He had. Deputy Butler is not long enough in Fianna Fáil to know what happened. The disappointed Mr. Gilligan gave the letter to Deputy Murphy. He was well in, as he thought, but then found that he was not—that there was a more urgent claim, and the correspondence was handed over. The letter was paraded and shown to quite a number of people and was not denied. I think that, in the next year, when this matter came before the Fianna Fáil Árd Fheis there was a considerable amount of anxiety over this revelation about the spoils system. There was clear evidence that it was in operation. The then Taoiseach made many attempts to explain that Deputy Moylan did not mean what he said when he wrote the letter. The plain meaning was not the one which the then Taoiseach read into it. The then Taoiseach got Deputy Moylan to agree before the Árd Fheis that the plan of Fianna Fáil was that the fruits of Government policy must go to Government supporters. There was the clear statement again of that. That was the best that Deputy Moylan could be brought to.
With all these things on record, am I doing the Party very much injustice when I say that they built up their whole Party system on administrative corruption? I think they did and I assert here now that they did. There is clear evidence of it. It takes some little time, I may tell you, to get people who were put in under such a system just smoked out, but the process is on, and I hope it will be continued. We will get an administration which will be based on merit. In that way we will get efficiency in the various posts that have to be filled and in the various classes of work that have to be done, and will get rid of that. I am sure people may come at me in a year's time or so and say that there is still someone hiding in a post obtained under a corrupt administration. I may have to confess that it is so because all this cannot be done immediately. We are taking a big step forward on that and on other matters, and we hope to get success there, as in other things, too.
As far as this Budget is concerned, the situation I want to present to the Dáil now is that I made a mistake when I said that I was faced with a deficit in the Budget of £8,731,000. I am really faced with a deficit of £10,500,000. I stated that I was faced with an estimated deficit of £8,731,000. In addition there is £600,000 for old age pensioners in some part of the financial year. Further, there is the extra half-ounce in the tea ration at a cost to us of £487,000; that makes £9,818,000. If I have to bear the odium of putting on the 6d. extra on income-tax, there was a failure in the estimated revenue of £600,000. Adding all that together means that the deficit I faced was £10,488,000. I want that sum thought of and pondered over. It is a big sum. In 1932, we were able to run the country on just about double that sum. At that time the country was run on a sum of between £21,000,000 and £22,000,000. In the end, what this country has to suffer through Budget impositions is that a tax has been put on petrol, 6d. on income-tax and that certain things have been done, that have been talked of ad nauseam, to hotels and caterers; the subsidy on margarine and oatmeal has been removed, farmers' butter is now without a certain addition by way of subsidy while there are various devices I adopt in regard to unemployment insurance and national health insurance. I suggest that it is not a bad performance to have bridged a gap of £10,500,000 by two serious taxes, one worth £900,000 and the other worth £670,000—call it £1,500,000 between them—and then by certain devices in regard to farmers' butter, margarine and oatmeal and the various other things that have been spoken of, made up the remainder.
What would have been the situation if Fianna Fáil were still the Government? They would not have made the economies that I have tried to make. They certainly would not have "looted"—that is the delightful word that has been used—the Widows' and Orphans' Pensions Fund. They certainly would not have off-shouldered the oatmeal and margarine subsidy on to consumers, and they would not have made any addition to the contributions called for under employment insurance and other schemes. They would not have stopped—it was still running when we came into office—the extra fuel subsidy even though Deputy Lemass said that we had ten years' supply of timber. Timber was still rolling in at the rate of 10,000 tons a week, for which a subsidy of £40,000 was required. It was still running when we came in but we stopped it. Aer Linte would certainly have been started and we would have been facing, I suggest, a loss of not less than £500,000 a year. Deputy Lemass said that we are in a deflationary period and his exhortation was to spend more. We should probably have to spend more and more if Fianna Fáil were in office. He certainly had the attitude that we should budget for a genuine surplus of several millions. If Deputy Lemass had any say in the framing of the Budget it would not have been a gap of £10,000,000 that we should have to bridge; it would have been something in the neighbourhood of £15,000,000. How would he have done it? He would not have done it by enforcing economies because they are taboo to him. He said there were only three types of taxation open—taxation on spirits or liquor, taxation on tobacco and taxation on incomes. These were the only three types that were left open to anybody. So not merely would you have continued the tax on beer and stout and the tax on tobacco, which we remitted, not merely would they have been left on, but they would have been increased.
