It has been the normal practice to move the General Resolution following the Resolutions which implement the proposals in the annual Budget statement for the purpose of permitting a review of the proposals on the following day, when Deputies have had an opportunity to consider them. This is the General Resolution which is before the Dáil now and on it I want to amplify some of the remarks which I made yesterday on the Budget statement of the Minister for Finance and the specific proposals which he made to the House. As I understand it, the main charge, if I may so describe it, which the Coalition Parties make against the Fianna Fáil Government is that it was extravagant—extravagant in the sense that it embarked upon projects which, in their opinion, the country could not afford, or projects which, in their view, were undesirable, apart altogether from the adequacy of the country's resources to sustain them. That is a view which has been expressed on more than one occasion since the change of Government by the Minister for Finance. He told us in his first speech as Minister, and again yesterday, that in expressing that view he speaks not only for his Fine Gael colleagues but for all the Parties comprised in the Coalition. It is true that members of the other Coalition Parties, even those who are actually Ministers and consequently in direct contact with the Minister for Finance, do not appear themselves to have stated that view with any emphasis, but we must assume at least from their silence that they are in general agreement with what the Minister for Finance has stated on their behalf.
In view of these declarations by the Minister on behalf of all the Coalition Parties, it was of course assumed by Deputies of these Parties in the House, by their followers in the country and particularly by the newspapers that give them such staunch support, that the Budget would spotlight the extravagance of Fianna Fáil, indicate the particular projects which the Coalition Parties consider to be extravagant and undesirable, and which the Coalition was formed to prevent, and that the proposals of the Minister for Finance following his Budget statement would be designed to eliminate these extravagant or undesirable expenditures. We must assume that has been done. Certainly the Minister for Finance represented himself as having that task and apparently considers that he performed it. If I am wrong in that, perhaps I will be corrected. Until I am corrected, however, I shall assume that the economies outlined by the Minister in his Budget statement are those which, in the view of the Government and the Coalition Parties supporting the Government, were necessary to correct extravagance or to eliminate expenditures which, in their view, were undesirable.
What are these economies? The total of the economies outlined by the Minister was £5,500,000. That sum is made up as to £3,250,000 by the reduction of food subsidies, as to £1,000,000 by reduced expenditure on social services, as to £750,000 by economies on the Army Vote and as to £500,000 by a number of other savings, minor in importance so far as their cost is concerned, to which I shall refer later. In so far, therefore, as there was a view in the Coalition Government that the Fianna Fáil Government was extravagant, that its extravagance had to be corrected, that it was spending money upon undesirable services and that they had to cure the extravagance and save the money being spent, in their view, in an undesirable way, the Budget indicates that that extravagant and undesirable expenditure came under three main headings: food subsidies, social services and defence expenditure.
We are told that, in addition to these so-called economies which were announced by the Minister yesterday, there are to be further savings, further reductions of expenditure, amounting, it is hoped, to about £1,250,000 and which, until we are told otherwise, we must assume will be of the same character as those announced yesterday. If we are to have any useful discussion upon this policy of the Coalition Government, we must try to speak in language which each of us can understand. That means that we should try as a preliminary to get agreement on definitions. What do we mean by economy? Economy must be something more than the avoidance of expenditure. The ordinary meaning of that word is the elimination of waste and nobody would ordinarily use the term to describe the mere cutting down of expenditure, regardless of the value of the purpose for which the expenditure was effected. If a person came to the conclusion that he was living beyond his means, he would not be congratulated on his policy of economy and retrenchment if he solves his immediate difficulty by postponing the butcher's bill until next month and meets the grocer's bill by an advance on next month's salary. That, however, is the type of economy the Minister has decided to recommend to the House.
I said yesterday that some of the savings outlined in the Budget were fakes. Having examined the Budget statement, I have come to the conclusion that they are all fakes. There is not one genuine economy amongst them. There is not a single instance in which the Minister was able to say to the Dáil that the country will get the same service for less cost. That is what I mean by economy and that is what the ordinary person understands by economy. It is true that there has been an avoidance of expenditure, but in no case could that avoidance of expenditure be described as an economy. What expenditures have been avoided? The main saving is upon food subsidies. Of the £5,500,000 the Minister claims to save, £3,250,000 comes under the heading of food subsidies. Of the saving upon food subsidies, the most important part is the reduction in the Vote for the subsidy on flour. The possibility of that saving has been partly attributed by the Minister to the anticipated implementation of the International Wheat Agreement which was provisionally signed in Washington last February, but he is not claiming to have had any part in the making of that agreement. That agreement was under discussion during the whole of last year, beginning at a conference held in London in March, 1947, which was unsuccessful, and continued at the Washington Conference which assembled in January. I do not want to repeat what I said yesterday in that connection. It may be that that International Wheat Agreement will be implemented. If so, we will be glad. There will be a genuine saving to the country in so far as we will get the quantity of wheat allocated under the agreement at a lower cost than we had to contemplate on the basis of last year's prices.
