of finance and other resources to productive investment in industry, services and agriculture. The call of particular public services on resources, no matter how worthy in themselves, must yield to the overriding objective of getting our borrowing down, reducing inflation and so creating better prospects for employment. This means that we must also ensure that the level of public expenditure is not such as to accentuate already excessive levels of taxation which are a potent inflationary force in our conditions. Central and local government taxation on its widest definition is now equivalent to over 35 per cent of GNP. It is not an unreasonable figure by international standards, but the taxation is levied in a way that can contribute directly and indirectly to inflation and bears on different sections of the community with altogether disproportinate degrees of severity. The proportion of total income paid in taxes by different sections is striking and it is one of the matters referred to in the Green Paper in which we have made certain proposals for discussion as to how the situation can be improved.
What the Government have done over the past few years is protect the people from the full effects of the worst recession this generation has ever known. In doing this we have strained our resources as shown by the facts I have quoted. The facts are there. There is no use in quoting a mass of statistics or a plethora of figures and producing a battery of reports if the message does not get across, if people are confused or if they only hear the last report produced and do not look at each one and try to see the simple facts behind it. We have strained our resources to the utmost, and even with these efforts our present economic situation is a  matter for considerable concern. Unemployment and inflation here are at unacceptable levels. A great many jobs have been lost. Some jobs have been lost as a result of lay-offs due to falling demand. Many of these should be made good as the economic recovery proceeds. Other factors, including management deficiencies, played their part in bringing about factory closures and redundancies. But the plain fact—and this is one of the issues not sufficiently adverted to—is that our high costs of production, primarily as a result of excessive income increases, was the main culprit over the period of the recession.
There has been some discussion during this debate on the fact that modern, highly-expensive capital investment industries of an automative character, or with a high degree of technological development, are capable of producing vast quantities of goods without providing the employment that traditional industries that were labour-intensive did provide. There is a lesson in this. Those interested in establishing industries here go principally for this type of factory because of the advantages it gives in respect of costs over the older traditional types, and the fact that it is possible to increase production substantially if the market expands or if prospects improve or, on the other hand, reduce output without varying the numbers employed. This is one of the matters that the social partners and all interested could with profit study.
The development of money incomes was contrary to the national interest and to the real interests of all at work. Between 1973 and 1975 nonagricultural money incomes increased by about 20 per cent a year on average while GNP in real terms stood still. This indicates the problem that I have mentioned, that it is essential to examine this because in a number of cases it was the cause of putting people out of jobs and aggrevating the inflation situation. As a nation, we put up the money cost of producing goods, some of them by as much as 20 per cent a year,  but continued to produce the same quantity.
I said earlier that external influences had been responsible for a large part of the increase in prices. We have been responsible to a degree and it is important to examine to what indigenous influences have pushed up prices or caused them to increase. In the first eight months of this year import prices went up by only 13 per cent but the consumer price index rose by 17 per cent. This substantial difference was due to higher costs here for which we ourselves are responsible. We cannot, as has been repeatedly said in this debate and as has been stressed in a number of reports, continue to pay ourselves as a nation more for producing the same quantity of goods.
We must also now pay the bills we incurred in earlier years to maintain the level of employment at a higher level than it would otherwise have been and to offset the effects of the recession and the consequential effects of the increase in oil prices to which I have referred. This high level of public expenditure to meet commitments like the debt service we incurred in the bad years is now at a level at which it creates problems in two areas which affect the economy —incomes policy and public finance, both of which are central to the discussions we have had here during the past few days.
