The yield in the year 1924 was £5,640,416. In the year 1929, the last for which I have the exact figures available, it had declined to £3,695,483, showing a total decline of over £2,000,000 between the years 1924 and 1929. If the Minister is to be judged by his own words, we have in them an admission that under this Government the economic conditions of the country have deteriorated by forty per cent. inside of five years.
Apart altogether from the fact that the Supplementary statement which the Minister has put before the House as to the present and future position of the country is fallacious and misleading, there is one other thing I think that emerges from it, and that is that the Government, whatever else may be said of them, are consistent in their financial policy. Deputy de Valera has already stressed the fact that we have proposals for increased taxation introduced before we have proposals for economy. The watchword of the Government from 1922 until 1931 remains as it always has been: taxation before economy. That is the guiding principle of the Minister for Finance in every one of those financial matters. Not only this year, but every year since we came into this House whenever the Minister put his Budget proposals before us we urged upon him that the economic conditions of the country did not justify, and could not sustain the demand he was making upon the resources of our people. We urged upon him that every avenue of expenditure should be explored and that all possible retrenchments should be made. He told us that every avenue of expenditure had been explored, that there was no room for economy, that no room for possible retrenchment existed, and now when he is driven to it, when the people cannot pay him any more, when their poverty has become so great that they are even unable to provide for themselves, let alone to provide for the drones in the Government, he comes along and says that now they have discovered retrenchments can be made.
Every retrenchment that can be made to-day in the public service could have been made at the beginning of the year, could have been made last year, or in 1927, 1928, or 1929. If it had been made then the condition of this country in relation to the world market, and as regards the social conditions of its people, would have been very much better, and the people would have been very much better able to bear the increased burdens which the Minister for Finance now proposes to lay upon them.
I do not know whether at this stage I should address any portion of what I have to say to the remarks which the Minister made regarding the exchange position. I say that if the Minister had acted with prudence and in a spirit of foresight in this matter, we would have been in as strong a position to weather the storm as France, Holland or Switzerland. But because the Minister for Finance is incapable of acting independently in this matter we find ourselves in the position in which we are to-day, tied to a currency which is going down, which is bound to deteriorate, and will depreciate very much more than it has done even up to the present. I think it was the President said that we were anchored to the £ sterling, and now the £ is a millstone round the necks of the people and is dragging them down to the bottom of the sea. That is the sort of safe anchorage that particular currency has afforded us. He said that one of the reasons, when they came to considering our financial relations with the British money market, which determined them that our currency should remain anchored to sterling was that if we set up an independent currency there would be a tariff against us in the British market. I do not think if that proposition were examined that it could be sustained. There would be no tariff against us in the British market. We only sell in the British market what there is a demand for.
When the President of the Executive Council was endeavouring to get the people to believe in the blessings which flow from the bankruptcy of our nearest neighbour and from sympathetic bankruptcy on our own part, he said that one of the consequences which would flow from the fact that we are tied to the £ would be that our prices would appreciate in the British market. I wonder has any farmer secured an increased price for his cattle since the £ sterling went off the gold standard. Since we went off the gold standard has there been any increase in the price of cattle? Has there been any increase in the price of any commodity sold by our people in the British market? There has not, but there has been on the other hand an increase in the price of things which we buy through the British market. We have seen the price of metals going up. We have seen the price of the manufactured commodities which we buy from the British go up. They are bound to go up because Britain has to buy the raw material in the world market and world prices are going up as against Britain.
Undoubtedly I think that if we had gone off the gold standard there would have been set up a rate of exchange between this country and Great Britain, one of the effects of which would have been to impose a tariff on imports and to have given our manufacturers a chance. We have an adverse balance of visible trade amounting to £11,252,106. Our farmers would have got the same relative price in the British market as they are getting to-day for their produce. Our manufacturers would have protection against that £11,252,106 adverse trade balance, and because the general tendency would be to throw our people back on their own resources. The financial and economic position of the country would be very much better if we had an independent currency instead of being tied to the sinking pound.
The Minister put forward the specious argument that certain Scandinavian countries have gone off the gold standard, and that they have gone off because they wanted to reap the benefits and advantages which flow from dishonest bankruptcy. These countries were driven off the gold standard. They did not go off it willingly nor because they wanted to maintain their place in the British market. Norway and Sweden went off because the banking institutions in these countries made the same mistake as the banking institutions in England made. They borrowed short and long, and had no option, because they could not meet their immediate commitments, except to suspend payment. In the case of Denmark the position is possibly slightly different. Denmark had entered into long term commitments in the British market, and, in addition, a considerable amount of British money is invested in Danish agriculture. We are not in that position. The unfortunate thing about this country is that it has lent long, and that so far as Great Britain is concerned, the creditor is now endeavouring to carry a composition. We have very little foreign money invested in our agriculture. It is practically all native money. We have no long term commitments in the British market, because we have no winter trade as far as dairying is concerned. We are in quite a different position to Denmark, and could have carried on on an independent currency and maintained our trade with Great Britain in exactly the same way as Holland, France and Switzerland are doing at the present day.
