I approach consideration of this Budget from the point of view of a person entirely unversed in the technique of finance, and look at it from the point of view of the average citizen who hardly knows the effect of the phrase, "balancing the Budget." I do not propose, therefore, to enter into any detailed examination of the masses of figures put before the country in the speech made by the Minister when introducing the Budget. I wish merely to refer to two or three topics, two of which are of paramount importance to the general community, and one of which is of particular importance to a section of the community. We have reached the stage now when the introduction of an unbalanced Budget is regarded as a commonplace. At least four out of five of the last Budgets that were introduced by the present Government have been unbalanced, and it is rather a striking commentary on the outlook of the people that the only thing they have been able to say as a result of the statement made by the Minister for Finance yesterday is that at least it is a good thing that there appears to be no additional taxation. A sigh of relief has gone up because additional taxation has not to any great extent been put on. The burdens have become so heavy and the people have really become so accustomed to bearing them, that they are relieved to find that they are not going to be heavier still. One crumb of comfort can possibly be taken from the Minister's statement when he said that the Government recognised that there was a limit to the taxation that even a Fianna Fáil Government could put upon the people. At last, after eight years, it is useful to know that the Government realises that there is a limit to the taxation which can be put upon the people. It is a small matter for congratulation that these are the only crumbs that can be got out of the present Budget.
I want to say a few words on behalf of the income-tax payers in this country. They have for years past been the prey of the Minister for Finance in Budget after Budget, The number of income-tax payers here is comparatively small and, from the point of view of their voting capacity, they are negligible to a Government and a Party whose policy and whose existence depend on votes. But I think it is time that the Minister for Finance and the Government should seriously consider the intolerable burden placed upon income-tax payers by the imposition of an income-tax of 6/6 in the £. We, while congratulating ourselves on being one of the few neutral countries that have escaped the really serious effects of the war have now an income-tax which falls very little short of the income-tax paid in Great Britain at a time when Great Britain is facing almost intolerable burdens in an effort to prosecute the most difficult and most perilous war in her history, when she is fighting for her existence and when, judging by the evidence before us, everybody is prepared to make any and every sacrifice.
I think it has been the excuse of the Government that such a high rate of income-tax is occasioned by matters arising out of the present war. When things are properly analysed it will really be seen that the present high rate of income-tax here is caused entirely by the policy that has been pursued by the present Government over seven years, prior to the commencement of the present conflagration in Europe. The rate of income-tax we have to pay now has very little relation to the situation created by the present war and by the emergency in Europe, but is entirely traceable to the kind of policy pursued in the last eight years, a policy which has brought us at least four unbalanced Budgets, and which has brought us to the position that every member of the community, rich and poor, is taxed beyond his capacity. It has often been said that income-tax is the fairest tax. Possibly that is an argument that might bear analysis in ordinary circumstances, but when you find income-tax payers for the last eight years having to pay far greater sums in proportion to their earnings than is justified by the results that have been obtained in the spending of the money extracted from them, the argument that income-tax is the fairest tax ceases to have any relevance.
It is, of course, an easy matter to take out of the pockets of those people who earn their money a tax collectable in the way income tax is collected. It is an easy matter for people to say: "Tax the rich," but the effect of such taxation, even on a matter of vital importance such as unemployment, has not been properly realised. The burden of income-tax on people who have to earn their livelihood has become so intolerable that every class of the community who earn incomes on which tax is collectable have had to retrench, and will have to retrench still further. I think it was the present Minister for Finance, or the Taoiseach, who said, on the introduction of the emergency Budget last year, that it was something in the nature of a patriotic duty for all citizens to spend as much as they could in the emergency, so that unemployment would not become a greater menace than it was. It would be quite impossible, with the rate of income-tax as it is, for any person to spend money on anything except what is absolutely essential. The idea of thrift will be banished from the minds of the people if the idea is that the more you earn the more is taken from you, that you have to retrench in order to pay taxes, the produce of which is to be thrown into the sea. There will, in these circumstances, be no impetus to thrift, and there will be nothing to recompense a person for the payment to the State of money which he would have been prepared to spend in the exercise of the patriotic duty referred to in the debate on last year's Budget. The only thing to do will be to get rid of the money in the easiest and most luxurious fashion possible.