There are, however, real dangers that the agreement will not be implemented. Apparently, the American taxpayer, having noted the proposals in the agreement and the general trend of world wheat prices, has come to the conclusion that the agreement could not be implemented without involving America in what would, in effect, be the subsidisation of wheat exports, and there is a disinclination in America to meet that charge. If that wheat agreement is not implemented, the savings on food subsidies which the Minister took into account in balancing his Budget will not be achieved. The rest of the saving—in fact some sum in excess of £2,000,000—is a mere postponement of the expenditure. Instead of meeting the cost of the subsidy in the present year, the Minister proposes to spread it over a period of five years.
He may have grounds for assuming that the cost of maintaining the present price of flour and bread through subsidy will be less next year or the following year than it is now. If not, he is merely, by this device, increasing the problem which he or his successor will have to face this time 12 months. Nobody, however, could describe the proposals of the Minister in relation to the flour subsidy as a saving. The possible reduction in the price of imported wheat is not due to any act of his. The postponing of a part of the cost of the subsidies to next year is a spendthrift device of which few people could approve.
The balance of the expected saving upon food subsidies is secured by increasing the price to consumers of tea, sugar, margarine and butter. Not all consumers of tea, sugar and butter will have to pay the increased prices, but some consumers will, and, by this device of increasing the prices, the Minister is reducing the cost of the subsidies hitherto paid upon these commodities to the Exchequer. In the case of butter, there is, in addition to the increase in the price to be charged to restaurants and caterers, a proposal to divert to the production of chocolate crumb for export some part of the milk supplies which might have gone into butter production. By that device, the amount of creamery butter available for consumption here will be less and consequently there will be a saving on the subsidy. I should like to deal with that particular project a little more fully later on.
In the case of social services, the Minister has the gall to present to this House, as an economy, a device for transferring the cost of the additional cash supplements paid to beneficiaries under the national health insurance scheme, the unemployment insurance scheme and the widows' and orphans' pensions scheme from the Exchequer to the insured contributors. Does any Deputy opposite believe that that is an economy? It is true that the cost to the Exchequer is reduced but it is reduced by transferring the burden from the shoulders of the taxpayers in general to the particular class of persons who are insured under these various social service schemes. I am not going to contend that at some stage the whole of our social service arrangements would not have to be tidied up. We contemplated tidying them up this year with the introduction of a comprehensive insurance scheme against all forms of undeserved want. That would, no doubt, have involved the disappearance of this cash supplement even though it was not intended by us that the total cost of the social service arrangements to the Exchequer would be reduced. We anticipated it might be increased. But we certainly would never have the audacity to present to the Dáil, as an economy, a proposal to transfer that particular charge from the Exchequer to the insured contributors to these funds.
The Minister also proposes to raid the widows' and orphans' pensions investment account. That fund was being built up by a series of annual contributions with the intention of ensuring that there would in the course of time be an investment income which would permit of the expansion of widows' and orphans' pensions without increased contributions from those insured under the scheme. By this device of making no contribution this year the date upon which the fund would be capable of meeting these larger pensions has, of course, been postponed. Again, that has been presented as an economy. No sensible person would attempt to describe it as such.
The third main item of reduced expenditure is the curtailment of expenditure on the Army. I referred to that yesterday. If Deputies opposite believe that this is a period in the world's history when it is sensible to save £750,000 on our defence services there is little I can say to convince them to the contrary. But it is folly. We all hope that a stage will be reached when small countries like ourselves can dispense with defence organisations. No one can contend that that stage has been reached now, and that this is a time when, for the sake of a comparatively small sum in relation to the total Budget, we can set out to destroy the efficiency of our defence organisation.
These are the Budget proposals. I said yesterday, and I repeat here now, that we are not interested in the Budget as a mere mathematical adjustment of State revenue to State expenditure. We are interested in the Budget as an instrument for achieving certain social and economic objectives. We examine this Budget for the purpose of endeavouring to ascertain what social and economic policy inspired it, what social and economic aims it is designed to achieve. I should have thought—and I still think—that in this House there would be general agreement upon the aims of social policy. There may not be agreement upon the methods adopted to achieve those aims. With regard to the aims we should set for ourselves and the purpose of any particular projects that might be discussed here we would, I am sure, find agreement as to what we desire. The aim of social policy must be to protect and, if possible, to raise the standard of living of our people and to provide out of the general resources of the community adequate protection against undeserved want.
