Dáil Éireann debate -
Wednesday, 31 May 1939

Vol. 76 No. 3

Finance Bill, 1939—Second Stage.

Minister for Finance (Mr. MacEntee)

In moving the Second Reading of the Finance Bill, I must at the outset express my regret at the necessity for circulating a revised print of the Bill, occasioned by the fact that three typographical errors crept into the text in the course of printing. The errors in question occurred in sub-section (2) (a) of Section 2 (where the word "eight" appeared in line 8 instead of the word "three") and in Section 7 (where the word "of" appeared at the end of line 17 instead of the word "by", and the word "or" after the word "land" in line 18 instead of the word "of").

Apart from these corrections the revised text of the Bill is identical with that originally circulated. Most of the matter contained in the Finance Bill has already been before the House in the form of the Financial Resolutions. As the provisions of these Resolutions have been explained to Deputies, and as a further opportunity will be afforded on the Committee Stage of the Bill of obtaining additional information, should it be required, it is scarcely necessary that I should occupy the time of the House with a recapitulation of what they purport to do. Accordingly, I propose to confine myself to a short explanation of the provisions contained in the Bill other than those covered by the Resolutions.

In Part I of the Bill, which relates to income-tax and surtax, the sections which have not been included in the Financial Resolutions are 4, 5, 6 and 7.

Section 4 provides that the allowance in respect of earned income shall be one-fifth of the income and that the total amount of the allowance shall not exceed £300. This provision is, of course, a complementary element in the whole scheme for the revision of income-tax and surtax and is an essential part thereof.

Section 5 of the Bill brings up to date the exemption given by Section 3 of the Finance Act of 1931 in respect of certain profits derived from the Sweepstakes. At the time that section was passed all the surplus from the Sweepstakes went to the hospitals organising the Sweep, but, as is known, the position following the Public Hospitals Acts, 1933 and 1938 is that all surpluses are now payable to the Hospitals Trust Board. Without the amendment of the law which it is proposed to make by this section, the strictly legal position would be that the Sweepstake surpluses would be chargeable to income-tax in the hands of the organisers of a sweepstake or the Sweepstakes Committee appointed by them. As we already secure a stamp duty of 25 per cent. of such surpluses, it is as well to make it clear that these surpluses are exempt from income-tax.

Section 6 provides for an exemption from income-tax in respect of the one year beginning on the 6th April, 1937, on allowances payable under Section 3 of the Army Pensions Act, 1937, to relatives of the signatories of the 1916 Proclamation.

Section 7 alters the method of assessment of certain profits derived from stallion fees from Schedule D to Schedule B of the income-tax laws for the reasons I have already given in the Budget statement.

Part II of the Bill relates to customs and excise, and the new sections not contained in the Financial Resolutions are 12, 14, 15 and 17. Section 12, sub-section (a) exempts from duty under the conditions set forth in the section such films as are imported by societies formed mainly for the study of film technique and not conducted for profit. Sub-section (b) of that section exempts from duty films not exceeding seven-tenths of an inch in width which have been processed abroad by the reversion process, but which consist solely of pictures taken here, and which, having been exported for processing, are reimported.

Section 14, as will be seen from the marginal note, contains various amendments of the Customs Acts. Sub-section (1) abrogates the prohibition on the importation of essences, extracts, or other concentrations of coffee or chicory contained in Section 42 of the Customs Consolidation Act, 1876, and is rendered necessary by the imposition of a duty on extracts, essences, etc. contained in Reference No. 15 of the First Schedule to this Bill. Sub-section (2) exempts from customs entry duty entries for reimported goods in respect of which a bill of store has been issued. The object of the sub-section is to give the same concession to entries for certain reimported goods, chiefly goods which are manufactured here as is given in Section 8 of the Finance (Agreement with United Kingdom) Act, of last year to United Kingdom or Canadian goods. Sub-section (3) is merely a drafting amendment to substitute "13" for "12" in a reference in Section 12, of the Finance Act, 1934.

Sub-section 4 is intended to remove doubts regarding the rate of duty to be applied under Section 15 of the Finance (Agreement with United Kingdom) Act, 1938. That section gave legal effect to Article 7 of the Trade Agreement with the United Kingdom, which provides, inter alia, that where licences are issued for the admission of dutiable goods into Eire, either free of duty or at a reduced rate, and where United Kingdom goods are available then goods not produced within the British Commonwealth of Nations shall be subject to a rate of duty not less than 10 per cent. ad valorem. Doubt has been raised as to whether there is legal power to apply a particular rate calculated on an ad valorem basis to goods ordinarily liable to a specific rate of duty, and this sub-section removes the doubt. Sub-section (5) redrafts sub-section (6) of Section 15 of the Finance Act, 1938, for purposes of classification. It relates to the definition of an article manufactured in a particular country by reference to the labour content in the article. Sub-section (6) is merely a drafting amendment to substitute the correct title—the “Revenue Act, 1909”—for the incorrect reference—the “Finance Act, 1909,” in Section 24 (4) of the Finance Act of 1938. Section 15 makes provision for the importation under licence without payment of duty of certain classes of dutiable goods in respect of which no licensing powers exist at present. The classes affected are set out in the Fourth Schedule.

Mr. Dillon

Could the Minister give any indication why power is being taken to issue licences without payment of duties?

Mr. MacEntee

The duties affected by Section 15 are of a protective nature, and experience in the administration of them has shown that a licensing provision is desirable either to alleviate cases of hardship or to facilitate importation of articles where such importation would not conflict with the protective nature of the duty. As the Deputy understands, a licensing provision has been a feature of these proposals and was omitted for one reason or other, but experience has shown, as in the case of other articles, that it would be desirable to have a licensing provision attached to these tariffs also.

Mr. Dillon

Does that mean that the two Ministers may, in fact, license the importation of any article?

Mr. MacEntee

Those set forth in the Schedule.

Mr. Dillon

Does that apply generally?

Mr. MacEntee

I am not in a position to say that. If the Deputy would like a little more information perhaps I could give an example.

Mr. Dillon

Perhaps the Minister would do so on the Committee Stage?

Mr. MacEntee

Yes. It can be taken by the Minister for Industry and Commerce.

Section 17 is designed for the setting up of machinery which, we hope, will be more effective in preventing abnormally large clearances from revenue control of imported goods, and also prohibiting excessive deliveries of goods which are liable to excise duty, whenever such excessive clearances or deliveries appear unreasonable for the ordinary requirements of trade. The main use of the provision will be for the purpose of preventing forestalling in anticipation of an expected imposition of customs duty or an expected increase in the rate of a customs or excise duty.

Part III of the Bill relates to death duties and Section 18 (1) raises from £25 to £52 the initial limit for exemption from estate duty in respect of an insurance annuity payable to the widow or beneficiary of a deceased person. The present limit of £25 was fixed in 1894 and is considered too low. This section will give relief in a number of necessitous cases. Section 18 (2) also gives a measure of relief in a case where the first annuity contracted by a deceased person for the benefit of any one person does not exceed £104 per annum.

Part IV is Miscellaneous and General. Section 19 provides for the transfer of £150,000 from the Road Fund to the Exchequer, a matter to which I adverted in my Budget statement. Section 20 repeals to a limited extent enactments set out in the Sixth Schedule. Section 12 of the Licensing (Ireland) Act, 1833, and Section 22 of the Intoxicating Liquor (General) Act, 1924, relate to fees to be paid by publicans and clubs. As these have been superseded by recent District Court Fees Orders their repeal is necessary.

The repeal of Section 15 of the Finance (No. 2) Act of 1915, and Section 19 of the Finance Act of 1919, is a necessary consequence of the extended powers to refuse delivery of goods which it is proposed to take under Section 17 of this Bill. Section 3 (1) of the Finance Act of 1932 relates to income-tax allowances in respect of earned income, and its repeal is necessary owing to the new allowance provided for in Section 4 of this Bill.

Sections 21 and 22 are the usual sections relating to the care and management of the taxes and duties, as well as the Short Title, construction and commencement.

Mr. Dillon

This Finance Bill appears to be one which is going to create a record in more regards than one. I think the House will be interested to learn, at an early date, whether, in fact, the Chair will determine that this is not a Money Bill at all, because it would appear that the terms of Section 17 clearly take it out of the scope of the rulings relating to Money Bills, and convert it into an ordinary piece of legislation to which the Seanad has the right to make amendments and to which the Seanad has the right to take exception. That is a matter which will be gone into in greater detail hereafter, and perhaps the Minister, when concluding this debate, may care to submit his views on that question, prior to the Chair reaching a final determination as to the character of the Bill.

An Ceann Comhairle

The Deputy should understand that neither the Minister nor the Deputy has any right to make representations to the Chair in that matter. The responsibility of deciding what is a Money Bill rests with the Chair, and the House is informed of the Chair's decision to issue his certificate only when all stages of the Bill in the Dáil have been completed.

Mr. Dillon

Quite so, but it is surely proper for the House to take every precaution to ensure that a Bill is not presented to you which would impose upon you the necessity of ruling that it is not a Money Bill? While no one suggests that your judgment should be influenced by anything here said, surely it is right, when dealing with a wholly irresponsible Minister like that, to warn him of the pitfalls which lie ahead of him, and guide his steps so that he may be able to protect himself.

An Ceann Comhairle

The responsibility still lies on the Chair.

Mr. MacEntee

Now let the guardian angel speak.

Mr. Dillon

The Budget statement has been made and this Bill is the instrument whereby the policy laid down in that statement is to be carried into effect. The Budget statement was remarkable in many ways, first, as the statement of a man who had learned by bitter experience some things he did not know when he first became Minister for Finance in this State, and it ended with a paragraph which I do not think has attracted sufficient public attention, but which I believe deserves very careful perusal by everybody who is concerned with the future of this country. In column 1999, volume 75, No. 16 of the Parliamentary Debates, the Minister is reported as saying:

"Stringent and straitened as our position is, I believe that we can endure it so long as peace is maintained. If a widespread war comes, however, our difficulties will be intensified beyond measure. I speak now only of the reaction of such a disaster upon our finances. But there I know that with a much diminished real income, we shall be called upon to shoulder vastly increased public burdens. Moreover, the problem in that regard will be aggravated by the fact that existing sources of revenue will rapidly dry up. The stamp duties are a case in point. And it will no longer be possible to get so large a part of our requirement by customs duties upon imported goods, for we may take it that our imports will be drastically cut down. We shall have to tax what we can and where we can. Taxes upon home-produced commodities will, I feel, be greatly increased; as will the standard rates of income-tax and surtax; while all the allowances which at present mitigate the full impact of these latter upon the taxpayer will be drastically reduced."

That is the statement, at the end of seven years of Fianna Fáil control of our finances, and that statement may be fairly paraphrased in this way: There is impending a danger to Ireland which our Government have no power whatever to control. If that danger should eventuate, we are irretrievably ruined. We have laid nothing by; we have no nest-egg for a rainy day; we are barely living from hand to mouth. If the fortuitous results of a third party's act, over which we have no control at all, eventuate, we are faced with immediate ruin.

Now, I ask the House to compare that attitude, at the end of seven years of Fianna Fáil administration, with the attitude of the same Minister at the end of ten years of Mr. Cosgrave's administration. At the end of ten years of Mr. Cosgrave's administration the present Minister for Finance embarked upon an economic war which, he admitted, was going to put an unprecedented strain on the resources of our people. But he was able to come into this House and say: "Revenue is buoyant, money is circulating freely; everything looks well, and nobody is suffering unduly." That was his story, and it was true, that during the first four years of that disastrous struggle, when the people of this country were losing immense sums of money, the revenue actually was rising. Ample resources were spoken of by the Minister. Where were those resources? Where did he get them? He got them from the reserves that were built up by his predecessor. Although his predecessor began with nothing except a civil war, which imposed immense expenditure upon the Exchequer, his predecessor handed over the country to him with reserves adequate to finance five years of an economic war.

He, at the end of seven years of his administration, offers his country, or to anybody who may succeed him, stringent and straitened circumstances, the danger of which, according to himself, may be intensified beyond measure by the action of certain peoples, and by certain circumstances which we cannot control. Faced by that prospect, the Minister tells us that we may be forced into having to tax what we can and where we can, without regard to whether those taxes hit the rich, the poor, or the middle classes. Is not that a comparison which speaks volumes in regard to the two Administrations? It ought to bring home to the Deputies of this House the lesson, which there is still time for this country to learn, that a responsible Government, in addition to financing the day-to-day requirements of our people, is under a heavy obligation to make provision for reserves against contingencies that they cannot control in the future.

I have said on many occasions that, if the Government continues to pursue the policy it has been pursuing, this country will go bankrupt. I repeat that now. I say that if a country finds itself in a position in which there are no resources left, and if it finds that, by the action of a third party, it can be launched into irretrievable disaster, we are, in effect, bankrupt, because we have not got the reserves that a solvent institution should have. As things are, it seems to me, that if we do survive we only survive by grace of those who spare us the crisis which we ought to be able to meet out of our own resources and reserves without being under any obligation to anybody for sparing us from that test.

According to the Minister's own admission, we are able to continue to-day only on the suffrance of certain Continental countries which keep the peace. If these countries should break the peace, according to the Minister, we must tax where we can and how we can and, in that case, the disaster —which, in his judgment, is irremediable—is upon us, and that what will come upon us then he is not now in a position to foretell. The comparisons between that statement and the statement the Minister was prepared to make at the commencement of the economic war crisis, in the conditions that existed just after Deputy Cosgrave left office, deserve consideraation by those who are learning the elements of finance, and, in that category, I have no hesitation in including the Minister. I have said on many occasions, and Deputies on these benches here have pointed out repeatedly, that the level of taxation in this country was rising steadily and had become intolerable. When that case was made many a person, who felt that the logic of the case was unanswerable, still was constrained to ask: "Where is the money coming from? It is all very well to say that the taxes are too high, but they get the money." The answer is fairly simple. The money was coming from the savings that we had made in the years that went before. The difference between us and Fianna Fáil is that, four years ago, we foresaw that if you went on living on those savings, while you were earning nothing to add to your savings, your reserves one day would come to an end; and, four years ago, we said that if you continue until your reserves come to an end, that will mean bankruptcy—national bankruptcy. Fianna Fáil, on the other hand, said that as long as we have money let us spend it. On the one hand, you had the unpopularity of being conservative, economical, niggardly, as it was called, and, on the other hand, so far as Fianna Fáil was concerned, you had the popularity of being an off-hand spender and a slap-dash dispenser of your neighbours' goods. However, that so-called niggardly, saving, and economical Government handed over a solvent Exchequer to its successor, and that successor—that generous, off-handed, slap-dash Government—offers to its successor a straitened Exchequer which, in the stringent circumstances which now obtain, is constrained to tax where it can and how it can. I say, therefore, Sir, that when the present Minister for Finance must end his Budget speech with the words I have just quoted, the State in which he is a Minister is, in effect, bankrupt.

A great many people in this country forget when they are thinking of the burden of taxation, that, under modern practice, the burden of taxation as borne under the Budget, bears little true relation to the burden of taxation that the people are carrying actually. What we have got to consider, when we are considering the economic condition of the people of this country, is the actual taxable capacity of our people, and not the revenue apparently produced by the Budget taxes. Now, the taxable capacity of our people represents a certain sum which is the limit of what our people can find, and it consists, not only of the taxes raised by the Finance Act, but also of the indirect taxes which the people are called upon to pay—such as the indirect taxes on bread, flour, butter, bacon, petrol. All these are taxed also, and when they have been estimated accurately, or as accurately as they can be, you must then turn to the taxes on such articles as clothes and boots and on the one hundred and one other things which are being produced behind protective tariffs, the extra cost of each one of which constitutes a drain upon the taxable capacity of our people. On the Minister's own admission, in his Budget speech, we have reached a point where the sum of all these impositions has exhausted the taxable capacity of our people, and he says, in effect, that if any untoward event should take place, as a result of action taken by certain other countries, we will have no place to turn to, no nest to raid, and no emergency sources which we can tax temporarily. According to the Minister, in his statement, we are all out now producing the last taxable farthing that can be yielded from our peoples' taxable capacity, and we stand in danger of a crisis also that will require substantial additional expenditure.