Deputy Vivion de Valera said that, and there is no answer to him, these taxes would probably have to be heavily increased. Income-tax would also have been increased. Instead of that situation, I have succeeded by various devices in so narrowing the gap that in the end by one substantial tax —the tax on petrol—and by continuing what had been threatened, this extra 6d. income-tax, we are able to get over the difficulty.
There have been many comments as to the manner in which the gap has been closed, a criticism about nearly every part of it. The first item discussed was the question of the reduction in the Army. I copied down some of the spectacular phrases used about that. Deputy Ormonde thought that it was scandalous that this little defenceless island should be left to fall into the hands of the enemy. In fact, he thought that what was being done by the Minister for Defence would operate as an invitation to the British to seize the country. Deputy Lemass thought that we were destroying the efficiency of the force. Deputy Boland warned us that in this critical situation with war threatening, when the Americans were asking for £3,600,000,000 for an army, it was no time to cut down the Army. Deputy Burke said that we are insulting and belittling the Army by what we are doing.
I want to make one simple answer to all this. The last Government had no urge to economy at all; they did not want to save money; they wanted to spend it, but they had failed to spend on the Army last year as much as I am looking for by an economy this year. To do their worst in the way of spending, they could not ladle money out fast enough to exhaust the Vote last year and the Vote was not as big as this year. Out of last year's Vote, they failed to spend £750,000. That did not destroy the efficiency of the Army last year. Apparently it was no invitation to the British to come along and seize this defenceless island. None of these costly things happened, because the money was not spent.
I do not often find myself in agreement with Fianna Fáil but Deputy Killilea said that it was not too much to talk about, that it was very little in the end, and I agree with him, but Deputy Killilea is well out of step with his Party, when he puts that forward as a comment on the Budget. The Minister for Defence, Deputy Dr. O'Higgins, said he had been able to achieve this economy; that it was a solid economy, and that he had achieved it without having to dismiss out of the regular Army any single person and without, as he said, impairing the efficiency of the Army in the slightest degree, without disrupting any Army plans there were for the establishment of the Army on a decent footing. It is surely not too much in a critical year, when every effort should be made to collapse Government expenditure to the smallest possible point, and when a determined effort has to be made to alter the price structure in the country, that the Government should be allowed to secure economy in this financial year by confining expenditure on the Army to the figure that the last spendthrift Government thought was sufficient to spend. They did not think they were breaking down efficiency. I do not believe that I am breaking down efficiency and I think I am entitled to save if the efficiency of the force is not affected. We shall see how it works out with regard to Army efficiency during the year.
The second matter about which a great deal of comment has been made is this question of taking of money from the Widows' and Orphans' Pensions Fund. Deputy MacEntee used phrases such as "malversation of public funds", "looting", "pilfering" and every other odious comparison that came into his head and he based every comment he made on an actuarial report which, I think, he dated in the year 1943. My colleague, the Minister for Social Welfare, has written to the paper which gave Deputy MacEntee a certain amount of publicity in this matter and I think that a mere recital of a paragraph from the actuarial report ought to be sufficient to put an end to these bogies which Deputy MacEntee and others are trying to arouse in connection with this whole matter.
As I understand the objection made to this, it is that I am not paying in the sum of money which ought to be paid in, and which has always been paid in, that I am bringing the fund to some near approach to insolvency and that, according to Deputy MacEntee, investments would have to be sold, thus correspondingly weakening the fund still further and that the whole fund would come into a terrible and complete state of bankruptcy. The actuary who investigated this matter reported on 16th November, 1944, and paragraph 18 of his report is:
"Under the Acts, the amount of the Exchequer grants is prescribed until 31st March, 1945, and thereafter is to be such sums as the Oireachtas may determine. As indicated in paragraph 16, the sum paid during the last eight years, namely, £450,000 per annum, is substantially larger than will be needed in the future, and an equalised annual grant, during the next decennium commencing on 1st April, 1945, of about one-half of this sum, say, £220,000, is estimated to be sufficient, together with the contributions at their present rates and the interest on the accumulated assets, to meet all expenditure out of the fund for contributory and non-contributory pensions and the cost of administration thereof, and to secure that in ten years' time the invested reserves of the scheme will then be substantially equal to the present balance, namely, £3,900,000."
