asked the Minister for Finance if he is prepared to publish a White Paper on the causes of the inflation in this country at present; and if the White Paper will contain a detailed analysis of the causes of the decline in the purchasing power of money as between the commencement of the recent war, the termination of that war and the present day.
Ceisteanna—Questions. Oral Answers. - Causes of Inflation.
The causes of the rise of prices which has occurred here since August, 1939, are, in the main, the same as those which have operated in other countries. These general causes include reduced domestic output, contraction of supplies from abroad, expansion of money incomes through higher wages, salaries and profits, increased landed costs of imports, higher agricultural and other prices, increased emigrants' remittances and tourist expenditure, and the greater volume of State outlay on emergency and other services with resultant Budget deficits. We have also had during this period an excess of exports, visible and invisible, over current imports which has caused an inflow of money not balanced by goods and has thus increased the disparity between money incomes and available supplies.
I do not propose to circulate a White Paper on the matter as it is not possible to assess precisely the degree of influence of the several causes of the decline in purchasing power of money since 1939.
Can the Minister say what is responsible for the fact that our £1 note is able to purchase only 11/- worth of goods in this country and has he any remedy for such a situation?
I have stated the causes. If there were no purchases on the market to-morrow the price of goods would fall. The people in this matter have the remedy largely in their own hands. If they would refrain from purchasing or over-buying, when goods are in short supply, the price of goods would fall. If a person who happens to have £100 or £1 in his pocket could keep it over the next 12 months it would probably appreciate greatly in value.
Will the Minister say whether the reduction in interest on savings certificates, which discouraged people from saving, has led to more spending? Will he think that over and try to suggest some remedy to meet the rapidly increasing cost of living?
I do not think that the decrease in interest on savings certificates has anything to do with the matter at all. A person can get 2½ per cent. free of income-tax on savings certificates at this moment. There has been a reduction in the interest of about 1/2 per cent., but if enough people who have a reasonable amount of goods in their possession, would refrain from buying further quantities of these goods, they would probably find, by keeping the £100 which they have available for spending, that it would be worth £110 or £120 a year hence.