I said that murder will out, and if there is one thing that the Minister's supplementary Budget speech to-day has done, it has deprived the Executive Council of the boast that they had improved in any way the economic position or the credit reputation of this State. When the last National Loan was being floated we on these benches examined the conditions of the issue in detail and we said then— and it is being admitted to-day—that judged by criteria of real value, the third loan was being issued at a higher rate of interest than either the first or the second national loans, and the Minister comes along now and says that one of the causes of his present difficulty is that there has been an appreciation in the real value of fixed charges. That appreciation in the real value of fixed charges has been proceeding here from the year 1925 and the Minister comes to the House to day and admits that fact, although he denied it before. The credit reputation of this country under the present Government in 1931 I believe stands at a lower ebb than it was in 1925. I believe if these proposals are carried to-day without a full examination of the whole situation, without first having before us full details of the retrenchment which the Minister proposes, the credit reputation of this country will be damaged, because however the speech of the Minister may affect the House it is not going to affect, and certainly is not going to satisfy those outside this House who are in a position to examine for themselves and to form their own judgments as to the requirements of the situation. I believe that when we come to balance our accounts at the end of this year on the basis of the present taxation and expenditure we will have a deficit of not £900,000, but a deficit of almost one and half millions. The Minister has indicated that he proposes to find from retrenchments something in the neighbourhood of £500,000.
I think that if the Departments of the Government were carefully combed out there would be no difficulty in making retrenchments amounting to well over one million pounds.
Apart altogether, however, from any retrenchments that may be made, there are other sources of expenditure to which we might have recourse, if we want to make our accounts square at the end of the year. The Minister could think of only one way and that is by imposing an additional burden on the people. At the beginning of my remarks I stressed the fact that the reason for this increase in income tax, and in the tax on petrol, is that the proportion of the people's income which the Minister proposed to take at the opening of the year, was not yielding him a sufficient return. Now because that income has contracted instead of expanding, as it should in a normal state, the income available has gone on diminishing since the opening of the financial year. Because it has diminished and because it is continuing to diminish, the old taxes are not going to yield the Minister a sufficient income to carry on. Now when income is contracting, the Minister proposes to take a larger part of the contracted income and he is going to leave very much less, after these proposals have been adopted, of the reduced means of the people, a very much smaller share for them to meet the ordinary expenses of everyday life than he proposed to leave when their income was larger at the beginning of the year. Surely no Government is justified in doing that.
The proposals which the Minister makes involve a definite reduction in the standard of living of every member of the community. In relation to the income tax proposals may I say this: that because the Minister proposes to increase the income tax without making any compensating increase in the allowances, I think this sixpence in the pound is going to fall most heavily on the one section of the community which, I think, has a lower margin over the level of sustenance than any other class. That section is the poorly paid clerical worker, the lower middle class, as it is called. There are men who pay income tax at the rate of 25s. or 30s. a year, who have to maintain a certain position because they follow certain occupations, who have to live in certain houses because they are not able to pay the rents of other houses available for them, because they cannot get other houses at low rents. These are the people who have to scrape from morning to night in order to maintain an appearance of respectability, who are going to be hit hardest by this increase of sixpence in the pound because that increase is not going to be set off by any increase in the compensation allowances.
The proposals of the Minister, as I have said, involve a definite reduction in the standard of living and I ask is a Government which has other resources at its disposal justified in doing that?
The amount of money expended on Governmental services during the year is approximately £25,000,000. Of that sum, 3¼ millions represent the amount paid in annuities which go out of the country and 1¼ millions represents the payment of pensions for the ex-R.I.C. I say that before any additional tax is imposed on income or before there is any increase in the petrol tax—which is a tax on transport and a tax on production—that before this or any other tax is imposed, the Minister and those associated with him are bound in conscience to examine the whole position created by the payment of annuities to England and the payment of ex-R.I.C. pensions. If these sums were retained in this country we would be able to solve our currency problem. We would be able to cut adrift from the sinking pound. We would be able to face the world as a community and a State prepared to pay twenty Irish shillings to the pound, to a pound which would be equal at least to five American dollars.