Now, the Minister for Industry and Commerce, speaking on the 29th May, 1939—column 262, volume 75, No. 2 Official Debates, said:—

"...I am sure they (Deputies) will agree with me that in the forefront of our immediate plans we must put proposals for the reduction of unemployment; that we must give those proposals priority over proposals for any other purpose—the reduction of unemployment must be our primary objective, getting consideration before any other objective whatever."

Add to that, the problem of housing in the City of Dublin, and add to that the problem of citizens of this city who are living in verminous rooms and who are sleeping in rooms disturbed as, I think, Deputy Tom Kelly said, by vermin falling on to their beds, whose children, as Deputy Tom Kelly described them in this House, are put to bed with clothes tied about thier faces to prevent them being eaten by vermin at night: add to that the inadequacy of our social services to meet the more urgent needs of the married poor about whom the Government Party are quite as solicitous as we are, and ask yourselves, where are we going to get the money to meet their needs?

We have three methods of getting it. We can borrow it; we can save it or we can print it. Can we borrow it? We can borrow it only if we can find someone to lend it. Now, it is important for this House to understand this; that those who have money to lend do not read the speeches that are made in this House. They go to the Revenue Accounts, and they examine the economic state of the country from the official returns. The economic statements, or the economic arguments, advanced in this House weigh little with them. They are skilled financiers, and their job is the examination of national accounts with a view to determining the solvency of any State which seeks money on the public money market. It is true, as was stated before the Banking Commission, that if some silly fool gets up and advocates riot and civil commotion, that may injure the credit of a country, because the prospect of civil commotion always injures the credit of a country, but even a dispassionate examination of the financial state of a country does not influence the judgment of financiers. They make their own decisions. They reach their own conclusions from their own researches. I put it to the Minister for Finance now, that that Budget statement being a true picture of our financial condition, where are we going to borrow for additional purposes when we owe £5,000,000 sterling in floating debt at the present moment which will have to be funded somehow or other pretty soon?

When that transaction is carried through, where can we hope to borrow? Does not the Minister know as well as I know, that when he finds himself in the position that he cannot borrow there will be found those who will want him to print. Does not the Minister know that if we do print the first reaction of printing will be very acceptable to the bulk of the people. It is only when the damage of uncontrolled inflation is well under way that the true consequences of that course of action will be become manifest, and it will then be too late to stop it. To bring any democracy within the reach of the strong temptation to inflate by printing currency is one of the greatest crimes that a Minister for Finance can commit, because he draws them into a temptation the dangers of which are absolutely impossible to explain in theory to the mass of the voting public —the full dangers of which the voting public can never learn except by experience. It would destroy the entire economic fabric of this State and make it impossible for any combination afterwards to re-establish our position. Is it not true that the longer you go on spending more than the national income permits, the harder it is to effect the savings that are necessary to restore stability? Who knows that better than the Minister for Finance? Remember, that saving to restore stability does not necessarily mean doing without many of the desirable things that we have. It may very well mean acquiring more, because one of the most evil aspects of the improvident administration of our national finances is not the waste in itself but the wicked improvidence with which money is spent on unnecessary things, while urgent necessary services remain unprovided for.

I have never hesitated to say in public, as an advocate of economic orthodoxy, that we ought to be able to provide in this country for our people family allowances. I hope I have always had that sense of responsibility to add that it could do no good to any section of the community, recipients or otherwise, if they were not provided out of annual revenue: that to borrow one penny for those services would be to ruin the pretended beneficiary. But I have no hesitation in advocating that, and at the same time advocating expenditure within our national income. We are spending at this minute £2,800,000 on the wheat scheme, £1,000,000 a year on the beet scheme, an indeterminate sum on the alcohol scheme, on the Roscrea meat meal scheme, on the peat scheme and on a hundred and one other futile schemes, including innumerable tariffs which are raising the cost of the people's commodities without any corresponding benefit to the community.

None of these things appears in the Revenue Accounts at all, but all of them are a burden on the taxable capacity of our people. Now, whether you trench upon the taxable capacity of the people in the Budget or outside the Budget, the ultimate results are the same, and all these things, including the tariffs, constitute a burden on the taxable capacity of our people, which, if it was not there, would enable us to get revenue to furnish services which would abolish very great evils: evils so great that they are a menace to the stability of the State, and enable us to institute services which might very easily stimulate the productive capacity of our fundamental industry, and substantially increase the national income as a whole. Instead of being in a vicious circle of increasing expenditure and increasing deficits, if we could only turn the wheel and get into an ascending spiral of increasing public services with increasing national income, we would then be on the right road. But the Minister knows as well as I know that at this moment we are in a descending spiral of diminishing income and an increasing burden. He realises just as vividly as I do that we are getting to the danger point, but in public finance you cannot afford to get to the danger point because if you do no action by democratic politicians will get the country out. Everyone knows that if we reached financial crises such as they had in Newfoundland, we would have civil commotion in this country. If you got civil commotion arising out of an excessive tax burden, the economic fabric of the State could not be maintained, and you would be in the vicious circle at once that while the remedy for the situation was to be found in economy, the civil commotion would demand extra expense.

In endeavouring to restore order you would throw your finance into more wild confusion, until eventually you would be in a state of absolute chaos. Out of that there is no redemption by democratic method, and you are then in the hands of a dictatorship either of an individual in this State, which would be bad, or—what would be infinitely worse—of an outside individual. That would reopen for this country an endless period of ruin and desolation which I am simply horrified to contemplate.

If we can get it the other way, if we can get the national income, the combined produce of our people's profitable production increasing, and deliberately declare that it is our intention to establish in this country a system under which we would not have millionaires on the one hand and paupers on the other, if we deliberately adopt the Irish way of running Ireland and resolve to be all well-off together or all poor together, if we deliberately recognise that the first charge upon the national income is the equation of a minimum standard of comfort for every honest citizen in this State, and a distribution of the remaining balance as a reward for enterprise, I think the Minister could then come before the House with a very formidable tax bill, if he was in a position to say "The national income is rising." I admit that my proposals constitute a certain measure of income distribution. I do not deny that; it is the Irish way, and so long as we can get the national income in the upgrade we have no reason to be afraid of it. I think the Minister would get a hearty welcome. But that is not what is happening. Your productive capacity is going down. You are putting burdens on the people that are reducing many of them to destitution and misery, and you are doing that when the national revenues will not meet the essential services, and when there is the menace of civil commotion, and the problems it represents, not to the Minister for Finance but to the Government and to any Parliament that is sitting in this country.

I do not believe in getting up and preaching panic, but I do not conceal the fact that I am alarmed. I consider that our economic state at the present moment is truly alarming, and I believe the Minister agrees with me, although he does not consider it politic to say so. I want to emphasise again that no useful purpose is served by holding your tongue when you see danger ahead. If we are to have democratic institutions in this country, the right thing to do when you foresee danger is to say so, and to ask the Government to take appropriate measures to avert it. If we once create the impression at home or abroad that when we get scared we run for cover, throw our hands up in despair and say: "Let's be merry while we may, disaster is inevitable," then we sacrifice all right to confidence, and justify those who decry parliamentary institutions. The whole value of Parliament in the counsels of the nation is that those who foresee danger have the right to say so, to give their reasons and to advocate remedies. It is up to Parliament then to determine whether those who sound the note of warning are right or wrong. I submit that every warning we have given to date has been amply justified. The only trouble is that we have seen too far ahead, because in the ranks of our Party we have experienced financial administrators who saw the logical conclusions of the things that were being done. I believe the Minister now agrees with us, though I do not think he did four or five years ago. What is the remedy? The first remedy is to increase the profitable production of our people. A lot of people leave out the word "profitable." They think that, if you can raise production on any terms, you are serving the interests of the State. That is nonsense. Subsidised production in this country, far from being a source of wealth, is a luxury we cannot afford.

Mr. Moore

Butter, for instance?

Mr. Dillon

I do not want to make sharp replies to the Deputy, and I beg of him not to interrupt me. I am trying to do a difficult thing now, and I beg of him not to interrupt me but to intervene hereafter. If he does interrupt, he will have to excuse me if I give him the rough side of my tongue, as I will, because I will lose my patience. We want to increase profitable production. If we want to increase production that will yield our people profits, we have got to have exports, and we have got to export to the British market. The Minister knows as well as I do that an elementary economic principle is that if you want to make profits on exports you must have cheap raw material. We do not want in agriculture, and we do not want in industry, high prices. What we want is high profits, and that is what a lot of people cannot remember. They think that, if you give a man a high price for something, he ought to be happy. A high price can do more harm to a man than a low price. The essential matter for investigation is not the price but the difference between the price he gets for his finished product and the price of his raw materials and the labour he put into producing it. In this country, we are losing sight of that element altogether. We are riveting every man's attention on the ultimate price, which is of minor importance. The essence of profitable production is the difference between the price of the finished article and the cost of production. The costs of production in this country are very largely the costs of our raw materials.

There are farmers in Armagh who walk into Monaghan town, buy bonhams in Monaghan, take them out to Armagh and feed them on cheap feeding stuffs, then bring them back into Monaghan and sell them at the high price there. The Monaghan farmer buys the same type of bonhams on the same day, feeds them on the dear feeding stuffs, sells them on the same day as the Armagh farmer and gets the same price for them as the Armagh farmer. But the Armagh farmer has made a profit and the Monaghan farmer has made nothing. That is the key to our whole problem, and it does not apply only to agriculture. It applies to industry, too, and for this reason: the fundamental industries in this country, if they are to expand, must export. Guinness exported, Jacob's exported; the linen industry exported, the shipbuilding industry exported, the woollen and textile industry exported, and all those industries grew great because they exported and had a chance of unlimited expansion. There may be some small secondary industries which in my opinion are mere luxuries, social services of, I think, very questionable value, but not worth bothering about. But the fundamental, the main industries upon which the industrial revival in this country ought to be founded, should be industries that have a prospect of acquiring export markets, so that their expansion and their capacity to employ would be limitless, measured only by the competition they encounter abroad and their own enterprise and efficiency. You are absolutely ham stringing those industries if you start them off with a burden of costs on their raw materials. If you do not say to those industries in the beginning "You will be permitted to get raw materials as cheaply as any competitor," you are telling them from the day they start that they must never expand, that when they reach a certain size they stop, and stop for ever. You will never get truly profitable production in this country until you can revive the spirit of Guinness and Jacob to conquer the markets of the world, and remember they did it when there were no tariffs at all.

Mr. MacEntee

The Deputy ought to think of that too.

Mr. Dillon

What?

Mr. MacEntee

That they secured the markets of the world when there were no tariffs either here or elsewhere.

Mr. Dillon

That is our position to-day. We have a market for 97 per cent. of our goods in which no tariff will be raised against us. You have a market which you can multiply by two in the morning with a guarantee that you will have no tariff against you. That is the point I am making. We are in the unique position here that we have got a market, unlike one hundred and one other countries which are surrounded and cloistered in by those who will not deal with them; we have a market guaranteed in perpetuity from tariffs and restrictions, with actual invitations to send more than we can supply. That is our unique position. What I want the Minister to do is to let us take advantage of it. It is because we have that position that we can get for our people a higher standard of living than any other agricultural country in the world.

Mr. MacEntee

Does that market exist for ships, which the Deputy gave as an instance?

Mr. Dillon

That is irrelevant. What I am trying to point out is that the essence of an expanding industry is that it must export. I point out to the Minister that we are in the unique position in the world that we have a market where we can export and where we can expand our exports; that we can use our influence in the Commonwealth to secure an opportunity for expanded imports all over the Commonwealth.

Mr. MacEntee

In ships and linen and stout? Is there a market for these? These are the industries which the Deputy cited.

Mr. Dillon

I assume the Minister is accustomed to listening to a coherent speech. I tried to give certain his torical examples. I explained the nature of an expanding market and its effect upon an industry. The Minister can dismiss that from his mind now, and address his mind exclusively to agriculture and to the new industries we are trying to build up here, in addition to the historical examples to which I have referred. Over and above the old established industries that we knew in the past, we want to add to these industries. I am saying to the Minister that if we are going to have industries we must get fundamental industries to which we can promise an opportunity for expansion. There is no use regarding an industry which is for ever cribbed, cabined and confined within Éire as an industry upon which we can base our industrial development in the years to come. We have secondary small industries to which we will say: "You must content yourself with the home market and you cannot hope to get any more." But the main industries, which ought to be the foundation of the industrial development, should have held before them the right to seek out the markets of the world and to challenge competition anywhere and try and get their share of the world expanding trade.

I agree that economic nationalism made that unthinkable and makes it unthinkable for many countries on the Continent of Europe. But we are in the Commonwealth, and we have a free market in England as a result of the Agreement made with the British Government last year. We can make our voice felt and our influence felt in the Commonwealth. We can be the individual within the Commonwealth which will call to our aid the pronouncements of Mr. Cordell Hull, Secretary of State of the United States of America, and say: "That man admits that economic nationalism is an error; that the United States was responsible for leading the world into it, and he is prepared to help in leading the world out of it." Let us in the Commonwealth show the world an example by freeing trade within our own borders and inviting others to join us in the spreading and freeing of trade the world over. We are not going to do it overnight. We are not going to do it in five years, or a decade perhaps; but we can walk in the right way. If we can do that we increase profitable production.

I do not take this occasion to repeat the arguments so often made for the urgency of making agricultural production pay. It is the only source of wealth we have got. There are hundreds of thousands of acres to-day under crops which are not paying, but which are a burden on the public purse. Every acre of that land which is at present a burden on the public purse could be made a contributing factor. The wheat land, instead of collecting £2,800,000 a year in subsidies, could be made to contribute a substantial sum to the national income, of which part might be properly segregated to help the less fortunate and to establish a standard of living for all our people which would be tolerable. The same can be said of beet and of many another scheme that we have at present. We know of the extravagance which exists in the administration of the State largely from lack of co-ordination, largely from the want of a clear philosophy to guide our financial activities.

I put it to the Minister that we are face to face now with this issue— we must save or perish. These are grave words, but I use them deliberately. I say deliberately that we are in economic danger to-day greater than this State has ever known. I say that to-day the very disaster which those who hated our country loved to prophesy is threatening us. There are many Deputies who care little about the history of the 19th century. But those of us who have good reason to know it well remember how many men staked their reputation on the contention that the Irish people, the people who live on the small farms and in the cottages of Ireland, would choose a better government for Ireland than ever the British House of Commons could. The enemies of Ireland in England and the enemies of Ireland in Ireland always prophesied two things. The first was: "They will tear one another to pieces like Kilkenny cats"—and we very nearly did. But, by the mercy of God, out of that great evil we brought great good. Instead of destroying the State, we demonstrated to the world that a country once torn by civil war could, by the public spirit of its leaders, overcome it. We demonstrated something that no other State in the world has been able to demonstrate since—that the antagonists in a civil war could bury the hatchet and sit down together for the common good, and so we confounded the detractors of Ireland. The other prophesy they made was, that if we did not destroy ourselves in conflict, we would, by our ineptitude, our inexperience and our peasant ignorance, destroy public finance and the British treasury would have to come to our aid. I deliberately say now that that danger is upon us.

Fianna Fáil has four more years of office before it. Nothing would gratify me more than that they should take such steps as now are necessary to ensure that they would leave office at the end of that period with a solvent exchequer, and with a complete answer to that second attempt to traduce our people. All the help they want they will get from the Opposition, but not the help of silence—no conspiracy of silence to pretend that things are other than what they truly are. If they are prepared to face the situation and to grapple with it, they will get all the help they want. If they are not, then unrelenting war to save this country and protect it from a real and insidious menace, and worse than that if we should fail to carry, fail to succeed in this great experiment. I am convinced now that we need not fail, that we ought not to fail and that we should be able to produce in this country an economic life which would be an example to every other country in the world, and a standing rebuke to the industrial horrors of England and the United States of America and many other countries which have given themselves over to black countries and to wide disparities of income that are a disgrace. I believe it would show the world that there is something good in these philosophies of Europe which prefer to be poor altogether, than to have some people hungry and others superfluously rich. I am profoundly convinced that truth will prevail. I should be long sorry to think that it could only prevail in a political system such as is at present in operation in the Totalitarian countries of Europe. I want to see democracy achieve this. I believe our democracy could be and should be the first to do it. If they do the world will follow. I would sooner have the world following Ireland in such a crusade of social justice than to have Ireland following Britannia as a beggar at her gate.

