Last year I budgeted for a small surplus of £7,000. As it turned out, despite an increase of approximately £4,000,000 for Supply Services over the Estimate of £48,896,428, we finished with a surplus of £488,000. One reason for the surplus was that tax and non-tax revenue received into the Exchequer exceeded expectations by £408,000. The principal increases in revenue over the Estimates were on the customs side: £375,000 in the hydrocarbon oil group, £250,000 on motorcars and parts, £417,000 on spirits and £108,000 on tobacco. On the excise side there was an increase of £136,000 on betting and £56,000 on entertainments duties. There was also an increase on matches of £40,000 but a decrease of £120,000 in the amount received from spirits duty. The yield from Inland Revenue duties exceeded expectations by £260,000 in the case of stamps and by £307,000 from the registration of motor vehicles. The increase in motor vehicles duty when received into the Central Fund and paid out again to the Road Fund had the effect of increasing both tax receipts and expenditure out of the Central Fund.
The second reason for the surplus was the over-estimation of expenditure on a few votes. The principal over-estimate was on the Vote of £3,000,000 for the alleviation of distress in Europe. Notwithstanding all our efforts we were unable to send goods to the value of more than £1.9 million. This year we are providing another £1,500,000 for the same purpose and I trust we will be able to complete delivery of goods to that amount to the peoples of Europe who are still suffering from the terrible aftermath of modern war.
FINANCIAL YEAR, 1947-48.
The expenditure for Supply Services anticipated this year is £54,256,000 or £1,371,000 more than the issues last year. Central Fund Services are to cost £6,277,857 which is £298,000 more than last year. The two services total £60,534,000 of which I propose to borrow £1,026,000 for certain items included in the Estimates for Supply Services: Forestry, £40,000; Airports, £786,000 and Employment and Emergency Schemes, £200,000. This leaves me with £59,508,000 to meet out of current revenue.
The estimated receipt from non-tax revenue this year is £8,715,000, and from tax revenue, on the basis of the rates at present in force, £49,980,000. The receipts from both sources, totalling £58,695,000, fall short of the estimated expenditure on the non-capital portion of the Supply and Central Fund Services by £813,000.
In order to meet this deficit in the current year and to make provision for certain other items, I am submitting proposals to increase taxation by £2,955,000.
TOBACCO DUTY.
I propose to raise the main rate of customs duty on unmanufactured tobacco by 5/- per lb., bringing the rate from 18/10 to 23/10 per lb. Proportionate increases will be imposed on imported manufactured tobacco of all kinds and the excise duty on home-grown unmanufactured tobacco will be increased by 5/- per lb.
I anticipate that the increase in duty will raise the price of the popular brands of cigarettes by 3d. per packet of 20 and the price of pipe tobacco by approximately 3d. per ounce.
As Deputies are aware, hard-pressed pipe tobacco at present enjoys a revenue rebate of 1d. per ounce. I propose to double the amount of the rebate for the purpose of enabling such tobacco to be sold at 2d. per ounce less than the price of the cheapest varieties of pipe tobacco.
These changes will take effect on and from to-morrow and will, I hope, bring in additional revenue of £2,605,000 this year and £2,896,000 in a full year.
ENTERTAINMENTS DUTY.
I propose to raise approximately two-thirds more from entertainments duty. I am making no change in the duty on cinema seats at present costing 6d. or less, inclusive of duty. Above this level the duty will be increased gradually from ½d. extra on the 6½d. seat until on a seat costing 4/- inclusive of duty, an extra 1/- duty will be charged. The changes in the rates of duty on charges for admission to other forms of entertainment liable to duty will be increased in proportion. The new rates are set out in detail in the Financial Resolution. They will come into operation on and from the 15th August next, and I expect to get £260,000 additional revenue from them this year and £400,000 in a full year.
I would be agreeable to the cinema proprietors and other interests affected consulting the Revenue Commissioners as to the detailed application of the new rates. It will be essential to speed any discussions which might possibly call for some minor adjustment in a rate of duty. I would be prepared to make an adjustment during the passage of the Finance Bill if it were shown to be justified.
