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Dáil Éireann debate -
Friday, 16 Apr 1943

Vol. 89 No. 17

Supplementary Estimate, 1943-44. - Vote No. 69—Supplies.

I move:—

That a supplementary sum not exceeding £280,000 be granted to defray the Charge which will come in course of payment during the year ending 31st March, 1944, for the Salaries and Expenses of the Office of the Minister for Supplies, including payment of certain Subsidies and Sundry Grants-in-Aid.

As I explained earlier, the reason for a Supplementary Estimate for a turf subsidy arises out of the fact that the original Estimate was prepared on the basis of provisional figures submitted by the Local Government Department as to the cost of turf produced by county surveyors. It will not be possible to have a complete accounting in respect of the turf production scheme until the scheme is wound up at the end of the emergency. Up to the present, however, we have been working on the basis of provisional costs, which meant a considerable degree of estimation. Amongst the figures which had to be estimated were those relating to the cost of the actual production of turf in the various districts by the county surveyors. When more complete information became available to the Department of Local Government, they submitted a revised figure which made it clear that if the price of 64/- a ton were to be retained, an additional amount by way of subsidy would be needed. It is for that reason that this Supplementary Estimate is being introduced. There is really no difference in the purpose for which this money is being provided and the purpose for which the money under the main Estimate is provided. It merely means that a larger amount will have to be provided for this service.

The statement made by the Minister is very inadequate, for two reasons. In the first case we have not been told actually what this additional £280,000 is required for, and secondly, we have not been told why it actually transpires that it is only required now. Some time last month we were told that £380,000 would be required for Fuel Importers, Limited, but within a month after that a Supplementary Estimate is submitted which says that an additional £280,000 is required. We should like to know why this additional demand is made so suddenly and why there should be this difference between the figures originally supplied by the county councils and the amended figures now supplied. Surely, if this involves an additional £280,000 we ought to be given some explanation about the matter. The Minister said the other day that Fuel Importers, Limited, had had to enter into contracts with private individuals and to take some of their turf at a certain price. What is the price? I do not know what it is. We want to know what is the change in price now? It is all the more important that we should get that information when we consider the extraordinary costs that arise in connection with the production of turf.

In December, 1941—I am quoting from column 1044, volume 85, of the Official Debates—the Minister was asked what were the various costs involved and he indicated that the average cost of the turf in question, to Fuel Importers, Limited, was as follows: Free on rail at loading point or ex-bog, 24/3 per ton; freight, 18/6; handling charges, 8/9—a total cost of 51/6. He said that the overhead expenses were estimated at 4/6 a ton, and that the cost to be borne by the company for shrinkage of turf was estimated at a minimum of 20 per cent., which meant an added cost of approximately 12/6 per ton. On the 27th June, 1939, the Minister was asked to state the average retail price of turf, per ton and per bag, in Dublin, in each of the years 1935, 1937 and 1938, and he replied that the predominant price per ton of machine-won turf in Dublin was 30/- in 1937 and 37/6 in 1938, and of hand-won turf 25/- in both years. Accordingly, turf could then be sold in the years 1937 and 1938 at 35/- a ton in Dublin, and how is that to be related to the basic figure that we have with regard to the present turf price and the added cost of 23/6?

In January, 1942, a schedule of railway freight charges was issued with regard to various parts of the country, and the rate of 18/6 a ton referred to transport over a distance within a radius of 164 miles from Dublin. Now, a radius of 164 miles from Dublin would mean that it could pass outside Tory Island, come down the western side of Blacksod Bay, pass through Innisboffin, and not touch the main land till it reached Kerry, and then go through the Lakes of Killarney and to Ballingeary and Clonakilty. There seems to be some very bad arrangement with regard to transport in that regard. In addition to that, provision was made for overhead costs, on the part of Fuel Importers, Limited, as I have pointed out already—such as 4/6 for overhead and 12/6 for shrinkage. The wholesalers were allowed a margin of 6d. for distribution, and the retailers were allowed 16/-, which brought the charge up to a total of 85/-. The Dublin wholesale distributors were allowed a margin of 6d. per ton and the retailers a margin of 16/- a ton. Now we have an increase of 2/6 on that 85/-, and it is very hard to understand how that is arrived at since, last year, the figure was 85/-. That extra half-crown makes a great difference, and I think that the House should have a further statement from the Minister in respect of these charges and particularly in respect of the prices paid to county surveyors originally or the prices asked from county surveyors originally and the prices asked now.