Professor O'Sullivan

I suppose, under somewhat different circumstances, the Budget that this Bill puts into operation might be called a victory budget. It is, after all, the first opportunity the Minister for Finance has had since the abnormal circumstances brought about by the economic war to frame a Budget after what he and his colleagues have celebrated as the victory won in that particular war. If, as most people and most countries do, we are to regard the annual budgetary statement and the annual Finance Bill of this kind as an index to the conditions of the country, surely we are entitled to ask what have the people, what has the country, what has the State to show in the way of gain, not merely from the policy of the Minister for the last seven years, but as some recompense for the privations that they were asked to suffer when they were asked to wage that economic war to what some Ministers call the final issue—if necessary, the bitter end. If this is the best Budget, if this is the best Finance Bill he can produce—the Minister having won, as he proclaimed, that particular victory —what prospect is there for the future? Undoubtedly that is something that has perturbed the minds of many people. There were occasions when I felt that, possibly, there was a deal to be said for the view that there was more than even the policy of the Government responsible for bringing about a state so lamentable as revealed by the present Budget that, so to speak, the economic curve was going against us, going against the principal source of our economic life and that there would be very little chance, even with a change of Government policy, of remedying this situation. If that were so, I think the outlook would be black indeed, but if it were so, all the greater the responsibility of the Government for avoiding any measure or any policy that would further depress the country. When I heard the Minister's statement I said, when speaking on the Budget, that I did gather an element of hope from it because I felt that there was some evidence, possibly for the first time, that at least some members of the Government were waking up to the situation this country has really to face. If that were so, and if we could be assured that, within the next three or four years of the Government's lease of life, of which they so constantly remind us, something would be done in accordance with the new light breaking in upon them, then something might be gained—if we got some assurance that the Government was ready to face that very heavy task that will face any Government, either Fianna Fáil or any other entrusted with the welfare and control in the coming years. If, as I say, the Government could wake up to that responsibility, then at least I should have some ground for hope so far as the future is concerned. "The victory Budget!" Did not the country expect, and was it not justified in expecting as a result of the Agreement so loudly trumpeted by the Government a year ago, an Agreement—as a result of which they were able to snatch a general election——

Mr. MacEntee

Oh!

Mr. Flinn

Co-operation.

Mr. MacEntee

That is the Deputy's interpretation.

Professor O'Sullivan

Before the people had an opportunity of realising precisely the state to which the Government had brought the country— I am not referring to the occasion selected by the Government to go to the country, but to arguments they were able to put forward before the country and the strength of the argument that they had made the Agreement. Everyone who knows the country is perfectly well aware of the fact that it was the hopes produced by that Agreement that led to the Government victory and now, 12 months afterwards, we are facing this situation that—in a time of peace, in a time when crises are threatening other countries, crises in which we may be involved, and when a wise Government would take every step to conserve its resources— we have this additional taxation. Does anybody believe that 12 months ago the country believed that that would be one of the immediate fruits of the particular victory referred to. In this which ought to be one of the most favourable years since the Government took office, the country is presented with this Finance Bill and its taxes and with the speech of the Minister for Taxation. That use of the word taxation was a slip—but not quite so inapt.

Mr. MacEntee

Carefully calculated.

Professor O'Sullivan

Minister for Finance. This is a year in which there has been an abnormal expenditure of money, and a circulation of money, on the part of our main and, to a large extent, almost our sole foreign customer, and yet we have not been able to take advantage of that.

I do not intend to call attention— Deputy Dillon has done so—to the closing paragraph of the Minister's Budget Statement. Like Deputy Dillon, I wish the country would weigh that paragraph. What I should like to put to the House is this, that, considering the black picture that the Minister has painted for the House and the country, do the Government think it a good preparation to raid the feserves of the country before that catastrophe comes upon us? Are there people in the Government who believe that the country will be in a better position to face the horrible situation that the Minister has so luridly depicted, if we eat into our resources as we are doing? What will there be left to meet that situation? In a time of peace, in a time when there is no interference with its trade, either export or import, the savings of the country, savings piled up, not during the régime of the Minister and his colleagues, but before their time, are being eaten into. What will be the position should the state of war pictured by the Minister arise? Is it wise to eat into these savings now and have to face a situation like that depicted by the Minister, a situation over the coming of which we have no control?

Surely, with a picture of that kind before their minds, the Government should have hesitated before they took this step, in a time of peace, of putting on these additional burdens? I wonder whether I am justified in saying that the Budget is, to a large extent, the Budget of the Government and the tone of the speech is, to a large extent, the tone of the man responsible for finding the money, the man who possibly knows better than the other members of the Government what is the financial situation facing this country? This ought to have been the first really normal year that we have had since 1932, owing to the disappearance of the economic war, and owing to the fact that there is such an expenditure and a flowing of money across the Channel. And yet, at this period, the Minister finds it necessary to raid the savings in the country.

What is the justification the Minister tried to "get across" for the extraordinary character of his Budget? Is it not that it is really a war Budget at a time when we are enjoying the full benefits of peace? Preparations for war, the Minister might say. I will deal with that subsequently; but before the crisis comes upon the country, we are budgeting as if we were plunged into the crisis already. We have to face that particular position painted by the Minister and read out by Deputy Dillon this afternoon. Therein the Minister refers to increased taxation burdens that the country will have to face. Where does he propose to get them with the disappearance, which he himself indicates, of our revenue from customs, and so forth owing to the difficulties of international trade? If war really comes, whether we are involved in it or not is to a large extent a secondary matter from this particular point of view. Where is the revenue to come from to keep this country going? Has not the Minister already, as a result of his policy over the years, cut the ground from under the feet of any Government that will be called upon to face such a situation as he himself has visualised?

I have no doubt the Minister must have made that clear to his colleagues, but they overbore him. Hence the contrast between the gloomy tone of the Budget speech, on the one hand, and the provisions of the Budget, on the other hand. If the man responsible for the gloomy tone of the Budget Statement had full responsibility for framing the taxation system that is contained in that statement, then he is suffering from a disease of double personality, two different people speaking in him.

What can we say of the description of the Minister that the past year was a year that had betrayed all hopes? Supposing it had betrayed all hopes, has the Minister asked himself why? Was it on account of the European crisis? The Minister hinted that that was so. Deputy Childers, speaking on the last occasion, also hinted that was so. But what neither the Minister nor his follower has pointed out to us is how that European crisis last September affected the trade of this country (not the trade of Europe as a whole), and the purchasing power of certain classes in Great Britain who buy our agricultural goods. Does the Minister really pretend that the crisis affected us and our trade to the extent that it justifies the imposition of these taxes or justifies the description of the year as a year that betrayed all hopes? Admitted it betrayed all hopes; I think it is time the Government should ask themselves, apart from any Party questions whatsoever, why the year betrayed all hopes.

Why was it that when, after the economic war, you returned to a normal position, the first year of that normal position betrayed all your hopes? Does it not call for a revision of the whole policy of the Government? Is it not time they asked themselves whether the policy they are pursuing is sound; whether the country can bear it much longer? Is not the Budget itself an indication that the country cannot bear it much longer? I put it to the Minister again, is it sound policy to subsidise all our industries and have to continue to subsidise them? If that is to continue to be our policy, where are the subsidies to come from? It is a plain question. It seems to me an incredible thing that the Government has not faced it. Economically it seems obviously unsound that a Government should be in the position of subsidising everything.

The Minister referred the last day to the subsidy of £10,500,000 that he alleged he was giving to agriculture. Leaving aside the fantastic nature of this statement due to the manner in which the Minister juggles with figures, if you are in the position of having to subsidise your main source of wealth out of taxation to the extent of £10,500,000 per annum, where are the subsidies to come from? It is a problem the Government may postpone for a year or two years, but it is not a problem the consideration of which the country can postpone for ever. Is there any indication, either in the case of that industry or in the case of the other industries that we have, with a great deal of trouble and cost to the consumer, set up in this country, that these industries can continue without a subsidy?

Surely, that is a matter requiring the gravest consideration on the part of the Minister and of the Government? Take our principal industry, or any other industry. You have two methods of helping it. Of course, again, our main source of wealth must come from our principal industry. We may regret that we have not other great industries as well as that industry, but we have not. Which, then, is the sounder policy?—either to get yourself into such a position that you have to subsidise every industry, and continue to subsidise every industry, or try, as far as you can, to remove the shackles that you have put upon agriculture and other industries, to remove the various obstacles that have been put in the way of their success. If the country is to get into a healthy financial condition. surely the latter policy is the saner policy in the long run.

One class after another have felt the whip of the Government. Take the case of the farmer. Does anybody pretend—even on the Fianna Fáil Benches —that the condition of the farmer at the present moment is a satisfactory one? If that is not pretended, how then do you intend to come to his help? Is it by still keeping the shackles on his industry, by compelling the State to help him by way of subsidies? Where are these subsidies to be got from? They are only to be got through taxation, and that taxation must be got from industry or from production; it cannot in the long run come from anywhere else. It must come from industries that, themselves, are subsidised, and therefore it all must come or all must depend on taxation that comes from subsidised industries. Can anything be more vicious than a policy of that kind? Does the Government, on serious consideration, think that these industries themselves can continue to exist if everything must depend on the provision of subsidies? How long can they continue to exist? They can only continue to exist so long as there is money in the way of savings to be raided, and no longer. That is what you are doing. You are raiding the savings and the reserves that were built up in the past, and we have only been able to carry on during the economic war, and we can only now afford this so-called victory Budget, because of those savings.

There is no indication, however, of a change in policy by the Government. nor is there any indication that conditions are becoming better so far as the main industry of this country or even the smaller industries of this country —at least, not to the extent necessary that one was led to believe would take place as a result of the improvement of relations with Great Britain. You have to remember, of course, the low level to which things were brought. One would take it for granted that, so low was the level to which things had been brought, that there must be some improvement of conditions resulting from a change of circumstances due to the Agreement—that Agreement was bound to bring about some improvement in conditions. It seems to me, however, that we are very far yet from reaching the level of what I may call pre-war years—and when I say war, I am referring to the economic war. We are very far from reaching that level. I know that, besides Government policy, other factors are responsible for that, and I know, equally well, that the Government stresses these other factors, and stresses these other factors unduly to the exclusion of the results of their own policy. If I thought that these other factors were really as dominant factors as the Government would like to lead us to believe, then I should say that there was no future for this country. But, in fact, these other unfavourable factors are not near so important as Government supporters pretend—and this is shown by returns that have been recently given by Northern Ireland. There was a return, published the other day, by the Northern Ireland Government. It covers the time when the Government here was defending its policy by pointing out that the widespread depression in trade in the world generally, was responsible for the decline in our agricultural exports and for the decline in their value, as well as the decline, generally, in both our import and export trade as a whole. It was held that this decline was due to world-wide conditions of depression. But these same conditions must have prevailed in Northern Ireland, yet there they had not been the same general bad effect. In effect, the fact is that, whereas we are still very far behind the pre-economic war conditions, Northern Ireland which, under similar conditions of world depression, ought to have been as much affected as we were, is considerably ahead of the pre-economic war position—i.e., better than its position in 1932. That shows that there must be some factor peculiar to these TwentySix Counties that is hitting us and that did not hit our Northern neighbours, who happen to live in a portion of our country. Now, what was the difference? The main difference was the policy of the Government. It is not a question of the character of the produce, because the export of even agricultural produce increased during those years in Northern Ireland, whereas ours went down catastrophically. It is not a question of the character of the agricultural produce, because the value of the exported cattle there went up during those years, whereas the value of similar exports in our case went down. There was the difference between the policies of the Governments concerned —not merely the policy, as carried out during the economic war, for which we have had to pay so dearly, and of the victory Budget, for which we now have to pay so dearly—but the whole policy of the Government in making the costs so heavy on the farmer as to make his position practically impossible.

You may describe this Budget, if you like, as a popular Budget. I have seen it so described. I do not care whether you describe it as a popular or unpopular Budget; I am more interested in finding out whether or not it is a sound Budget. Does it indicate a change of heart on the part of the Minister for Finance or on the part of the Government? The farmer has been hit and sorely by the policy of the Government. We want a change there. I realise that the industrialists must in the long run—and not too long a run at that—be hit also because the industrialist cannot live on tariffs alone unless the country is capable of paying the tariffs. The realisation of this truth is just as necessary for him as for the farmer. As I have called attention in the past so I now call attention, not merely to the condition of the farmer, but to the condition of the traders in the country towns. Their situation is bad, and their outlook is deplorable. I do not know whether it is the policy of the Government to drive out of existence the ordinary town trader in the country towns, but that is happening, and I believe that it is happening as an indirect result of the policy of the Government.

Then, we hear talk about economies. Take the case of the labourer. Will he not be hit also? What is the only place where the Government thinks of making economies? Employment schemes—and that is at a time when there are so many people unemployed and at a time when there is so much emigration from this country. That is the principal economy the Minister has announced to this House.

Mr. MacEntee

Has the Deputy an alternative to announce to this House?

Professor O'Sullivan

That is the principal economy the Government has produced. I am only dealing with their statements.

Mr. MacEntee

Has the Deputy an alternative to offer?

Professor O'Sullivan

I could offer plenty of alternatives, but I will say that, at a time when there is so much unemployment, which the Ministry has not been able to cure, and at a time when there is so much emigration the existence of which the Ministry for a long time has tried to deny, but now is forced to acknowledge, this is the one economy that the Minister puts before us. Did he make economics in the cases where he said again and again, when he was on these benches, he would make them—in the police force and in the Army?

Mr. MacEntee

Does the Deputy believe that economies can be made in the Army?

Professor O'Sullivan

I have said on many occasions in this House that the sums provided in the present defence programme really represent a pure waste of money. Again and again I have pointed out to the Minister that our objection to that was that it was spending money for which no return was being got.

Mr. MacEntee

Does the Deputy want the Army personnel to be reduced?

Professor O'Sullivan

I am referring to the fact that while the Minister is putting on extra taxation for it, neither he nor any of his colleagues has shown that there is the slightest justification for their defence policy. The high cost of living is hitting everybody, rich and poor alike. This Budget is the solace and the balm that the Minister for Finance has for the people who were asked to bear the scourge of the economic war for such a long time. These are the fruits of victory.

There is one change, a welcome change I will confess. We all remember the Minister's first Budgets, especially the first one. We all remember, shall I call it the malicious joy—perhaps I had better say joy and leave out malicious—with which he imposed extra taxes on that occasion. Those who were present in the House on that particular day can recall not merely the words but the whole attitude of the Minister. Since then he has learned that the imposition of taxes in a country like this is not the gay pastime that he apparently thought it was when he entered on office. What I regard as the most serious thing of all—more serious in my opinion than the acutal material losses inflicted on the people, serious though these may be—is that the Government of which the Minister is a member have killed hope to a large extent in one class of the community after another. That is the really serious thing; the fact that the people have now resigned themselves to whatever may come. They are bearing these burdens and facing the fact that there is to be no improvement in their condition. The result that they had hoped for from the settlement with Britain did not come. I do not like to see the despair that follows from that grow on the people, but I am afraid that is what is occurring.

Deputies will remember that we on this side begged the Minister and the Government in this House to settle that dispute while the country was still in a position to make the most of a settlement. I believe that the settlement was delayed too long, so that we are now reaping the result of the failure of the Government to wake up in time to the seriousness of the situation as it then was. In view of these facts we urge the Minister and the Government to face the situation that confronts them to-day. Possibly they are going to be faced with a much more serious situation tomorrow, but the strange thing is that they act as if they failed to see it in all its seriousness.

With regard to taxation, I am not denying that at the beginning it may cause a circulation of money which gives the appearance of increased prosperity. That is at the start, but how long is that going to continue? At the beginning, you get that kind of a false sense of prosperity. The circulation of money is good in its way, but if it has to be continually financed out of eating into savings, then I have not much hope that it can be long continued.

The Minister dealt with the debt of this country: with local taxation and central taxation. I venture to suggest that it is a matter not of primary importance whether the Central Government or the local bodies have thrust on them the unpopular task of imposing fresh burdens on the people. In any event it is the people who will have to bear the burden. The shifting of the burden on to the local authority, or by the local authority back on to the Exchequer does not get us any further. What I do put to the Minister is this: That for the enormous sums of money which the State gets, whether from the central body or the local body, it should ask itself: Is it getting value for that money? I suggest that is the much more important question. It is a problem that the Government should seriously tackle. So far as local taxation is concerned, the thought has often been brought very clearly before me, that people—I am speaking now of the time when I became first interested in question of public finance, local and otherwise—in those far-off days—paid a great deal more attention to the question whether the rate was to be 7/6 in the £ or 7/8 in the £ than they did to the question whether they were getting anything approaching even a moderate return for the money spent. I put it to the House that it is the business of the Government and of the local authorities to see that good value is got by the public and the country for the immense burden that the country is bearing.

