This Government will go down in history for a number of records. It will go down in history, first, for its capacity to impose, in the most reckless fashion, oppressive burdens of taxation and, secondly, for its all-time record of an unbroken spiral of taxation over a period of 16 years. That is the record of a Party which got into power on the promise that taxation must be reduced by £2,000,000, that the country was being run on an Empire scale and could not afford the taxation then existing. If they were in opposition to-day, I wonder what they would describe the present level of taxation as. I suggest that the third record of this spendthrift Government is its capacity recklessly to squander public money on any and every sort of non-productive scheme, and, lastly and above all, its crowning achievement is that it has dealt some of the best and most flourishing branches of Irish agriculture a fatal blow.
The most alarming feature of this immense and staggering bill, this unprecedented burden, is the rising curve of taxation and the particularly steep rise anticipated for this financial year, on the one side, and falling production, on the other. In the last analysis, we all live out of the pool of production, and it is from that pool that the Minister now proposes to rake £69,356,000. If we add to that a sum of £4,000,000 for Supplementary Estimates during the year and £9,000,000 for local services, we get a sum of over £82,000,000, and that is grabbed by the Minister for Finance for administrative purposes out of the incomes of the community. It is paid for, I suggest, and must be found, by the people engaged in real production, because that is where our wealth comes from, and the number of people engaged in real production, according to the census, is 800,000. There are 1,250,000 people engaged in profitable employment and only 800,000 engaged in real production, and it is out of their work that we have to find £82,000,000, over £100 per individual engaged in real production.
The outstanding feature of the Budget is that there is not in it a single constructive idea for development and expansion, although the Minister referred to the desirability of expansion and gave a little bit of advice to workers and workers' organisations. There is no scheme or plan designed for the development and expansion of our main industry. This Government knows how to impose and collect taxation. It has a record second to none in the world in that respect, but it knows nothing about the organisation and running of the nation's business efficiently and effectively. I always felt that one could not get an original, constructive idea from any Minister in this Government, but there is one idea in the Budget which is certainly not constructive but is surely original—the peat moss scheme. This Budget will be known as the glasshouse and peat moss Budget. That is the plan we have now for the development and expansion of Irish agriculture. However, more of that later.
The position, as given by the Minister in his statement, is that £69,356,000 is the amount he plans to spend in the coming year, and I submit that there must be added to that £4,000,000 for Supplementary Estimates and £9,000,000 for local authorities, making a sum of £82,000,000. The State debt was given by the Minister as £100,800,000 and the local authorities' debt as £37,000,000. I might add to that that, since 1939, the gross liabilities of this State have been increased by £22,336,000, and, as against that, there are total assets of £5,318,000, so that the net liabilities since that period have been increased by £17,015,000. The liability for housing over that period has increased by £2,000,000. The gross liability for housing to date is about £9,500,000. The net liability of the State is over £50,000,000.
It would be interesting to know from what sources the Minister proposes to collect the big sums he has mentioned. Contrary to the usual practice, he gave us no details in that connection. He proposes to raise from taxation £52,416,000. Of that, customs represent £19,960,000 — practically £20,000,000. Although taxation as a whole contributes substantially to the cost of living, this imposition of £20,000,000 on essential imports has very evil effects not merely on the cost of living but on industry and agriculture. When Fianna Fáil came into this House in 1927, the cost of administration was £21,000,000. From ad valorem import duties in the present year, the Minister hopes to collect £20,000,000. He told us yesterday that he was increasing the duty on cigarettes by 3d. per packet and on tobacco by 3d. per ounce. The amount of tax collected on tobacco in the last financial year was over £11,000,000. Add a sum of about £3,000,000, which the Minister hopes to collect in the present year, and we get a total of £14,000,000. The people who smoke are to subscribe £14,000,000 to the cost of administration of the country.