There is another matter which may not, perhaps, arise in connection with this, but I think it may have some bearing on the matter, and that is the position with regard to the loss involved so far as the county councils are concerned in connection with this turf business. Is the increase that is now being made in any way intended as a payment to make up to the county councils for their general losses on turf, and, if not, in what particular way have the additional prices paid to county councils to be assessed? We have had information presented already to the House as to the price that the public institutions in the various counties paid for delivery of their turf last year. I take it that that had some relation to the facts of the situation, but we have been given no idea how the increased price to be paid to county councils has arisen. On 2nd July, 1941—column 797, Volume 84, Parliamentary Debates— the late Parliamentary Secretary, Deputy Flinn, said:

Deputy Cogan asked that, under no circumstances a county council be involved in loss by its continuance. That is an assurance which I am not prepared to give, and that is an assurance which I am perfectly certain Deputy Broderick does not desire.... But, just as I gave an assurance to the county surveyors, when they were sent out to do this work, that, in regard to any act of theirs which was shown to be in good faith and in the exercise of reasonable judgement, I would stand over it and take responsibility, in exactly the same sense the Government recognises that the county councils are their servants in this matter, and the servants of the cause which is common to them, and, except in the case of default, except in the case of something which could not be defended, except in some case where it would be quite obvious to the people that there had been abuse of those powers, they will be held blameless and clear. We do not believe for one moment that there is going to be a loss in those matters, nor are we asking any county council, when it comes to clear up its accounts, to have sold its turf at such a price as will leave it with a deficit."

Where we are dealing with such a large amount, so unexpectedly presented to us, I think these are matters that should be explained.

As regards the cost of the turf produced by the county surveyors, this will completely recoup them for their expenditure in that connection.

Does that mean in respect of their total cutting, or in respect of their deliveries?

It will ensure that they will not be involved in any loss. The Deputy must bear in mind that the county surveyors are also producing turf for local sale, to meet the requirements of the institutions under the local authority concerned, and to meet local needs in some cases. In so far as they are producing turf for the national turf supply, they will be completely recouped for the cost involved by the amounts that will be paid to them.

Does the Minister mean only the loss they made upon needs outside of the institutions within their counties or areas?

In so far as this Vote is concerned, the only turf that is involved is that which is produced for the national turf supply. I cannot speak with any authority on the arrangements that may be made by the or with the local authorities in respect of turf produced for other purposes. I think that, in considering the total cost of turf which is available to Fuel Importers, Limited, Deputies should bear in mind that some substantial part of it is due to development works. That applies also in respect of the turf produced by the Turf Development Board, to which reference was made during the discussion upon the main Estimate. A large part of the expenditure incurred by the Turf Development Board, just the same as with a large part of the expenditure incurred by the county surveyors, was on development operations of one kind or another—the construction of roads, the draining of bogs, the removal of the tops of the bogs, and other activities of that kind which will not have to be done twice, and, in so far as turf production is continued on the bogs which have been so developed, the future costs on that account should be lower. The costs may rise for some other reason, but the same work will not have to be done all over again.

The average cost of all the turf obtained by Fuel Importers, Limited, either from county surveyors or private producers, on rail or loaded on lorries or barges in 1941-42 was 37/9 per ton. The freight upon that turf to a point of discharge which was either a fuel merchant's yard or a turf dump was 17/10 on the average. The cost, therefore, of a ton of turf at the discharge point was 55/7 per ton. The turf could be sold at that point at that price. I tried to explain to the House in the course of a previous discussion that a large part of the additional cost of the turf in the non-turf areas is due to the fact that it has to be stored. It is not stored as it comes in. Turf can only be won and transported during a limited season of the year and it is required for use in another season. There must, therefore, be a process of storing, and that process is a particularly costly one, due, amongst other reasons, to the loss of weight which occurs in storing.

The actual average cost of the turf delivered in Dublin is not 87/6, or any such figure, but 55/7. That includes all the turf produced by all the county surveyors, as well as the turf bought from private producers. Some of it had to be transported, as Deputies are aware, over very long distances. Now, consider the costs that arise in the dump. There are a number of expenses—the handling of the turf, bringing it from the railhead to the area where the dump is, ricking it in the dump, the payment of rents, the making and the repair of roads, the watching of the turf, the maintenance of the clamps, the segregation of unsaleable turf and the re-ricking of rejected turf, the interest paid to banks upon the capital involved in that storing of turf, as well as overhead expenses. These charges come to a total of 14/1.2d. in respect of the turf in the dumps.

As I explained, not all the turf goes into the dumps, because some is sold direct to the merchants and is delivered direct to the merchants' yards. Spread over all the turf handled by Fuel Importers, Limited, these charges arising in respect of the turf in the dumps average 6/1. I mentioned that we had to face a considerable loss of weight through shrinkage. Experience has suggested that we must assume a loss of 20 per cent. in weight through shrinkage in the dumps and, in relation to the turf actually placed in the dumps, that shrinkage loss must be taken into account at 17/5. Spread over all the turf handled by Fuel Importers, Limited, the cost arising from shrinkage in the dumps is 7/6.