The Minister for Finance, in his Budget statement, took pride that he was able, by the doing of a certain sum almost amounting to arithmetical gymnastics, to point to the fact that in the Budget proposals for the present year a sum of £8,383,000 represented the contribution of the Government to the solution of the problem of unemployment. I regard, as I think most people must regard, the problem of unemployment as one of the most pressing problems facing the country as a whole. It is easy for people making speeches to say that it is the duty of the Government to spend more and more money on unemployment relief, unemployment schemes, and in giving employment, that it is the duty of the Government to have some sort of ordered policy or plan for the solution of unemployment. The days when any Government, in this country at all events, could produce in the manner the present Government said they could produce eight years ago, a readymade plan for ending unemployment have gone for ever.
When I speak on the subject of unemployment, I speak with all sincerity. I do not speak in the mood of throwing at the Government their alleged plan for the solution of unemployment which appeared in their famous plan in 1932 and 1933. I think that the last Minister for Finance had the courage to say on several occasions that there was no plan for the solution of unemployment. While there cannot be said to be any ready-made plan for the solution of unemployment, the paramount duty of every class of the community is to bend its energies and unite in order to solve the present terrible condition in which we find ourselves in the matter of unemployment at the end of eight years of the present Government. The sum of £8,383,000 is supposed to represent the contribution of the Government to the solution of the unemployment problem. It is a sorry story to tell that with that colossal sum which the Government proposes to spend in the relief of unemployment, we are facing this year greater unemployment than ever. The menace of unemployment is more menacing than ever, and there is less chance of even palliating the evils of this very serious problem. Presumably, a corresponding sum to this sum of £8,383,000 was spent during the last three or four years. Notwithstanding that figures have been produced and proved showing that in the last five years of Deputy Cosgrave's Government, more people were put into gainful occupation than were so put during the corresponding five-year period of the present Government, despite this vast expenditure of money.
The expenditure of these sums of money may, possibly, palliate the evil of unemployment. They may give employment, direct or indirect, but no money spent on the relief of unemployment can give real or lasting results unless some tangible asset is produced in return for it. As I said, I speak with all sincerity on this subject. I believe that in the conditions existing in the world, the impact of which must be, and is being, felt in our own country feelings of unrest must be produced amongst the unemployed that will cause many grave reactions on the stability of any State, including our own State. The Taoiseach yesterday found himself in the position of making an appeal over the radio to the people to support him in the restoration of ordered conditions. I believe that a great deal of the disorder in the country is due to the existence of unemployment. From my own experience of people coming to me trying to get work, I believe that the vast majority of unemployed people are, in all sincerity, anxious to get any sort of employment. The cancer that eats into them through idleness day after day creates in them such a feeling of revolutionary unrest—almost hatred of the existing order—that there is no knowing to what lengths they may ultimately be driven. From the point of view of restoring ordered conditions it is the prime essential that every possible effort should be made to find some method of relieving unemployment in the course of the coming year.
It is no answer to say that £8,000,000 can be extracted by arithmetical gymnastics from the Estimates and that this sum has been passed by the Dáil. No real results have been achieved or will be achieved from the expenditure of these vast sums. The only effect will be a minor palliation of the evil. The vast amount of money extracted from the pockets of private taxpayers might more properly be spent by these individuals in giving employment by private enterprise. As it is, they are forced to retrench and cut down the employment formerly given by them. The high rate of income-tax has a very serious repercussion on this vital problem of unemployment. An individual who has to give one-third of his income to the State for all sorts of extravagances and to bolster up schemes which have produced no real, tangible or lasting asset finds that he cannot maintain even the employment previously given in his own private business or in his own household. The result is that each individual has to do without one particular workman or one particular servant or, perhaps, two more that they might keep on if the income-tax was not so high.
