Dáil Éireann debate -
Thursday, 23 Nov 1939

Vol. 78 No. 2

Finance (No. 2) Bill, 1939—Second Stage (resumed).

Question again proposed: "That the Bill be now read a Second Time"—(Minister for Finance).

Mr. Childers

At the close of last night's debate, I said that we had been twice warned by two successive Ministers for Finance that the burden of taxation was growing heavier and heavier, and I expressed doubts as to how far that process could continue without disadvantage to this country. In view of the exaggerations frequently made by the Opposition, and in view of the equally optimistic statements made by others, I think it would be well to give the House a picture of how far this Supplementary Budget does add to the burden of taxation which affects this country in relation to our national income. Our national income is based on the summation of the physical output of goods, and also of the services carried out by the people in this country. Before making wild statements about the Budget, I think it would be well if we compared our position, first of all, in relation to former years, and, secondly, our position in relation to other countries in Europe. Then we shall know just how far we are over-stepping the limit, having regard to our circumstances. I suggest that that comparative method is fair, too. If we take a certain number of countries and compare their taxable revenue with this country, making allowance for all average differences in them, we shall arrive at some degree of knowledge as to what our own position is.

The national income of this country, owing to the economic struggle, which we have had, has not improved in the last eight years. In 1929, according to several estimates, it was £161,000,000. It fell as low as £140,000,000 in 1933, and in 1936 it must have approached £155,000,000. Since then, there has been no figure by which a computation can be made. I think, however, it may be agreed that the national income has now recovered fully the proportion it lost as a result of the economic struggle. Bearing that in mind, let us examine our expenditure. Our total expenditure in 1932 was £27,000,000, and in 1936 £33,000,000. During the period 1932 to 1936 we increased the debt of this country from £20,000,000 to £71,000,000. We, in Fianna Fáil, need make no apology for creating that debt, or for increasing that expenditure. We entered into office in a country which had been paralysed by political struggles, first of all with another great nation, and, secondly, an unfortunate struggle amongst ourselves as to what our national status should be. In these circumstances it was desperately essential to get reconstruction started, to get houses built for the people and to give the people a stimulus to improve and increase production, as far as they were able, having regard to the circumstances of the day. A great deal of the debt that we have incurred has been due to land division which was designed to increase the total production of the people of this country, and also for the purpose of providing the people with houses so as to give them self-confidence and thereby enable them to increase production.

No country should increase its taxation, or increase its indebtedness, without at least making the assumption that the national income is going to increase correspondingly in order to pay for the increased burden of taxation, and in order that the next generation, if this one cannot pay, will be in a position to start to discharge the indebtedness that we had created. We could not expect the national income to increase during the economic struggle, which was our method of settling the majority of our differences with England. We adopted that method deliberately and advisedly, and we did succeed in settling the great majority of our differences with England. But, as I have said, we could not expect the national income to increase during that period. It was a lucky thing for this country that the national income did recover as far as it did during that period. As a result, we increased the burden of taxation in this country relative to the people's capacity to bear it.

When we examine the percentage of taxation in this country in relation to our national income, and compare it with other countries, we find that it is not anything like so heavy as one would imagine from listening to the speeches delivered on the Opposition Benches. I suggest that Deputies should bear these figures in mind because they are very important. In criticising a Supplementary Budget one has to be very careful in the language one uses. The language of the platform, or the language of exaggeration, should not be used. These figures reveal that we have not done anything insane or anything that can be regarded as ultimately dangerous in the way of over-taxation of the people of the country. I propose to give the House figures concerning various countries indicating the percentage of taxation in relation to national income. These figures will provide Deputies with a picture of what the position is and give them a definite idea of what the burden of taxation in this country is compared to other countries. Canada spent 14 per cent. of her national income in 1932. In 1936 she spent 13 per cent. In the United States the figures for 1932 and 1936 are 8 per cent. and 13 per cent.; in France, 26 per cent. and 29 per cent.; Norway, 18 per cent. and 20 per cent.; Sweden 15 per cent. and 13 per cent.; the United Kingdom, 22 per cent. and 18 per cent., and Australia 25 per cent. and 19 per cent. It will be observed that, in relation to the total expenditure the percentage of taxation in most of those countries decreased from 1932 to 1936, whereas the national income of those countries had increased. That is perfectly clear from a perusal of the figures.

General Mulcahy

What does the Deputy include in that taxation?

Mr. Childers

Central taxation.

General Mulcahy

It was of no value then.

Mr. Childers

It has a certain value. If we were to take the figures for local taxation the proportion would be the same. The taxation figures that I have given for other countries did not include local expenditure. We take our own country. We find that in 1932, the taxation was £27,000,000; the national income was £145,000,000, and we spent in taxation 17 per cent. of that. In 1936, our taxation was £33,000,000; our national income was estimated at £155,000,000, and we spent during that year 21 per cent. of our national income in taxation. If we compare those figures of 17 per cent. and 21 per cent. for the years 1932 and 1936 respectively, with the figures for the same period in other countries varying from 8 per cent. to 26 per cent., it can be said immediately that we are undergoing a very high rate of taxation, a dangerously high rate of taxation. I am sure what has been in the minds of both Ministers for Finance in this country is the fact that our taxation has risen from 17 per cent. to 21 per cent. in the last eight years, whereas in other countries because they had a period of financial development, their percentage of taxation compared with national income has decreased in most cases. It is quite obvious that an increase in taxation from 17 per cent. to 21 per cent. of our national income is a very dangerous increase, but only dangerous if it continues.

To further expand those figures and to show how the national incomes of other countries have increased while ours have remained stationary or declined I will give some figures to show the increase in those other countries. In Australia the national income has increased by 40 per cent.; in Belgium 20 per cent.; in Denmark, our principal agricultural rival, 25 per cent.; in Sweden 33? per cent.; in Norway 20 per cent. Our national income all these years is either the same or very slightly higher or lower than it was in 1932. I am prepared to believe that it was worth bearing that burden of taxation in order to set going the wheels of economic reconstruction, to begin the provision of housing accommodation for the people and to dispose of most of the causes which divided this country from England, leaving one issue only outstanding. It was worth all that increased taxation to end the mental civil war amongst members of both Parties in this country in which for too long a period every issue was distorted. But at the same time I feel very strongly that we cannot leave that position there with a burden of taxation of one-fifth of our national income because for the last 12 months people are paying for this higher taxation partly through reduced savings, the consumption of their existing savings and a consequent reduction of consumption.

I regard the development of the economic life of this country in the past eight years as having three stages: (1) a general period of reconstruction; (2) a period of crisis in carrying the economic war through to a successful conclusion; (3) a period during the last year when we have changed from what was an abnormal financial position to a normal financial position. The present war has created an entirely new situation which we will have to examine in the light of existing circumstances if it is going to continue. What I feel as an ordinary citizen is the fact that taxation which reaches 21 per cent. of our national income is removing that portion of the surplus wealth of our country which is used in giving ordinary employment to a number of our people. The theory of taxation is that you transfer portion of a rich man's income from him to the poorer section of the community and distribute it amongst that section using it to find employment for that type of persons who would not be employed by that rich person if he were to retain all his income. But if we continue that type of taxation the effect will be to discourage employment by private individuals in this country. I refer to such work as the employment of gardeners, the employment of persons building and repairing houses, the improving of agricultural methods, the improving of agricultural premises and that kind of employment given in the production of some of the more expensive kinds of food on which more employment is given than in the production of other foods. There is also the improvement of production in industry, for prosperity for the country will depend on inducing the individual to devote portion of his savings or existing income to perfecting improvements in his industry. I feel certain myself that what is consciously or unconsciously at the back of the minds of the Ministers is that the present rate of taxation, if it continues indefinitely, is not going to create a stimulus in the mind of the private individual to do that sort of work.

I know it is terribly hard for any Government to face the prospect of reducing taxation, unless they can be quite certain that the private individuals will, with the savings they are enabled to make, re-employ those people who may be disemployed. I think that having regard to our economic circumstances in this country and having regard to the still continuing—in some degree amongst both Parties in this House—of the mentality of the civil war, that no Government could quickly and without great and firm consideration reduce taxation unless they could be quite certain that the first effect of that reduction would be to release the savings in current incomes for the re-employment of those who might lose their present employment derived from moneys collected by the State. Any reasonable person will recognise the enormous difficulty of that position, particularly under the present circumstances, facing as we are an international conflict. That, to my mind, is a matter that deserves the deepest thought by all concerned in this country's prosperity. I believe that any form of financial jugglery would be far more dangerous in the end than the burden of taxation now imposed. Many suggestions have been made in the matter of ways and means for improving our position. Most of these suggestions would, if imposed on this country, defeat their own ends.

I feel myself that taxation of the present kind if continued at the present level will eventually reveal a lack of faith in the ordinary human beings in this country. We have got to rely on our own people without assistance from the State to increase agricultural output. That is the only way of making the present taxation capable of being paid and not being a too excessive burden on the people. I believe that there will have to be, in the course of the next few years, a general form of agricultural reconstruction. That cannot be brought about by any suggestion involving the transfer of benefits from the nonagricultural community to the agricultural community. Neither can it be brought about by further increasing taxation so as to make possible the issue of loans to farmers. It can be brought about by making such economies in central taxation as will enable the Government to spend such sums as are required to enable our agricultural policy to be developed. I believe that our own Government having regard to present circumstances will be able to effect that change. One of the most hopeful signs at present is the fact that the report of the Agricultural Commission in connection with pigs and bacon was signed by members of both Parties in this House, and that sane and sensible suggestions were made for an increase in pig production, without regard to national politics. If that spirit were to continue, and if we could have suggestions made on every aspect of our agricultural life, even in the middle of this severe international crisis. I believe it would be the best way of enabling us to shoulder the burden of this taxation. No one can say, on the basis of the figures I have given, that we have done anything disastrous. We have nearly reached the end of the third stage of our economic reconstruction, and we now have to consider the whole position in the light of the present emergency.

Mr. Linehan

Deputy Childers, as usual, made a very reasoned speech. As usual, he deplored what he called the mental civil war between the various Parties and individuals in this House. Mind you, his main admission in his speech is that the burden of taxation in this country cannot be left at one-fifth of the national income. I entirely agree with him, but from the mass of figures which Deputy Childers has produced both last night and to-day I had expected that he would give some indication as to his idea for reducing the expenditure below one-fifth of our national income. It is all very fine to say that at some future date something must be done that will enable the Government to cut down spending and put the moneys into agricultural production, but he gave no indication whatever as to what he thought should be done.

His comparisons of taxation as a percentage of national income are very enlightening. He says his comparisons show that the burden has not been too great in this country. I doubt that, even on the figures he gave, and on his estimated figures of national income no one can agree with him. In possibly one or two of the cases he mentioned there would be a comparison. In the rest there would not be. There would be no earthly use in comparing the proportion of national taxation in France with the expenditure in this country under normal circumstances, when you think of a country like France which, for the period covered by Deputy Childers, has been facing the prospect of another European war on her frontiers, and which has been building up military, naval and air resources; yet, even his own figures, 26 per cent. and 29 per cent., would not justify Deputy Childers' argument. Take the United States; the figure was 8 per cent. in the year 1932. After a period of the greatest economic upheaval in the United States, with the National Recovery Act and the vast amount of money that was spent on the various public schemes by the Roosevelt administration, the United States figure goes up only to 13 per cent. Possibly there might be some relation between Norway and Sweden. But Norway is roughly the same and Sweden is much lower than this country. Australia, a country which provides its own maritime defences, compares very favourably with this country. Deputy Childers' entire argument was based on the fact that he was assuming that our national income in the years for which he has not the statistics was either slightly higher or slightly lower than the last year for which he had statistics. If I accepted that from Deputy Childers, I would agree with him, but I do not accept it. I think when he made his mistake was when he described himself as an ordinary citizen. I do not think he is an ordinary citizen in the sense that I mean, and I do not believe he could convince any ordinary citizen down the country, in the small towns, in the small villages, the small farmers or the labourers, that the national income in this country remained at that level or even slightly lower.