We know that the Minister did refer in his Budget statement to the burden of local taxes, but he was completely silent as regards other taxes. He was significantly silent about the various sums that have to be provided by the public to support the beet industry, the butter and bacon schemes and so on. These are taxes which the people have to bear. Up to a couple of years ago they appeared in the form of taxes. A mere change in a bookkeeping transaction does not make them less a burden on the people and does not make them less taxes on them. But the Minister was significantly silent about them, with the result that the country is not told what the real burden is. I admit that portion of the burden is incalculable. What do the ordinary charges following tariffs amount to in the way of increased costs to the public? A certain portion at all events of the sum of money ought to have been referred to by the Minister, namely how much the beet factories and so on get out of the public to keep them going. We refer to those hidden taxes year after year. We can legitimately complain that in what professes to be a statement of the financial position of the country there is no mention of this— in the Budget.

As I say, you have increased taxation at a time when there is no indication of increased prosperity in the country, and no indication that that taxation imposed by the Government is producing good and lasting results. Redistribution of money? There is something to be said for that; I am not denying it, but it is not in itself necessarily productive.

As Deputy Childers pointed out the last day—I would ask the Minister for Finance to take to heart what he did say the last day—it is all very well to put on certain taxes but they are bound to go down through the people, no matter who pays the first, and they are bound to be a burden on industry. Taking that statement, I do not know how he was able to support the Minister in his present Budget. He did it on the plea that this was an abnormal year. I pointed out that it is, in the sense of being a much more favourable year than we are likely to encounter in the immediate future. If there is war, I put it to Deputies to read the last paragraph of the Minister's statement and see what the prospects are so far as revenue for this country is concerned. If there is peace—if there is any kind of assured peace, with the reduction of armaments in different countries—then what are the prospects? Will our principal market, the market to which we export most of our goods, be in a better purchasing condition in the years immediately after the cessation of expenditure on armaments? On the question of armaments, the Minister did not show, any more than his chief, the Taoiseach—who was at one time acting Minister for Defence—or the Minister for Defence, that the proposed increased expenditure on defence is likely to produce any satisfactory results so far as the defence of this country is concerned. He used abusive terms to certain members of this House. I know the Minister would not consider them abusive——

Mr. MacEntee

No.

Professor O'Sullivan

——but other people would. Standards vary, in finance as in other things. But what was his own policy? First of all, he objects to the idea that Great Britain would defend this country. That is in column 2,591. In column 2,592 he realised it is the business of Great Britain to defend this country, but when that suggestion came from friends behind me they were described as "poltroons." Not abusive—gentle stroking, so to speak? The Minister said: "We have secured our absolute sovereignty over five-sixths of our ancient territory. There is a danger that, in certain circumstances, our territory or our commerce or those communications which are vital to us might be endangered." I waited, in vain, for an answer from him or from his colleagues how the additional expense which the country is asked to foot this year is likely to conduce to a better defence of our territory. Still more, perhaps, he might tell us how it is going to help us to defend our commerce? This, remember, is immediately after repudiation of the idea that the British were going to defend those things. Will he tell us how this additional expenditure will help us better to defend our commerce and our communications? Not one of those things will be helped by the extra expenditure. If the members on this side of the House thought there was any justification for this additional expenditure or that it would help to maintain the independence of this country, then we should be prepared to face it, but not a single line that we could consider a justification has come from the Minister. It is not merely what we are in for this year. A policy of this kind involves further expenditure in the future. I do not take the optimistic view that the Minister took when he said that certain supplies would last a lifetime. Surely it is characteristic of modern war supplies that they do not last a lifetime, and that Governments are lucky if such supplies are up-to-date in a few years' time. Few things can get out-of-date so quickly as modern war supplies, and yet it was on that basis that the Minister justified at least portion of his borrowing under that particular head.

His defence policy merely means the expending of money. He has not told us against whom he is going to employ the forces that he is going to secure by this particular money, or how he is going to employ them. Those problems were put up to the Government, and the Government—perhaps wisely—has refrained from answering. Personally, I am not convinced that there is any justification for any such increased expenditure. I do not know what is involved in another statement of the Minister where he envisages the effect on another power, namely, Great Britain, of our not providing those services. He discussed, later on, what the British might say if we did not provide this extra money: "Might they not say `the Irish want to have it both ways; they want to be free but they will not accept the obligations of freedom," and so on. I wonder is it in order to please that particular power that we are making this gesture? That is the only thing that I can read out of the statement at the end of column 2,592 and the beginning of column 2,593 of the Debates of May 17th. I suggest that is all it is—a very costly gesture, but no more useful for real purposes of defence than a gesture.

If I were convinced that there were forces—forces with which we cannot deal—working against the economic prosperity of this country to anything like the extent that is sometimes alleged from the Government benches, then I should regard the future as hopeless; but I am convinced that a great deal of the trouble is due to the policy of the Government, and I think, now that the economic war has ended, now that at last the Minister for Finance seems to have wakened up to the seriousness of the situation, it is time that the whole policy was subjected to a radical examination.

Mr. Benson

There are two or three small points of detail in connection with this Bill that I should like to mention at this stage, although possibly they may be gone into more fully on the next stage. The first is in connection with Section 12, which permits of the free importation of cinema film by certain organisations. I wonder would the Minister consider the extension of that to cover organisations of an educational nature. The particular matter I am thinking of is the question of life-saving. There is a film in existence demonstrating the correct method of saving a person from drowning. That film has been in this country, but so far as I am aware, duty had to be paid upon it. I may be wrong in that. There may be a provision which allows films of that kind to come in free of duty. Perhaps the Minister would look into that matter before the Committee Stage.

I noticed a picture in a newspaper the other day of the Minister taking ciné-camera pictures at a race meeting. I should hesitate to suggest that the latter part of that section has any connection with that. What I really want to raise is the interpretation which is likely to be put on the word "solely" in line 13. Many people who possess these ciné-cameras go away for holidays and naturally wish to make a pictorial record of their holidays. If this word "solely" is retained in the section, it seems to me that if they bring the films in here and despatch them from here for processing, they will be liable to duty, whereas, if the camera was used solely in this country, they would be admitted free. Possibly the Minister will look into that question before the next Stage.

As to the provision for the transfer of £150,000 from the Road Fund, it has been, I think, the custom in the past to make a grant from the Road Fund also for unemployment assistance. At the Committee of Public Accounts recently, it transpired that £100,000 was transferred for that purpose, none of which was expended; but at the end of the financial year that amount was surrendered to the Exchequer. I should like to know whether £150,000 is the full limit or whether there is still to be what one might describe as a cancealed raid on the Road Fund to the extent of £100,000 on top of that £150,000. I also want to draw attention to Item No. 4 in the First Schedule. This is a matter to be raised on the Committee Stage and I take it the Minister for Industry and Commerce will be present to deal with it. I merely mention it now so that the Minister may be prepared to deal with the matter on the Committee Stage.

Mr. Cosgrave

In the early part of the Minister's Budget speech he dealt with the balancing of last year's Budget, and in the course of his speech as reported in the Official Reports, he gave what is called a "Comparison between Budget estimates and Exchequer receipts and issues in 1938-39." According to this the deficit last year was £527,500. But, in making up that sum, the Minister allows himself borrowings in respect of unemployment relief schemes amounting to £215,000, and for export bounties and subsidies amounting to £335,000. The sum provided in last year's Budget for unemployment relief schemes was £1,500,000. The practice, of which we have had experience, has generally been that where you borrow a proportion of a sum which is provided, you at least take responsibility for what is left of the sum. In that case, £1,250,000 would stand to be provided for out of last year's Budget in respect of that service. In that case only £40,000 could be borrowed in respect of the £1,290,000. The same applies to the export bounties and subsidies.

Finance is a matter upon which most people affect either to have no knowledge or to portray as something which is beyond the ordinary person to understand. So far as the case for this particular deduction by the Minister is concerned the fact is that the taxpayers were taxed to provide £1,250,000 last year in respect of unemployment relief schemes. How and by what process the Minister takes £215,000 off £1,290,088, to make his deficit only £527,000 needs some explanation. The taxpayers were taxed also in respect of export bounties and subsidies. It is not a question of juggling with figures; it is not a question of misunderstanding. There is nothing in it except one thing, that instead of having a Budget deficit of £900,000 odd, the Minister produces one of £500,000. It is that sort of thing which damages the credit of the State and which must make it more and more difficult to borrow money because no reliance can be placed upon figures presented in that form. That is not the presentation of the Ministry of Finance. It is the presentation of the Minister for Finance. If it is an attempt to deceive, it is an unworthy attempt. If it be pure innocence we can overlook it. But it is inconceivable that the Ministry of Finance would not have informed the Minister that he could not stand over this figure.

The Minister, in the course of his reply to the Budget debate, stated that the Government had saved £2,000,000; that the sums in dispute with Great Britain, amounting as they did to £5,000,000, were roughly £3,000,000 for Land Commission annuities and £2,000,000 for pensions, local loans and other sums of that sort. No one except the Minister could read into the promise that had been made by him and his Party in connection with the saving of £2,000,000 in taxation that that was the £2,000,000 concerned. Their statement ran: "We have examined the Estimates very carefully, we have gone through them, and we find that £2,000,000 can be saved without interfering with efficiency."

Mr. MacEntee

We saved it.

Mr. Cosgrave

Very good; you saved it. He saved £2,000,000, so that in contrast with his predecessors he had £2,000,000 more to spend. This Bill is schemed to collect £32,511,000 this year from the taxpayers. In the last year of office of the Minister's predecessor the amount collected was £25,496,000. The difference is £7,014,000. The Minister told us just now that he had saved £2,000,000. Therefore, he has £9,014,000 more money to spend than his predecessors had in their last year of office. When criticised in respect of this enormous burden on the people, they ask: "Do you want us to save on social services. We will not do it." Let us examine what the social services are costing. Take in this case this political statement with figures which the Minister has circulated for the benefit not only of the Dáil but of people outside it. In Table 7 there is a comparison between 1931-32 of what is described as "audited expenditure," and Estimates for 39-40. These are the Minister's figures. The difference between the two sums amounts to about £5,500,000. The social services according to his figures are costing £5,500,000. He is collecting £7,000,000, and says he saved £2,000,000, therefore he is getting £9,000,000. What has become of the additional £3,500,000? Where are they being spent? They are not claimed in respect of social services.

If there are any economies to be made is it not easier to examine how far it would be possible to save in respect of the £3,500,000, rather than the £5,500,000 with which I will deal later? What reliance can be placed on the figures presented to us? There are various reasons for this enormous addition of £3,500,000 to expenditure not connected in any way with the social services of the State. In this table there are 24 separate supply services—not social services—the expenditure on all of which has advanced since 1931-32. The very first one concerns the President of the Executive Council. The Estimate—not the audited expenditure—for 1931-32, was £11,543, and this year it amounts to £14,259. There is a difference of £2,716. It is a much more expensive office than in 1931-32.

Mr. MacEntee

A more useful office.

Mr. Cosgrave

We will deal with that. It happens that the same Minister is responsible for the Department of External Affairs. The Estimate in 1931-32 was £59,879, this year, £90,931. There is a difference of over £30,000. For what? Style, I suppose. To lift up our prestige. About 300 men could be employed at £100 a year each for that expenditure and it would probably be better for the country. In 1931-32, the Estimate for the Department of the Comptroller and Auditor-General was £18,111, the Estimate for 1939-40 is £19,861, an excess of £1,750. The Estimate for the Minister for Finance, the man who is supposed to be the custodian of every fraction that comes into or goes out of the Exchequer, is £12,892 over and above what it was in 1931-32. The Estimate for the Revenue Commissioners is increased by £214,061; Commissions and Special Inquiries by £1,966; Public Works Office by £31,654. I have not checked the figures. They may be £32,000. Expenditure on the State Laboratory increased by £1,245; the Civil Service Commission by £12,449. Rates on Government Property, by reason of the policy that is being pursued for the last seven years, increased by £37,500; Secret Service by £10,000; Miscellaneous Expenses by £2,825; Stationery and Printing by £31,228; Law Charges by £8,406; Department of Justice by £3,060; Gárda by £279,125; Supreme Court and District Courts by £362; Department of Education by £21,795; Science and Art by £16,734; Department of Industry and Commerce by £201,484; Marine Service by £3,510; the Army by £1,815,158; External Affairs by £31,052; League of Nations by £1,451. In the Department of Local Government and Public Health, salaries, and wages, increased from £79,600 in 1931-32 to £132,988, a difference of £53,388; in the Department of Agriculture, salaries and wages increased by £61,939; in National Health Insurance, salaries and wages increased by £20,433; in Forestry, salaries and wages increased by £7,235; in the Land Commission, salaries and wages increased by £105,470. The same people incurred all this extra expenditure under these various headings amounting to £2,971,942.

Would it not have been worth while to have gone through these Estimates to see how it might have been possible to make savings? We have been asked to point out where money can be saved. Surely representations must have been made to the Minister in his Department repeatedly. I had experience of that during a longer term of office than the Minister, with regard to any possible indication of a rise in expenditure. These are not social services, but they are headings under which it was the special responsibility of the Minister for Finance to have saved the taxpayers every possible penny that could have been saved. The Minister gets an occasional compliment from the Irish Times. That newspaper stated that the Minister had done his work. Taking the figure of practically £3,000,000, it does not look as if he had. Even that newspaper, which is quoted by the Minister's organ, goes on to say that if there are to be savings they have to be on social services. I say that there are possibilities for saving where I have indicated, and if the Minister had paid attention to them rather than making political speeches——

Mr. MacEntee

Does the Deputy put that forward as a considered suggestion?

Mr. Cosgrave

If that is a sensible question I will answer it.

Mr. MacEntee

Has the Deputy fully considered that, and is he putting it forward as a considered suggestion?

Mr. Cosgrave

The Minister wants to know where are the savings to be made, and I say they are to be made in the figures I gave. Does the Minister want more information on his policy from top to bottom? The more pronounced and the more marked the Ministers, the greater the cost they have been to this State. I will take the three Ministers who spoke on this Budget, the Minister for Finance, the Minister for Education, and the Minister for Industry and Commerce. The former Minister for Industry and Commerce had an estimate of £106,000 here in 1931-32 and the Estimate for the same Department this year is £307,000. Are we to be told that that is efficient and economic public administration? Why, on its face it is condemned. All the Minister has done is to make some senseless interruptions. He asks if certain things are put forward as sensible, constructive suggestions.

Mr. MacEntee

Are these the Deputy's considered suggestions?

Mr. Cosgrave

Considered? Not at all. I am quite sure this is put forward without a moment's consideration. I expect it is to be assumed from that statement that it is compiled without a moment's consideration, that all the information is got without a moment's consideration; that one simply looks at the book and makes a subtraction without a moment's hesitation—that the whole thing is done merely as an amusement. The Minister asked the last day where were savings to be effected. Here they are. Here is every evidence of the extravagance, the squandermania, the thing for which the Minister is responsible.

Mr. MacEntee

In the Guards and everywhere else?

Mr. Morrissey

That is where you were going to make the savings—on the Guards and on the Army.

Mr. MacEntee

The Deputy was never Minister for Finance, but Deputy Cosgrave was.

Mr. Cosgrave

The Minister and his colleagues were not long in office before the Guards Estimate went up. Let us understand one another on this matter.

Mr. MacEntee

That is all I want.

Mr. Cosgrave

I think the best thing for the Minister to do would be to resign. I think that his statement is the greatest confession of incompetence that this country will ever see. It is a very serious situation. The situation, when I had compiled these figures, made me regret being a member of this House.

Mr. MacEntee

Or glad that you were not in office?