I propose to make another change in the incidence of this duty. At present, and since 1936, certain places of entertainment endowed with Letters Patent under an ancient Act of Parliament, which present both cinematograph and personal items, enjoy a concession in respect of entertainment duty. In effect the concession amounts to repayment of one-half of the full duty payable at the ordinary rates applicable to cinema prices of admission. I intend to leave the actual amount obtained under this concession unchanged, which means a reduction in the rate, but not in the amount, of relief.
I do not anticipate that the increases in the tobacco and entertainments duties will have any appreciable effect on our expenditure of foreign exchange. Lest Deputies may feel that the tobacco duty should have been raised to the British level in order to save dollars, let me point out that one effect of a big increase on tobacco would be to reduce the revenue yield and thus necessitate increasing taxation in other directions. Let me also point out that our net deficit per head in trade with dollar countries in 1946 was only £3.8 as against £8.1 per head in Great Britain and that our retained imports of tobacco were only 5.3 lbs. per head as against retained British imports of 8 lbs. per head. The consumption of tobacco here was not allowed to increase during the war at the same rate as in Great Britain, and if consumption falls by the anticipated 25 per cent. in Great Britain it will still be well above ours. Rather than force a drastic reduction of our comparatively low consumption of tobacco it would be better to reduce our expenditure abroad in ways more suitable to our particular economy.
It is quite likely that the difference in price may tempt some people to smuggle tobacco and cigarettes out of the State. I want to warn them not to yield to this temptation. If they are caught in the attempt the Revenue Commissioners will deal with them with the utmost severity.
STAMP DUTIES.
I propose to double the ad valorem duties payable on conveyances or transfers, by way of sale or voluntary disposition, of stocks, shares or marketable securities. The proposal is confined solely to such sales or dispositions as are effected by deed. I do not, however, propose to increase the rates of composition duty at present chargeable in respect of transfers of stocks issued by local authorities, nor do I propose to increase the rates on contract notes, letters of allotment or renunciation, scrip certificates, scrip, share warrants or other instruments to bearer. The rates on conveyances, transfers or leases of property other than stocks, shares and marketable securities, and on mortgages, bonds, debentures, etc., are not affected by the proposals.
The increased rates on transfers of stocks, shares or marketable securities will come into effect on the 1st August next and will, it is estimated, bring in an additional £90,000 this year and £135,000 in a full year.
There is one other small matter relating to excise duty for which I have to provide but it has no appreciable effect on revenue and imposes no additional tax burden: the imposition of a licence duty on licences to be taken out by auctioneers and house agents under the Auctioneers and House Agents Act, 1947. I am making no alteration at present in the rates.
The three new taxes added together will bring me in a sum of £2,955,000, which will cover the deficit of £813,000 and still leave me £2,142,000.
ADDITIONAL BUTTER SUBSIDY.
As Deputies are aware, the Government is giving an increased subsidy on butter in order to enable it to be sold at 2/8 a lb., whilst allowing a price to creameries which will enable them to pay 1/2 a gallon for milk delivered to the creameries in summer and 1/4 in winter. A proportion of farmers' butter will also be bought for inclusion in the ration. It is estimated that the combined cost will be around £1,250,000. Much as I dislike increasing taxation, I think it is better to collect the money in ways which will cause little hardship rather than allow the price of butter to rise to 3/- a lb. this year. If the cost of living falls considerably during the next year the butter subsidy and other food subsidies should be reduced accordingly. Food, fuel and agricultural produce subsidies will cost us this year a total of £5,936,000. As soon as they can be abolished not only will the amount of the subsidies be saved but the expense of collecting the taxes to meet them and the expense of distributing them will also be saved.
INCOME-TAX.
For the last few months I have been urged by many Deputies in the House, and by trade unions and other organisations, to increase income-tax allowances. I propose to increase the personal allowance for an unmarried person from the existing figure of £120 to £140 and the allowance for a married person from £220 to £260.