Mr. Childers

On a point of explanation, I may tell the Deputy that the last figures to my knowledge show that the national income in the year 1935 was £155,000,000; in 1929, it was £161,000,000. The Deputy will surely agree that the total economic production of this country has increased since 1935, and that therefore my figure was not too excessive.

Mr. Linehan

It may not be too excessive, but I may say that the Deputy based his entire argument on the assumption—I do not at all agree with the Deputy—that the national income has reached such a figure at the present day. I believe if the Deputy is able to procure statistics from either the present or the former Minister for Finance he will find he is unduly optimistic. That is the furthest I will go with it. The Deputy mentioned the mental civil war in this House between people of the various Parties. Occasionally from the Fianna Fáil Benches we hear grave expressions of regret that there should ever be anything like opposition in this House. There has been a most amazing change recently. The Fianna Fáil Deputies in the House and down the country in the past fortnight have got up and complained that the Opposition Party had made a deliberate attack on the neutrality of this country because they opposed the taxation on sugar. I am not saying Deputy Childers would go as far as that. I am saying that the people on that side of the House have taken on the aspect of a cooing dove. They hope that nobody in public life in this country would ever dream of criticising any act of their administration, and they are horrified that, since this emergency came about, anybody in this House should be so base as to criticise in the slightest degree any action of the Government, because that is an attack on our neutrality. The people—who dare to criticise the Government in this country are either engaging in mental civil war or else they are attacking our neutrality. I do not believe that the Fianna Fáil Deputies who made that statement in the country will get anybody to believe that criticism of the present Supplementary Budget or criticism of the present Finance Bill is an attack on the neutrality of the country.

They are still trying to get away with the old tale. When anybody attacks an increase in taxation, they immediately say: "If we do not increase taxation, how are we going to find the necessary money?" or conversely: "If we are to reduce taxation, what are we going to reduce in order to make some reductions in the various burdens on the people?" When they get into action, not so much here in the House as down the country, they ask: "Are we going to cut the social services?" Anybody who objects to an increase in taxation in this country or recommends a reduction in taxation is immediately attacked by Fianna Fáil as a person who is going to reduce the social services, who is going to take the bread out of the poor man's mouth, the sugar out of the poor woman's tea, and the 1/- out of the poor man's pocket. I wonder if any Fianna Fáil Deputy in this House ever reads the Book of Estimates. When they use the argument that any reduction in taxation can only be achieved at the expense of social services, I wonder if they ever look at the Book of Estimates. Let them compare the Estimates over the last ten years, taking them one by one as they appear in the tabulated sheet, leaving out every item that is represented as a social service. It is a very interesting list. Let us start off with No. 1—not that I make any point of it—which is the President's Establishment: £3,602. Apart from objecting to that particular institution in the country, it is not a social service, and if that much money was not paid over it could not be said that there had been a reduction in social services. The next item is Houses of the Oireachtas: 1930-31, £111,000; 1939-40, £125,000. I suppose they are a social service. I suppose the Fianna Fáil Deputies do consider that the House of the Oireachtas are a social service. The third item is the Department of the Taoiseach. It is a small Vote: £11,000 in 1931-32, and £3,000 up in 1939-40. Is the Department of the Taoiseach a social service, or can the expenditure be reduced on that service? Item No. 4 is Comptroller and Auditor-General. That is hardly a social service.

Mr. MacEntee

Does the Deputy sug gest that it should be curtailed?

Mr. Linehan

I am telling the Minister that the argument used by the Fianna Fáil Party is that they can only reduce taxation by reduction in the social services.

Mr. MacEntee

The Deputy should face up to the implications of his statement.

Mr. Linehan

I am reading out a list of things which are not social services. Does the Minister consider that the office of the Comptroller and Auditor-General is a social service?

Mr. MacEntee

I consider it an essential service.

Mr. Linehan

That is an entirely different thing. Is it one of the services that were viewed by the new Economies Commission, and, if so, what did they say about it?

Take the next Department, the Office of the Minister for Finance. In 1930-31 the estimated expenditure was £57,000, and in 1939-40 the figure has increased to £75,000. According to the Minister, that may be an essential service, but it is quite definitely not a social service. Where is the money going? It is going in a way that is an entire contradiction of the former Fianna Fáil policy. We all remember the time when they suggested that we could reduce the Civil Service, that we could reduce the number of inspectors, and so on. The Minister calls it an essential service. What it really means is that you are actually paying more people more money to do the same quantity of work. You cannot call that a social service.

Then we have the Office of the Revenue Commissioners. They probably needed the increase there considering the amount of money the ex-Minister for Finance took out of this country. It is no wonder that they had to increase that particular service. I would not consider any of the items I have mentioned a social service. I would not consider Law Charges a social service, and that has gone up by £3,000. Then we have that infliction on the country that should have been wiped out long ago and that was consistently attacked for 12 years, that institution that is overmanned and over-officered, the Gárda Síochána. That was not regarded from 1923 to 1932 as a social service and I do not know if it is so regarded now, but look at the difference in the Votes. In 1930-31 the amount was £1,500,000 and in 1939-40 it has advanced by £300,000. Is that a social service?

Is there any explanation of the fact that four or five years ago the Government created an additional detective force and this year they have decided to create an additional Gárda force? Having swallowed their own words, they have increased taxation for this particular service this non-social service, to the tune of £300,000. We can deal later with the question whether these are social services or not, and we can also deal with the point as to whether they are essential services. As regards Broadcasting, whether or not there is any question of it being an essential service, the Vote has gone up from £23,000 nine years ago to £69,000 this year.

Mr. MacEntee

Does it pay for itself?

Mr. Linehan

Whether it does or not, it is not a social service.

Mr. Corish

We cannot hear it.

Mr. Linehan

You cannot, because at times it is not there. Then we have the greatest infliction of all time, the worst of the whole lot, the Army. That was the one thing that was going to be wiped out when Fianna Fáil were in opposition here. It was the one thing that, according to them, there was no necessity for. They described it as a scandal and an abomination, and they said it represented the complete robbery of the taxpayers. In 1930-31 the Army Estimate was £1,173,000 and for 1939-40 the net Estimate is £3,252,000. The Army is not a social service. I would like to draw particular attention to the extra expenditure on the Army within recent months and the manner in which the money has been expended by people who are merely playing at soldiers.

We have next the Department of External Affairs. In 1930-31 the expenditure on this Department totalled £55,000, and for the year 1939-40 the estimated expenditure is £91,000. Is that an essential service? What great value is coming from it? Is it a social service? In the case of the League of Nations the expenditure has jumped from £9,000 to £12,000. Nobody could call the League of Nations an essential service. It might be regarded as a social service for those who go to Geneva. It is well known that since the League of Nations was instituted it never achieved very valuable results.

I have read out a fairly comprehensive list. The point does not arise now whether the Minister or anybody else can justify the increased expenditure in those Departments. That is the Minister's business and he has an opportunity of defending the expenditure every year. The main point is that Fianna Fáil have glossed over the increased taxation during those years; they have glossed over the increased taxation contained in the last Budget and now in the Supplementary Budget by telling the people that social services are the main cause. They declare that a 1/- reduction in expenditure will mean a reduction in our social services and that if we do not put on the extra taxation it will mean cutting our social services. That is all nonsense. The people are told that the increased taxation is justified because of the social services. I have given you a list of non-social services where the expenditure has been increased, and will probably be increased next year also.

I must say that I am sorry for the present Minister for Finance. I am afraid that in the moving around he got juggled and he is now holding the bag for the last man. He has my greatest sympathy. There is one great difference between the two gentlemen. It may not be very complimentary to the present Minister for Finance when I say that he is far more honest in his Budget statements and in his statements on the Finance Bill than the last one was. He can take that for all it is worth.

The Government have picked out four items for taxation, sugar, tobacco, beer and spirits. The Minister endeavoured to justify the taxation. Why had he to tax those commodities? They presented an easy way in which to get money; they were the things that people used and could not very well stop using. If people were to stop using them, what would be the position? That might cure the Minister's extravagance. If there was a general strike in regard to the use of these things between this and Christmas—a strike in relation to drink and tobacco—that might bring the situation home to the Minister.

Mr. MacEntee

When is the Deputy going to begin?

Mr. Linehan

The Minister showed himself to be something of an optimist when he was presenting the Supplementary Budget and this Finance Bill. What the reason for it was I do not know, but the Minister was somewhat optimistic in regard to one item, death duties. He has increased the death duties in connection with estates exceeding £10,000 and not exceeding £50,000 and there are further increases in the case of estates over £50,000. I am delighted to see that the Minister is still full of the old Fianna Fáil policy and is still so optimistic about the future of the country that he expects revenue from estates of that sort. The Minister was quite safe in imposing such taxes on estates of that size. He knew well that they were not going to hurt anybody. It is the old stunt again —"We do not want to hit the poor man too much; look at what we are doing to the fellows with the big estates. We had to hit the poor man to a certain extent; we had to put up the price of sugar and tobacco; but look at what we have done in the case of the wealthy people; we have put heavier taxation on estates of £10,000 and over." The Minister is quite welcome to what he can get out of that. I hope Deputies will realise how fair the Government were. They increased taxation on sugar, tobacco, beer and spirits, but they have also increased the duty on estates valued at £10,000 and over. I hope the Minister gets away with it, but I am afraid he will not this time.

What is the actual effect of these extra duties? The Minister said it was necessary for him to find about £1,700,000 to meet deficiencies in taxation that were expected on account of the war. He said there would be a reduction in certain figures that were estimated at the beginning of the year. He proposes now to bring in £603,000, with the economies. Mind you, with the economies. They found something they could economise on and they are probably somewhere in the list I read out, because if they are not in the list the economies are going to be off the social services, no matter what anybody says. The economies would produce £400,000. That would leave £700,000 still short.

I am surprised the Minister ever brought in the Supplementary Budget. The tender skin of Fianna Fáil must have become tenderer still that they worried at all about a little thing like £1,700,000. I did not believe it would worry them for a moment, and the Minister for Finance's conscience must be far tenderer than that of his predecessor in that he decided to bring in a Supplementary Budget and not gloss it off in a grand Budget statement which his predecessor would be far better able to do than he would be. He could have managed it that way. He must be getting very pinched in his conscience.

What is the actual position? What is going to happen with these increased taxes? They will hit the poorer sections of the community. They will hit the smaller towns and the small traders particularly because those are the people who will have the smallest margin of profit. They will not hit the traders or wholesalers or the bigger retailers in the large cities. They are near the source of supply. They do not have to pay carriage. They do not get goods in small lots. They will hit two sets of people in this country, the consumer who has to pay more and who can ill-afford to pay more at the moment, and the small trader who has to buy in small quantities, who cannot afford to buy in big quantities and who cannot risk giving credit at the moment. You are putting him into a position that his trade is unprofitable.

You have done enough in increased taxation in the last eight years and with various Government measures as, for instance, this Pigs and Bacon Bill that will be coming before us to-night, to harass the small towns in this country and to take business from them. You are now going a step further, because whatever chance the bigger traders have of existing and of making their trade profitable, the smaller traders in the country districts have none. I wonder if an ordinary citizen like Deputy Childers realises what is the position of a man in a small country district at the present time living, we will say, in one of the new houses he referred to, paying 4/6 a week rent and earning maybe £1 a week, possibly working for a farmer at 14/- or 15/- a week and his food, possibly on unemployment assistance, and having to support a wife and four or five children. He found it hard enough to live prior to this. He will find it harder still now. Whatever expedient was necessary—and I do not believe any expedient was necessary—taxation should not have been imposed on the people of this country who are least fit to bear it and when the ex-Minister for Finance justified the increased taxation due to the increase on the Army by saying circumstances made it necessary I did not believe that for one moment. Does anybody believe for a moment that the mobilisation of the Army to a figure five times as big as it was for the last 12 years is justified or, if it was necessary on the ground of danger of external attack, that a semi-trained infantry force would be any use to meet external attack?