The actuary, in fact, reported that the previous Government were paying too much into that fund. A sum of £450,000 was not required and the actuary says that, for ten years to come, £220,000 a year would do, and that, at the end of that time, every call on the fund would have been met and "the invested reserves would then be substantially equal to the present balance, namely, £3,900,000." The reserves are now at £4,500,000 and the previous Government after getting that report—why, I do not know—put in two sums of £450,000 in each of two years. They made in two years what I would call a four years' contribution.
I say that I am entitled to save not merely £450,000 this year but £450,000 next year. I had not thought of it until this report came in detail before me. I think I have a good case for remitting any payment to that fund this year and next year. Certainly, on the basis of that report, nobody can say that the fund has been brought an inch nearer insolvency and yet we have had all the propaganda of the last three weeks from the benches opposite, focussed to a great extent upon this point about the fund being brought to the point of insolvency and that either of two things would happen—the sale of investments would be necessary or the benefits given to the contributors would have to be reduced. They can be continued at the same old rate and the investments still kept at that high point.
The turf matter had to come very heavily into this debate. I wonder could we treat this matter seriously and not have it just as a matter for propaganda lectures to Fianna Fáil clubs in an attempt to do what I can only describe as serious fifth-column work—to disturb people who should not be disturbed, who should be allowed to get quietly back to their own avocations and who should be brought to realise that there is available work, and work in abundance, work which they used to do until, in an emergency, they were asked to remit their old labours and come into a new type of occupation in order to help the country through.
The late Minister for Industry and Commerce spoke here on 21st February, 1946. I propose to give certain extracts from his speech and I do not think I am parodying his speech or putting it unfairly if I say that, in dealing with the prospects as he then outlined them, he divided the matter into four heads. There was what he called the production of turf by people in turf areas, which had always gone on and which he hoped would continue; there was the production of certain hand-won turf for what was called the national turf pool; there was the production of machine-won turf by Bord na Móna; and there was coal. There was also in the background the provision of fuel of the firewood type. I think the Minister in February, 1946, definitely outlined the prospects in this way: turf production always went on for the needs of the people in certain areas and it was not affected to any great extent by the drive for the extra effort put into the winning of turf, and it should go on. I see no reason why it should not go on, except that possibly the late Minister brought in too much coal; but the position being at the point of the importation of coal we had in 1939, there is no reason why anybody who used to produce turf for sale in the turf areas or for his own use should not continue to do so.
The Minister went on to look a little ahead with regard to the turf won by the county councils and he contemplated that as being a declining process, likely to end quite soon and all the more speedily if great quantities of coal could be brought into this country. The gap which had to be filled was that as between the then imports of coal as compared with what they were in 1939 and that gap was to be filled by turf, either hand-won or machine-won. He said that the whole thing depended on coal—whether we could get back to the coal importation of 1939. If we did, turf was going to disappear, except that turf which was always produced in turf areas for people's own use. Speaking on 21st February, 1946, at column 1335 the Minister said:—
"As many Deputies know, hand-won turf provides the basic fuel over large areas of the country and in some districts no other fuel can offer even a partial alternative. Production by persons resident in those areas, for their own use or for local consumption, averaged about 3,500,000 tons per year, and it is to be assumed that those people will continue to provide their own requirements by their own efforts in the future."
Later, in column 1336, the Minister continued:
"On the most optimistic basis, it will be very many years before the production of machine-won turf will make good the deficiency in coal supplies and, as we move from the emergency to normal conditions, this machine-won turf, produced under the auspices of the Turf Development Board, will merely replace the hand-won quantities now being produced by the county councils and by the Turf Development Board, as agents for the Government during the emergency and now being supplied on a ration basis in the non-turf area."