The effect of these alterations will be that approximately 27,000 tax-payers will be removed from the charge. A single man if he is earning £175 or less and a married man if he is earning £325 or less will under these proposals be exempt altogether from income-tax.
The benefit of the changes for persons who will not be completely excluded from the scope of the tax will be seen clearly from some examples. A single man earning £175 per annum, or with an unearned income of £140 has hitherto been liable to pay £3 5s. in tax. In neither case will he now have to pay any tax. A single man earning £260 per annum, or £5 a week, has up to now had to meet an income-tax bill of £14 6s. His future bill will be £11 1s. A single man who earns £350, that is to say £6 15s. a week, has had to pay £35 15s. His future liability will be £29 5s.
Take the case of the married man. A married man earning £325 per annum, or £6 5s. a week, will now be exempt instead of having to pay £6 10s. in income-tax. A married man who earns £400 per annum, that is, rather less than £7 15s. weekly, will pay £9 15s. in place of £16 5s. If he earns £500 per annum, which is over £9 10s. a week, his liability will be, not £42 5s. as hitherto, but £29 5s. A married man whose income is unearned and amounts to £300 a year will have to pay £6 10s. instead of £13.
A married man with three children has up to now been immune from income-tax if he did not earn more than £479 annually. Under these proposals the effective exemption limit will be raised to £529.
The cost to the Exchequer of these income-tax proposals will be £510,000 this year and about £930,000 for 1948-49.
"WITH PROFITS" POLICIES.
The Finance Bill will include provision to secure that that part of the profits of life assurance companies which is allocated to, or reserved for, policy holders will be excluded from computation under the rules of Case I of Schedule D. The income-tax position will then approximate to that under the corporation profits tax code, and the effect will be that only that part of the profits which belongs to the shareholders will be taken into account for tax purposes. The cost is estimated at the moment to be of the order of £4,500 a year, but it will increase if the "with profits" type of policy expands.
LOCAL AUTHORITY INCOME-TAX.
When a local authority pays interest on its loans it deducts income-tax and is, of course, obliged to account for this tax to the revenue. It will, no doubt, have a certain amount of taxed income available for set-off against the interest from which it deducts tax, and to cover any balance of tax deducted a special charge is raised. As the law stands the tax, if any, ultimately borne by the local authority under Schedule A in respect of any of its property which it occupies, cannot be considered in connection with the process of set-off. This is a peculiar disability of local authorities which is not shared by individuals or by limited companies. It flows from an old legal decision. I propose to remove the disability. The total yearly cost is estimated at slightly over £4,000.
EXCESS SURTAX.
As I indicated in the Budget statement last year it is not proposed to continue the charge of excess surtax for this financial year. This tax was first imposed for the year 1941-42. The excess corporation profits tax ceased at the 31st December, 1946, after a life of six years, and it would not be proper that excess surtax should be imposed for a longer period.
CORPORATION PROFITS TAX.
I propose inserting a section in the Finance Bill to extend for a further period of three years the existing exemption from corporation profits tax afforded to public utility concerns.
EXCESS CORPORATION PROFITS TAX.
When I announced a year ago the repeal of the excess corporation profits tax after the end of 1946, I indicated that I would put provision into the 1947 Finance Bill for relief in respect of stock held at the 31st December, 1946, which subsequently might not realise the value then placed upon it. Provision will appear in the Bill to implement this undertaking but I do not anticipate that it will cost much.
UNIVERSITY SCHOLARSHIPS AND PRIZES.
Since the inception of the scheme about five new Gaeltacht university scholarships of £110 each have been awarded every year. These scholarships will now be raised to £150 each. In addition 50 scholarships per year will be granted to students from any part of the country who do their university course through the medium of Irish. A prize scheme is also being instituted which will provide up to £20 per student per annum for all students who qualify in Irish, including an oral test, in some or all of their subjects at the university or end of term examination. The scholarships and prizes will be tenable at any university in the State. The additional cost of both schemes will amount to about £10,000 this year and to over £20,000 next year.