If any Government except the present one were in office and called up and mobilised the Army to the strength to which it is mobilised now, and if the Fianna Fáil gentlemen were in opposition, they would tell the country what they thought about that mobilisation and it would be like an echo from the past. I will say this much, that the days of echoes from the Minister and his colleagues are gone because they never echo anything they used to say before. They have departed completely from the old days. They would now prefer a spirit of mild co-operation. They say an attack on sugar taxation is an attack on our neutrality, that an attack on spirit taxation is an attack on neutrality. What do they want? They want co-operation. I believe that the Fianna Fáil definition of co-operation is to put a Minister sitting there in the corner of the Front Bench and that nobody in this House should rise to his feet except to say, "Well done, Tánaiste, or Minister" as the case may be. It is entirely unfair to criticise anything. They want co-operation. For what? To preserve our neutrality. Are they really serious? Do they think that anyone in this country, belonging to any political Party or no political Party, does not want neutrality or that the people are going out of their way to embroil us in war? They are using neutrality and the expense of preserving our neutrality as an excuse for this pressing taxation. They have put a lot of people in this country into the position of saying: "If neutrality costs us so much, what, in the name of goodness, would a war cost us?"

Remember this—and I will say it now finally—that never again will Fianna Fáil get away with the yarn of being the poor man's Government. Never again will they be able to say that you cannot refuse to increase taxation or that you cannot decrease taxation without hitting the social services. Never again will Fianna Fáil be able to say they spread the burden evenly, because the people of this country will realise that extra costs like those for the Army and the Civic Guards are responsible for this taxation, whatever the Minister may think. I am sure the Fianna Fáil supporters down the country will rub their hands with glee when they find that the burdens were evenly distributed on sugar, spirits, beer and estates of £10,000.

Mr. McGovern

My contribution to this debate will be brief. I know that the Minister and his colleagues find themselves in difficulties and they have asked us to co-operate with them in finding a solution. We have been always anxious to co-operate with them and our co-operation in the past took the form of pointing out they were leading the country astray but they simply jeered and laughed at our advice. But now they find themselves in these difficulties. Unfortunately it is not they themselves who are in the difficulties but they have the country in difficulties and those difficulties are none the less serious because they are of their own making. They are even greater because the Ministers themselves are responsibile for them and it is, therefore, much more difficult for them to overcome them than it would be if they were imposed on them from without. It means that they have to reverse that policy they pursued for a long number of years. They have not the moral courage to do that. I am afraid that when we point out that fact we are supposed to be uttering criticisms which are unjustified. Now they ask for co-operation. The only way we can co-operate with them is to point out their mistakes, show them where they were wrong and are wrong, and indicate where they should begin to reverse the machine and put it on the right track in order, if possible, to bring about economic improvement in this country, raise the national income and lower taxation.

We have now an enormous Supplementary Budget imposed upon the country that taxes the people beyond their capacity. The last farthing that can be squeezed out of every poor man and woman in the country is being squeezed out of them. At the same time the Minister cannot tell us to what extent he is going to balance the Budget. There is still a big deficit. We do not know what it is. It may be £2,000,000 or £3,000,000—we do not know what it is—in connection with the increased expenditure upon militarism, and the Minister and his colleagues will not give the House any indication, not even a guess, of what this increased expenditure amounts to and what the deficit in the Budget is likely to be.

It is serious for people who are taxed beyond their means at the present moment, but the prospect for the future is still more serious. The Government find themselves now on slippery slopes. They have not the moral courage to call a halt to any of their wild schemes and they will not listen to advice when it is offered in good faith from members of the Opposition Parties. They have gone on for seven years on the same course and every time that we pointed out where it was leading to all we got from that side were sneers, jeers and laughter. I think that the Minister now has begun to realise the position. His predecessor as Minister for Finance, in introducing the last Budget, made a speech which, if it was made by anyone on this side of the House, we would be branded as traitors and it would be said that we were guilty of sabotage and all that kind of thing. The former Minister for Finance knew perfectly well what was coming; he knew there were no reserves. We could have been building up reserves over a number of years that would enable the country to meet the present crisis. But, instead of building up reserves, we have been spending the last farthing that the country could possibly afford, and more than it could afford. Now there is no reserve to fall back upon. There is no resort except to tax the necessaries of the very poorest people in the country.

I do not want to refer to sugar and tobacco any more than I can help. I know that sugar, although it is a very sweet ingredient, puts a bad taste in the Minister's mouth. Tobacco, also, although it is a sedative, proves to be an irritant to the Minister's nerves. Like other Deputies, I am sorry for the Minister for Finance. I am afraid somebody played a nasty trick on him by dropping out and dropping him in to face the attacks of everybody in this House. He has to defend a Budget which he, as well as his colleagues, is responsible for bringing about. I do not believe that there was any necessity for this increased taxation to provide extra defence. I do not think it makes any difference whatever, whether we increase or decrease our expenditure on defence in the present emergency. There is no justification for imposing such a burden on the poorer classes of the people.

The Minister reminds me of a certain litigant down the country who went into court with a neighbour. The neighbour had a gentleman to give him a character and the judge said to this gentleman: "What have you to say about the other man? Can you give him a good character?""I do not know anything about him," said the man, "I never had any dealings with him.""Do you know what reputation he has with his neighbours?" asked the judge. "So far as the reputation he has with his neighbours is concerned," said the man, "they tell me he would steal the sugar and milk out of your tea." I am afraid the Minister is stealing the sugar out of the poor people's tea by the present Budget. Tobacco is also a necessity which the poor man will miss as much as sugar. The cost of living generally is so high that it is impossible for people to continue to produce at a profit.

There was a question put down here dealing with the price of flour. It is extraordinary that there is a difference of 20/- in the cost of a sack of flour here and in Northern Ireland—43/6d. as compared with 23/6d. On one of the most essential raw materials for production in this country, namely, fertilisers, there is a tariff of 20 per cent. at a time when the Government are asking the people to produce more and more in order to be able to export more agricultural produce. We have to pay a tax on fertilisers, a tax on agricultural machinery, and a tax on all the raw materials of agriculture at a time when the Government are taking compulsory powers to force the farmers to produce more. You cannot do impossibilities. Unless taxation is reduced, and reduced drastically, I am afraid that this country will not be able to carry on.

Again and again we have been asked from the other side of the House: "What is the alternative to this taxation?" I say that there is no alternative, that there is no source left. They have taxed every possible source to the full; there is no alternative tax left. But the alternative to this Budget is to reduce the expenditure. We may be asked: "Where can you begin to reduce expenditure? Is it on the social services?" There are plenty of services which can be reduced without touching the social services. They might begin with the increase which was made in Deputies' allowances, Senators' allowances and Ministers' salaries. All these could afford to be cut, or at least income-tax charged on them, and that would be a beginning. I know we will be told that that would not amount to anything in meeting the deficiency. But it would put the Minister in a moral position to go along on the same road; he would be in a better position to demand sacrifices from other sections of the community.

For instance, he might consider the extra officials and inspectors numbering between 3,000 and 4,000 that they have added on since 1932 when they promised to reduce them drastically. These could certainly be done away with without reducing the efficiency of the services. Indeed, I am satisfied that the services could be improved by reducing the number drastically. I have it from a person with inside knowledge, who gave me an honest opinion, and who knows the position better than any of the Ministers, I believe, that not only are the extra civil servants useless but they are positively detrimental to the efficiency of the services. I went to enquire about a bit of bungling which was done by one of the Departments and the explanation I got was that they had too many civil servants; that they had to be employed at something and they bungled this business. So that by reducing the officials by the number that they have been increased since Fianna Fáil came into power we can save, on the assumption that each of them is costing £300, a sum of £1,200,000. We could save the whole of the deficiency in the revenue at present, which would be much better than putting a tax on sugar, tobacco, beer, and all these other things, because they will only bring in at the best £600,000. It is in economies such as these that the Minister will find the means to balance his Budget and not by imposing more taxation upon people who are already over-burdened. The Minister cannot raise money beyond a certain figure, and that is the taxable capacity of the people.

Deputy Childers has made a very interesting speech. He has pointed out how the country is taxed, the proportion of the national income that is paid in taxation, and the increase since 1932. It is a sad commentary that a member of the Minister's own Party had to admit that the tendency has gone in the opposite direction to the promises made by that Party when seeking power and upon which they were elected. It was not justifying their attitude, and I hope, even at this late stage, the Minister and his colleagues will try to see where they may repair, to some extent, the damage they have done. Unless we are going to admit to the world that we are unfit for self-government, all Parties in this House must face up to their responsibilities, and try to overcome the difficulties into which the country has been led. There is no use in Deputies on the opposite benches sneering and laughing when Deputies on this side point out where mistakes have been made. At any time, it was not difficult to see where we were heading. Every day we got deeper and deeper into difficulties, so that it is up to all Parties to try to find out how these may be overcome.

I am suggesting where the Minister might begin. He will be able to find other courses in the same direction. He should remember when he is increasing the burden that this poor State has been living above its means. He has consistently refused to admit it when that case was made, but I think it is beginning to dawn on the Government that this country is living beyond its means. We are trying to carry on on the same lines as Great Britain, where the average income is four or five times greater than it is here. Not only are we spending proportionately at a much higher rate than other countries that are engaged in a war that is a life and death struggle, but we are spending at an increasing rate out of a much reduced national income. The sort of militant neutrality that we are engaged in is more serious than if we were engaged in a war. If we had to find the millions that other nations have to provide for navies and armies where would we be? We could not do it. Is it not plain to everyone that there is something wrong in this State, when we find ourselves in such difficulties, without being engaged in any war? In the past we had wars here that could very well have been avoided, but as these were fixed up, we should now be in a better position. Some effort should be made to reduce expenditure. Instead of that we find that it is going higher and higher. No matter what the cost, the tendency has been to spend more and more, until there is nothing left for the nation to do but to borrow in order to balance the Budget year after year. By that course the credit of the country will suffer.

As the matter is so serious the Minister should give it consideration before it goes past remedy, I intended to refer to other matters but, as they have been dealt with by several speakers, I do not want to waste time. I ask the Minister not to belittle advice offered to him by his opponents in this House, as by availing of it he will be co-operating with those who are as anxious as he and his colleagues are to get this country out of its difficulties.

Mr. Brasier

I intend to draw attention to the way in which this Budget affects my own constituency, rather than to go over ground which has been covered by other Deputies. The sugar question has been exhaustively dealt with, and a Fianna Fáil Deputy has certainly drawn attention to the absolute incompetence, and almost criminal negligence exhibited by the Sugar Company, which is the darling child of the Government, to which was entrusted the care of this particular question. I do not think a more grave indictment could be brought against any commercial concern than that brought by Deputy Corry against a company which represents the considered policy of the Government since it came into office. The Deputy definitely charged the company with incompetence that an ordinary schoolboy would not be guilty of. When such a reproof comes from a Deputy on the Government Benches, they should very seriously consider rectifying the faults that the company has exhibited in neglecting to import sugar after being forewarned. Having regard to the difficulties that this country was likely to be involved in, that certainly amounts almost to criminal negligence, which would justify the abolition of such management.

Another side of the question has been lightly touched upon. When any Government is embarking on the financing of administration, naturally it is up to them to explore every means of raising revenue. It has been frequently asserted that there is very little left to tax. Therefore, the Minister has to fall back on particular articles to see how far taxation on them can be increased. I think I may say that the policy exhibited by the Government was best shown in the statement of the Minister, that the taxation imposed in the Supplementary Budget was taxation that could be most easily collected. Certainly that is an excellent way of getting in money, by taxing the necessaries of the poor, but it should be the concern of the State, when raising revenue for administration purposes, to do as little harm as possible. I have been interested for many years in the tillage question, and large areas of barley are grown in my constituency. My mind goes back to the time when the Midleton Distillery and the malt houses at Ballinacurra worked right through the season. That was an indication that that industry was in a highly prosperous condition. A fair price was paid for barley, without unduly taxing those who consumed its products. To-day the position is a melancholy one, and the malt houses are practically empty because of the over taxation of the products of the manufactures of Messrs. Guinness while the distilleries have been taxed almost out of existence.