Mr. Cosgrave

I never shirked a responsibility. I never attempted to hoodwink the people of this country. I put before them at all times what the situation was. What is the situation we now have to deal with? I will take Table VII. It is the Minister's figure, and upon that figure depends that particular sum I have mentioned, £3,500,000, which has been very largely squandered. I will take the first item, the Department of the Executive Council, and the excess in that case is £2,716. It is up largely because of propaganda. You have a newspaper and you have radio and now you want another propagandist in the President's Department. Comparable figures are what we would expect from anybody, Minister or otherwise. We have here in Table VII Estimates compared with Exchequer issues and audited expenditure. There is a negligible difference in items No. 1 and No. 2. No. 3 deals with unemployment assistance and unemployment insurance. I will let those pass. Then we come to National Health Insurance, and I will allow that to pass.

Mr. MacEntee

If the Deputy has anything to say about it, he should say it.

Mr. Cosgrave

I merely want to save time. I will come now to No. 5, Relief Schemes and Employment Schemes. There was a sum of £1,290,088 spent last year and the Estimate this year comes to £1,500,000. That figure has been affected in two ways. In the first place, there has been a deduction in the Budget of £100,000, and there is no indication of the deduction there. In the second place, it is affected by the fact that the Minister proposes to borrow £350,000. Therefore, so far as that column is concerned, it falls for a deduction of £450,000. I come now to the item dealing with miscellaneous public health and other grants and expenses of Local Government and Public Health. That represents the entire cost of local government. Surely it is not contended that Dr. Conn Ward is a social service—and his salary is on that. If it be, it is a new order of social service.

Surely, the Minister for Local Government does not regard the administrative charges in connection with the local authorities as a social service. If it is, is not everything a social service? Is the case going to be made that every single penny of expenditure here, if it is reduced, is off the social services? Those particular items in relation to local government, with a total of £372,055, should go out. The Land Commission expenditure is not a social service and it could not be brought in there but that there happens to be a figure of £625,000 in respect of the halved Land Commission annuities. Is that a social service? I suggest it is not. The whole of the Land Commission Vote should go out, because it is not, by any stretch of imagination, a social service. Then there is an item for the Gaeltacht Services, other than housing grants. I wonder did it strike the Minister that Fisheries and Gaeltacht Services were together in 1931-32? We can let that pass, and, presumably, the item for 1931-32 should have been up.

I am taking out what are properly described as social services. I omit items 10, 11 and 12. I make a comparable figure with last year and I deduct the Minister's proportion of £1,000,000 out of the £35,000,000. He did the same thing last year. In order to get the Estimate more in keeping with the comparable figure of audited expenditure, £220,000 should come off for over-estimation, and then there is a sum of £450,000 not provided for in taxation. The Minister is not going to provide it out of taxation and, therefore, it is not a cost to taxation. We get a net figure of £7,240,992, and the corresponding figure for 1931-32 was £3,640,983, leaving the actual net cost of social services at £3,600,000. We are saving and collecting £9,000,000 to discharge that, and if there are economies to be made, they fall to be made out of the larger sum, and they fall to be made out of the sum which will affect least those who are unable to bear the burden. That is the situation with regard to the general question of the Budget.

The Minister wants to know what can be done. If this amount of money had not been squandered, if every precaution had been taken to ensure that value for the money would have been got for the people, it would have been possible to have derated agricultural land on this balance of £5,500,000. It would have been possible to wipe out this £1,169,000 that we are now adding to the taxation already imposed. It would have been possible not to have recourse to borrowing in respect of the £350,000 connected with unemployment and relief schemes. It would have been possible to have provided £350,000 more for the Army, but the Army Estimate should be reduced by £1,000,000, and you would have a better balanced Budget and better results for the people than we have by reason of this policy of squandermania.

We are told the industrial policy that has been pursued is equivalent to a fairy tale. I never heard a policy better described. Looking over the returns in connection with National Health Insurance, I find that the Minister and his Government did not keep pace with the expanding employment that was in operation in this country from 1926 to 1931. Notwithstanding this enormous expenditure of money, and going further on with this table, and looking at the last page, in which the Minister says that farming has been benefited to the extent of £4,167,000, I add that to the £9,000,000, and get over £13,000,000, and I then take out the figure of the additions to unemployment insurance, £250,000—also arising out of the policy pursued by the. Ministry—and take out the cost to local authorities also, £229,000, and with £150,000 Road Fund get a figure of approximately £13,800,000. It would be possible, reckoning it at £100 a year to give employment to 138,000 persons. Has that been done? No, nor anything approaching it. What has been the principal reason? The principal reason has been what has already been referred to this evening by two other speakers and that is that the agricultural industry in this country has undergone a greater onslaught than it has ever experienced in its entire history. The year 1931 was by no means a prosperous year, having regard to the people's standards of living by comparison from 1914 to 1931, or, if one wishes, from 1922 to 1931: and that was one of the principal reasons that was adduced for effecting a change of Government. Looking back now, it seems very much like a fairy tale that year 1931 as compared with what we were told about the industrial expansion that was to take place in this country. Those were very prosperous times, notwithstanding the fact that we thought they were not prosperous times, and a change in Government was effected because it was thought that they were not prosperous times. We were told that, as a result of electing a new Government, and putting into effect this change of policy, we would have prosperity. There was to be much more tillage and, even if the cattle trade suffered to a large extent, we were told that that loss would be compensated for by an immense increase in tillage and also by limiting imports of agricultural produce into this country. What has been the result? The net exports of produce of agricultural origin in this country, in the year 1931, amounted to £23,348,670, and the net imports of goods of agricultural origin amounted to £9,923,413—a balance of exports over imports of £13,425,257. In 1932 the net exports were £15,963,483 as against net imports, of £9,900,667—a balance of exports over imports of £6,062,816. In 1933 the net exports amounted to £11,522,106 and the net imports amounted to £6,936,795—a balance of £4,585,311. And so on. I shall give the net figures later on. Now, it so happens that there is a relatively stable consumption sale of agricultural produce in the home market. Of course, it would be of advantage to me to go through all those figures, but I have not bothered about them. I prefer to go to the end of the figures with regard to exports and imports for 1932, 1933 and the succeeding years. In the year 1932, the net exports of agricultural origin from this country amounted to £15,963,483, as I have said before, and the net imports amounted to £9,900,667, representing a balance of exports over imports of £6,062,816. Perhaps it would save the Minister's time if I were to adopt the Ministerial practice of just handing in the tables, or should I give the actual figures?

Mr. MacEntee

Has the Deputy got the figures?

Mr. Cosgrave

Yes. I do not want to weary the House by reading out all the figures with regard to the net exports and imports for each year; so perhaps it would be better if I gave the net balances. I have already read out the figures with regard to exports and imports for some of the years, and now I propose to read out the balances of exports over imports from 1931 to 1938. They are as follows: In 1931, £13,425,257; in 1932, £6,062,816; in 1933, £4,585,311; in 1934, £3,417,444; in 1935, £6,401,463; in 1936, £8,079,290; in 1937, £6,454,513; in 1938, £9,986,915. The average sum received for our exports for those seven years was £6,426,822, as against the last year of our administration, which amounted to £13,425,257; and, mind, the economic war cost a lot of money. If there are difficulties in this country at the present moment, I hold that they are largely traceable to the policy that presented that unfortunate experience to the farmers of this country. I say that it is significant that, although we were told that our policy here was to be self-supporting, self-sufficing and self-sufficient, the result of all this policy has been that the lowest sum to which we could reduce our net imports was, in 1935, to £5,846,951, increased in 1936 to £6,072,507, in 1937, to £7,638,464 and, in 1938, to £7,618,958. According to that, it would appear that the more we export, apparently, the more we must import, and yet that is the kind of policy that we were told was going to make this country more self-sufficient—that policy that is costing the country so much, and that has been so dearly bought. While that policy has been in operation, it must also be remembered that the number of persons employed in agriculture has been reduced. It has been reduced at a figure favourable to the Minister. The figure is something like 25,000 persons. This relates to persons employed in agriculture in this country. That figure is favourable to the Minister because a difference was introduced in 1934-35 which sent up the numbers, and, had the same scheme been in operation in 1931-32, it might be more likely that the figure would be 40,000 rather than 25,000. While that is the case here, we read in the papers of 27th May, 1939, that the value of the gross output of agricultural produce in Northern Ireland, in the year 1937-38, reached a record figure of £16,413,000 and that it exceeded the sum for the year 1932-33 by more than £5,000,000. If State subsidies are taken into account the gross value in 1937-38 is £16,700,000. The total amount of subsidies paid to the farmers between 1932-33 and 1937-38 was £1,551,791. The income from live stock products in 1937-38 increased by approximately £5,000,000— from £9,157,000 to £14,288,000. Since 1932-33 there has been an increase attributed principally to a rise in the value of pig's output. The increase is put at £3,000,000—from £1,236,000 to £4,405,000. This certainly is an amusing country. The Northern Pigs Board has been fired. It was successful, apparently, according to that. Ours has not been a marked success. If we had a Peerage, I suppose the members of it would be raised to it.

General Mulcahy

And they would be well able to pay for the Peerage.

Mr. Cosgrave

I think that is probably enough to say on this Budget and on the policy of the Ministry. As I said before, having gone through that case and seen those figures, I have to express regret that I am a member of this House.

Mr. D. Morrissey

The Minister and his colleagues have met every argument from this side of the House on this Budget by the old cry: "Are we to reduce the social services; if we do not increase the income-tax and the petrol tax and if we do not put a tax on tobacco and so on, then we shall have to tax tea and sugar and other things that are required by the very poor." I want to ask the Minister one question regarding the cost of the social services. The biggest single item in the increase which the Minister tries to justify is in respect of unemployment. When the Minister and his colleagues boast of the amount of money they are providing in this Budget either for the relief of unemployment by way of relief works, or by unemployment assistance, they are merely saying: "We have fallen down on the job because we have failed to do what we promised to do; we deluded and fooled the people when we told them that we had a solution for unemployment. We now have to call upon the people for approximately £3,000,000." Yet, the Minister for Finance and his colleagues have the audacity to seek for praise and for commendation from the people for what they call the social services they are providing. They do that in this House and on public platforms outside. Instead, the Minister and his colleagues should be asking pardon from the electorate as a whole, and in particular from the 100,000 people who are still signing the register, and from the other 100,000 people who have been forced to cross to the other side and seek for the work that they could not get at home.

The Minister could save this £3,000,000 in this Budget by carrying out the promises that his colleagues and himself made publicly to the people. When they were seeking office they told the people that they had a carefully thought-out plan; that they had a solution for the unemployment problem in this country such as no other country in the world had, a solution that was going to put into employment every unemployed man. They said they were going to provide so much money and jobs that we would have to send for and bring home the exiles. These are the sort of promises that deserve to be described as a fairy tale. Certainly, they are more deserving of that description than the one the Taoiseach is so fond of talking about. The Fianna Fáil Party told many fairy tales to the people in 1932 and 1933. The answer to all this talk about the social services that the Government is forced to provide is this: that they are forced to keep the people of the country in existence because of the rotten policy they have pursued over the last seven years, and because of the effects of that policy. That, I submit, is the real answer to all the clap-trap we hear from the other side of the House when they taunt us with the question: "Do we stand for a reduction in the social services."

Mr. T. Crowley

Will the Deputy tell us what the policy of his Party is?

Mr. Morrissey

I am perfectly certain the Deputy knows nothing about it.

Mr. Crowley

I know all about it.

Mr. Morrissey

What did the Deputy tell the people in the Country Limerick in 1932. Did the Deputy not tell them: "If you vote No. 1 for me and send me back I will provide a job not only for every idle man in the Country Limerick and in the City of Limerick but in the whole country"?

Mr. Crowley

I never said it.

Mr. Morrissey

Am I to take it that the Deputy is now repudiating the policy put forward by Mr. de Valera in 1932?

Mr. Crowley

Not at all. Will the Deputy tell us how he and his Party are going to cure unemployment.

Mr. Morrissey

Is the Deputy now denying that he ever said he was going to provide jobs for all the idle people in the country, or is he admitting that he secured election to this House under false promises?

Mr. Crowley

I never said it.

Mr. Morrissey

Does the Deputy believe that Fianna Fáil ever had a plan to provide work for all the unemployed in the country?

Mr. Crowley

We had an idea.

Mr. Morrissey

In other words, it was a fairy tale, but it was good enough to put across the people of this country in 1932 and 1933?

Mr. Crowley

What was the Deputy's solution?

An Ceann Comhairle

Order!

Mr. Morrissey

At the moment I am dealing with the solution that the people on the opposite benches offered the people when they were asking the people to give them responsibility.

Mr. Crowley

It is the obligation of the Deputy's Party just as much as ours.

Mr. Morrissey

The Deputy must be forgetting all the promises made by his Party.

Mr. Crowley

I am not forgetting anything.

Mr. Morrissey

The Deputy must be forgetting that Fianna Fáil begged, prayed, promised and cajoled the people of the country into putting responsibility on their shoulders on the promise that "We have a solution for unemployment; we have a solution such as no other country in the world has."

Mr. Crowley

I never said it.

Mr. Morrissey

The Deputy may not have said it, but I am sure he will agree that a much more important man than he said it. The Taoiseach said it.

Mr. Crowley

Will the Deputy give the quotation?

Mr. Morrissey

That promise must have cost the Fianna Fáil Party tens of thousands of pounds. They had it printed in every newspaper in the country and posted up on every blank wall.

Mr. Crowley

Will the Deputy give the quotation?

An Ceann Comhairle

Order!

Mr. Morrissey

The Deputy will get the quotation from the 100,000 unemployed.

Mr. Crowley

On a point of order. When the Deputy states that the Taoiseach made a statement to the effect that we had a cure for unemployment am I not entitled to ask him to give the quotation?

An Ceann Comhairle

That is not a point of order.

Mr. Morrissey

It only shows, Sir, the straits to which the Deputy is reduced in trying to get away from those very awkward promises.

Mr. Crowley

The Deputy is not a bit worried about it.

Mr. Morrissey

I have not a shadow of doubt that that very promise, apart from all the others that were made, contributed very largely to securing the Deputy his seat in this House.

Mr. Crowley

Quote the promise.

Mr. Morrissey

Mind you, it worked for a time. I am now pointing out that after all their years here in this House as the Government, with all the opportunities they have had, far from providing jobs even for those who were idle in this country there are to-day 100,000 signing the register. Far from bringing back the unfortunate exiles, in the last seven years we have sent another 120,000 to Great Britain. Would the Deputy tell us why that 120,000 went across to the enemy?

Mr. Crowley

I do not know.

Mr. Morrissey

The Deputy does not know. Let me tell the Deputy something which perhaps he does know— that the reason the figure is not greater than 120,000 is that a considerable number of the 100,000 who are still unemployed in this country have not even enough to pay their fare across to the other side. The Deputy ought to go down to his constituency and talk to some of the married men with five, six or seven children, who are trying to exist and rear that family on 14/- a week unemployment assistance. The Deputy might concern himself, and so might other members of his Party, with this problem, that, as a result of the policy of the last seven years, we have youths in this country of 17, 18, 19, 20 and up to 22 years of age who have not get an opportunity of doing one day's work.

Mr. Crowley

They would not have it.

Mr. Morrissey

They would not work? Is that the Deputy's allegation?

Mr. Crowley

That is my allegation.

Mr. Hurley

It is most unfair to say that.

Mr. Morrissey

The Deputy has made a statement at which I am very much surprised. Unfortunately, there is a very big number of unemployed in the Deputy's constituency, both in the city and the county, and I am sure they will be enlightened, to say the least of it, when they find that at the end of seven years the result of all the promises is to tell them they do not want to work. If the Deputy will show me the jobs, I will guarantee to give him 100 men for every job he can offer. Coming back, Sir, to the point about the social services, the Minister asked Deputy Cosgrave during the course of his statement if Deputy Cosgrave was suggesting that any economies should be made in the Gárda Vote. Deputy Cosgrave pointed out that the Gárda Vote is somewhere between £200,000 and £250,000 over and above what it was in 1931. The Minister and his colleague sitting immediately behind him had something to say in 1931 about the cost of the Guards and the cost of the Army.

Mr. MacEntee

And in 1932?

Mr. Morrissey

And in 1932. The Minister was satisfied at that time that on those two services alone he could save most of his famous £2,000,000.

Mr. MacEntee

In 1932 and 1933, I had a great deal to say about the Gárda, and the Deputy had something to say on the opposite side.