From recent conferences with the heads of all the universities I feel confident that they will make every effort to extend the appropriate courses as soon as possible. The Minister for Education will announce the detailed conditions of both schemes and I trust they will speed the day when university courses will normally be taken in our own language. I need hardly point out that these new scholarships and prizes will provide an opportunity for 50 students to secure a university education with little or no cost to their parents. The prize scheme will also enable other students to obtain sufficient by way of prizes to reduce the cost of university education by substantial amounts. I trust the secondary schools will co-operate by helping their students to reach a standard of oral as well as written Irish which will enable them to compete for the scholarships and to benefit from the prize scheme should they desire to take a university degree.
GAELTACHT GLASS-HOUSE AND POULTRY SCHEMES.
In order to improve the standard of living of the people in the Gaeltacht the Minister for Agriculture is arranging to carry out experiments in the concentrated production and marketing of glass-house crops. The scheme, roughly, is to get a minimum of 100 farmers to erect glass-houses covering one-fortieth of an acre each in an area sufficiently concentrated to justify the running of a central plant-rearing and packing station and to have the crops grown and packed under the best technical supervision. The importance of promoting glass-house production on the small holdings in the Gaeltacht can be appreciated when it is realised that 40 tons of tomatoes per acre can be grown under glass on land that could not produce ten tons of potatoes per acre.
The Minister for Agriculture intends also to help the extension of poultry keeping in the Gaeltacht by providing better facilities for the erection, through county committees of agriculture or otherwise, of suitable poultry houses and where necessary the establishment of hatcheries.
Further details of both schemes will be announced later by the Minister for Agriculture and I shall make £100,000 available to him this year to initiate them. Not more than a few thousand will be for the poultry scheme; the remainder will go to the glass-house scheme. I trust the Minister will get wholehearted and loyal co-operation in making both schemes a success. I feel that they will not only add to the incomes of the families concerned, but will add in an important way to the technical skill of the people of the Gaeltacht.
In addition to the proposals I have made we have commitments which will cost another £251,000. The first is to revise the pensions and gratuities to civil servants who retired during the stabilisation period so that they will be related to the appropriate cost-of-living figure at the date of retirement or to a cost-of-living figure of 270, whichever is the lower. The figure of 270 was the basis for the recent consolidation of salaries of civil servants who were paid on a sliding scale. A corresponding adjustment will be made in respect of Gardaí pensioners. These revisions will cost £188,000 this year. The cost of a proposal made by the Minister for Education, to which I have acceded, granting the normal salary scale to national teachers in smaller schools will be £30,000. Additional Army retired pay will cost £33,000.
Deducting the items of expenditure to which I have alluded from the estimated receipts there remains a small surplus of £12,500. I anticipate that there will be a number of Supplementary Estimates during the year and that certain Bills now before the House, such as the Public Health Bill, will entail additional expense for the Exchequer. I hope that if there is additional expenditure it will be compensated for by a decrease in other items for which I have budgeted.
PART II.
Having made provision to meet the non-capital expenditure out of revenue, I wish to discuss the capital side of the Exchequer accounts and to deal with total State expenditure in relation to the general national economy.
NATIONAL INCOME.
I regret that official estimates of national income in continuation of the figures for 1938 to 1944 which were published last year are not yet available. I can, however, give some indication of the trend in output in the past year. Gross agricultural output was valued at £105,000,000 in 1945; the provisional estimate for 1946 is £104.3 million. As there was an average increase of 3 per cent. in agricultural prices between 1945 and 1946, the decline in the value of gross output confirms the presumption that last year's bad weather caused a fall in the volume of agricultural output. It was, however, only slightly below the 1938 level. In the case of industrial output, complete figures are not available, but the quarterly index numbers, which are based on inquiries over a sample of industries producing transportable goods, indicate that the volume of output in these industries was about 16 per cent. higher in 1946 than in 1945, or about 10 per cent. above the 1938 level. Transportable goods accounted in 1938 for 81 per cent. and in 1944 for 88 per cent. of gross industrial output. The increase in the value of imports from £41.1 million in 1945 to £71.8 million in 1946 is very welcome, but it is well to remember that, allowing for the doubling of import prices since 1938, last year's £72,000,000 figure means less in terms of goods than the £41,000,000 figure for 1938. In fact, when reduced to 1938 values, it comes to only £32.6 million. In general, these figures confirm that there are not yet enough supplies of all kinds available to restore the 1938 standard of living.