The income-tax is collected and spent in a vast variety of ways that produce no result except in increasing taxation and increasing unemployment. The expenditure that is to be made this year will have no other effect than to mortgage the future and to leave the position of the unemployed far worse at the end of it, notwithstanding all this vast expenditure, than it is even at the present time. It had been hoped that from the experience gained in the last few months some retrenchments or economies might have been made. It was dangled before the eyes of the taxpayers last year, when the emergency Budget was introduced, that an economy committee was sitting, in regard to which there were great expectations; if not great expectations, at least expectations of some real and lasting cutting down of extravagant expenditure. Instead of that we find the position to be this, that the Minister, in his opening statement yesterday, says that he feels that it is not possible for any such economies to be achieved. He gives no reasons why, except one, which is a mere vote-catching reason.
He gives us no explanation of the work of the economy committee or no indication of what their recommendations are. He gives no opportunity to the House to say that this recommendation ought to have been carried out, that that recommendation could have been carried out, or possibly this other recommendation might eat into old age pensions or unemployment assistance and, therefore, should not be carried out in the present circumstances. In two or three lines the Minister dismisses the work of this economy committee, merely stating that he had come to the conclusion that it would eat into the social services and for that reason was not necessary. Every time economy is demanded, at every stage when extravagant expenditure is protested against, one answer is given by every member of the Government, and there is the following chorus from the Fianna Fáil Party. That answer is that if you reduce expenditure or effect economies you will be doing it at the expense of the social services. That cry has been shown to be false so frequently that it is not necessary to repeat it.
Social services include old age pensions and unemployment assistance. The poor want work rather than unemployment assistance. I think economy in public administration would be far more beneficial than any social service you can possibly have. It is a great sign in a country that social services are well looked after, a sign that all parties desire to look after the old and infirm and the workless. But it would be a far better sign for the prosperity of the country and for the future of the country if the Minister for Finance could say: "We require less money this year for unemployment assistance; we require less for employment schemes; we require less money to hand out for road work on this, that or the other scheme, because of the fact that there is more work being given; the wheels of industry are working more smoothly and, consequently, our social services, while we maintained them when we had to maintain them, can now be reduced; we are now in a position to reduce them."
Instead of the Minister for Finance trying to pretend that the Vote for the Stationery Office, for the Public Works Department, for the construction of national schools, for the Gárdaí, the Army, for A.R.P. shelters, and all the other Votes that he added to make the £8,300,000, that, he said, was a good contribution by the Government to the unemployment situation, it would be a more healthy sign if he could say to us: "Our industry is such, our social scheme is such, under the policy pursued by this Government, that we require less for unemployment assistance and less for employment schemes."
Although I do not wish in any matters I have to say on this question of unemployment to leave myself open to the charge of merely playing politics, I cannot pass this question by without saying this, that much of the £8,300,000 in so far as part of it is represented by money that went in assisting employment, was used indirectly for the purpose of bolstering up the political fortunes of the Fianna Fáil Party. We have had experience of the working of Fianna Fáil political clubs in the country getting employment for the political supporters of the Government in power. I think that many of those schemes have been thought out and devised rather with a view to the effect that they will have upon a general election or a bye-election than what effect they will have upon a permanent solution of the general unemployment situation, and the proof of that lies in the fact that with all the money expended in the last eight years, the unemployment situation is worse now than ever it was, and the only prospect that is held out is that it will possibly get even much worse in the future.
We have a situation where the principal officer of the Department of Finance, speaking to a gathering of civil servants and discussing with them the necessity for inflicting upon them a greater sacrifice than any other section of the community is called upon to bear in existing circumstances, stated that the financial position of the country is sufficiently disquieting, and that expenditure for the year ended on 31st March exceeded revenue by over £2,000,000. That was a statement made, I am sure, carefully, a statement made with due deliberation.