Consider then the Budget in relation to those aims. The Budget raises the cost of certain essential foodstuffs. It expresses the Government's stand against any attempt on the part of the workers to compensate themselves for these higher prices through wage increases. There is, in fact, a threat, or a suggestion of a threat, that if there is a continuation of the present upward movement of wages the Government will consider reimposing the standstill Order. It makes no provision for the introduction this year of a comprehensive social services insurance scheme. The House is aware that the Fianna Fáil Government had intended to legislate for such a scheme this year and we had been led to assume by statements made by the Minister for Social Welfare that the Coalition Government would do likewise. The most we have been promised now is a White Paper before the summer. It is quite clear that the White Paper is merely a device to keep the public hoping. There is, in fact, in the Budget no provision for any such scheme before April, 1949. We must assume, therefore, that there is no intention to operate such a scheme before that date. I should have thought that not merely would we have had agreement upon the general aims of social policy but that equally there would be agreement upon the general aims of economic policy. It is true that there has always been and always will be far greater differences of opinion as to ways and means of achieving economic objectives than in the case of social objectives. I am sure, however, that most of us will accept the contention that the aim of economic policy is to make possible the achievement of our social aims by increasing the national wealth through expanded output from agriculture and from industry.
Again, examining the Budget in relation to that particular aspect of public policy, we find nothing in this Budget which is in any way designed to ensure an expansion of production of any sort except a general exhortation such as we have had on many occasions recently from members of the Government speaking in public. There is no positive stimulus offered to any class of producers. In so far as there is anything in the Budget at all, which appears to have a bearing upon the volume of industrial production, it is only a deterrent. The tax upon motor fuel must to some extent operate to increase the cost, and, therefore, reduce the volume of industrial output. If that is a fair comment on the Budget, then it is obvious that we can get from it no clear indication that it has been designed to serve any intelligible social or economic aims at all.
If we are to attempt to deduce from this Budget what is the economic and social policy of the Government we must take note of the following facts. Firstly, in the future, because of the Budget, the public will pay more for jams, margarine and oatmeal. They must reconcile themselves to enduring bread rationing for a period of five years. That, I assume, is the logical implication of the remarks of the Minister for Finance concerning the flour subsidy. We must reconcile ourselves to enduring sugar rationing for an indefinite period although we know that there are stocks of sugar in the country capable of maintaining an unrationed supply of sugar for eight months and that the world position in regard to sugar has changed radically, so that there is now no difficulty in obtaining whatever supplies may be required to supplement our own production on the basis of unrationed consumption. The only reason why we have to continue to ration sugar is because de-rationing it would either mean increased expenditure upon a price subsidy or an increase in price, and the Minister for Finance was not prepared to face either. I assume that we must also be prepared to do with less butter. The diversion of milk from creamery butter production to the manufacture of chocolate crumb for export must mean a lower output of creamery butter. The Government of which I was a member had an interest in the long-term development scheme for the production of chocolate crumb. We were responsible for the initiation of that development here, and we were anxious not to discourage it. We had to recognise, however, that in present circumstances, with creamery butter rationed and an insufficient milk production to maintain the output of creamery butter on an adequate scale, we could not permit of the unrestricted export of milk products and that the allocation of milk for chocolate crumb production had to be limited. The former Minister for Agriculture and myself came to an agreement as to the quantity of milk that could be made available for that purpose. The decision of our successors has been to increase that quantity of milk. That will earn certain sterling resources, but it means that we will have to be content with less creamery butter for home consumption.
In addition, the contributors to the social services must pay more in contributions for the benefits they will get. I think it is true to say that the contributors to these social insurance schemes would not object to moderate increases in their contributions for the purpose of getting additional benefits, but the device adopted by the Minister for Finance puts them in this position, that they will have to face a substantial increase in contributions merely to draw the benefits that they have heretofore been receiving. As I have already mentioned, the raising of the widows' and orphans' pensions through the operation of the investment account must be postponed.
The other indicator of Government outlook upon policy is the decision to reduce the Army. In return for all these burdens, and the risks which the Government are asking the people to take, we have got lower prices for wine, beer, tobacco and cinemas. I want someone to tell me what sort of social policy that scheme is designed to implement. If there is a social policy someone should be able to explain it; to me it is unintelligible.