STATE AND LOCAL DEBT.
Last year I dealt exhaustively with the State debt and our ability to bear it. Since then the State debt increased by £5.8 million but of this £5,000,000 was for the Transition Development Fund. Including the capitalised value of the housing subsidy, the State debt now totals £100.8 million. At the 31st March, 1946, the gross debt of local authorities was £37,000,000 and their net debt £24.4 million; there was no significant change in these totals during 1946-47.
VOLUME OF MONEY.
The flow of money into the Exchequer, plus the borrowings from the savings banks and through savings certificates, rendered it unnecessary last year to raise a long-term loan from the public or to call upon the commercial banks to take up Exchequer Bills. We were able also to meet without borrowing the items of expenditure in the Supply Estimates for which I budgeted to borrow last year: £42,000 for Army buildings, £40,000 for forestry, £400,000 for airports and £200,000 for employment schemes.
In the financial year the amount due to depositors in the savings banks increased by £2,287,000 and to holders of savings certificates by £405,000. Commercial bank deposits increased by £16,384,000. There was every indication that the volume of money was more than enough to buy available goods and in such circumstances the less additional purchasing power created by State spending of borrowed money, whether from the public or the banks, the better it is for the stability of the national economy.
It is too seldom realised that the spending by the State of money borrowed from the public tends to add to the amount of active purchasing power almost as surely as an increase of loans by the banks or a fiduciary issue of notes by the State; for, when the State spends money borrowed from those who are inclined to save, it often reaches those who are inclined to spend, and the lenders are left in possession of State securities which can be sold to the banks or to foreigners or pledged with the banks as security for fresh advances.
While in times of a surplus of saleable goods, it is socially and economically desirable to have additional money created by the State or by the banks so as to enable consumers to buy total output, any large addition would be disastrous in times like these when there is a grave shortage of goods and an over-supply of money. It is, of course, not possible to have mathematical precision in the matter of equating the volume of money to the volume of goods, seeing that the balance depends also upon the attitude of the public from day to day in regard to spending or saving; but it is the duty of the State to see that the general tendency is towards a proper balance of money and goods, so that the community at all times has at its disposal sufficient money to buy at a fair price all the goods and services it is prepared to produce, but not such a surplus as would induce a serious rise in prices.
RATE OF INTEREST ON STATE DEBT.
A matter which has an immediate bearing on the effect on the national economy of any given volume of money is the rate of interest on State debt. It is in the public interest that such debt as the State must incur should be at the lowest possible rate of interest. In certain circumstances the appropriate rate might be nil. If we want as little State intervention as possible in economic affairs, we must secure that private expenditure will at all times be sufficient to keep our economy running smoothly. Low rates of interest will help by encouraging private enterprise to undertake capital development and so recirculate savings, instead of forcing the Government to borrow and spend them on State projects. It is better, from every point of view, that the people should use their savings directly in ways which will help to maintain and increase the national income and capital resources, rather than that the Government should be compelled to undertake a large share of the task.
In the present abnormal situation when supplies are scarce in relation to the volume of money and prices are tending to rise too high, it would be positively harmful for the State to intervene to increase the total volume of expenditure, as distinct from diverting expenditure from consumption to capital development. Indeed, in this situation it is desirable that the State should sweep some of the surplus money into the Exchequer through taxation. During the past year I tried to carry out this policy by finishing with an Exchequer surplus and by paying out of taxation money which, in other circumstances, I would have borrowed.