Mr. Morrissey

The Minister had a great deal to say about the Gárda. In 1931 and 1932 the Minister said many things about the Gárda, and the duties they had to perform, which I am sure he would like to forget to-day. The Minister on many occasions said things about the forces in this country and the State Departments in this country that I am sure he would like to forget to-day. I am not going to remind the Minister of them, beyond saying that on those two Votes alone he told this country that after careful and minute examination he was satisfied he could save a very big portion of his £2,000,000.

Mr. MacEntee

The Deputy is quite wrong about that. If the Deputy has a speech of mine he can quote it. I would remind the Deputy that, in the debate on the general resolution, a speech of mine was quoted by his colleague, Deputy Brennan, and I dealt with that speech.

Mr. Morrissey

That was no trouble to the Minister.

Mr. MacEntee

None whatever.

Mr. Morrissey

And it will make no difference whatever to the answer the Minister is going to make—if he does bother at all to reply to what I am saying—whether I quote him verbatim or not. The Minister is now attempting to take shelter in the same way as his colleague from County Limerick attempted it a few minutes ago. I know, of course, that the Minister and the Deputy sitting behind him do not like to be reminded of, to use the Taoiseach's phrase, the fairy tales which they pitched to this country during three or four general elections. They do not like to have the contrast between promise and performance held up to-day. I am not going to encroach on Deputy Davin's preserves in regard to Deputy Cooney and Grangegorman——

Mr. MacEntee

It is a shame to explode that before he has time to use it.

Mr. Morrissey

Mind you, if I were to make any comment at all, and if my mind were to run on that establishment on which Deputy Davin's mind occasionally runs when he sees Deputy Cooney, I would say now, looking back on the last seven years, that it is a great pity those statements and the promises made by Fianna Fáil were not made from the most fitting place in this country, and that would not be outside the walls but inside them. I do not want to go over in detail the ground that was gone over in the debate on the general resolution. If I might put it that way, I do not want to stand between the House and the pleasure of listening to the Minister, but, in so far as I can, I do want to expose this humbug and nonsense about the social services. I want to show that, so far as at least £3,000,000 of that money is concerned, the people of this country are being taxed to provide it because the Government have not only failed to cure the evil of unemployment which they told us in 1932 they could cure, but have aggravated it to a very large extent. Further, I would say in conclusion that this Budget, far from helping in any way to reduce unemployment in this country, is going still further to increase it. It is going to bring a number of other people, who are to-day not in well-paid jobs but at least in permanent jobs, out of those permanent jobs and for the first time on to the starvation line represented by unemployment assistance in this country. That is the social service the Minister talks about. There is one way to reduce it, and that is to carry out the promises that were made. We are not asking them to do anything which we said they ought to do. We are asking them to do what they said they could and would do. When they were told they were not possible to do, when they were told it was at least almost impossible to provide full-time employment for every unemployed man in this country, they insisted—at the expense of a full-page advertisement in the daily papers—on saying that, although every other country in the world failed, Fianna Fáil had a plan which would succeed. The Taoiseach told us that there was no reason why any man who wanted to work in this country should be denied the right to work, and that, so far as he and his Party were concerned, if returned to power, they would not be denied that right.

Mr. Cooney

We are still waiting to hear the Fine Gael plan.

Mr. Morrissey

As soon as you get out of that we will give it to you very quickly.

Mr. Hughes

The Government and the Fianna Fáil Party, contrary to the promise made before coming into power that they would reduce taxation by at least £2,000,000, have year after year increased taxation to such an extent in this small and relatively poor country that it has now reached the unprecedented level of over £35,000,000, an increase of over £6,000,000 during their period of office. To my mind this crushing burden is one of the main causes of the present state of our primary industry, agriculture. Its depressed condition and its reduced output, I suppose, were mainly caused by the economic war, but the failure of the industry to recover since the settlement of the economic war is undoubtedly due to the crushing overhead charges caused by general and local taxation. The Banking Commission, having examined the financial position of the country, reported that there was a marked deterioration in recent years in the state of the public finances, and then they issued this warning: "That this deterioration should be checked is, in our view, a matter of urgent necessity." One would expect that the Government, having set up a commission to examine into the financial position of the country, would make some effort at all events to carry into effect the recommendations of that commission.

Mr. Hickey

Which of the recommendations?

Mr. Hughes

The Deputy knows very well the recommendations to which I refer. No attempt has been made to carry out any of the recommendations —I think the Deputy will agree with that at all events—either the majority recommendations or the minority recommendations. The Banking Commission has simply been waste of so much public money. The report has been pigeon-holed in some Government office and, so far as the Government are concerned, it is completely forgotten. The Minister has asked how can taxation be reduced or where can economies be effected. Wherever economies can be effected, we must realise that the country cannot stand the present burden of taxation. It is beyond the capacity of the country to bear that burden of taxation and it has to be reduced by some means or other. The private individual, in running his own household, if he is a wise man, is going to live within his means. Many of us, if we were rash enough, could take many services into our household that we cannot afford, but how long would we last if we did? The State is in the very same position. There is no getting away from the fact that at the present time this State is living far beyond its means and it is throwing on the people, particularly on our main industry, a burden that they cannot bear. It has the effect of reducing our output and reducing our productivity. This year I believe that the effect of the high taxation will be shown in a diminishing return from taxation and in a further reduction in output.

Deputy Childers had the temerity to warn the Government of the present dangerous financial situation. I admire him for his courage, but he made the excuse that this was an abnormal year. I pointed out here before that it was an abnormal year in one respect—that it should be a prosperous year for agriculture, taking general world conditions into account, and especially taking into account the conditions of the market in which we sell our produce. Since I made that comment on Deputy Childers' speech figures have been published in the daily papers showing the position of agriculture in Northern Ireland. Deputy Cosgrave has referred to these figures and I do not think they can be over-emphasised. They bear an extraordinary comparison to the position of agriculture in this part of the country. Since 1932 the agricultural output in Northern Ireland has been increased by £6,000,000. On a total output of £16,500,000, there has been an increase of £6,000,000 since 1932. Pig production has increased from £1,250,000 practically to £4,500,000, an increase of over £3,000,000. The excuse has been put forward by Ministers in this House that world conditions are responsible for the present depressed conditions and that what is happening here is similar to what is happening all over the world. How is it that there has not been that effect in Northern Ireland? How has Northern Ireland increased its agricultural output by that extraordinary figure since 1932? Side by side with that, in this part of the country we have had a reduction in gross agricultural output from £62,000,000 to £47,000,000, which is the latest available figure.

Then compare the pig industry here with that in Northern Ireland, where the output has increased by over £3,000,000. There has been a serious falling off here in the same period. In that year we exported slightly over 500,000 cwts. of bacon and nearly 500,000 live pigs, as well as the pork trade we have into Northern Ireland. What is the position to-day? Our exports of bacon have been maintained, but the export of pork and live pigs has practically disappeared. The pork trade has gone. Exports of live pigs last year numbered only 66,000 instead of 500,000, while side by side with that in Northern Ireland the industry has increased its output by £3,000,000. We were told that world conditions had affected agriculture. It is obvious to any experienced farmer that it has been Government policy— taxation and overhead charges—that has destroyed the prosperity of agriculture and retarded its progress. There is no use in setting up a commission to find out how to improve or to increase agricultural production. The best and the only way to do that is to take the load off the farmer's back. That is all he asks.

The Minister for Industry and Commerce addressed the Dublin electors last week and stated that the Government had been asked to help agriculture. Agriculture, the Minister said, should be improved. He meant that the price of agricultural produce would have to be increased, and the natural corollary, of course, was that the foodstuffs the citizens had to buy would cost more. I suppose the speech was a grand one for some of the unfortunate people in the back streets who, with their mouths open, listen to that sort of stuff. I take it that some of them were incapable of analysing what was really meant. That is not what we suggest. We have pointed out, time and time again, that we have no control over the prices we receive for our agricultural produce, because we have to sell in an export market. I pointed out, in this House, also that the prices we received at present were relatively good, but that the cost of production was the problem. That is the burden that is affecting agriculture. It must be removed if there is to be prosperity in agriculture, or amongst any section of our people. The great source of wealth from which our people derive their purchasing power comes from agriculture. What is happening in Northern Ireland. We talk about bringing the people there into Éire, but there is, at present, no attraction for farmers to come in. The only way to bring them in is to make this country attractive for them. We are all anxious to do that. It is the duty of the Government to face up to this serious situation, and the way to do it is to cut down expenditure. A private individual, if he is wise, will live within his income. We have not been living within our means in this State for the past few years. The sooner we set down to tackle that problem the better. In his Budget statement the Minister said:

"The Parliamentary Secretary to the Minister for Finance has already told the Dáil of the great difficulty which he is experiencing in securing work which, in respect of the requisite labour-content, justify themselves as proper charges on the Employment Schemes Vote."

I want to say something about relief schemes and the dole. Relief schemes administered by the Department of Public Works are costing approximately £1,500,000, and to that can be added another £500,000 contributed from local authorities, and then, as a direct dole to the Department of Industry and Commerce, another £500,000, or, in the aggregate, £3,500,000 spent on work of an unproductive nature. There is no return to the State from that money. For the last seven or eight years this country has been living on a form of artificial prosperity. Some £3,500,000 was spent on these schemes, and on water sewerage and housing schemes under the Department of Local Government. If the expenditure of that money was stopped what would be the position? In spite of that fact we have over 100,000 unemployed.

Mr. Hickey

Because you cannot get money to give employment.

Mr. Hughes

Some 80,000 people have gone to Great Britain, and compared with 1934 there are 43,000 less engaged on the land.

Mr. Hickey

Why is that?

Mr. Hughes

How is it the position is all right in Northern Ireland? Production in Northern Ireland increased by £6,000,000 while our output has decreased from £62,000,000 to £47,000,000 during that period. A crushing burden of taxation has been imposed on people who are living on the land, on people who are really carrying this country on their backs. When is the Government going to face the responsibilities of remedying that situation? I say that the £3,500,000 spent in that way is a scourge as the money is being wastefully spent.

Mr. Davin

All of it?

Mr. Hughes

It has been wastefully spent. Where is the return? I would prefer to see the amount doubled if it was spent on productive work. There would be some return then. There is nothing coming back now.

Mr. Davin

Nothing?

Mr. Hughes

Nothing.

Mr. Davin

Take the bog roads.

Mr. Hughes

What return is the State getting from bog roads.

Mr. Davin

Is not the State the individual?

Mr. Hughes

Where is the financial return? If an individual is running a company, a factory, or a farm and if there is no financial return from the money he invests, how long can he keep going? Is not the position of the State identical? We cannot keep on spending money on non-productive work. Notwithstanding what Deputy Davin thinks, that kind of work is not productive and is a drain on our financial resources.

Mr. Davin

What is productive work?

Mr. Hughes

I am engaged in productive work. I do not know if Deputy Davin is. Any man who works a farm or who produces food that can be sold and exported is engaged on productive work and is an asset to the State. Put more people on the land to engage in productive work.

Mr. Cooney

Is it to let them die of starvation?

Mr. Hughes

No. I employ labour, and if the Deputy farms on the same basis as I do, he will be making a move towards a solution of our problems. Does the Deputy approve of the £3,500,000 that is being spent on Defence?

Mr. Cooney

Yes.

Mr. Hughes

The Deputy thinks that it is wisely and judiciously spent in the interests of the community. I can tell the Deputy this, that the general public believe that it is being foolishly squandered, that it is being wasted, and that it serves no purpose whatever.

Mr. Traynor

Is it by the recipients that it is being squandered?

Mr. Hughes

It is being squandered by the Government, who are spending over £3,000,000 in a stupid, silly way.

Mr. Traynor

But surely that money is circulating in the country?

Mr. Hughes

If the Government want to prepare for war, the best way they could prepare for any conflagration in Europe would be to spend the £3,000,000 on agriculture, equip agriculture so that it will be able to go into production and supply food when more food becomes essential. That would be the best way to spend it, not to be spending it stupidly on obsolete forts. We know very well that our ports will be used for sheltering the British Navy and British submarines. Deputy Corry knows Spike Island, and he knows the use it was made of during the war. It was one of the most important bases the British Government had, because it covered the principal food lines extending all over the world.

Mr. Corry

It will not be their base the next time.

Mr. Hughes

It will be their base, the point from which they will be able to guard their food routes.

An Ceann Comhairle

The Finance Bill does not afford an opportunity for re-opening the debate on different Estimates.

Mr. Hughes

I am merely pointing out that this money is being wastefully expended on these forts and, in criticising the Finance Bill, I am suggesting that the money should not be spent in that fashion but could better be devoted to the improvement of agriculture. I do not know what navy we possess——

An Ceann Comhairle

These were matters which were definitely raised on the Estimate for the Department for Defence and they may not be reopened now.

Mr. Hughes

Speaking generally, I am suggesting that the money that is being uselessly spent in this connection could be more effectively spent on agriculture, in preparation for war.

Mr. Davin

Who is going to fight?

Mr. Hughes

It does not matter; we do not worry about the people who are going to fight, because we will not be able to stop them from fighting if there is a row on, no matter what money we spend. Then, again, you have the Road Fund being raided to the extent of £150,000 and the unfortunate country people will have to make good that amount. Motor users, people who pay road taxes, contribute to that fund and one would naturally expect it would be spent on the roads. Out of over £1,000,000 contributed to the Road Fund only £600,000 is spent on the roads. The ratepayers have to make five out of every six miles of road and even the one mile in every six is only partly met out of this fund. The agricultural people pay over 80 per cent. of local taxation and no attempt is being made to reduce that burden. Those people are completely ignored under the policy of the Government.

As regards customs duties, the Minister said that last year 38.8 per cent. of our revenue came from customs duties. Is that not an extraordinary tax on the essential commodities that are purchased by our people? Notwithstanding all the new industries that have been started in the country, that figure gives you an indication of what is being done to reduce imports. It is remarkable that the import duties are still yielding 38.8 per cent. of the total revenue. The sugar beet industry has been mentioned, and I was glad to see that Deputy Corry, in a letter that he wrote to the Press last week, put the Minister wise on certain points.

Mr. Davin

He will be expelled.

Mr. Hughes

Evidently the Minister did not go to the trouble of finding out certain things. I referred to the sugar beet industry and apparently he took it for granted that I was a member of the executive of the Beet Growers' Association. As a matter of fact, the position is that Deputy Corry and two colleagues, including Senator O'Callaghan, who is the chairman of the Beet Growers' Association, are the people who are running the beet growers and not Deputy Hughes. I am glad that Deputy Corry put the Minister wise, and in another sense I am sorry that he has made him wise to the situation. He was letting the cat out of the bag.

I asked a question of the Minister and he did not go to the trouble of replying. I will repeat it. Is he satisfied, in an industry like the sugar beet industry, which is indirectly subsidised, the consumers having to pay for it, with the financial policy of the company and the actual working of the company? Is he satisfied to allow that company to depreciate its capital in a period of ten years, because its predecessor, Messrs. Lippens, had to do it under their contract here? They had a contract to manufacture sugar in the ten years' period and they had to depreciate their capital. This company is doing the same and they have depreciated their capital by £150,000. If the Government and the company believe there is a future for the industry, I think there is no necessity to depreciate the capital in a period of ten years. It might be done in a period of 20 years and that would make available £75,000 for the growers. I cannot understand why it costs 50 per cent. more to manufacture sugar in this country than in England.

An Ceann Comhairle

Sugar beet was dealt with on the Agricultural or the Industry Estimate.

Mr. Hughes

I was told before when I raised it on the Agricultural Estimate that it concerned the Minister for Finance and, if I am not permitted to raise it on this Bill, then I will not be permitted to raise it at all. I am anxious to raise this matter.

Mr. MacEntee

There is a Vote for the Department of Finance coming on.

Mr. Hughes

The taxpayer has to contribute over a million of money towards the production of sugar. It is shown in that famous table where the Minister tells us that agriculture is benefiting by the Government's policy to the extent of £10,000,000.

Mr. MacEntee

There is nothing about sugar in the Bill.

Mr. Belton

You would want something to sweeten the £10,000,000.

Mr. MacEntee

The Deputy had an opportunity of dealing with this matter on the General Resolution.

Mr. Davin

Does the Minister still think it is a white elephant?

Mr. Hughes

The Minister has been informed with regard to that since, and I am sure he read Deputy Corry's letter putting him wise as to who were the members of the executive of the Beet Growers' Association. For instance, take into consideration Table VIII, (a) (5)—beet sugar industry—and compare that with the voted subsidy in 1931-32 with the year 1939-40. According to this table, agriculture benefits to the extent of £1,050,000.