The officer in question was representing the Minister for Finance at this conference, and he was putting to them the decision of the Government, which has been conveyed to the country in the Minister's speech to-day, that the bonus of the civil servants was to be stabilised. He took care to say that the disquieting financial situation of the country was not the primary reason for the Government's decision. He did say, and I quote his words:
"You are aware that the position is sufficiently disquieting. In spite of increased taxation, including that which was imposed in the Supplementary Budget last November, expenditure for the year ended 31st March exceeded revenue by over £2,000,000."
That situation is possibly not revealed in all its crude and naked truth in the Minister's statement that he read here yesterday. But it is well for the country to know that that is the position, that £8,300,000 are being claimed as the sum that is being spent as the contribution of the Government out of the taxpayers' pockets to unemployment relief, unemployment solution and to the employment position. It is well that they should recognise that all that has been a failure so far as the unemployment position is concerned, and it is well, therefore, that something should be done to reverse the policy which has brought about that position. There must be something wrong with expenditure here, or the means by which expenditure is being directed if that is the situation.
I said that I wished to make some general comments on matters affecting the general community, and one particular section of the community. The matters to which I have referred, the high rate of income-tax and its effects on the general community and on a particular section of the general community, the income-tax payers, are very much affected by the unemployment problem, as are, perhaps, all classes and sections of the community. But the stabilisation of the bonus adumbrated in the Minister's statement affects vitally one class, small it may appear, of the community. And I find myself once again in the course of a few years protesting against an injustice to the Civil Service of this State. In his Supplementary Budget statement last November the Minister said:
"The Government felt that it was incumbent upon it to set its face against the efforts of any class of the community to obtain compensation for the rise in prices at the expense of the community."
That is the statement which is supposed to furnish justification for the stabilisation of the Civil Service bonus.
The Government wants to set its face against the efforts of any class of the community to obtain compensation for the rise in prices at the expense of the community. Why select one class of the community? Was that phrase of the Minister's, given in his last year's Supplementary Budget and repeated in this year's Budget statement, directed solely at one class of the community, or was it to be of general application to all workers as well as to State servants?
There has been growing up for some little time past a notion that a number of industrial disputes, strikes, lock-outs and demands for increased payments, the dislocation of trade and the things that result from these disputes might possibly be alleviated if the principle of the cost-of-living bonus was applied in the matter of the workers' wages. I understand that principle has been successfully applied in some industries here in this country. There has, I understand, been a growing tendency in industry and amongst the workers to apply the principle of the cost-of-living bonus to these industrial disputes. It is felt that the principle of the cost-of-living bonus is a sound one. It has been decided by one of our courts that the cost-of-living bonus is a mere device to relate the actual salary or wages to the cost of living as it exists from time to time. The very name, cost-of-living bonus, carries its own justification.
I think at this time it is improper, however expedient it may be from the point of view of the Minister for Finance sorely pressed with an unbalanced Budget, to balance his unbalanced Budget by a raid on the pockets of State civil servants. It is a bad time for him to come to this decision, at the time when there was some hope that the cost-of-living bonus principle might be applied in the adjustment of wages generally, and so alleviate the distress and dislocation caused by industrial disputes, strikes, lock-outs, and the dislocation caused by these disputes generally. The Minister has, however, taken that decision, and he has taken that decision after having promised the civil servants that he would consult with them or their representatives before such a decision was made. He carried out that promise merely in a formal way, presenting the representatives of the civil servants with an accomplished fact, presenting them with that decision and asking for their approval.
The cost-of-living bonus of civil servants was based upon an agreement between the Civil Service organisation and the State. It has been judicially decided that the relationship between the State servants and the State is one of contract or statutory obligation. It is extraordinary at the very moment when that decision has been given in our courts, and not appealed from,— and until it is set aside by a superior court it is the law of this country— that the Minister should seek to set it aside. We have therefore the position now that the relationship between the Civil Service and the State is a statutory one. Civil servants who have entered the service of the State since the establishment of the State have done so under a contract and a statutory obligation founded on contract.