TRANSITION DEVELOPMENT FUND.
Of the increase in State debt £5,000,000 was, as I have said, due to borrowing for the Transition Development Fund. The expenditure out of the fund last year was only £56,480 but commitments have been entered into to pay out an additional £1,250,000 as soon as the work for which grants have been promised has been carried out. The fund stands ready to support development by helping local authorities, State and semi-State organisations to undertake work which might otherwise be postponed because of abnormally high cost of materials.
One reason worthy of note as to why the fund was not called upon to a greater extent, was that the lowering of the rate of interest on local loans from 4¼ per cent. to 2½ per cent., and the extension of the period of repayment from 35 years to 50 years, had the effect of reducing annual loan charges from £5 10s. 4d. per £100 to £3 10s. 4d. per £100. Consequently it required a much smaller grant from the Transition Development Fund to enable local authorities to build houses for letting at reasonable rents. Leaving subsidies aside, the interest reduction and the lengthening of the repayment period would enable a house costing about £800 to be let at the same rent as a £500 house under the old terms.
HOUSING.
During the past year the Government did all it could to encourage new capital development and particularly the building of houses. Shortage of materials, however, and in some cases lack of skilled building workers retarded our efforts. Over 1,000 houses were completed in the last financial year. This year it is hoped that local authorities alone will complete at least 1,500 dwellings. The Transition Development Fund was useful in encouraging local authorities to undertake housing work as grants were given or promised amounting on the average to £250 per house in addition to the ordinary housing grants. Grants were also given out of the fund to encourage local authorities to proceed with water and sewerage schemes. Assistance from the fund will decrease as the cost of construction falls. The flexibility of the contribution from the fund was an essential element in getting the local authorities and the Electricity Supply Board under way last year without committing the Exchequer to high scales of fixed subsidies, which might tend to become permanent.
RURAL ELECTRIFICATION.
During the year the Electricity Supply Board made a beginning on rural electrification and are at present engaged in building the network in seven rural districts. By the end of the year they expect to have 12 districts linked up and the network for 20 more in course of erection. The board were promised that if they commenced the work at once a special grant would be made to them out of the Transition Development Fund to meet the present abnormally high cost of construction. As Deputies are aware the board are at present constructing the Erne hydro-electric works and a large steam plant near Clonsast Bog which will use turf.
TURF.
£353,000 was advanced to Bord na Móna last year to enable them to extend the production of machine-won turf and to erect a peat moss litter factory. They delivered 100,000 tons of machine-won turf and briquettes last year which were used for the free fuel and cheap fuel schemes and for industrial purposes. Notwithstanding the abnormally wet summer and winter they were able to deliver high quality fuel for these purposes even during the recent bad weather. Next year Bord na Móna will take over the production of turf from the county councils. Instead of producing all hand-won turf, as the county councils were compelled to do, they hope to produce mostly machine-won turf with 17 large machines such as those at present in operation on the major bogs and 240 small machines suitable for the bogs on which the county councils produced hand-won turf. All these machines are already on order and some of them are nearing completion.
PEAT MOSS LITTER.
The peat moss litter factory at Kilberry near Athy has just been opened and it is estimated that 4,300 tons of litter will be produced in the next 12 months. I regard the opening of this factory as a most important event for Irish agriculture, and I hope it is but the first of a number of similar factories. If farmers purchase this 4,300 tons of peat moss litter and use it as bedding for stock and for soaking up liquid manure, they will save nitrogen and potash from going to waste on the farms corresponding to an import of 2,750 tons of nitrate of soda and over 4,000 tons of kainit. When the soaked litter is distributed it will improve the texture of the soil as well as conveying the manurial constituents to the crops. The litter is cheaper and more convenient to store and distribute than liquid manure, and as it fixes the nitrogen it is very much more valuable as a fertiliser.
CAPITAL ISSUES APPROVED.