Again, there was a forecast that machine-won turf under Bord na Móna auspices was going to replace all hand-won turf other than what people in certain areas produced for their own requirements or for local consumption. Later in the same debate, at column 1349, the Minister said that he would urge upon each individual turf producer in the country to keep up the supply, and here is the basis for that:
"that we must get this year at least the same production of hand-won turf as we got last year, because there is no likelihood that we will be able to get any more coal or even able to dispense with fuel rationing in the eastern area next year."
It is clear from that speech that the Minister's view was—and he was announcing it quite clearly to the Dáil in February, 1946—that there were certain areas in the country where turf would always continue to be cut and there was no reason to interrupt that. Nothing that has happened since the 18th February has interrupted that.
There was then hand-won turf under the auspices of the county councils. That was going to be changed over to Bord na Móna and that hand-won turf was going to be replaced by Bord na Móna machine-won turf. The amount required from Bord na Móna would depend upon what coal supplies were likely to come into the country. The then Minister for Industry and Commerce got somewhat frightened at this stage about the fuel situation and in February, 1947, an Irish coal mission, with the benediction of the Government, was sent to the United States. That mission arranged for 500,000 tons of American coal to be shipped to Irish ports during the ensuing three months in 60 specially chartered Liberty ships. The Minister was, no doubt, acting in an emergency. He was taking steps to get in a lot of coal and, the more coal there was in the country, the less necessity there was for turf. The old importation of coal used to run about 50,000 tons a week. In 1946 the average was less than half that. Towards the end of the year 1946 the imports fell to 17,000 a week and they continued to fall steadily. In February, 1947, there was less than 13,000 tons of coal coming in. The British were being pressed to increase their supplies and on the 21st March, 1947, the then Minister for Industry and Commerce met the British Minister for Fuel and Power. The best he could get at that stage was 11,000 tons of British coal of the lowest quality and there was no hope of improvement for an indefinite period. But, in November, 1947, the British Government undertook to supply 1,000,000 tons and the Minister grabbed it. The 11,000 tons were of course still to continue and that meant that, if the 1,000,000 tons were going to come in in regular instalments over the year, we had got to a position where we were having 31,000 tons of coal per week coming into the country.
Alternatively, if a considerable amount of the 1,000,000 tons was to be landed in at once it would presumably be put in the dump with the American coal that had come here. There is no doubt about it that by November a situation had been reached in which we had very big supplies of coal promised to us. The consequence of that upon the hand-winning of turf was obvious to anybody who knew and understood the problem.
Prior to that, of course, certain things had happened. In 1947 the then Minister for Local Government objected to the enlargement of the scope of his duties in connection with turf; he objected to county councils being asked to take any more responsibility with regard to the production of turf and he objected to any intention of continuing beyond the emergency that Minister's responsibilities for turf production through the county councils. In accordance with his views on the 18th August, 1947, a circular was addressed to county councils telling them that the Minister for Local Government had decided that county councils should not participate in the production of turf for Fuel Importers, Limited, after the 31st December of that year. The future production on behalf of Fuel Importers, Limited, was to be taken over by Bord na Móna. There then follows in the memorandum that was circulated a list of 17 turf counties. There is another memorandum here about the difficulty of transport and as to what would be done with bogs and so on. County councils were definitely given their instructions on the 18th August. They were not to have any further responsibility for the production of hand-won turf. That was followed by letters from the Minister for Local Government in December, 1947, thanking the various county councils for all they had done and more or less bidding farewell to the whole scheme.
Eventually we come to this conference, which has been mentioned so often, held in the Department of Industry and Commerce on the 12th February of this year. There was a long agenda. A number of items appeared on it and one of those items was "turf development programme for 1948." The decision that was taken was "no provision should be made in the 1948-49 Estimates for Bord na Móna hand-won turf scheme." That was a week before the Minister left office they decided that. Part was not decided. "The question of the discontinuance of hand-won turf production by the county councils should be further examined." Can anybody tell me that that meant it was going to be continued? That is the 12th February.