During the course of this debate some Deputies suggested that we should engage in more extensive discussions with the social partners. I have a list of the occasions on which we had discussions between February, 1974 and May of this year, and some additions have been made to it since. Between the economic Ministers and myself and the different bodies represented, the ICTU, the IEC, CII, IFA, ICMSA, NESC, there was a series of 22 meetings. I do not believe any Government in the history of the State ever consulted as regularly, as consistenly or in such detail and with such an anxiety to secure a consensus as the Ministers or the representatives of the Government did with the social partners. We have probably  spent more time than any Government in consultations and setting out the economic circumstances of the country and the financial position as we saw it. The easy phrase that comes to everyone is that the Government must give a lead or the Government must do this or must do that. Nobody suggests what the means are or how they can be put into practice. If one were to listen carefully to what Deputy Colley said, he invited the Government to get into a state of confrontation with large-scale important interests in the community. We do not believe in that approach. We believe in consultation with the social partners, either jointly or separately as may be required, in order to get a consensus on the policy which we believe is in the interests of the community.
A number of references have been made to the need to get an understanding of this. We have taken this line because we believe that every section of the community is responsible enough to see that its advantage lies ultimately in national prosperity and in common accord and the means by how this can be achieved. The latest of these developments which have been referred to repeatedly during the course of this debate led to the tripartite talks arising out of clause 22 of the interim national agreement. That provides for the holding of discussions on economic and social strategy for the next two years and involves a conference which would discuss the availability of resources, employment, welfare, prices, public revenue and expenditure and all forms of income.
There is a vital need to bring the terms of national agreements more closely into line with the true interests of our people, particularly our young people and, indeed, the country generally. In the recent tripartite discussions the Government side have taken an active role in trying to quicken economic recovery. We put forward certain proposals for reductions in taxation and increases in expenditure to promote employment. These proposals would have meant lower costs and prices and increases  in take-home pay for all workers irrespective of the ability of firms to pay. They would have provided jobs for thousands now without them. I want to emphasise this. The proposals were conditional on a stay on further pay increases in 1977. Those in receipt of payments under national agreements will, of course, see their incomes rise by about 4 per cent next year. I want to emphasise now that if income increases in prospect in 1977 are excessive the Government will have no option but to resort to countervailing taxation and will be unable to provide the capital to reduce unemployment to the extent that we would wish. Much as we would deplore this course, we could not contemplate— and the economy could not tolerate— the additional inflation and unemployment which excessive income increases would generate. At the same time I should say that, while the Government could not accept any proposal involving an increase in the total of their offer, they could agree to minor modifications within that total. The point is that the farther away that proposals for incomes in 1977 move from the conditions of our offer, the less the Government can put on the table and the less will be achieved of the country's fundamental objectives of stabilising prices and increasing employment.
It is recognised by all responsible commentators, as well as by those who have discussed it here, that inflation is the greatest obstacle to the achievement of these objectives. It destroys the prospects of full employment by making the goods and services we produce non-competitive. If things cannot be sold it is obvious that no one can be paid or employed to produce them. The effects of inflation are as immediate and real as this. It also has other less distinguishable consequences. With an inflation rate of 15-20 per cent who will invest in an industry or project for a return yielding less? Without investment here there can be no jobs. In fact, inflation at its present level is not only inhibiting investment, it is diverting its flow.
For instance, why should anybody put money into the construction or  re-equiping of a factory, workshop or hotel when he can get as good a rate of return by buying land or property and watching it appreciate in value more than it could ever appreciate if a similar investment was made in industry or services? The flow of money towards land and assets drives up prices without any increase in total production. I am not talking about investment in agriculture. This type of investment is contrary to the best interests of the country. It is in investment in productive capacity that lies our best hope. Probably more than most others this country needs investment from abroad if we are to develop our full potential. But there is no attraction for an investor if the rapid inflation to which I have referred continues unabated.
Inflation used to work in favour of the State as a borrower. Now it does not. Most of our borrowing is done in foreign currencies and the more our inflation gets out of line with that of other countries the more expensive it becomes for us to service the borrowing. This is an important figure—every 1 per cent by which the £ depreciates adds approximately £9 million to the cost of servicing our existing debt. Inflation not only destroys the prospects for jobs but also the value of savings and of pensions. While it continues there can be no security, not only for those in jobs but for those on fixed incomes. Over time, it destroys the value of welfare payments which cannot be maintained except by continual revision. It gives to those who have and takes away from those who have not. It destroys, in a real sense, all the values on which society prospers.