Apart from the Transition Development Fund, the capital expenditure for which we propose to borrow this year is much greater than we borrowed for last year—£8.2 million as against £1.8 million. If we succeed in investing this amount of capital this year we shall add appreciably to our productive capacity. We propose to spend £1,450,000 on the extension and improvement of the telephone service; £2,000,000 on electric power stations and the rural supply network; £150,000 on improvement of facilities for tourists; £500,000 under the Local Loans Fund Act, largely for housing development by local authorities. The Local Loans Fund will also have at its disposal the sum of £850,000 representing the surplus of interest and capital repayments over its own interest disbursements. Our total borrowings for airport development and the expansion of air services will amount to £2,136,000. For machine-won turf development a sum of £1,550,000 is being borrowed. We are also acquiring further shares in the Industrial and Life Assurance Amalgamation Company at the cost of £111,000 and advancing another £100,000 to Comhlucht Groighe for the improvement of bloodstock. The expenditure of these capital sums will provide opportunities for productive work for large numbers of skilled and able-bodied men, and in future years will add to the output of goods and services upon which our standard of living depends.
NEW OFFICE BUILDINGS AT DUBLIN CASTLE.
One large scheme of development on which we are making a beginning this year is new office buildings at Dublin Castle. £30,000 is being provided for the preliminary work this year in the Vote for public works and buildings. These buildings will be constructed over a number of years and are designed to provide accomodation for a large number of civil servants who are at present in occupation of houses and unsuitable offices throughout the city. As 4,000 officials will eventually be given office space at the Castle, nearly 3,000 more than at present, the number of houses and other buildings released for alternative use will be considerable. It is estimated that the scheme when completed will cost around £2,000,000. Once the plans are ready building can proceed according to the supply of materials and to the ability of the building industry to carry out the work having regard to the volume of demand for other construction.
SAVINGS CERTIFICATES.
To raise the £8.2 million for the capital development I have outlined, and to make the money available at 2½ per cent., I have in mind the same borrowing programme as I outlined last year and also to raise the limit on the purchases of savings certificates from £280 to £500 until further notice. I have received many requests to raise the limit on savings certificates recently, and I need hardly point out that of all the State securities available they offer the highest yield, slightly over 2½ per cent. when held to maturity. They are, of course, income-tax free. As they are cashable on demand, should the necessity arise, they are an ideal form of investment for small savings.
FOREIGN TRADE AND FOREIGN ASSETS.
Last year I dealt with the subjects of our foreign assets and international trade and all I need add this year is that although the value of our imports at £71.8 million exceeded our exports of £38.4 million in 1946 by £33.4 million, we added about £20,000,000 to our holdings of external assets. This balance of £20,000,000, on all items of trade visible and invisible, represents the value of goods and services which we gave over what we received in return. Had it been possible to buy and transport a reasonable amount of coal, wheat, sugar, petrol, timber, steel and other essential commodities, this balance would not have been accumulated, the development of our economy would not have been so badly handicapped and the bad harvest and the strike in the sugar factories would not have affected our rations so severely. It is to be hoped that with a return to peace-time output in other countries we will be able before long to buy a fair share of consumer and capital goods.
EMIGRATION.
Apart from the fact that we could not buy the things of which we were in urgent need another reason the increase in our external assets cannot be regarded with any great satisfaction is that an appreciable fraction of them is due to emigrants' remittances. The net emigration in the years 1939-1946 inclusive was 87,600, according to calculations based on the outward and inward movement of passengers. This figure must be adjusted following the census return and it is now estimated that the true figure for this eight-year period is 120,000. There is no good reason why this figure should remain so high. Whatever monetary advantage was to be gained by the individual emigrant to Great Britain during the war, there is none to be gained by any who can find a job at home at the present time. In many classes of employment wages here are higher, and when income and other taxes and the cost of a reasonable standard of living are taken into account the balance is clearly in favour of all classes of employment here. I trust there will be a substantial reduction in the net emigration figures in the next 12 months and that workers' organisations, as well as farmers and industrialists, will co-operate with the State in extending the scope for employment in building up our capital resources and our national output.