It may be a highly moral thing to try to curtail the use of alcoholic drink as much as possible, and I have no doubt that there are many Deputies on both sides of the House who neither consume nor approve of the consumption of alcohol, but it should be remembered that it is food and drink to a great many people, especially to hard-working dock labourers or men engaged in heavy manual work. Consequently, it requires serious consideration before taxation that practically drives an industry out of existence is justified. We have to take into consideration the fact that to many poor people, dependent maybe on the old age pension, a "pint" is the only form of nourishment they get, or that a plug of tobacco is the only little comfort they can enjoy in what is perhaps a drab and weary existence. Many of those who come into contact with such people know how loud-voiced their opposition is to anything in the shape of a tax on the plug of tobacco or the "pint."

I, therefore, feel that this is a consideration which ought to engage the attention of the Minister. This is an industry which gives employment to many thousands of people on the land. The agricultural labourer gets employment in the production of barley, and the malsters' labourer, who is now on unemployment assistance, also gets employment, and there are various other subsidiary forms of employment in that industry that are now done away with. It seems to me that, by the policy of the Minister, he is taking the money out of one pocket and putting it into another pocket, and then taking it out of somebody else's pocket to put into another pocket. Now, the farming community, in the area to which I have been referring, have been very seriously hampered, and they have nothing left to enable them to stand up to the extra taxation that has been imposed, owing to what they went through during the economic war. In the area that I have the honour to represent the farmers have suffered very considerably and, in many cases, they have practically been put out of existence; they are not able to pay either their rents or their rates. In many cases, we have to try to get whatever relief we can for these people in order to enable them to carry on— either by asking the Land Commission to show some clemency and give them time to pay their annuities, or by asking for clemency in the case of the rates. In addition to that, we have the case of people, who got loans from the Agricultural Credit Corporation, and whose lands have been completely denuded of live stock during the period I have mentioned.

Now, we all understand that the Minister has hard times in front of him, and I am sure that none of us want to make the case worse for him; but, none the less, we have to face up to the facts, and the facts are that the people of this country are not able to bear further burdens, or further taxation and, therefore, I say that the Minister should make as many changes as he can with regard to the particular kinds of taxation that I have mentioned.

Mr. Hickey

I have not much to say, Sir, except with regard to the remarks made by the Minister yesterday. The Minister referred yesterday to what, I think, he described as the disparaging remarks made from these benches about the bankers. Now, I want to say that no member of these benches said anything disparaging about the bankers of this country. I believe that the bankers are doing their job well, and I do not think we made any disparaging remarks about them; but what we do say is that the people of this country, individually, should not be put into debt for what is, after all, the collective debt of this country. That is not a job for the bankers; it is a job for the Government. I would also say, with regard to what the Minister said as to his attitude to the workers of this country and workers' organisations, and what he said as to his non-attack on the workers of this country, that he should admit that the workers of this country have made as many sacrifices for the independence of the country as any other section of the community; and we can assure him that, in any crisis, either now or in the future, as in the past, he can rely on us to try to get the country out of any difficulty that may arise.

The reason we make any attack on the present Budget is due to the fact that, as it seems to me, an attack has been made upon the poorer sections of the community. When we talk about the unemployed, I hate to think that people should imagine that we are trying to make Party capital out of it. We are not trying to make any Party capital out of this question; but when you are faced with the question of widows and unemployed people being rigidly dealt with with regard to the so-called means test, surely no exception should be taken with regard to our statements on the present Budget. In that connection, I have in mind the case of a man—a husband—who has been unemployed for two years, and who goes to live with his father-in-law, who is in receipt of, let us say, a pension of £2 a week. Because of his circumstances, he has to go to live with his father-in-law, and, as a result, he is paid at the rate of 3/6 per week, for himself, his wife and son, aged ten years; whereas his eldest son, who is over 18 years of age, gets 4/6 a week. The irony of it is that one son is receiving 4/6 or more than the allowance for the father, mother and other son combined. I think that is wrong, and I should also like to say to the Minister again that, so far as the working classes of this country are concerned, he can rely on them now and in the future, as in the past, to try to do everything to save this country from any crisis that may face the country.

Mr. Fagan

I am not very much surprised at the necessity for the introduction of this Supplementary Budget because, when one looks at the awful expenditure that has taken place in the last five or six years, and all the costs that have been piled up upon the people, one should have known that things would have to come to a head some time. I think that anybody should have known that. What I am rather surprised at is the statement of Deputy Childers that the income of the country is the same now as in 1931. If it is, where has it gone to? That is what I am puzzled about. The Deputy told us that the income to-day is the same as it was in 1931, but everybody in the country is poorer now than they were then. Everybody knows that. If the income to-day is the same as it was in 1931, who is getting it? As far as I can see, a few people in the city are getting it. The so-called heads of factories are getting it. These are the new rich. Those of us who go, occasionally, to dances arranged by factories and by golf clubs can see many new cars there and many new faces. You see very few of the faces of the old, decent people we used to see there. The faces you see at these dances now are different. The people you see there now are what we call the new rich. You do not see the old, decent people of the country, who used to patronise such dances, because their clothes are not decent enough or respectable enough to mix with the new people. That is the position.

I do not begrudge anybody getting rich, but I certainly do begrudge people getting rich at the expense of the ordinary, decent, hard-working people of this country and at the expense of the poor of this country. That, however, is the policy of the present Government. They have reduced the ordinary people of this country down to a very low level. A few years ago, as I remember, everybody had enough money to spend, but now nobody can go anywhere. The farmer's wife cannot come up to Dublin even for a day. That is due to the policy of the Government. Personally, I am sorry for the present Minister for Finance because I feel that he has taken over a job that he cannot perform, and, in order to do his job, as things are at the moment, it looks as if he will have to tax the people out of existence. For instance, when I was leaving the Dáil last night, about 11 o'clock, I noticed three newsboys; one of them had a bag of groceries, and I heard him remark to his comrades, as he passed: "Well, I have this in spite of de Valera." That is the kind of thing that makes people think. I think that the Government have got into the position now that they cannot administer the country, and I think they should hand over the Government to some Party that will be able to face the position. I remember when people used to say to members of the Fine Gael Party: "It is a great thing that you are not in power now"; but I think that this is an international question that will have to be faced by the strong and decent people of this country, because I believe that the present Government are not honest and have failed in their promises to the people. They got into power on false promises. They said, in effect, that, if they were put into power, this would be a land of milk and honey; but what happened? All that has happened is that the people, generally, and the farmers are running for the dole. I remember the time when farmers would not have sat breaking stones by the roadside in order to get a living. But they are craving and begging to get a job breaking stones now. That is the position to which the Government have reduced the country. I think that the Government should throw up the sponge and let some responsible Party face up to the position and to the international question as a whole. Nobody ever thought that he would live to see a farmers' strike. In my own county there are pickets at every cross-roads stopping people. Is it not an awful thing to think that the farmers are reduced to that position and that an Irish Parliament has passed a Bill for the use of emergency powers against the farmers of Ireland who are trying to get their just rights? They are fighting for derating because the rates have gone beyond their capacity to pay. They are three times what they were in my early days and everything the farmer buys has increased threefold. I conclude by advising the Government to resign like men and let some responsible Party get in and—though it is a big job—put the country in a good position. That would be for the good of the country.

Mr. Hughes

It must have been obvious to anyone listening to Deputy Childers' apologia for the failure of the Fianna Fáil policy that he was only too well aware of the weakness of his case. Deputy Childers knew full well that it was the inability, ineptitude and muddling of the Government in handling national affairs which brought the country to a state of economic disaster. He went to great pains to compare the cost of Government here with that of other countries. He showed that there was an increase in the cost of administration in this country from 17 per cent. of the national income in 1932 to 21 per cent. in 1936. I should like to add that that increase of 4 per cent. has continued and is increasing up to the present year, 1939. He made clear that in the two or three years prior to 1936 most of the countries of the world showed an economic improvement after passing out of the world depression which occurred in 1930-31-32. There was a definite improvement right up to 1936. In some cases, he showed that there was an increase in the cost of administration of certain countries but that increase could be justified in their case by the increase in national income. He gave figures to prove that the cost of administration here definitely increased between 1932 and 1936. We, in this House, and the public are well aware that that increase continues up to the present day. Side by side with that, we know that the national income has fallen.

Deputy Childers, taking a figure of his own, contended that the national income in 1936 was in or about the same as it was in 1932. How can that be maintained when one bears in mind that our agricultural output, which has a very definite bearing on the national income, was £63,000,000 in 1931, and last year had fallen to £47,000,000 odd—a reduction of approximately £15,000,000? Side by side with that, we had an increase in taxation of over £7,000,000. That is the position. Deputy Childers said that the burden of taxation on this country up to the present was all right but that, if it continued, it would be dangerous. He did not justify the statement that it was all right up to now. He said the purpose of that taxation was to stimulate production. I am pointing out that the effect of the supposed stimulus they gave production was to reduce the most important form of production we have from £63,000,000 to £47,000,000. The Deputy went on to say that prosperity could only be brought about by effecting economies in central taxation. That was Deputy Childers' summing-up of the situation. We can be thankful for one thing at all events—that there are some people on the Government Benches who realise the real position. That is a healthy sign. It is a good thing—if it is not too late—that it is beginning to dawn on some of the people on the other side that it is this enormous burden of taxation which is destroying the prosperity of this country.

The Minister, when speaking yesterday in reply to criticisms from this side of the House, referred to the impossibility of effecting economies in certain social services. We believe economies can be effected even in social services without impairing those services. A short time ago, Deputy Linehan referred to the cost of the office of the Comptroller and Auditor-General as shown in the Book of Estimates. The Minister for Industry and Commerce challenged him as to whether he wanted that figure reduced and suggested that the money was well spent. Why is there an increase in the cost of the office of the Comptroller and Auditor-General? It is because there is an increase all round in the expenditure of other Departments. Naturally, there must, in these circumstances, be an increase in the cost of supervision. If you lower the cost of the various Departments, then you ought to be able to reduce the cost of the office of the Comptroller and Auditor-General.

Passing from social services to the Army, the Minister informed us that our commitments for the Army up to the present amount to £4,700,000. There is, then, an Estimate for the Army included in the Vote for Public Works amounting, approximately, to £500,000. That puts the figure for the Army at well over £5,000,000. Is not that an enormous sum for a poor little country like this? The Minister told us that constant scrutiny is being maintained by his Department in the matter of Army expenditure. Does the Minister really appreciate how this money is being spent in the Army? The pivot of the Army is in my constituency—the Curragh. I have been told by people who live in the vicinity of the Curragh that the tomfoolery going on there is appalling, that there are days when 50 or 60 lorries turn out in the open spaces and the men go chasing each other with the lorries all over the Curragh. That is the position there.

Mr. McMenamin

Joy-riding.

Mr. Hughes

This is something which should be looked at very, very seriously. You cannot blame the people living near the Curragh for getting into a white heat when they consider the way in which they are mulcted in taxation to maintain this joy-riding, as Deputy McMenamin called it. That is the position as regards the Army at the present time. The greatest tomfoolery that one could envisage is going on on the Curragh; the greatest gymnastics and codology that could be pictured are going on there. What is the necessity for all this? We have not got any straight statement from any responsible Minister in this House as to the necessity for maintaining this Army and expending over £5,000,000 on it. We were told by the Taoiseach that it was for the preservation of our neutrality, that our neutrality is such a terribly delicate affair that the censorship and such things must be handled with extreme caution. Then we were told by the Minister for Industry and Commerce that there were dangerous subversive organisations in the country and the Army was there for preserving the national institutions against those subversive elements. Does the Minister for Industry and Commerce— who is in violent contradiction with the Taoiseach on this matter—suggest that the subversive elements are so powerful that it takes an Army costing £5,000,000 a year to keep them in check? If that is the position, it is very, very alarming indeed. We do not know what the position is, because we have not been able to get any definite information here. What is the justification for spending over £5,000,000 on the Army? I suggest that that £5,000,000 would be better used if it were put into food production, which would be far more in the national interest than spending £5,000,000 on tomfoolery and codology on the Curragh.