Those are the reasons why the proposals we made at the tripartite talks were based so much on the objective of reducing inflation and restoring stability to prices. It cannot be done in the short term or without effort. The longer we defer the effort the greater it will be, the more difficult the task and the greater the sacrifice needed in the end. In many respects—and we have said this before—as a nation we will not be  consulted on either the nature or extent of the sacrifices that will be imposed one us.
An Leas-Cheann Comhairle Denis Francis Jones
An Leas-Cheann Comhairle: The Taoiseach will realise that it is now 8.25 p.m.
The Taoiseach Liam Cosgrave
The Taoiseach: We do not have to look very far in these days to see precisely what this means. I understand, a Leas-Cheann Comhairle that I have very little time left.
Mr. J. Lynch Mr. J. Lynch
Mr. J. Lynch: I would be prepared to give the Taoiseach an extension if he could give us one positive proposal for getting us out of this morass.
The Taoiseach Liam Cosgrave
The Taoiseach: This debate has involved references to a number of reports, including one commissioned by the Bank of Ireland for the purpose of educating and informing the public and interested parties such as the social partners. Reports of this sort are useful as a contribution towards a better understanding of the situation. Indeed the bank interests themselves might benefit from such a process.
I have listened with care to this debate. A number of things struck me about it—the way in which Deputies quoted commentaries and reports. Indeed the media or the press, in fact almost anyone who wished to say so has commented on what is happening, and all agree on what is wrong. They say unemployment is too high; we agree. They say inflation is excessive; we agree. They say the rates of economic growth are not as high as they should be; we agree. But, having said that, the difficulty arises in agreeing on what is right. Everybody can point to the duty which devolves on the other fellow. Unions will say that employers should do this; farmers say what urban people should do; and urban people will say where a farmer's duty lies; employers urge certain courses, maybe on the unions. The Opposition see no contradiction in voicing all of these together no matter how irreconcilable they are.
Mr. J. Lynch Mr. J. Lynch
 Mr. J. Lynch: We are all waiting for the Government to do something.
The Taoiseach Liam Cosgrave
The Taoiseach: At the same time they urge a reduction in taxation and borrowing, ignoring the fact that the combination is impossible. What is missing from all of this, and I say this with all the force I can muster on it—and this goes for every section —is a willingness on the part of every group to forget its sectional interests for a while and concentrate on what is best in the national interest.
Deputies: Hear, hear.
The Taoiseach Liam Cosgrave
The Taoiseach: If this debate has shown anything it is that this type of awareness and readiness to contribute to the country's wellbeing are, above all, what are needed now. Some body once said that property has its  duties as well as its rights. That could be adapted to our circumstances.
Mr. J. Lynch Mr. J. Lynch
Mr. J. Lynch: Change property for Government.
The Taoiseach Liam Cosgrave
The Taoiseach: Property is not the thing it was. Every one of us living in this country has a certain property in it, whether it be physical assets or an entitlement to pay or to welfare benefits. This citizenship has its duties as well as its rights. Let us now think how best we can discharge these duties without looking over our shoulders at how the other fellow is managing or behaving, and resolve that, as a united nation, behind sensible, realistic Government proposals, in consultation with the social partners, we can solve the problems facing us.
The Dáil divided: Tá, 71; Níl, 66.
Tellers: Tá, Deputies Kelly and B. Desmond; Níl, Deputies Lalor and Browne.
Question declared carried.
The Dáil adjourned at 8.40 p.m. until 10.30 a.m. on Thursday, 4th November, 1976.
Dáil Éireann 293 Economic and Social Policies: Motion (Resumed).