EXPANSION OF OUTPUT
In this connection I appeal to workers' organisations to put their trust in a policy of expansion rather than of monopoly and restriction: expansion of output per individual, expansion where necessary of the number of members in the various crafts. Restrictive monopolies of all kinds defeat their own purpose in the long run. If workers' organisations do not live up to their responsibilities and act in a disciplined manner in keeping with their important status in the national life, the national economy and the number of jobs available cannot expand; and instead of their own incomes and the national income rising and becoming more secure, it will be difficult to support, in terms of real income, the recent general increase in wages. If increase of output were not to precede increases in wages and reduction of hours in future, home production would shrink and exports to pay for the things we wish to import would become impossible. We could, of course, live at a high standard for a time if we could realise all our national capital assets, but in the long run the nation can only live at the standard warranted by its current production.
There is every reason at the present time for workers' organisations to take the initiative in suggesting ways in which output per worker will be increased per unit of wage, with the advantage to the worker of greater earnings. If production costs are reduced and yearly output increased, the real standard of living will rise. If wages only were to rise, the real standard of living must inevitably fall.
RECENT SALARY INCREASES.
As Deputies are aware, substantial increases in salaries and wages have been given during the year to all classes of persons paid in whole or in part out of the public purse. The extra cost on the Exchequer this year will amount to well over £2,000,000. Let me emphasise, lest some editorial writer may accuse me of pretending that this sum is being paid out of my own pocket, that I am extracting this money out of the pockets of the taxpayers, some of whom can ill afford it. I trust the people will be given the best possible service in return. All classes paid out of the public purse are, in my opinion, generously treated by the taxpayers. They are bound in honour to carry out their own work with efficiency and zest and not to tolerate waste or slackness around them. I appeal to every individual high and low to do his or her duty in this regard and so help to raise the national standard of education, efficiency and well-being.
OBJECTS OF STATE EXPENDITURE.
In conclusion, I want to point out that total State expenditure to be met by taxation and borrowing for the coming 12 months amounts in all to £69,356,000. Even a rough analysis of the manner in which it is proposed to expend this money would give an intelligent outsider a fair idea of our way of life and the way we wish to live, the problems which bear heavily upon us and the principal objects we strive to achieve.
The fact that we spend £12.5 million, or 18 per cent. of the total, on Social Services shows that we have thought for those in need and that generally as a people we are prepared to contribute to the support of those who are unable to take care of themselves.
Clearly we are living in uneasy times and have had our troubles, for we are spending £5.2 million, or 7 per cent., on Defence Services and the care of ex-servicemen.
We are deeply interested in education and the development of our language and cultural institutions, for upon them we spend £7.8 million, or 11 per cent., a percentage much greater than many countries with larger resources.
Although our food situation is some-what difficult, as indicated by the £2.2 million we spend on food subsidies, it has not destroyed the spirit of charity, for we are making a contribution of £1,500,000 to help peoples in greater need on the Continent of Europe.
The keen interest of our people in the land and its products and its social distribution, is shown by the £7.8 million we allocate for agricultural education, research, subsidies and development, and for land division.
Fuel is obviously an acute problem, and one which we are tackling vigorously, for we provide £1.5 million for fuel subsidies, £2.2 million for turf development and £2 million for electricity.
The £2.8 million to be spent in assisting the construction of houses and public health works emphasises that we are conscious of a need to build more houses and to improve our housing standards.
That we are determined to provide ourselves with modern industries, communications and transport is evidenced by the expenditure of £.8 million by the Department of Industry and Commerce on research and development, the £6.1 million for Postal, Telephone and Wireless Services and the £2.8 million for Airports and Air Services.
The balance of our expenditure indicates our other activities and the institutions we have set up to make, administer and enforce our laws. The general impression left by a survey is that we are a people who have a decent respect for the past, a vigorous and balanced approach to the problems and opportunities of the present and a firm determination to transmit to our children a broader basis for a better material and cultural life.
Go dtugaidh Dia cabhair duinn 'san obair sin.
