9 January 1980,
I wish to talk to you this evening about the state of the nation’s affairs and the picture I have to paint is not, unfortunately, a very cheerful one.
The figures which are now just becoming available to us show one thing very clearly. As a community we are living away beyond our means. I do not mean that everyone in the community is living too well. Clearly many are not and have barely enough to get by. But taking us all together, we have been living at a rate which is simply not justified by the amount of goods and services we are producing.
To make up the difference, we have been borrowing enormous amounts of money, borrowing at a rat which just cannot continue. As few simple figures will make this very clear.
At home, the government’s current income from taxes and all other sources in 1979 fell short of what was needed to pay the running costs of the state by about £520m million. To meet this and our capital programme, we had to borrow in 1979 over £1000 million. That amount equals to one-seventh of our entire national output.
The situation in regard to our trading with the outside world in 1979 was bad also. Our income from abroad fell short of what we had to pay out by about £760 million which led to a fall in our reserves.
To fully understand our situation, we must look not just on the home scene but also on the troubled and unstable world around us. There are wars and rumours or wars. There is political instability in some of the most important areas of the world. A very serious threat exists to the world’s future supply of energy. We can no longer be sure that we will be able to go on paying the prices now being demanded for all the oil and other fuels we require to keep our factories going and to keep our homes and institutions supplied with light, heat and power they need. We will, of course push exploration for our own oil ahead as rapidly as possible but in the short term the burden of oil prices will continue to be a crushing one.
All this indicates that we must, first of all, as a matter of urgency, set about putting our domestic affairs in order and secondly, improving our trade with the rest of the world on so far as we can do so.
We will have to continue to cut down on government spending. The government is taking far too much by way of taxes from individual members of the community. But even this amount is not enough to meet our commitments. We will just have to reorganise government spending so that we can only undertake the things which we can afford.
In trying to bring government expenditure within manageable proportions, we will, of course, be paying particular attention to the needs of the poorer and weaker sections of the community and make sure they are looked after. Other essential community expenditure will have to be undertaken also. But there are many things which will just have to be curtailed or postponed, until such time as we can get the financial situation right.
There is one things above all else which we can do to help get the situation right and which is entirely within our control. I refer to industrial relations. Any further serious interruption in production, or in the provision of essential services, in 1980 would be a major disaster. I believe that everyone listening to me tonight shares my anxiety about our situation in that respect.
Strikes, go-slows, work-to-rule, stoppages in key industries and essentials services, were too often a feature of life in 1979. They caused suffering and hardship; at time it looked as if we were becoming one of those countries where basic services could not be relied upon to operate as part of normal life.
Immediately following my election as Taoiseach, I received countless messages from all over the country from people in every walk of life, appealing to me to do something about this situation.
Let us clearly understand, however that this is not a one-sided affair. Managements that do not give first-class attention to their firm’s industrial relations, who ignore situations and let them drift into confrontation, are just as blameworthy as the handful of wild men who slap an unofficial picket and stop thousands of workers from earning their living.
Apportioning blame, however, is not going to get us anywhere. What we need is a new way forward and that is my primary purpose, as head of government, in talking to you tonight.