Mr. MacEntee

I submit, Sir, that this has nothing to do with the Bill we are discussing.

Mr. Hughes

All I am asking for is some accounting for this amount that appears here. Somebody should be responsible for this money.

An Ceann Comhairle

Is it in the Budget?

Mr. Hughes

Well, Sir, it appears here in this table.

An Ceann Comhairle

Is it in the Finance Bill?

Mr. Hughes

It is there before us now.

An Ceann Comhairle

Is it in the Finance Bill which is now before us, or is there any provision in the Finance Bill for the beet sugar industry?

Mr. Hughes

I am only looking at this table, Sir.

Mr. Brennan

There is certainly some return for sugar in the Vote.

Mr. MacEntee

I suggest, Sir, that the only way to raise this matter would be in connection with the Resolution concerned.

An Ceann Comhairle

I think Deputy Hughes has already discussed the matter on the Resolution.

Mr. Hughes

Yes, Sir, but I was anxious to inform the Minister that he was labouring under a misapprehension in saying that I was a member of the executive of the Beet Growers' Association, and I was also pointing out that, I think, Deputy Corry has put him wise in that regard. Let us hope that that is the last we will hear of that with regard to politicians down the country, so far as that is concerned. At any rate, it is time that taxation should be reduced if there is to be any prosperity in this country, and the sooner that things are done in a business-like way here the better. As I have already stated, the Minister has asked: Where can we effect a reduction? I suggest that the whole bulk of the Vote should be reduced— each and every one of them. I admit that there ought to be a reasonable amount spent on the Government of this country, but it must be remembered that the people who have got to find the money are not able to find it and that they are being put out of production. That is the real problem in this country.

Mr. Keating

To my mind, Sir, this Budget is very disappointing. I think it may have been a mistake that, now that there is a question of electing a new Leas-Cheann Comhairle, the Minister for Finance himself was not elected to that office. The Minister has asked us what plan we have to reduce taxation, or what we have to put forward with regard to the social services. Well, what plan had Fianna Fáil before the election of 1932? They told us at that time that they would reduce taxation by at least £2,000,000 a year, and they also told us that, as a result of their industrial policy, we would have to send to England and America to bring people back to work in our industries here. They also told us that the farmer here would have a sure home market. Now, I admit that I am not growing wheat, but I would tell the Minister that the reason I am not growing wheat, and the reason that the great majority of people here are not growing wheat is that they are not getting a fair price, and also because their land is being worn out for the want of proper manuring. Then, take the hundreds of thousands of calves that were slaughtered during the régime of the Minister for Agriculture. It is a very strange thing, notwithstanding that, that the Minister for Agriculture can still get people to back him up here in this House.

An Ceann Comhairle

The Minister for Agriculture is not responsible for this Bill.

Mr. Keating

Well, the Minister for Agriculture is not here, but I will say this: That, down in his own parish, last Sunday night, a lion or a lioness got loose and slaughtered one calf, and about 15 bullets were needed to kill that animal. Now, think of the Minister's policy for the last few years. That is one item. Now, the Minister must know, in his heart and soul, that we were told that this was going to be one of the greatest and most prosperous countries in the world. As a matter of fact, standing on a Fine Gael platform down in that part of the country and listening to the statements of the Fianna Fáil members, I sometimes began to wonder whether I was right or I was wrong, and I often asked myself whether, in view of what was being said, we would ruin the country or make it prosperous. What has happened to-day, however? We can all see what has happened. The Minister for Industry and Commerce and the Minister for Finance ask us to tell them what solution we have for the problem. I ask them what has become of the solution they had in 1932 when they promised to reduce taxation by at least £2,000,000 a year.

There was another thing that I forgot to mention. In 1932 British tariffs were flung at the Irish farmers overnight, and I remember well being at the fair of New Ross and, when the people went to have their breakfasts there, the price had already gone up. Apart from that, at that particular time, prices were very bad for lambs and other agricultural produce. Those lambs were shipped to Britain, and you had the charge of 10/- a lamb and the overhead charges of 6/2, amounting to 16/2. It is no wonder that the young boys and girls are leaving the land, and it looks to me as if a lot of the "ould ones" are going also. I know, as a matter of fact, that along the Comeragh Mountains, when people were wanting to send their lambs to England——

An Ceann Comhairle

I presume that the Deputy does not desire to go over the whole history of the economic war?

Mr. Keating

Yes, Sir, with your permission.

An Ceann Comhairle

Oh, no!

Mr. Keating

Well, perhaps I might be in order in talking about the subsidies on cattle?

An Ceann Comhairle

That was discussed on the Estimate.

Mr. Keating

Well, the Minister for Agriculture talked about the bounty on stall-fed cattle, and I think it is nearly time for the people of this country to wake up to the facts of the case. I am sure that Deputy Corry is an intelligent man, but a gentleman on the other side wants to know whether or not we want to starve the people. We do not. As a matter of fact, we here in this House are getting more than we are earning, but the unfortunate people down through the country are starving. That goes for every Deputy in this House, and I say that it is nearly time to shake hands and try to save the unfortunate people of this country. To use the words of another Deputy, we have been "codding" the people of this country long enough, and the people know that we are "codding" them. I think that Deputy Davin knows that.

Mr. Davin

It is the people over there who are "codding" them.

Mr. Keating

Yes, and every time they "cod" the people they succeed in getting more votes. However, Sir, I shall sit down now since I cannot speak on agriculture, and I thank you very much for allowing me to speak as long as I have.

An Ceann Comhairle

The Minister to conclude.

Minister for Finance (Mr. MacEntee)

It seems to me that the only speech which was really germane to the Bill was the very practical speech of Deputy Benson. He raised a number of points in relation to the Road Fund, the question of the free importation of films for educational purposes, and the duty-free re-importation of certain films used by amateur cinematographers. I do not propose to deal with all those points at the moment, but I shall communicate with the Deputy as soon as I have looked into the two questions in relation to films which he raised.

With regard to the Road Fund, Deputy Benson was apparently under a misapprehension. I think it was in the year 1935 that the Dáil approved of a proposal which I submitted in the Budget of that year, to the effect that £100,000, collected by way of motor vehicle duties and appropriated to the purposes of the Road Fund, should be transferred to the General Exchequer Account, and used for the general purposes of the Budget. It was found at the end of that year that the out-turn was much better than our anticipations of it had been, so that a large part of the normal expenditure, in fact, all of the normal expenditure, was defrayed out of normal revenue; but, at the same time, there were also considerable commitments in respect of that portion of the export bounties and subsidies for which we had proposed to borrow, and to reduce the borrowings for that account, and, therefore, to reduce the subsequent charges upon the Exchequer, the original decision of the Dáil was given effect to, and £100,000 was transferred from the Road Fund to, as I have said, the general account of the Exchequer. But that only happened in one year. There was another year in which we had the same authority from the Dáil to transfer money from the Road Fund, and that was acted upon, but it was acted upon in the normal course of the year. In the case to which I am referring, the case which is before the Public Accounts Committee, the transfer, I think, was made at the close of, or immediately after the close of, the financial year. The Deputy, apparently because of that, is under the impression that £100,000 is being transferred from the Road Fund every year for the general purposes of the Exchequer. I should like to disabuse him of that impression, because that in fact, is not the case. We have only taken money for the Road Fund whenever such a course has been sanctioned by legislation: sanctioned by such a proposal as is set out in Section 19 of the Bill.

Mr. Brennan

When in dire distress.

Mr. MacEntee

When it is necessary in order to avoid imposing additional taxation, for then I think there is every justification for taking money from the Road Fund. People are under complete misapprehension as to the justification for this fund. When the proposal was first made to tax motor vehicles, in order to make that proposal acceptable to that very small class in the community, the wealthy and the leisured class who were then in a position to own and to run motor cars, the suggestion was thrown out: we are going to tax those vehicles, but the money which we get in taxation is going to be used to improve the roads for your vehicles. Well, now there is no more justification, in my mind, for appropriating the proceeds of motor vehicular taxation to that special category than there is, say, for appropriating the proceeds of the Excise duty on beer for the purpose of improving public houses.

Mr. Brennan

Does the Minister know anything about the cost of the roads at the present time?

Mr. MacEntee

Of course, I know a good deal about the cost of the roads, but I am just saying that, to my mind, there is no basic fundamental reason for earmarking one particular tax for a specific purpose than there is for earmarking any other tax for a specific purpose. In fact, there is the objection to that procedure which experience has shown to be well founded in the case of the whole range of all other imposts which are put on in order to raise the revenue necessary to maintain the public services. The proof of that is this: that in the country where this particular system originated, it has been abandoned for some years, and there the proceeds of the tax on motor vehicles are appropriated for the general purposes of the Exchequer.

Mr. Brennan

Where is that?

Mr. MacEntee

In Great Britain.

Mr. Brennan

Of course they have derating there, and that makes all the difference in the world.

Mr. MacEntee

They have a number of taxes there which we have not here. But in any event, the system which I am dealing with now originated there, and for sound, practical reasons they have abandoned it.

Mr. Brennan

Immediately the Minister gives us derating he can abandon it here.

Mr. MacEntee

I am not proposing that it should be totally abandoned here now, but what I do say is this: that in order to avoid the imposition of taxation upon other commodities perhaps more essential to life than petrol is, or motor transport is, then so far as I am concerned I think that the case for appropriating for general expenditure the proceeds of this tax, which were reserved for a specific purpose, has everything to commend it.

Mr. Belton

Then why the Road Fund at all?

Mr. MacEntee

Precisely. "Why the Road Fund at all?" That position is going to come about here one day.

Mr. Belton

I was thinking that was what was being foreshadowed.

Mr. MacEntee

It may be some years from now, but inevitably it is going to come, and I think that it will be for the public good that it should come.

I was saying that the only speech which was really germane to this Bill was the practical speech of Deputy Benson. I do not know whether I should waste the time of the House in dealing with the speeches of, say, Deputy Dillon and Deputy Professor O'Sullivan. They seemed very like Monday's cold dinner: merely a rehash of everything that they had said on the general resolution. I think that I dealt very adequately with any points of substance which either of those Deputies made on that occasion. Deputy Dillon, of course, is a preacher of queer inconsistencies. He avowed his faith in what is known as the transfer theory of taxation, the equalitarian theory—take from those who have and give to those who have not. Let us, he said, be poor together or better off together. Let us, he said, approach a common norm of life in which we shall all be equally comfortable and equally happy. Then he proceeds with the same breath to say that if he had his way he would kill the beet scheme and kill the wheat scheme. That comes rather queerly from a Deputy who believes in the principle of equalisation of income, because, after all, what do we do when we promote beet and wheat? First of all, we give our country a certain assurance, an assurance which is not unwelcome in those very critical times. We have got no navy. I am sure no one will contend that we can ever hope to have a navy strong enough to render our overseas communications immune from interruption or the risk of severance in times of war. What then do those two schemes do in the first instance? They safeguard for our people a supply of two essential commodities of life. We can do without a lot of things much more easily than we can do without sugar, and we can certainly do without most things much more readily than we can do without wheat or bread. Those schemes then have, first of all, this general advantage, that if war were to break out in Europe to-morrow, and our supplies of foreign wheat and foreign sugar were to be cut off, we should have the home-grown article to fall back on, to the extent to which the production of that article has not been hampered during the last two years by the sort of speeches to which we have listened here from Deputy Dillon.

Leaving that on one side, what else do we do by means of those things? I suppose the Deputy agrees with me that it is of vital interest to maintain as many people on the land as possible? There will be two views as to what is the best way to do that. I do not hold myself out as being an expert on agriculture. I should be nothing more than candid if I said I knew very little about it. At any rate, there is a school of thought in this country—and, mind you, it is a school of thought which is representative of the majority of the people in this country—which holds very strongly that our general agricultural economy is benefited by the development of the sugar beet in dustry here, and by the fostering of wheat growing, and general tillage. As I say, I am not going to decide one way or the other; it is not my function to do so, but at any rate that belief would seem to be fairly commonly held. Therefore we have this position, that in order to help our people to maintain themselves upon the land according to the ideas and according to the theories which seem to be generally accepted here, we have asked the community as a whole to subsidise two sections of the agricultural community—those who are engaged in beet growing and those who are engaged in wheat growing. In that way we give effect to this principle which Deputy Dillon has admitted he accepts, the principle of utilising the powers of the Legislature and the powers of the Government to transfer, if you like, income from one section of the community to another, income from purposes the utility of which is more open to question than those which are represented by the wheat scheme and the beet scheme. By means of those schemes we have tried to improve the conditions——

Mr. Dillon

Of the millers.

Mr. MacEntee

Of a very large section of the farming population. Now there is a difference of opinion as to how right we have been; Deputy Dillon has been very emphatic as to what are his views on that matter. The point is that, after all, the Deputy is no more infallible than I am. He may know more about agriculture than I do, but I am not taking him as a judge, and he is not taking me as a judge. We all have to go to one common tribunal in this country, and that is the tribunal represented by the farmers and agricultural labourers of this country, because it is from that section of the community that the Fianna Fáil Government gets the greatest measure of support. They have tried these schemes, and know what these schemes mean to them. In the light of that, I am prepared to say that we ought to do a great deal to foster both wheat growing and sugar beet growing, bearing in mind, of course, that as a Government we have also responsibility to other sections of the people, and that we cannot improve the position of those who are interested in the production of those crops at an exorbitant expense to the rest of the community.

I think that disposes of that portion of Deputy Dillon's speech. He seems to think that the future of this country lies in the development of its export trade, but he was rather unfortunate, I submit, in the examples which he cited. He ultimately came down to this, that our future welfare was going to be determined by our ability to increase our export trade, and that the only industry upon which we could rely to expand our exports would be the agricultural industry. Like Deputy Dillon, I too, feel that we have to expand our agricultural exports. I feel that we must do that in order, as I said before, to compensate ourselves for the loss of externally derived income which results from the fact that we have had, for one reason or another, to realise our investments abroad. If we are to maintain our general economy here, if we are to maintain our existing social services, we have got, by increasing production, to compensate ourselves for the loss of income derived from investments. As I say, bearing in mind that agriculture is our main industry, and that we can produce very much more than we can possibly consume, there seems to me to be, in fact, only one market in which it is possible for us to secure an increased sale of our products on a scale which would be proportionate to our needs. Bearing that in mind, we have got to watch the British market and satisfy the needs of the British market——

Mr. Dillon

Deputy Allen is fainting away.

Mr. MacEntee

——we have also got, in relation to this matter, to bear in mind that the British market is not an unlimited market, that there are other people who have claims on that market as well as ourselves——

Mr. Brennan

You did not realise that in time.

Mr. MacEntee

——and that there are other people who, in regard to that market, are in a very different position to ourselves. We are a creditor nation in regard to Great Britain. We have to buy from Great Britain in order that she may pay the interest upon our investments with her. The position is somewhat different between Great Britain and certain of our competitors. Great Britain is in the same position with regard to New Zealand as we are in with regard to her. This position then arises, that in order that New Zealand may be able to honour her financial commitments to Great Britain, the New Zealanders must find a place in the British market—I think it will be found that the British are not going to crush out New Zealand just simply for love of Deputy Dillon and the philosophy of life and trade which he expounds here in this House. Therefore, we have always to bear that in mind, even while, as my own view is, we ought to export up to the limit of our productive capacity, after meeting the needs of our own people. It is necessary, undoubtedly, in order to meet some of their needs for the things which we cannot produce here, that we should have a substantial volume of exports. While I believe that there is only one market that can absorb them on an adequate scale, we also have to bear in mind that the capacity of that market to absorb these products, notwithstanding what Deputy Dillon has said, is not unlimited.

Mr. Belton

Therefore it would be an advantage if we were a debtor nation to England.

Mr. MacEntee

It would not be an advantage for us to be a debtor nation to any country. If the Deputy wants to know my view about it, we are in a much better position to maintain our standards of living here and to provide our people with the services they want if we can get these out of the products and the fruits of the labour of other people, as we do when other people are indebted to us. It makes for greater leisure and for easier standards of life here, and no matter what Deputy Belton may think about it, it makes all that difference between the easy, suave conditions of life that exist in most of the country parts of Ireland and such conditions as exist in Manchester, in the Black Country, and in the other industrial centres in England.