Then we come to A.R.P., to censorship, to coastal watching, to the "black-out" muddle, to the increase in the Guards. We are told that no economies can be effected there. Is it not utter stupidity to suggest that no economies could be effected; is it not blindness on the part of the Minister for Finance and on the part of the Government to let this go on? Are they properly informed about the real state of the country and about the feelings of the people in regard to these matters? Do they think that we come in here and exaggerate? I say definitely that we are not exaggerating one iota, that we are representing the feelings of the people, who are highly indignant over the present position. The sooner the Government faces up to a realisation of the public feeling on this matter the better. With regard to coastal watching, supposing a German U-boat comes into our territorial waters, what are our coastal watchers going to do? Are they going to send for the Muirchu or have a pot at it with a rifle? What is the necessity for this whole scheme? What will they do when a U-boat comes into our territorial waters? Will they send word to Mr. Chamberlain; or vice-versa, will they send word to Herr Hitler if a British submarine comes in? I do not know what the whole scheme is for. I do not see any sense in it.

Then there is the censorship. We were told by the Minister for the Coordination of Defensive Measures that it was necessary. Incidentally that is another extravagant office. What are we co-ordinating? What is the necessity in our defence scheme for two Ministers for Defence? I think that this whole situation has got out of hand; the whole situation has gone mad. The censorship was introduced for the preservation of our neutrality; it would be very, very dangerous to the neutrality of this country if any international news appeared in our Press, if anything appeared that might endanger this country with regard to the international situation! What is the censorship being used for now? It is to suppress news that is purely internal news, to suppress knowledge of things like the strike going on at present amongst the farmers.

An Ceann Comhairle

The merits of that strike may not be discussed.

Mr. Hughes

I am not discussing the strike, Sir; I am simply saying that the censorship is being used for a purpose other than that of which the House has been informed. I am going away from that and do not intend to dwell on it. Then, there is the increase in the Guards. Here, again, we have not got any definite information as to the necessity for that increase. Taking all this —the Army, coastal watching, censorship, A.R.P., the cost of the "blackout" muddle and the increase in the Guards—the public are in a state of white indignation over the way they are being treated at the present time.

Yesterday we had Deputy Corry coming into the House here and boasting that the farmers got £5,000,000 out of the wheat scheme. He made a very severe attack on what Deputy Dillon said about the wheat scheme, the beet scheme, the peat scheme and other schemes of that sort. It put me thinking on this matter, as to what exactly the people whom Deputy Corry referred to—the farmers—got out of the wheat scheme. It is a well-known fact that, for the past couple of years, flour in this country has cost £1 a sack —a bit more than £1 a sack—more than in England or Northern Ireland. As a matter of fact, the difference at the present time is 22/-. We use 2,750,000 sacks of flour a year. In other words, our flour is costing us approximately £3,000,000 more than it would cost if we were buying it here at the British price.

I took up yesterday the Irish Trade Journal and find that in 1937 we grew here 2,983,000 cwts. of wheat, and that we were paid £1,959,000 for that. The cost of the wheat-growing scheme to the consumer is the difference between the cost of home-grown wheat and imported wheat. In 1937 the difference between the cost of home-grown wheat and imported wheat was 4/8, worked out on the figures returned by the Department of Industry and Commerce in the Irish Trade Journal. The cost of imported wheat was 28/- per barrel; that of home-grown wheat for that year—1937—was 32/8. These figures were returned by the millers. The amount the consumer had to pay was the difference between 28/- and 32/8, namely, 4/8; and that amounted, for 1937, to 1,993,000 barrels, costing roughly £278,000—roughly £250,000 in 1937. That was the subsidy the wheat growers of this country got out of the wheat scheme, which has cost the consumer approximately £3,000,000.

Last year, imported wheat cost 22/11 per barrel, worked out again on these figures. The price of imported wheat last year was abnormally low. It was down to 22/11, and was lower than the previous year's price. The price paid last year to the farmers—and it includes cost of delivery to the mill— works out at 35/5, leaving a margin of 12/6 per barrel, which, on the amount of wheat grown, 1,025,000 barrels, works out at £640,000, which the wheat growers of this country got last year out of £3,000,000 cost to the consumer.

Deputy Corry and other Deputies, and possibly people outside the House, have been feeling for quite a long time —and I admit that I personally felt— that the farmer got more than those figures indicate. These, however, are the figures returned and the Minister for Industry and Commerce can work it out for himself. I have carefully worked out the figures and I should like to make this comment, that, although the figures show that, in 1937, imported wheat cost 28/- delivered into the mill here, and, in 1938, it cost 22/11, I do not believe it cost any such thing. I believe that these high figures returned by the millers have been returned to cloak the profits of the milling companies because it is not possible that imported wheat in 1937 and 1938 cost anything like what these figures suggest. Yet, taking the aggregate amount of wheat imported and the aggregate cost of it as returned in this journal, the figures work out as I have given them. The only explanation is that these figures are returned in order to hide excess profits. What attempt has been made by the Government to implement the recommendations of the commission which inquired into the cost of wheaten flour four years ago? None whatever. The consumption of flour in this country is about nine-tenths of a sack per individual, and at an excess price of £1 per sack, it works out at a tax of 18/- per head of the population, and while no attempt has been made by the Government to deal with that glaring case of profiteering reported by this commission—and not only in relation to flour, but in relation to bacon and other commodities—the poor people are asked to pay huge imposts on the necessaries of life. We, as responsible, representatives here, cannot countenance that, and we cannot, and will not support it.

Money has been foolishly squandered on other schemes, such as the peat scheme, and anyone who was any judge of the position knew that there was no possible hope of the peat scheme succeeding. As a result of that peat scheme, practically £200,000 lies buried in the bogs of Kildare. Then, again, we have four sugar factories operating. I have grown beet since the first factory was built, but since the new company was formed, I have never been able to get actual figures on which to base a judgement as to whether the company is working economically and efficiently. We have no means of comparing the cost of production here with the cost of production in Great Britain. Is that a healthy situation? Does that make for efficiency? Is the Government going to continue that policy of cloaking inefficiency from public examination and from the public gaze?

The situation is a serious one, and the financial stringency of the present day, brought about by the ruinous policy of the Government, has had the effect of forcing a great many people into a state of mental confusion about the whole situation. They talk about social credit when our problems are purely economic. There are many people in the country at present advocating some form or other of monetary manipulation. I personally know very little about finance, but I believe it is a highly dangerous thing to touch, and I am glad the Government have not attempted to do anything of the kind so far. I feel, however, that our problems have nothing at all to do with monetary systems, that they are purely economic and that the real problem affecting our major industry is not that we are getting bad prices for our produce but that the cost of production and overhead charges are so great there is no margin of profit for the farmer to live on and, as a result, it requires a desperate effort on his part to make ends meet, to keep going and to maintain his family in decency and respect.

Mr. T. Burke

He cannot do that at all.

Mr. Hughes

He is trying to cut expenditure and to cut his losses, with the result that you have a shrinkage of output. I agree with Deputy Childers that from now on, if there is to be any future for this country, we must have a reduction in taxation, a reduction in overhead charges, and we must have a very close examination and a very serious search of many of the industries which are highly protected and which are very serious burdens on the community, and particularly the agricultural community. Essential raw materials for agricultural production are costing too much. Take, for instance, binder twine. There is a 50 per cent. duty on binder twine, and there is a factory here which manufactures various twines, including binder twine, and ropes. Last harvest, it was possible to buy Dutch twine in this country far superior in quality to Irish twine and cheaper than Irish twine, although the twine manufactured here is protected to the extent of 50 per cent. Can the farmer stand that? Is it possible to continue an industry of that sort which is not able to compete with a protection of 50 per cent.?

The Minister for Industry and Commerce referred to this matter a few weeks ago at a meeting of the Dublin Chamber of Commerce. He spoke of the low output and of the inefficiency of many of our industries, and those are the things that are wrong. There are too many of our industries burdened with overhead charges in the shape of heavy salaries and fees to directors, and it is all handed on to the unfortunate consumer. No attempt has been made by the Government to see that these matters are put right, and it is the duty and the responsibility of the Government, if they are going to shelter any industry under a high tariff, to see that at least that industry is efficient and, if it is not efficient, the sooner it is scrapped the better. I agree absolutely with the Minister for Industry and Commerce on that. Those are the things from which we are suffering and on which we are in violent disagreement with the Government, and the Government need not expect any co-operation from these benches until these matters are put right. The Government will have to mend their hand. They will have to remove the baneful effects of the policy pursued for the last seven years. These effects have been felt for the whole period of the Government's term of office. It is not the emergency situation that has brought about the very serious and alarming conditions which exist in the country at present. The emergency has accelerated the crisis probably. It has brought it to a head, but it has been developing for a long period. It was inevitable, to any thinking man, that this crisis was bound to come and, mind you, we are in a crisis. That is demonstrated by the mentality of the farmers at the present time. The farmer is not the type of man who will normally resort to the strike weapon. If he is provided with opportunities of carrying on, and living under anything like tolerable conditions, he will not think of resorting to such a weapon. That is a weapon that has never been used in this country before by the farmer, and it is a sad state of affairs that farmers have had to resort to it at the present time. Extravagance in administration and unnecessary expenditure are the root of all this trouble, and Deputy Childers knows that quite well. We have had huge spending in this country; we have had bad spending and we have had mis-spending. That is what the country is suffering from.

Colonel J. Ryan

I think I can be very brief in any criticism I have to offer on this Budget because I think if criticism can serve any useful purpose, the Government should have enough of it by now. One noticeable fact which would indicate that the Government feels that the present position is anything but satisfactory and that this must be a very bad Supplementary Budget, is that very few Deputies of the Fianna Fáil Party have remained in the House to-day. From the very time the war started, panic seems to have seized the Government and there seems to have been utter confusion from the beginning of the crisis up to the present. We have had confusion on confusion and, yet, we will not be told what is the real necessity for all this expenditure. We will not be told the number in the Army. We are told by one person that the Army is needed to maintain our neutrality and preserve our nationality and to stave off external aggression. Somebody else says that we are in danger of internal trouble. The extraordinary thing is that we see published in the newspapers the strength of the armies of countries which are right in the centre of the war zone and also information as to the amount of money they are spending on these armies. To all appearances, we are cut away from the danger of invasion at the moment and yet we are told that it is not in the public interest to tell us the number in the Army, just as we were told that it was not in the public interest to tell us the price of the sugar that we have to import.

One thing I will say about the Army, whatever its numbers may be and whatever it may be costing. From what we can learn from outside there seems to be utter confusion within the Army. Deputy Hughes, I think, mentioned about lorries parading around the Curragh. I should like to know from some responsible person what is the cost of transporting here and there, backwards and forwards, say, 1,000 troops. Evidently the officers responsible do not know what they are doing or where they are. There seems to be, as I say, utter confusion within the Army with the result that the State is forced to bear expenditure that should not be incurred. Nobody in this House, or outside it, can see any terrible danger of internal trouble. There is not half the danger that existed ten or 12 years ago. When certain big men were leading the people, would-be revolutionaries, a couple of policemen scattered here and there kept peace and order and prevented these revolutionaries from carrying out their aims. Ten times as many people were being arrested at that time as are being arrested now. Therefore, there is no excuse for all this extra expenditure on the Army that we hear about. If it is intended to deal with internal trouble a few extra policemen would be quite sufficient. We have, I believe, got 125 extra policemen. We should have got more but I believe they were not all satisfactory to the Government. The sooner we give up playing politics the better for the Government. I believe that you have gone so far on the rake's progress that you cannot now turn back.