The Minister made perfectly clear yesterday that this imposition of 3d. is not made for the purpose of reducing our purchases of Virginian tobacco. It is not intended to save dollars. The Minister had no worries about the dollar position. The price of cigarettes has been increased from 1/5 to 1/8 for revenue purposes. There are many people who have very few luxuries. Smoking is one of the luxuries on which these people place great value. Those with low incomes, struggling with a high cost of living, will find that this imposition will bear heavily upon them. The Minister may say that tobacco is a luxury commodity and that people can live very well without it. The Minister might have been able to make a case if he had sought to reduce consumption to save dollars. But that was not the Minister's case. He made clear that he was imposing this tax because of the increased expenditure here and in order to bridge the gap between income and expenditure. He hopes to obtain this year £2,605,000 from tobacco and £260,000 from entertainment tax. He expects to get from excise duty over £10,000,000, from motor vehicles duties £1,500,000, from estate duties £2,000,000, from stamps £1,180,000 and from income-tax £12,981,000. In that connection, he announced increases in the personal allowances from £120 to £140 for single persons and from £220 to £260 for married persons. He suggested that, because of that increase, 27,000 individuals would be freed from the payment of income-tax. I submit that that is not correct. Because of recent increases in wages and salaries, substantially more than 27,000 persons have been brought into the Minister's net. This easement will not release from the payment of income-tax the number of people who should be released. Taking the value of the £1 at 50 per cent. less than it was, if the Minister wants the people to maintain pre-war standards, the personal allowances ought to be doubled. This small addition does not do justice to these people. Many people who are rearing families on small incomes are called upon to contribute taxation. The real incomes of the majority of the people are considerably lower than they were prior to 1939. Many of these people will be called upon to pay income-tax. It is obvious that that will be so. With the tremendous increase in taxation, the Minister must tap sources other than those which were being tapped prior to 1939.
The contemplated increase in taxation for the current year of £5,374,000 is a new record for the Fianna Fáil Government. For 16 years, without exception, they have maintained this spiral.
In this particular year, the public ought to know that the Minister proposes to take in taxation, over and above what was collected last year, £5,374,000. That is being done after an increase last year of £3,402,000 and of £4,225,000 the year before that. A new record for this year is being created over 16 years. The net increase this year is nearly £5,500,000. What effect will that have on the economy and the cost of living here? Is it not obvious? We listened to Deputies on all sides of the House talking about the cost of living. Is not the main contributory factor in the cost of living the huge sum of money taken out of the pockets of the people and used, not for constructive purposes, not to ensure a development and expansion in agriculture, but to be squandered in a reckless way on a great many schemes that are of little benefit to the community and certainly no real benefit from the economic point of view?
The Minister's predecessor, in his last Budget statement, expressed certain views on this matter. He said it would be the responsibility of the Minister for Finance to see that taxation would be reduced at the earliest possible moment and he felt the time had now come—that is, two years ago—to plan for a reduction, to relieve industry of its heavy burdens of taxation and to relieve the community generally, since those burdens were passed on. The working man pays as much, not merely directly but indirectly, in taxation as every other citizen in the community, since the people engaged in industry and trade in a big way are in a position to pass on those tax impositions, to a very large extent. Evidently, the Minister paid little attention to the views expressed by his predecessor. There appears to be no intention on the part of the Minister or the Government to make any attempt whatever to economise. The Minister, in his two Budget addresses to this House, has made no reference to any attempt to effect economies. He does not appear to be concerned about its reactions and repercussions on our economic life and the effect it inevitably has on the cost of living, on the health of the community generally and on the emigration of our people.
Finance Ministers in every other country are making reductions in the burden of taxation and we are almost the sole exception. Canada recently was in a position to effect a substantial reduction in its tax burdens. That country was engaged in the war and had very substantial financial commitments in that respect. One would have expected that a country like this, which was in no way involved in those heavy financial commitments other countries had to bear, would be the first country to lead the world in reducing the burden of taxation. There was a White Paper recently published by the Netherlands Government, showing a complete plan for the reorganisation and rehabilitation of its industry and its agriculture. It sets out clearly what their plans are. They have a target for each industry: they expect to have their heavy industries, iron and steel, fully developed back to pre-war standards in a year or so; they set out for agriculture a couple of years; and for housing they have a definite target over a period of years. As a matter of fact, they are so anxious—and this is the point I want to stress—to ensure that the majority of the people of the Netherlands will be engaged in productive work, that they are taking a number of their civil servants out of their Departments and putting them into industry.
Because of the huge sum that must be spent here and administered here, obviously we require a very big Civil Service, and we have an immense Civil Service in proportion to our population. That is a further burden on the community. The proportion of the community engaged in real productive work is very small in relation to the community as a whole. In page 13 of the Budget statement, the Minister referred to that very useful and interesting White Paper published last year on National Income and Expenditure. He regrets that the official estimates of national income, in continuation of the figures for 1938-44, are not yet available. I think we can all regret that the figures are not available. The Minister continues:—
"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."
Taking the increase of 3 per cent. in prices for 1945-46 and expressing the output in 1945 values, our output last year fell by £4,000,000.