Mr. Belton

Amongst the Irish population there driven from the land here.

Mr. Dillon

A Daniel come to judgment.

Mr. MacEntee

I think I have shown at any rate, that it would be regretable if the great experiment which the Government has undertaken should fail, and that is to try, out of our own soil and by the labour of our own people to feed our own people, to supply them with all these articles of food which are necessary for life. That is why I took the opportunity, when replying to the debate on the general resolution, to point out to those who are engaged in these industries how much the people were paying in order that these industries might be maintained. I put it to them that they ought to approach these questions, not from the point of view of their own immediate personal interests—I am not going to say that they should completely submerge them—but that they should bear in mind that the community is doing a great deal in order that these industries should be established here, and that they ought, at any rate, meet the community by being satisfied with a fair and just return for what they themselves put into those industries.

It would be a sad thing for me if a debate upon a financial question, whether a question of the Budget or the Finance Bill, were to take place without a contribution from Deputy Cosgrave, because there is no Deputy in this House who supplies one with such beautiful material for a reply. Deputy Cosgrave professes to be a precisian in regard to this question of public finance. He always begins by the laying down the law, like one of the prophets and then proceeds to take figures and to say: "Now, if that is so, then this ought to be such". But, if a person is going to take up that pose, he at any rate ought to secure himself against the charge either of misquoting or of not being able to understand the figures which he quotes. He opened his attack on the Budget by saying that the present Bill is schemed to collect £32,000,000. I have here the table explanatory of the Budget and it shows that, so far from being schemed to collect £32,000,000, the amount of taxation which we will collect as a result of the provisions of this Bill and the provisions of the existing tax law will be, not £32,000,000 as Deputy Cosgrave suggests, but £26,700,000. I admit that it is a considerable sum, but it is at least 20 per cent. lower than Deputy Cosgrave stated.

Then, having started with the erroneous statement that we proposed to collect £32,000,000 in taxation, the Deputy turned and compared that with the figure for 1931-32, and said there was a difference of £7,000,000. The actual tax revenue collected in 1931-32 was £21,286,000. Undoubtedly, we are collecting £5,414,000 more than we were collecting in 1931-32 by way of taxation. But, in the course of the Budget statement, I was at pains to explain to the House why it was necessary that we should collect this £5,414,000 more this year than in 1931-32. If the House will look at the first 12 items of Table VII—Issues for Supply Services 1938-39—I have taken that year, 1938-39, in order that I may be able to speak as exactly as possible on the matter—they will see there that the Exchequer issues in 1938-39 for these 12 services, which I have called "Social Services Proper" were £9,780,000, as against £4,551,000 for the same services in 1931-32. So that the whole of that £5,414,000 of additional taxation, with the exception of £185,000, is accounted for by the increase in those 12 items of public services which I have classed under the heading "Social Services Proper." If we are taking more from the people in taxation, we are spending an equivalent amount on social services.

Deputy Cosgrave, commenting upon my classification of public services, referred in particular to item 10, which sets out the figures for Miscellaneous Public Health and other Grants and Expenses of Local Government and Public Health and he asked rather facetiously did I regard the payment of the salary of the Parliamentary Secretary to the Minister for Local Government as a social service. Of course, as I said, it was a rather facetious remark. If the Deputy really understood the Table, he would have seen that it is not necessary for me to write down item 10 in order to allow for the fact that the salary of the Parliamentary Secretary to the Minister for Local Government is included within the figure, because the figures are given for 1938-39 and 1939-40 for the purpose of making the comparison, and in 1931-32 the figure for the then Minister for Local Government (General Mulcahy) and for the then Secretary to that Department, who, I think, was Deputy Seamus Bourke——

Mr. Brennan

No; there was no Parliamentary Secretary then.

Mr. MacEntee

Very well. Deputy Bourke was Parliamentary Secretary of that Department at one time.

Mr. Brennan

He was Minister for Local Government.

Mr. MacEntee

Not in 1931-32. In any event the Parliamentary Secretary was not included, but the Minister for Local Government was. There is no pretension here in Table VII that we do not include in the cost of social services the cost of administering them. We were at pains indeed to draw the attention of the House and the people to the fact that included in all services is the cost of administering them. We took that cost out and segregated it in a footnote at the end of the Table. If Deputy Cosgrave had been concerned about a matter of that kind he would, if he wanted to make a comparison and to be as exact as he pretended, have made a simple deduction instead of making that finicky point.

I suppose I am unduly flattering the Deputy when I say that broad principles do not inform Deputy Cosgrave's speeches on questions of public finance.

Mr. Dillon

Deputy Cosgrave dug the pit and you fell into it. There was no Mrs. Harris.

Mr. MacEntee

We had a further example when the Deputy dealt with the expenditure on the Gárda Síochána, on the Department of External Affairs, on the Department of the Taoiseach, and the other Departments, and suggested that taking all these we could secure economies extending over £2,000,000, which would enable us to provide additional employment for a considerable number of men. When he was making that point I asked the Deputy if he was really putting that forward as a considered suggestion. We have to look at the matter in a number of ways. Strange as it may seem, we are not responsible for the present scales either for the Gárda Síochána or the Civil Service. We have made no significant changes in the general format of Civil Service scales of pay or of the Gárda Síochána. We inherited them from our predecessors.

Mr. Brennan

The numbers.

Mr. MacEntee

I am talking about the scales. They stand as we inherited them from our predecessors. As far as the Civil Service is concerned, while there has been an expansion, I think I could say that 90 per cent. of the personnel was there when we came into office. There has been in certain Departments an expansion in numbers, due to the increased activity and the increasing value which, I believe, these Departments are giving the community. In regard to the Gárda Síochána, I do not think we have increased the strength of the Gárda by 3 per cent. But there has been considerable increase in the cost of the Guards, an increase of almost 12½ per cent. How does that increase arise? It arises because we inherited the scales of Gárdaí pay that were laid down by our predecessors. When they were maintaining this force they were paying the Guards at a lower rate; since then the expense every year for serving Guards has gone up by the amount of the increments laid down in the scales. The same applies to the Civil Service. We inherited a Civil Service for which these scales had been laid down, and 90 per cent. of the civil servants accepted service here on scales laid down by our predecessors. In the case of those who were transferred officers we had scales laid down from £100—I am only dealing with two of the larger classes; I am not dealing with those at the top.

Mr. Dillon

Although they are the ones you retired since you came into office.

Mr. MacEntee

They form so small a proportion of the whole that they do not have any significant effect on the cost of the Civil Service. The great bulk of the Civil Service is as we found, represented by the lower grades. In the case of the Junior Executive Officers in the transferred class we inherited a scale rising from £95 to £380 per annum with bonus. That is the case of those who were transferred officers. In the case of those who joined since 1923 we inherited scales ranging from £90, for women and unmarried men, to £250, and ranging in the case of married men from £90 to £350. In the case of clerical officers the scales range from £57 to £237 in the case of men who were transferred male officers, and from £60 to £150 in the case of unmarried men and new entrants, that is of post-1923 entry, and from £70 to £200 in the case of married men. Every year in respect of 90 per cent. of the Civil Services, due to circumstances which were not of our creation, and not within our control, the cost of the Civil Service has been rising. I am not using that argument in order to make the case that the principle of allowing an annual increment for zealous and efficient service should not be given effect to. I am merely citing the failure to show that in that large range of services which Deputy Cosgrave put forward, there is no room for the economies which he suggested could be made—except we make them in one of two ways. We can either dismiss some of the civil servants, or we can reduce their scales of salary.

Mr. Dillon

Or abstain from appointing more.

Mr. MacEntee

We can reduce the salaries of these civil servants or, as I say, dismiss some civil servants or Guards, or some of the officers and men of the Army, or we can reduce their scales of pay.

Mr. Brennan

There are 30,000 more civil servants now than when you came in.

Mr. MacEntee

How many?

Mr. Brennan

Over 30,000.

Mr. MacEntee

The Deputy is in dreamland.

Mr. Dillon

How many have you added to the Civil Service?

Mr. MacEntee

There was an addition of about 10 per cent. There were 12,000, excluding the Post Office and the industrial employees. There are 12,000 more in the Post Office, and that made a total of about 24,000 civil servants all told. But Deputy Brennan has told us —and it is typical of the sort of language used throughout the country— that we have recruited 30,000 since we came into office. We have not done anything of the kind. I believe the total personnel in the Civil Service, including those who are Post Office employees and part-time Post Office employees, is about 25,000 or 26,000.

Mr. Dillon

How many new civil servants did you create?

Mr. MacEntee

The Deputy can get that information by putting down a parliamentary question. At the moment I propose to go on with my speech. I want to treat Deputy Cosgrave's words more seriously, and give them more consideration that he appears to have done. I asked him, when he was suggesting that we could make economies on the branches of the public service to which I have referred, whether he was putting this forward as a considered suggestion, and he assured me he was. He waved in my face four or five typed sheets and said he would not have gone to the trouble of putting down his figures unless he had thought all these matters out. If the Deputy does sincerely believe that he can make economies in these branches of the public service, he can only do it in one or other of two ways. He either proposes to reduce the personnel of the Civic Service and the Gárda and the Army—that is, he proposes to dismiss serving officers in all of these services— or else he proposes to reduce the scales of pay and the emoluments which the officers of these services already enjoy. That comes very strangely from Deputy Cosgrave, particularly when it is applied to the Guards.

In 1933, we introduced a Bill to enforce certain economies in the public services. I had great difficulty in getting that Bill through this House particularly because of the provisions relating to the pay of the Gárda. The Bill went to the Seanad and certain amendments were made in it there. When it came back to this House I had to acquiesce in these amendments made in the Seanad because Deputy Cosgrave and the Labour Party were in a position to influence by their votes legislation in this House. The Labour Party then happened to be in a position very strongly to affect legislation in this House. As it was I had to submit to the virtual abandonment of the Bill. I had to do that in the light of the opposition offered to the Bill by those very Deputies who at the moment are clamouring that we should cut down public expenditure upon these services.

Mr. Dillon

What Bill was that?

Mr. MacEntee

The Public Economies Bill of 1933. Not only did Deputies in 1933 oppose any economies in the public service but we had something of a like nature before the General Election of 1938. Deputy Cosgrave has told us about the economies that he would make in order to obviate the need for putting taxation upon the people. In May of 1938, Deputy Cosgrave helped to defeat the Government upon a proposal which if accepted would have meant that the control of expenditure upon the Civil Service would have been taken out of the hands of the Government entirely and vested in an independent arbitration tribunal whose decisions would have had to be accepted by the Government of the day. I wonder what would be the position of our people if we had accepted Deputy Cosgrave's point of view in regard to that very critical matter. What would have happened if the demands of the Civil Service had been referred to an arbitration board and this Government had been tied hand and foot by the decision of that board? The Government would have had to come to the House, not alone to ask Deputies to increase the rate of existing taxation so as to make good a deficiency of £1,160,000 in the public revenue, but on top of that to ask them to tax the people further, to tax their tea and sugar and even put another 6d. on the income tax in order to give effect to a decision of the arbitration tribunal which Deputy Cosgrave and his Party voted for in 1938. When this issue was before the House on another occasion—and it was an issue which did vitally affect the question of public expenditure—Deputy Cosgrave took up the attitude that the Minister for Finance, who, as he told the House to-day, should scrutinise very carefully every penny piece of expenditure, should not be able even to look at or question the decision which would be handed down to him from the arbitration tribunal, but should have to rush off to the Dáil to ask it to provide him with the wherewithal to honour the award. That was the position of Deputy Cosgrave just 12 months ago. It suits his book to get up here, having clamoured for additional expenditure and make a purely factitious case for economy in the public services. So far as expenditure on them is concerned the services to which he referred are incapable of reduction except in one of two ways, either by dismissing personnel or reducing remuneration. If that issue were put to Deputy Cosgrave and he had the responsibility, I am sure he would say, as I have had to say, that a contract of service has been made with the Civil Service and the Gárda and the officers and men in the Army and it cannot be broken except in dire need. "Stringent and straitened" though the position is it is not such that I believe we would be justified in refusing to honour the commitments into which our predecessors entered with the great bulk of the public servants. We have accepted that and we propose to honour it. I do not think there is anything more I need say on the matter.

Mr. Brennan

Last year on the Committee Stage of the Finance Bill an amendment was moved by Deputy Costello with regard to a particular case of persons living outside the country but who come here during certain periods and who are liable to income tax. I am sure the Minister will recollect the case, as it was taken up with his Department since. He promised to consider the matter. What does he propose doing? The Minister can have the reference if he wishes. It is in Volume 72, col. 920. Although the Minister expressed great sympathy I do not think he took any steps to deal with the matter. Does he propose to deal with it before we reach the Committee Stage?

Mr. MacEntee

Well, I have been talking to Commissioner Carey on that matter, and he informs me that the matter is under consideration but that it is full of difficulties. I cannot undertake, therefore, to have an amendment inserted in time for the Committee Stage of this Bill.

Mr. Dillon

But I presume the Minister is bearing it in mind in any case?

Mr. MacEntee

Oh, yes.

Mr. Dillon

Would the Minister be able to make a statement in connection with that matter on the Committee Stage so that it would then be open to the Opposition to put in an amendment for the Report Stage?

Mr. MacEntee

I am informed that it would not be possible for me to give that undertaking.

Question put. The Dáil divided: Tá, 57; Níl, 37.

Tá

Aiken, Frank.Allen, Denis.Bartley, Gerald.Beegan, Patrick.Boland, Gerald.Brady, Brian.Breathnach, Cormac.Breen, Daniel.Breslin, Cormac.Briscoe, Robert.Buckley, Seán.Cooney, Eamonn.Corry, Martin J.Crowley, Tadhg.Derrig, Thomas.De Valera, Eamon.Flinn, Hugo V.Flynn, John.Flynn, Stephen.Fogarty, Andrew.Fogarty, Patrick J.Friel, John.Fuller, Stephen.Gorry, Patrick J.Harris, Thomas.Hogan, Daniel.Humphreys, Francis.Kelly, James P.Killilea, Mark.

Kissane, Eamon.Lemass, Seán F.Little, Patrick J.Loughman, Francis.McDevitt, Henry A.McEllistrim, Thomas.MacEntee, Seán.Meaney, Cornelius.Moore, Séamus.Morrissey, Michael.Munnelly, John.O Briain, Donnchadh.O'Grady, Seán.O'Loghlen, Peter J.O'Reilly, Matthew.O'Rourke, Daniel.O'Sullivan, Ted.Rice, Brigid M.Ruttledge, Patrick J.Ryan, James.Ryan, Martin.Sheridan, Michael.Smith, Patrick.Traynor, Oscar.Victory, James.Walsh, Laurence J.Walsh, Richard.Ward, Conn.

Níl

Belton, Patrick.Bennett, George C.Benson, Ernest E.Brasier, Brooke.Brennan, Michael. Coburn, James.Cole, John J.Cogan, Patrick.Cosgrave, William T.Costello, John A.Curran, Richard.Davin, William.Dillon, James M.Doyle, Peadar S.Fagan, Charles.Giles, Patrick.Gorey, Denis J.Hickey, James.Hughes, James.

Broderick, William J.Brodrick, Seán.Browne, Patrick.Byrne, Alfred.Byrne, Alfred (Junior). Keating, John.MacEoin, Seán.McGovern, Patrick.Morrissey, Daniel.Mulcahy, Richard.Norton, William.O'Donovan, Timothy J.O'Higgins, Thomas F.O'Neill, Eamonn.O'Sullivan, John M.Pattison, James P.Redmond, Bridget M.Rogers, Patrick J.

Tellers:— Tá: Deputies Little and Smith; Níl: Deputies Doyle and Bennett.

Question declared carried.

An Ceann Comhairle

When is it proposed to take the Committee Stage?

Mr. MacEntee

I had intended to put it down for this day week, Sir, but I understand, from Deputy Dillon, that there is a possibility of amendments to certain sections being put down; and if, after consideration of what I was able to say, it is still considered necessary to put down these amendments, I am prepared not to take the Committee Stage on Wednesday, but I should like to say that I should prefer to take it on Wednesday.

Mr. Norton

A week is a short time in which to submit amendments to a Finance Bill when one has got to refer to previous Finance Acts.

Committee Stage ordered for Tuesday, 13th June.