When the economic war was started, we were told that it was a great boon to this country. Whether that was so or not, it is a fact that £1,500,000 which formerly went to pay the land annuities is now collected as revenue which we were not getting here before. According to the pronouncements of Ministers opposite at various times, this country gained appreciably as a result of the economic war. If we had all these gains to which the late Minister for Finance referred in his rosy speeches at Budget time, why is there the necessity to bring forward a Supplementary Budget to raise a further £603,000? That may seem a paltry sum to the present Government. Two million pounds were only a flea bite to them, as far as reduction in taxation was concerned, before they assumed office. When, instead of reducing taxation, it was increased we were told it was all for the poor and for the social services. I wonder how many people have benefited by these social services during the past two years? I think the inspectors administering these social services are costing almost as much as is expended on the benefits provided. It is all right for the late Minister for Finance to laugh, but I think he should not, remembering the progress he has made in certain directions during the last eight years.

As I said at the beginning, since this war started we have had utter confusion. We are supposed to be neutral, and everybody is in favour of that. One day we are told that this money is needed to preserve our neutrality, and on another day we are told that it is required to prevent internal trouble in the country. Then we had a black-out, and now we have a black-in. As far as Air Raid Precautions are concerned, I think the same confusion exists. The Department of Agriculture is one of the Departments in which I am most interested, and I would not say a word in opposition if it were proposed to spend more money on that Department, because I believe it is all to the country's advantage to develop our agriculture to the highest pitch. I would not object to employing extra agricultural instructors, but I do object to the Department costing us more at a time when we have a dwindling income from agriculture. Our income from agriculture each year for a number of years past has been dwindling.

Why should this Department cost more and why should extra inspectors be appointed? It would have been far better if it had been wiped out of existence eight years ago than to increase the cost of it in this way, while the income of the farmers has been dwindling. The Minister for Finance knows perfectly well that no family in this State could go on if it was losing money year after year and then had to spend whatever reserves it had. For that family the day would come when it would have nothing to live on. It is the same with the State. While members of the Government talk about the industries they have built up, they failed to provide an export trade for agricultural products. They find now that they have to depend on what comes from the produce of the land. It is only from the export of agricultural products that this country can get any income. For the last eight years the country's income has been dwindling, and I am afraid the Government are not inclined to do anything to better the position. The present proposal to increase taxation by £603,000 is not calculated to help production or to make our people better citizens.

The point has been stressed that there is internal trouble. If there is, it has not been caused by those who called themselves patriots 15 or 20 years ago. The internal trouble now is coming from the very poor, from the mobs and the people knocking about who helped put the members of the Government where they are now. If internal trouble comes it will come from those people because they are tired of the Government and want to leave them. They will give their support to some socialistic body such as "Saor Éire", because the Government have put taxes on the tobacco and sugar of the poor. By their action the Government are driving these people to the extreme left, to organisations such as "Saor Éire", so that if there is trouble it is due to the fault of the Government that brought it about.

This Budget should not have been brought in for the sake of a sum of £603,000. The Minister said he would tax those things which it was the easiest to get taxes off. My submission is that he should not tax the tobacco and the sugar of the poor and, therefore, that he should not have brought in this Budget for the sake of £603,000. He should have waited to see how the country would fare in this war. If he wanted to, he could have, in my opinion, saved twice as much on the Army alone. Why should we have an Army of the present size? The Minister for Defence has never told us. I think there could be a big saving on the Army. We do not need the Army to deal with internal trouble. The Civic Guards are quite able to deal with that. It is because I believe there is something the Government know, but will not tell the House, that I intend to vote against this Budget which proposes to increase taxation.

Captain Giles

If the taxation of the necessaries of life is the best that the Minister can do, then I think the sooner this House considers the whole social structure of the State the better it will be for all concerned. My firm belief is that there is something wrong with the social structure of the State. Some years ago a group of people banded themselves together and brought about a political revolution, thereby achieving freedom for this country. There must be something wrong when that freedom did not bring with it some comfort and prosperity for the people. I think that a thorough stocktaking of the whole situation is needed at the present time. If things are let go on as they are, it will be impossible to apply a remedy, and we will have a revolution. In my opinion one of the chief causes of our troubles is the cumbersome structure that we took over from the British. At the time that we had the revolution I spoke of, we should I think have had a social revolution, wiping the slate clean and making a fresh start. Instead, we are simply imitating the British Empire in the big services we are endeavouring to carry on. The social machine that we have in action is too big for this country. Every other day new officers are being appointed, so that at the moment the taxpayers are carrying a huge number of drones on their shoulders. They must be shaken off if the nation is to survive.

I believe the time has come for a change. We must cut through the huge amount of red tape that is binding this nation. The taxation proposed in this Budget is, to my mind, of the meanest and the lowest type, especially when one realises the huge services that are being maintained. I believe these services could be cut by at least 50 per cent., and that there could be an immediate saving of from £3,000,000 to £5,000,000 in our taxation. Take such services as the Army, the Guards, the Civil Service and the Land Commission. You have an Army which, to my mind, is most unnecessary. When the present Government came into office seven years ago the strength of it was about 6,000. That, I think, was quite sufficient because the police force would be quite well able to protect the lives, the property and the liberties of the people. We are not told the number that is in the Army to-day. Its strength may be anything from 30,000 to 60,000. What is that Army wanted for? Is it to keep the people at the other side from shaking their fists across the sea at us. I think it is time that we thought first of our duty to our own people instead of considering what Great Britain or anybody else wishes us to do.

We certainly do not want an Army of the magnitude of the present one. If we are free, then let us show that we are and pay no attention to outside dictation by having an Army that is costing us £5,000,000 a year. I think that £3,000,000 a year could be saved on the Army immediately. That could be done by telling 25,000 of the young men in the Army to go home and mind their business or work on their fathers' land. They would be far better employed doing that than skedaddling around the Midlands in lorries, as Deputy Hughes has said, at the expense of the State. When those young men joined the Army they were innocent little boys but we find that when they come home they are little men—little "maneens". They tell the people at home of the great times they have on the Curragh, and say to them that they should also go out and see life. I am afraid a lot of them have been spoiled. Take the Civic Guards? I have been in touch with a good many officers and men in the Force, and I know from conversations that I have had with them that it is not the Force it was ten or 11 years ago. It is fast becoming abused like a lot of the other services we have in the country. In the Guards, as in some of the other services, you have a huge number of drones.

All over Dublin there are hundreds and I may say thousands of clerical officers working in the different offices and the same is true all over the country. These are doing nothing but wading through red tape. They are doing nothing but handling paper after paper making orders that are sent out and cancelled morning, noon and night while the people's property, rights and liberties are threatened by robbers. Robberies are taking place and there is no one brought to book for them, because there is not a proper head or tail to the Gárda Síochána Force. If the Government want a proper Gárda Force they must not have functioning at the head of it a civil servant. I am not attacking that civil servant. He is a man who knows his job but if you want an efficient Gárda Síochána Force you must put at the head of it a man who has risen from the ranks and not have the force as it is to-day doing nothing while robberies are taking place. We all know that all over the country the Gárda who does his duty is sent to Hell or Connaught. I know down in my own county that any man who does his duty is treated in that way; the man who wants to get on must shut his eyes and not see what is going on around him.

That is not the sort of force we want. That is not the sort of force the Gárda Síochána should be. For this the Government are directly responsible. Once we had a native police force built on the blood and treasure of the best men of the country. What have we to-day? In this force we have too much red tape. What we want is a Gárda force doing its duty along the highways and byways, and not allowing any man to escape who is not observing and respecting the law. In the City of Dublin itself there are thousands of civil servants who have scarcely anything to do except wading through documents. I say this, that if half the pigeon-holes in the Government offices were taken out and burned, it would be a good day's work for this country. We have too much of this paper and red tape nonsense in this country. We have typists working, turning out papers and all this other nonsense, and orders, and sometimes these orders are cancelled three times a day. All this is costing immense sums of money.

I want to see every man producing something for the country and doing his duty. I am not at all sure that there are not in hundreds of offices civil servants who are doing nothing, and there are in the police offices men who should be out on the highways and byways catching robbers and evildoers. Instead, these men are allowed to go scot-free with the people's money and property. These are some of the things to which we want to see an end put; sooner or later the people will force the Government to listen to them. The civil servants are a fine efficient body of men, but it is they who are definitely running this country, and not the Government. That is all wrong, because the civil service mentality is never the mentality of the man down the country. Civil servants are a good body of people, but they are shut away in their offices from all touch with the people in the country. Except perhaps for a fortnight's holidays they never see the countryside. The people expect that the Government should be the men to rule this country. I ask the Government are they competent or incompetent, or are they going to stand up and do their duty by the people who put them where they are, or are they going to let civil servants do their job? The job of the Government is not to sit down and let civil servants ride rough-shod over them. In the morning 50 per cent. of the officials could be scrapped and this country could carry on without them. It is the same in all other public departments of the country, such as the county councils and the boards of health. The Land Commission could save millions of pounds by cutting their establishment down to half. Too much burden is being thrown on to the backs of the people.

Several years ago the Government said, in the matter of the Land Commission: "We will divide the land of Ireland amongst the people of Ireland," and, of course, what they meant was to divide it chiefly amongst their Fianna Fáil supporters. Well, since then they have been dividing a lot of it in my county, but one thing is certain, and that is that they will later on regret it keenly. The Government have destroyed the greatest source of wealth with which the people in Meath were left. They purported to divide these estates into economic holdings of 17 or 18 acres, and they told us this would bring relief to the people of the country. Estates that were giving employment to 60 or 70 people were taken over and divided at huge expense. It took hundreds of officials to divide these estates. Well, they divided them and they put on them numbers of people who before the outbreak of war were flocking over to England. Since then these people have been flocking back, and for months past they have been cringing for unemployment assistance at the labour exchanges. In the farms which they now occupy there were people previously employed, and benefits were conferred by the people who owned these estates on all the neighbouring farmers. They bought up hay, oats and cattle from the small farmers around them. The men working on these estates were living in comfort, and the surrounding farmers were snug and comfortable, but the Fianna Fáil machine insisted that these estates be divided up. Well, the Government went down to the West of Ireland and took from there numbers of men and brought them up to these colonies. Unfortunately, they brought up numbers of men who did not know a spade from a crowbar. I am saying nothing against these people that were brought up; they are decent enough, but thousands of pounds were wasted. They were brought up there and left, one might say, in the wilderness because they did not know the first thing about farming. Not alone did the Government buy the necessaries of life for them, but they bought horses costing £50 or £60 apiece for them. They bought horses for men who never worked an ass in their lives. These horses were fit to be troopers, but in a fortnight after they got them, one could not believe they were the same horses. They were all a mass of sores and cuts from the barbed wire. If I am not stating what is a fact, the Minister can go down to Rathcarne, Lambay or Gibbstown, where hundreds and thousands of pounds were squandered in order to help on the Irish language. Well, if one goes there to-day, he will hear more than the Irish language; he will hear language that one does not forget.

The Government Ministers may smile and look pleasant but the country people are not smiling and their wrath will soon be felt. If we here who have been elected by the people do not do our duty a new group of men will take our places, a group of men who will not be elected by the votes of the people either. Does the Government know what is wrong in the country? A revolution is almost needed to bring this country to the position in which it should be. All the Government red tape should be smashed through; the Government should go back and rule the people in a plain way. They should get shut of their British ideas, rule Ireland for the Irish people and not be looking across the water to the Englishman, asking his views so that we must change ours if he does not like them. The Government is there sitting in the saddle. What I say to them is that they should put on their spurs and set to work. The only hope of this country is agriculture and not a man in the Government Front Bench knows anything about that industry. The Minister for Agriculture unfortunately was not brought up to agriculture. From the age of 14 I presume he was trained to be a doctor and from that day to the present day I do not believe he was ever on a farm of land. Is it fair that the important industry of agriculture should be without a leader? Why not appoint the best man to the job and put him in charge of the Department of Agriculture? If the Government did this, there would be plenty of work all over the country for everybody, but they will not do it because they know nothing about it. I say to them: Get out or get on with your job and do not be sitting there like a crowd of blood-suckers——

An Leas-Cheann Comhairle

I do not think that is a proper expression.

Captain Giles

I do not wish to use any opprobrious expression.

An Leas-Cheann Comhairle

That expression must be withdrawn.