When a person proposes to enter the Civil Service he does so as a result of an intimation conveyed to him either by document or advertisement. It has been the invariable practice when the person is sitting for the examination to set forth the salary, cost-of-living bonus—indicating the precise amount of the cost-of-living bonus which would obtain. When he is received into the Civil Service he is received on the basis of that offer made to him on behalf of the State. He enters into agreement with the State that he will serve for a basic salary and the cost-of-living bonus. That is a contract complete in law under statutory obligations. It is proposed now so far as the Civil Service is concerned in the case of those with Treaty rights and those who have not those rights to set aside that contract.
I do not know what means the Minister proposes to adopt in order to carry that decision into full effect. There are two classes of State servants who would be affected by this decision. One class of servants have Treaty rights. The other is a class who have entered into the State service since the establishment of the State. We had experience shortly after the present Government got into power of cuts in the salaries of the civil servants and we know, therefore, the large amount of money that that particular decision following the cutting of salaries has cost the taxpayers of this country in giving compensation under Article 10 of the Treaty. Those civil servants who were entitled to retire by reason of the inroads by the Government on their rights, retired presumably under these Treaty rights which are now set aside unilaterally. Does the Minister hope to have some further moneys extracted from the pockets of the taxpayers by the stabilisation of the bonus? I warn the Minister that that proposal to stabilise the bonus will cost in the first year £150,000.
Where is the economy going to come in when that is taken into account as well as the cost of those who retire under Article 10 of the Treaty? I assume, in the absence of any indication to the contrary, that Treaty rights will not be affected in any way. The Minister must, of course, remember that it has been decided judicially that any cut in salary, including the cost-of-living bonus, is an infringement on Treaty rights. It is, therefore, clear that the present proposal is an infringement on Treaty rights. It is an infringement on constitutional rights as well as on Treaty rights, because those rights, which were originally based on Article 10 of the Treaty, have been put into the Constitution. As a constitutional right, the State servant was entitled to Treaty rights before the enactment of the Constitution. As regards the inroad that is proposed to be made on the statutory and contractual right of every State servant, we have had a sufficient example of the complete disregard by the Government of those contractual rights to have any hope that those rights will be in any way sanctified, or have any proper consideration from the present Government. At all events, we have left to us the right to protest in this House against those inroads upon contractual rights.
We have had the experience of having a general election fought nominally upon the defeat of the Government upon a matter affecting civil servants. We remember the vilification of State servants that was indulged in by members of the present Government during the course of that campaign. I do not wish to rake these things up again, but I think it is grossly unfair to try to get it over to the people that the servants of the State are in a peculiarly privileged position, and that the sacrifice which is being demanded of them is not what the chief officer in the Department of Finance told the representatives of civil servants when he entered into this co-called consultation with them—a demand to take special sacrifices or burdens upon themselves in the interests of the State in a moment of emergency. That was put forward by the Minister for Finance in his Budget statement as a mere step in equality of sacrifice for all. The statement made by the chief officer of the Department of Finance was not put upon the basis of equality of sacrifice. It was put upon this basis, that State servants were asked in the present emergency to make a special contribution in view of their special situation to the financial stability of the State.
If State servants are to be asked to make special sacrifices in special circumstances, let a case be made for that, but it is false pretences, it is a blinding of the ordinary people of the country who have been sufficiently blinded over the past eight or ten years by the vile propaganda that went on in Fianna Fáil circles about salaries and pensions, to say that this proposal to stabilise the bonus is merely asking civil servants to make equal sacrifices with all other classes of the community. They are asked to make special sacrifices. It is on equality of sacrifice that the present Minister for Finance has put his case for the stabilisation of the bonus. That in my view, and I think it is beyond controversy, is an untenable case. The vast majority of civil servants are lowly-paid officials who have to bear the brunt of every tax that has been put upon the people in the last eight years by the present Government. Now a special section of the community is being asked to bear an additional tax in breach, first of all, of Treaty and Constitutional rights, and, secondly, in breach of contractual and statutory rights. The case that is being made of equality of sacrifice is a false case. If a case is to be made for special sacrifices on the part of a special section of the community, let that be justified, if it can be justified, on special grounds.