If we take up the paper on national income, we see there is a downward trend in agricultural production. The Government have made no attempt whatever to stem that downward trend. They are not interested in trying to stop the rot and they have no plans to reorganise our main industry. The only plans they have and the only things they are interested in are the imposing of high burdens of taxation, to provide non-essential services. That is what has alarmed me all the time —the neglect of the main industry. We spend £5,200,000 on defence. I think that at least £3,000,000 of that money is waste, pure and simple. I admit that an Army is necessary to ensure internal control and internal peace and harmony, but so far as defence is concerned, I believe an Army of half the personnel would be just as effective and that it is utter waste of money to spend £5,200,000 on defence. In the same way, I am not yet convinced that the spending this year of over £2,000,000 on air services and airports will be of any real benefit to the country. We are spending money on schemes of that sort—cosmic physics and other fads— that are of no benefit to the community, and that do not hold out any hope of giving a return to the people who have to foot the bill. That is how the money is being squandered.
The Minister is not interested in economising. He is certainly not interested in providing a plan to expand agriculture. Agricultural output is falling. It was falling all through the emergency, and all through the period when food and the price for it was at a premium. In comparison with the British, our output has fallen by 10 per cent. The British have expanded theirs by 70 per cent. The Minister for Industry and Commerce recently stressed the vital importance of our export trade. He went so far as to say that we either had to export or perish.
What is our export position? In the case of live stock we were exporting, 16 or 17 years ago, over 800,000 animals a year. To-day that figure has fallen to less than 450,000 animals. There has been a drop there of practically 50 per cent. At one time we were exporting over £3,000,000 worth of butter and now we are not producing sufficient to meet our own requirements. The best that we are able to do is to give the people a ration of 2 ozs. per head per week. In the case of bacon, we were exporting, at one time, 500,000 cwts., and 500,000 live pigs. Even before the war, our exports of bacon and pigs had fallen. To-day the best we are able to do is to provide 50 per cent. of our own requirements. Sixteen years ago we were exporting £3,000,000 worth of eggs. To-day the quantity we are exporting is negligible. The position to-day is that, in this city, we are not producing enough to meet the requirements of the people in butter, bacon, eggs and milk. The citizens are not able to get sufficient milk for young children. No matter what they are prepared to pay for milk, the milk is not there because output has fallen to such a low level.
This Government have concentrated on two schemes and both of them, to a great extent, have been failures. They have concentrated on wheat so far as agriculture is concerned, and they have concentrated on turf production. The country is experiencing the measure of success that has been achieved by the responsible Ministers in both cases. Last year we did not produce 50 per cent. of our requirements in wheat. So far as wheat production is concerned, in my opinion the country was unorganised. The soil conditions under which people are expected to produce wheat are unfavourable and unsuitable, and no attempt is made to adjust those conditions so that some expectation of a favourable crop might be there for the people who have to produce the commodity. In connection with all that, some of the most essential branches of Irish agriculture were grossly neglected, with the result that we have a depressed output all round.
There is a provision in this Budget of £1,250,000 to increase the subsidy for butter. There is a subsidy there already of £950,000. Therefore, practically £2,250,000 is to be provided this year by way of a butter subsidy. That is an industry that has been grossly neglected. The fact is that while subsidies must be paid, if you pay the subsidy and ignore the conditions that are there you merely help to crystallise the status quo. That is what the Minister for Agriculture has been doing for a number of years. There has been a decline in production and a falling off in milk yields. It will take many years of patient effort and of close attention to reorganise that industry and make it efficient. There is no plan for agriculture, and there is no attempt to provide a plan for the expansion that the Minister for Finance referred to, and hoped for, yesterday. It is not enough for the Minister merely to express the wish that an expansion is going to take place. It will take a tremendous effort and a tremendous organisation with an intelligent plan to get back to the position which we enjoyed here 15 or 16 years ago.
The fact is that our agricultural production, during the 16 years that the Fianna Fáil Party has been in office, has never reached the output that was there in 1929. The statistics reveal that. We should also remember that during that period agricultural science and knowledge have made tremendous progress. The scientific knowledge available in the world to-day for the production of food is far greater than it was in 1929. During those years there has been a terrific development in, for example, soil science. That development has taken place during the last 16 years, but no attempt has been made here to disseminate that essential knowledge if we are to expand production. Such an attempt has been completely absent.
In connection with the Government's projected plan to try to encourage into the national butter pool privately-produced butter, I am amazed that any Government should suggest that all the butter that is produced privately in the country should be sent into a factory to be processed. When one visits the Show one sees the interest that is taken in the butter-making classes that are conducted there. There is evidence there of the desire to encourage young girls to become expert butter makers. But when they qualify as expert butter makers and return to their own farms the Government tell them that when they produce butter—and they are able to produce a far better quality of butter than the creameries—they are going to take it from them and send it to a factory in Cork to be processed.