Captain Giles

I withdraw it. If you want to save this country, then you must save the agricultural industry. You can save at least £3,000,000 on the Army here and now, by sending those people to their homes instead of having them skedaddling around the country. If this country is menaced, the people from the land will do their duty and flock to its defence. They did it in 1916; they did it in 1918; they did it in 1921, and they did not want half an army to do it. They stood foursquare, and they will do it again. I say the soldiers of Ireland should be the farmers' sons and the decent country workers, working at home, and when the whistle is blown they will respond to the call. You will not need uniforms or bribes for them. They are using their spades to-day and to-day is the day for the spade.

Five or six years ago you started to industrialise this country. All of us who fought for freedom do believe in industrialising this country, but we do not believe in building up industry by strangling agriculture. We believe in having agriculture our strong right arm, with industry coming next. We believe in building up only industries which have their roots in this country. We do not believe in having one factory in this country which has a penny of British or foreign money in it. We do not want Jewish and foreign stores springing up here. We want none of these chain stores. We want decentralisation, and we want the people down the country to have some say in their markets. But, of course, the Government had to build up big combines in Dublin, and make Dublin the heart of Ireland. I want to see the Midlands, all those places where the sons of Ireland fought for freedom, getting their fair crack of the whip. They are not getting it, for the simple reason that the Government are getting things too easily themselves. If you on that Front Bench were put to the pin of your collar to exist, we would be getting more service from you. You fooled the people, and even the Labour Party, which kept you going for years and years when they should have been throttling you. I know they are sorry to-day, and they would not do it again. You are there to-day with your clear majority, and you are riding rough-shod, but you ought to remember that you can fall out of the saddle.

Mr. Browne

I am opposed to this Supplementary Budget, mainly for two reasons. One of the reasons is the decrease in the exports of our agricultural produce for the last eight or ten years. The second reason is the increase in taxation in this country over the last ten years. We have to take into account that our agricultural exports in 1926 amounted to about £28,000,000, and in 1937 the figure had fallen to about £18,000,000, that is a reduction of £10,000,000 in the main industry of this country. It is an industry that will always have to remain; it is an industry that will always have to maintain at least 80 per cent. of the people of this country.

Then we come to the increased cost of living. I do not want to go into a lot of details, as the whole thing seems to have been fairly well debated during the last five or six days. I will just take one or two items. Flour production in this country is costing the consumers of this country roughly £3,000,000. What is the position? We find that flour was produced and sold to the British consumer during the last four or five months—I may say the last 12 months—at 22/- a sack, while flour in this country is costing the consumer anything from 36/- to 42/- a sack. Surely the ordinary people in the country, who live mainly on bread as the principal food, should not, through legislation, be taxed to that extent. I may be told that the millers are responsible for it. I am not going to blame the millers for this increase in the cost of flour. Why? We have a Minister for Industry and Commerce and we have a Minister for Supplies; the Minister for Industry and Commerce is in charge of the millers and the production of flour in this country, and I am perfectly satisfied that it is legislation through the Minister for Industry and Commerce that is responsible for the increase in the cost of flour.

I say it is bad management that the consumers in this country have to pay 42/- a sack for flour that can be sold in England at 22/- a sack. What does the difference mean to the ordinary consumer in the country, particularly to the farmer, because the farmer has to make two of his meals per day out of flour? What does it mean to him, and to the consumer in every part of the country? The average overcharge as compared with the price of an 8-st. bag of flour to the consumer in England is, roughly, 8/-. The price quoted in to-day's paper for flour delivered in England is 22/- a sack, and that price is quoted at Liverpool. We down the country have to pay 42/- a sack for the same flour. It will be seen, therefore, that a man who purchases an 8-st. bag of flour per week has to pay an increased tax of 8/- per week. Take the unemployed man, who has to go out and depend on two or three days' work on relief schemes. His purchase is a stone of flour. What does he pay? On the stone of flour he has to pay 1/-. What is happening to the man who is buying a 2-lb. loaf? The increased price of flour increased the price of the 2-lb. loaf by 1½d. and of the 4-lb. loaf by 3d. I do not mind who is getting the benefit of the growing of wheat, but I do say that it is not fair to the poor people in counties where the land will not grow wheat that they should have to pay this increased price for flour. I am satisfied that that is wrong, and that if flour is to be manufactured in this country on the basis of the present legislation the Government should subsidise the millers to the extent of the difference between the value of the imported flour and the flour that we mill in this country.

Some time ago here—I think it was in July or August—we were given to understand that the Minister for Industry and Commerce had made arrangements with the millers whereby they would be allowed 1/- per sack to defray interest on capital for the purpose of having in stock a surplus of imported wheat to meet emergencies.

I should like to know what was the quantity of wheat that really was bought and stored to meet the emergency that occurred on the 1st September. If that wheat was in stock, and if those millers were paid 1/- a sack, I expect it would be more or less on the basis of interest for the capital invested in it, in the purchase and storing of it. Why should flour increase in price, within a fortnight or three weeks, from 35/6 to 42/- a sack? On the 1st September the general price for a sack of flour was 35/6 to 36/-; on 1st November the price was 41/6 to 42/-.

The producers of wheat, those who sell the wheat and get the fixed price from the millers, have got no increase for the wheat that was sold between 1st September and 1st November. The price was just the same. I do not know what is the exact mixture of Irish wheat; I expect it would run to 40 per cent. of our consumption of flour. We were given to understand that the surplus stock was there. If it was there, why did the Minister for Supplies, who must know all about it, allow the price to advance from 35/6 to 42/- inside three weeks? According to what we were told, the surplus stock was there.

We were told last week that the price of bran and pollard was increased. There was no further increase in the price of flour; flour was the same from the week previous to last week, and it is the same to-day. Pollard and bran are made out of wheat; wheat is the article that produces flour, bran and pollard? Why should they be allowed to increase the price of bran and pollard. Bran and pollard seem to be the popular feeding-stuffs for the farmer owing to the price and the scarcity of Indian meal. We have the same condition of things in regard to Indian meal. In yesterday's paper corn was quoted in the British market at £5 a ton and Indian meal was quoted at £6 a ton. There is a Minister for Industry in England and we have a Minister for Supplies in this country. I do not see why our Minister should not take up the same attitude in this country as regards Indian corn, having as the main object the production of meal to help the agricultural community here. I think they should work on the same basis as the British.

In this country we produce pigs, eggs, butter and other commodities for export; we have to produce them for export and we meet in competition with the British farmer, who has the advantage to-day of being able to purchase a cwt. of Indian meal at 5/- less than we can, and is able to purchase pollard at 4/- a cwt. less and bran at 4/- a cwt. less. These are the disadvantages that the farming community in this country are up against, and unless there is some remedy introduced I am satisfied that the farmers here will not be able to continue much longer. At least the purchasing power will be such that I am afraid the Supplementary Budget will not show much results.

I would be glad to see the Budget balanced, but my opinion is that you will get nothing from the tax on tobacco. Nobody can afford to pay 1/11d. for a half-quarter of tobacco. A man was talking about tobacco the other day and he said: "If I wanted a half-quarter of tobacco I would have to sell 1 cwt. of potatoes in order to get it. I live four miles from the town. That will not happen, anyway, because I will not do it; I will do with less tobacco." The consumption of cigarettes is sure to fall, and I believe the same will apply to whisky and stout. As a matter of fact, my information is that the consumption of these things is decreasing steadily.

I do not want to say anything on the sugar tax beyond the fact that it is certainly a tax that reacts on the poorer sections of the people. Sugar is a necessary article of food. It is an article that affords considerable nourishment and it is the main form of nourishment that the poor people have. The Government have increased the price of sugar; in fact, they have increased most of the commodities required by the average household. The sugar tax is an easy tax to collect, because it is such a necessary food. I suppose that is one of the reasons the tax was put on it.

We have been told that on this side of the House we want social services cut down. Deputies on this side have made no such suggestion. I submit that the Deputies on the other side of the House are the people who have reduced social services. Last year £100,000 was transferred from the Road Fund in order to balance the Budget. That money was taken away from social services and it was not this side of the House that was responsible. This year relief schemes, which may be regarded as social services, have not yet commenced in my county. Such schemes are very badly needed there and I hope they will be started before Christmas. Last year the relief schemes were started in October. We have now almost reached the end of November and we have a huge number of unemployed people in Mayo and no relief schemes have yet been started in that county. There are many people there who, for the greater part of the year, have to depend on unemployment assistance or relief schemes, and unless something is done soon to have the relief schemes started in our county, conditions will be very hard for the people. I trust the Government will see their way to remedy the situation.

It has been suggested that we want reductions in social services. I did not hear one Deputy from these benches making such a suggestion. Everybody on this side of the House has asked for a reduction in expenditure. I say that a reduction in expenditure is the only way to get over the difficulty, and that reduction can be achieved in one day. The black-out regulation was taken off in one night. You can cut Army expenditure from £4,000,000 to £1,000,000 to-morrow, and you will have £3,000,000 saved, £1,500,000 over what you hope to obtain from sugar, tobacco and drink.

There is very little more I have to say. As I said before, the thing has been gone into fully, and there is no use in repeating what has been already said. In conclusion, I say the Budget is a bad one, that it is a Budget that will react on the poorest of the population of this country. It makes no provision for helping the main industry in this country, the agricultural industry. Having mentioned the agricultural industry, I just want to make one reference to it. In a question yesterday I asked for our exports of eggs over a period of ten years taking every third year, 1927, 1930, 1933, 1936 and 1939. I asked for the exports for March and October of each year. The reason for that was that March is the biggest month in the year and that October is coming on to the smallest months of the year in regard to egg production. If we take one month, which is the month nearest to our recollection, the month that we have heard about and that we all know so much about, that is the month of October this year, what do we find? We find that in the month of October, 1939, our export of eggs from this country was 55,642 great hundreds, while the export of eggs from this country in 1927 was 197,651 great hundreds. What does that represent? It means that the difference between the total export in October, 1939, and October, 1927, was 142,000 great great hundreds. The average flat rate price for a great hundred of eggs in the month of October last was roughly £1. Therefore, that means that there was £142,000 less in the pockets of the farmers' wives and families who are gathering those eggs. I say that is a serious difficulty confronting the farmer. I say that it is even more important in this way that the heavy production of eggs in this country is mainly confined to a few countries which are very big producers, and that this big reduction in the value of egg exports is going to be confined to a few counties with very high population, where the land is poor, where the people cannot either grow beet or wheat, or make use of those crops, and will have to pay in excess for the purchase of flour. I say that this reduction in the egg production of the country, especially in October of this year, is a serious loss to the agriculturists. I am satisfied that this is a bad Budget and I am going to vote against it.

Mr. Belton

This increase in taxation has been a very unpleasant surprise to the country and an anticlimax to all the promises of the people's Government, the poor man's Government. I would venture to say that the information that has come to the Minister already in regard to those new taxes does not point to an increase in revenue. I am satisfied that the sales have gone down, leaving the revenue from those taxed products as a whole less since the new added taxation than before it.

Since the war started it has been stated over and over again from the Government Benches that unemployment, already very considerable, would increase. Faced with that situation and finding that war conditions so affected this country that revenue was seriously affected and diminished, the only remedy the Government could find was in increased taxation, and increased taxation of the necessaries of life. No man seriously thinks to-day that the working man who has smoked all his life looks upon his ounce of tobacco as anything more than a necessary. The smoker will give up food rather than give up tobacco. The working man, accustomed to his pint, will give up food before he will give up his pint. The Minister put twopence on the ounce of tobacco and a penny on the pint and he is getting less out of both now with the increased cost than he was getting before. I challenge contradiction on that from the information to hand at the present time.

Revenue from a source that should never in proper government and in proper administration have been looked upon as a revenue making device was seriously affected. The present Government set out upon a rapid industrial programme but they discovered that the protective duties they were imposing to help industry, the tariffs they were putting on articles coming in, were in advance of the industrial development and that the industrial arm at home here was not able to give products as fast as the Government contemplated or as the tariffs that they were imposing would indicate, so that out of those tariffs a third of the revenue of the Government came.