The Minister for Finance, in his statement yesterday, made the case that State servants were in some way in a special position. He rather hinted that they were trying to get away with something that the general taxpayer was not going to stand for. The ordinary person in the country, and particularly the poor farmer and the small farmer, has been poisoned in his mind and outlook by the propaganda carried on by the Fianna Fáil Party for many years about the big salaries that civil servants and Ministers were getting. That cry has since been admitted by the present Government to have been a wrong cry, a false cry, and an untenable cry. Before they got into power we all remember how they decried the last Government for the salaries they were taking at the expense of the poor farmers and of how they were raking the pockets of the poor for their own advantage. When this Government got into power they were put in this humiliating position, that they had to go to the country and confess that they were wrong in what they had said.
I admire them for confessing that they were wrong, but now they are proposing to do something which can find its only justification and excuse in the country by an appeal to a similar kind of poisonous propaganda. I think it is entirely regrettable that such a case should be made. Civil servants are in the same position as any other class in the community. They enjoy no special privileges. In the course of the debate on the 1933 proposals of alleged economy, in answer to the statement that the country could not afford to pay salaries on the scale that they were being paid, I made the statement then, and I repeat it now, that the ordinary people of this country, so far from not being able to pay decent salaries to hardworking officials who have given loyal service to successive Governments in this country, must sooner or later wake up to the fact that they cannot afford to underpay servants of the State.
I have stood repeatedly for the rights of civil servants. I, at least, can make the case here that I have a mandate from my constituency to speak on behalf of civil servants. Every effort was made in my constituency during the last election to vilify civil servants. Every effort was made to deprive me of my seat in that constituency because of the stand I took on behalf of civil servants. But I was returned at the last general election and, therefore, I claim that I am entitled to stand up here and say that I, at least, have a mandate from my constituents to speak on behalf of civil servants, and I am doing so. I want it, however, to be clearly understood that I am doing that, not in the interests of any section of the community and, above all, not in the interests of bureaucracy, but in the interests of the general good of the community, in the interests of the general good of the taxpayers who have to bear the cost of the Civil Service. I want to see develop here a State service which will be efficient, small and properly paid, a service that will not be run on bureaucratic lines, a service in which there will be less red tape and more loyal service and more hard work than will be got from the pursuit of the kind of policy insisted on since the present Government came into office.
I think it will be admitted—in fact it has been admitted—that civil servants have given good service to this State, service that no money could buy, during the last 20 years, in building up the State and in building up the institutions of the State. I think it is unjust to single them out now on the cry of "equality of sacrifice." That is a false case to make. The plea that a special contribution must be made in the present emergency is a false one. If any special contribution has to be made by income-tax payers, if any special contribution has to be made by civil servants under the present conditions, those sacrifices are not demanded by the war; they are not demanded by our neutrality or by world conditions, but are the direct and inevitable result of the policy pursued over the last eight years by the Fianna Fáil Government. In every single respect their policy proved in effect, in reality and in working to be an absolute failure.
The taxpayer of this country has been made pay very dearly for the failures of the present Government. The income-tax payer is paying 6/6 in the £, not because of the war but because of Government policy. The working man pays taxes upon his tobacco, bread and other foodstuffs not on account of the war, not on account of the restrictions upon imports but on account of the results of the failure of Government policy, on account of their efforts to try to justify at the expense of the taxpayer something which could not be justified. When that is realised —as I think it has been pretty fully realised throughout the country—when it is realised that democracy rests upon efficiency and when we are able to educate our own democracy in this country to the position where they will vote, not to get pecuniary advantage from any Government at the expense of the taxpayer but to get efficient service, loyal work and a good return for their money, then there will be some hope of ending the unemployment problem.