There are then certain selling expenses which have to be incurred. These average 10d. over all the turf handled by Fuel Importers, Limited. The total of these dump charges, spread over all the turf handled by Fuel Importers, Limited, averages 14/5. The 14/5 representing the dump cost, and the 55/7 representing the cost of the turf delivered in Dublin, give a total of 70/-. That is the final cost of the turf available for sale to merchants and bellmen. Since, however, the Government have decided that turf shall be sold at 64/- per ton, quite clearly Fuel Importers, Limited, cannot sell at 70/-, or even at 64/-, to merchants or bellmen. They must sell to merchants and bellmen at a price which will enable merchants and bellmen to recover the costs of collecting the turf from the dumps and delivering it to their customers. That cost varies from district to district. In the case of the Dublin bellmen, it amounts to 16/- per ton.

It is clear, therefore, that the figure we must take into our account is the actual amount which Fuel Importers, Limited get for the turf. They got 47/5 per ton up to the end of 1942, and 46/- since for the turf sold by them to merchants and bellmen. The average amount realised by Fuel Importers, Limited, from merchants and bellmen for the turf sold by them since the commencement of their operations is 46/7. The estimated loss, therefore, is 23/5. Now, 210,036 tons were sold up to the end of last year. Another 293,868 tons, it is estimated, will be sold up to the end of the present year. The total sales, therefore, actual and estimated, amount to 503,904 tons. At the rate of 23/5 per ton the loss upon that total quantity of turf will amount to £589,989. Adding the provision for possible additional sales during the coming twelve months, on the assumption that the demand for turf will be greater in the present year than it was in the past—£70,250—the total of the subsidy required in respect of the turf to be retailed at 64/- per ton is £660,239. The total amount of the original and of the Supplementary Estimates is £660,000. I think that gives the House all the information it requires to enable it to understand how this amount is calculated, and for what purpose it will be required.

Does not the Minister realise that the principal thing that requires to be explained is this: why the price, free on rail or ex-bog, has risen from 24/3 per ton to 37/9, and why that fact apparently only disclosed itself during the last month so that there had to be this Supplementary Estimate to bring the matter to our minds?

The situation is somewhat as the Deputy has described it. We were working upon a provisional figure and prepared the Estimate on the basis of that figure. Subsequent to the preparation of the Estimate, a revised figure was sent forward by the Department of Local Government and Public Health from the county surveyors. That revised figure indicated that the turf produced by the county surveyors was going to cost substantially more than the amount originally estimated. As it was desired to keep the price of turf unchanged, it was decided to come to the Dáil with a Supplementary Estimate and ask for an increased subsidy.

Surely the Minister realises that the House is entitled to get some kind of explanation as to why there has been an increase of more than 50 per cent. over last year in the cost?

Both figures are estimates, both the original figure and the present one. We must get the subsidy voted on the basis of the higher figure.

Are we not entitled to get some explanation as to how the estimates were made up? Is it not an astonishing thing that hand-won turf could be delivered in Dublin for the years 1937-38 at a total retail cost of 25/-?

That turf came from areas in the immediate vicinity of Dublin. The greater part of this turf comes from Kerry, Galway, Mayo and Donegal.

That is what we would like to know: where it comes from and why this increase. It seems to me to be unreasonable to ask the House to pass this Estimate on so little information.

I suggest that the Deputy is not presenting this matter in its true perspective. He is adopting somewhat the same attitude as that of the Kerry Farmers' Union before the county council. They did not advert to the fact that the county surveyor in his estimate included development costs. He included the cost of developing the bogs as well as the price of the article when produced on the roadside. The Kerry Farmers' Union did not present the case as they should have. I suggest that Deputy Mulcahy is doing the same. He is not differentiating between the actual cost of the turf and the other expenses that have to be incurred in connection with its production.

The Deputy should remember that the Minister has concluded on this Vote.

I just wanted to say that the Deputy was not putting this in its true perspective.

Somebody appears to have wakened up during the last couple of weeks to tell the Minister for Local Government and the Minister for Supplies that turf produced locally is actually costing twice as much to put it on the side of the bog as they thought it was costing over the last two years. We ought to hear what is at the back of all that. I agree that the Minister has been more informative than Deputy Flynn on this.

Is the Deputy withdrawing his motion?

No. I think the explanation is most unsatisfactory.

Motion to refer back, negatived.

Original Supplementary Vote put and agreed to.

Supplementary Vote to be reported to-day.

Progress reported.
Supplementary Vote reported and agreed to.
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