Then when war conditions came the Government, that in its profligacy had learned how to spend all this money together with the withheld land annuities, could not find revenue without imposing new taxation. Consequently, we have increased taxation on sugar, tobacco, beer and spirits and estate duties and an increase in the income tax—all these increase in a country where both industry and agriculture are contracting.

I wonder does the Government consider what is in the offing or what the future holds. Unemployment is increasing. Taxation is increasing, and there is no evidence of any step being taken to fill the vacuum created by the loss of peace-time employment, because war is being waged all about us. No effort is being made by the Government to substitute war-time employment for that peace-time employment, and to run the country at the old level it has to increase taxation on the constantly diminishing number of people that are engaged in industry and in agriculture. The Government ask: "Well, do you want to cut the social services? If you do, will you mention the social service that you wish to cut?" It has been stated over and over again, and will still bear repetition: Cut the Army expenditure instead of increasing taxation. If the Army expenditure is kept up, peace-time sources of revenue will still further dry up, and the deficiency will have to be made up by a still further increase of taxation if there are not savings made somewhere. I suggest to the Minister that he should think seriously and quickly about effecting economies in public expenditure, because the resources of the State are not able to meet the demands that he is making on them.

The Minister knows from his experience in the Local Government Department how employment is shrinking among local authorities. He knows that the Government are in a less favourable position to help local authorities now than they have been. He has stated himself, and I accept his word, that he must charge a higher rate of interest for the money he is lending to local authorities. That will curtail employment by local authorities, while, at the same time, those who are disemployed will become a burden either on the State or on the local authorities. The position is so serious that I should like to see the Government approaching this matter from the angle of economy rather than increased taxation, because I am satisfied that taxation has reached saturation point, and that there is a diminishing return from taxes. If the Minister has any information on the subject to contradict my statement, I would be glad if he would give it when replying. I maintain that so far those taxes are not productive, and that more revenue was obtained from these commodities before the imposition of these taxes.

We are pretty well as much in this war from the economic point of view as we were in the last war. The last war brought some benefits to us, brought prices for the things we had to sell. This war is not doing that. Therefore, if economic conditions during the war continue as they are at present, this country will make no profit, and, consequently, will not be able to build up any reserve for the terrible aftermath. There has never been a war yet without a terrible aftermath for the belligerents. We have been told that the Government have made provision for production in this country, have anticipated the effects of the war. I fail to find that. We were told that the Government had plenty of artificial manures here. I cannot buy them in Dublin, I cannot get a quotation for them, and that is the test.

Supposing, as we all hope, the war collapses suddenly and the reserves of foodstuffs which Great Britain has stored up are let loose on the British market, the British would be buying nothing here. What would happen to this country? Something that Ministers should not smile at, something they should consider very seriously would happen if you had a collapse in prices here. It is well known that Great Britain has a year's reserve of foodstuffs. If the war collapsed, these reserves would be unloaded on the British food market and at a very low price. What would we do with our food? Where would our agriculture be? All its commitments would have to be met, but there would be nothing to sell because there would be no market in which to sell it.

Now, while the war is on, prices have not gone up. The war has seriously affected certain sources of revenue. While the Government have failed to provide any war-time employment for our workers and are letting them go on the dole or on home assistance, the Minister has rushed in with this Bill to impose new taxation on unfortunate people who are being disemployed, and on others who are hanging on and do not know what to-morrow will bring them. Ministers have stated that labour should not demand higher wages. If you put 2d. on an ounce of tobacco and if an agricultural labourer smokes three ounces per week, do you not reduce his wages by 6d. per week? The agricultural labourer cannot afford to spend his holidays on the Riviera. If a penny is put on the "pint," and if a man drinks a "pint" every day, that comes to 7d. a week. I wonder has the Minister ever followed the ramifications of the barley crop, from the time it is sown and harvested and then sold as stout and porter, and what taxation it is called on to bear. It is an Irish product and becomes the raw material of the distilleries and breweries. When it leaves these places it becomes the finished article of the publican, and it is also the raw material which the Minister taxes up to the hilt. I suggest that it is taxed beyond the hilt now, just as tobacco and sugar are taxed beyond the hilt.

The Minister is asking the trader in sugar to sell it at 4½d. per lb. This question has been discussed ad nauseam but traders cannot be asked to take in sugar in bulk, to weigh 112 lbs. out of 1 cwt., to put them in 1 lb. or ½ lb. paper bags, and sell at ¼d. profit. That is impossible. While this matter has been debated at length, I have not seen any anxiety shown about the seriousness of the position on the Government Benches.

When I go through the country, or through the city of Dublin, I hear very grave doubts about the position expressed by ordinary citizens. It is not political opinions are heard now. The question is: "Whither are we going?" How can we bear the heavy burden of taxation?" The Government seems to have no remedy but to increase the burden. Everybody is asking what the Army is for. We had a semi-black-out, or nearly an entire black-out, for a long time. The Guards called at a business house of mine and said that the neon light should be blacked out. Now if you go to the Rock Road, or to Dalkey or Killiney, or look across at Howth you would think it was a bright, frosty night.

How much has been spent on the black-out? How has been wasted by public bodies, by big business houses, and by private people, particularly along the sea front? The Government seems to have had a fit of nerves for the past couple of months. Then we have trenches being dug for A.R.P. shelters. I should like to know how much money was wasted on A.R.P. Are we not a neutral country? If so, is it not waste to spend money on A.R.P.? A conservative estimate of the expenditure of the Dublin Corporation on A.R.P. amounts to £50,000, while there is no money to build houses. Yet we have been squandering it on A.R.P. I understand that 500,000 gas masks have been procured, and that these are made of perishable material. Are we neutral or not? If we are neutral why all the fuss about A.R.P.? Why have a black-out one week and not another week? The Minister for Finance should give the matter serious consideration.

I do not want to touch on the parts of the Budget that affect agriculture, as that will come on another day, perhaps more appropriately. However, this should be remembered: that agriculture here was brought to the verge of ruin, and that frozen debts amounting to millions were accumulated in the banks during the period that Great Britain pursued a policy of getting back from the high point of inflation in 1919 to the gold standard in 1925. During that time agriculture was working against an impossible barrier. When war broke out in 1914 this country was part of the United Kingdom and the British Chancellor of the Exchequer was looking after our finances. We also had him looking after our finances from 1919 to 1925. He had the authority and the machinery to do so. As a matter of fact he did not look after them.

The Minister for Finance has a very big responsibility at the present time. The British £ is as cheap to-day as it was in 1919, although the present war is only on a few months. England was the big financial and banking centre of the world, and when this war is over she will endeavour to get back to that position. She cannot get back to it unless she has a stable currency and that currency will be on the gold £. What is going to happen to this country if we have a rapid period of deflation similar to what occurred in 1919 and 1925? We were able to start a Government of our own here in 1922. The ex-Minister for Finance can laugh, but he is the only Minister in the world who did not look after finances and banking.

Mr. MacEntee

I was only thinking of the Deputy's contraband supply of manures.

Mr. Belton

I do not understand what is meant by "contraband supply of manures." I do not understand any possible meaning that could be put on contraband that I would be implicated or interested in. The Minister might be thinking of smuggling something from the North down here.

Mr. MacEntee

Spilling cabbage.

An Ceann Comhairle

Neither cabbages nor kings.

Mr. Belton

A blackguard can do anything.

Mr. McGilligan

And get the Minister's support.

Mr. Belton

And get a cheap gibe. If the Minister is referring to my stuff, it was sent to a shop after consultation with responsible people in the Farmers' Executive, who were sent as a deputation to me to do certain things. The Minister sees in that a cheap gibe, because a blackguard jumped out of a van, pulled the trap-stick off one cart and ran away, but my man collared him and nearly murdered him. That is the type of thing the Minister revels in. That is the type he associated with in County Dublin and that put him in when he represented the county.

Mr. Corry

Did you not tell us you were supporting the farmers?

An Ceann Comhairle

As that question is irrelevant it should be ignored.

Mr. Belton

I support a strike nowhere. I have sympathy with the farmers' cause. When I was interrupted I was saying that the Minister could smile.

Mr. MacEntee

The Deputy knows what I was smiling at.

Mr. Belton

It was not worth a smile. It shows lack of intelligence on the part of the Minister if that would make him smile. I am surprised that such cheap smiles could appear on the faces of men on the Government Benches. However, I will pass from that. I impress, upon the Minister for Finance the need of considering the very serious position that agriculture is in, because of the financial state of the country and the increase in unemployment. No Minister can say, with any justification, with any authority, or with any feeling of truth that he could guarantee prices next year for barley or wheat. He could not do so. If there are a couple of hundred thousand unemployed people to be assisted, how is any Minister going to guarantee high prices for farm produce? How could he redeem his promise regarding the price of wheat, barley or beet? Where is the guarantee to come from? Can high or inflated prices be paid by people who have no work to do, or who have no wages or no purchasing power? That is a thing to which the Minister should apply himself, and to which the members of the Government Party should apply themselves. If you have not got the people working and earning wages, you cannot guarantee prices. If there is not a market here for farm produce because the people have not the purchasing power, is it proposed that our agricultural produce should be exported out of this country in order to get a price, and leave our own people to starve? If prices are to be guaranteed, then some provision must be made to enable the people to purchase the commodities they require. It will be bad enough during the war emergency, as it was during the last war emergency, but if the Minister does not get a grip on the financial situation during the course of the war, I do not see how it will be within human power to save the country from wreck in the aftermath that will follow after the war. It will be the same as was the case after the last war, and it is well known to everybody what happened in that case. You have found that out as a result of the findings of every commission that has sat since the last war. Whether these commissions were dealing with agriculture, industry or banking, they were all confronted with the one problem of frozen debts in the banks. I have seen it stated that the amount of these frozen debts runs to about £15,000,000 or £20,000,000. How did they accumulate? They accumulated as a result of the rapid deflation that took place after the war. I hope that the Minister will deal with that aspect of the situation when he is replying, and I do not think the matter needs any further discussion so far as I am concerned. It has been debated, ad nauscam, in the various other forms in which it has been before the House.

Seán O Monghaile

Táim ag éisteacht le cupla lá leis na daoine ar an taoibh thall ag cur síos agus ag argóint mar gheall ar na cáineacha atá san mBille seo, agus á chur in úil dúinn chó cruaidh agus a bheas na cáineacha seo ar na daoine bochta. Tá siad ag leigint ortha nach bhfuil duine ar bith ag cuir suim i gcruadhtan na mbocht acht amháin iad féin. Acht tá fhios againn uilig cad a thug siad-san do na daoine bochta. Bhí siad i réim ar feadh deich mbliadhan agus thug an Riaghaltas seo níos mó do na daoine bochta i rith cupla bliadhain ná thug na daoine ar an taoibh thall dóibh ar feadh na ndeich mbliadhain úd. Má tá duine ar bith i láthair i ndon é sin a bhréagnú is féidir leis é do dhéanamh anois. Ach tá fhios acu gur fíor é.

Is deacair a bheith ag éisteacht leo anois ag cur síos ar chruadhtain na mbocht. Tagaim ó roinn na tíre in a bhfuil a lán feilméirí beaga agus daoine nach bhfuil mórán saidhbhris acu agus gidh go bhfuil cáin ar shiúcra agus ar thobac ní chluinim iad ag gearán mar gheall air. Tuigeann siad go bhfuil an Riaghaltas ag déanamh a dhícheall chun cuidiú leo agus sin é an fáth nach bhfuil siad ag gearán ná ag clamhsán.

Muna mbeadh go raibh an scéim i dtaobh an sugar beet againn caidé an seort siúcra a bheadh ag na daoine san tír seo anois? Tá fhios againn an sórt plúir agus siúcra a chuir muintear Shasana chugainn sa gcogadh deireannach. Níl aon mhaith do na daoine thall a bheith ag clamhsán mar gheall ar na cáineacha seo. Caithfidh an Riaghaltas an tír a chosaint agus caithfidh siad an t-airgead a fháil chun sin do dhéanamh.

Mr. Brennan

I move the adjournment of the debate.

Debate adjourned.