I move:—
That a sum not exceeding £14,450 be granted to complete the sum necessary to defray the Charge which will come in course of payment during the year ending the 31st day of March, 1950, for the Salaries and Expenses of the Department of the Taoiseach (No. 16 of 1924; No. 40 of 1937; No. 38 of 1938; and No. 24 of 1947).
For some months now we have been discussing in great detail, but not at unreasonable length, the various workings of Government policy in connection with finance, social services and general economic matters. This Estimates traditionally provides an opportunity for discussing general Government policy. Each year there has been a difficulty in ascertaining the precise scope of a debate on that particular topic. If I might put it this way: we have been discussing the details of the picture and this Estimate now gives us an opportunity to stand back, look at the picture as a whole and see the underlying structure and the principles underlining the details which comprise the entire picture. Perhaps I might help Deputies this year by departing from the usual procedure. It has been the general practice of the Taoiseach, so to speak, merely to throw in the ball and let the various Deputies worry the ball and throw it back and forward and, finally, the Taoiseach wound up on the various matters mentioned.
I propose to give some general indication of the principles underlying Government policy which may possibly give a line to those Deputies who are, perhaps, a little bit doubtful as to the kind of matters which may be discussed on this Estimate. At the very outset I want to refer to a change of a rather significant character which has been made in the course of the year in my Department, because it is something of significance in the direction of general Government policy and the outlook of the Government on policy as a whole. There has been created, by administrative Order of the Government, a new office attached to the office of the Taoiseach, a new central statistics office, which forms part now of the Department of the Taoiseach. That decision was come to because of the fact that the Government in framing, designing and endeavouring to carry out their policy, found that, by reason of the greatly extended scope of the responsibility of Government under modern conditions, it was difficult, if not impossible, properly to frame general policy and carry it out without up-to-date statistical data and information. By reason of the complex nature of the compilation of statistics, by reason of the fact that we have not had any up-to-date estimate of national income, we were quite unable to follow the general trend of policy in its working out, and, in order properly to chart the course of Government policy, it was necessary that there should be an office charged with the responsibility for producing an up-to-date, timely, full range of official statistics.
It has been stated that the best indicator of the economic health of the country is the level of its national income. There has been no really official compilation of estimates of national income since the year 1946. To use a phrase employed recently by a distinguished Irish economist, those people who are considering economic policy and the trends of trade, investment and national income are really working, as he put it, in the shadow of a somewhat considerable statistical darkness which has rested on our affairs since the White Paper on National Income and Expenditure for the years 1938 to 1944 was made available in 1946. We desire to dispel that darkness. We wish to have a modern, scientific compilation of the national income so that we could have from time to time the best possible information as to the trend of our economic life, the nature of our economic health. We felt that, although it was natural that the Statistical Office as it has existed up to this should have emanated originally from or found its birth in the Department of Industry and Commerce, yet that up-to-date, timely statistics were of such vital importance in modern conditions and the subject matters to be handled by such a Department were so complex that it required a separate office with considerable independence of every Department, which would be an organ of the Government as a whole, to deal with the compilation of official statistics and particularly estimates and statistics relating to the national income.
Accordingly, we have set up this new office attached to my Department, to underline its independence, to emphasise the importance which we attach to this work and to give the office real freedom and scope for the compilation of those statistics which are of such vital importance to those people who are charged with the conception, design and carrying out of Government policy.
The first time and, indeed, the only time when any really authoritative estimates of national income were published was the occasion of the publication of the White Paper which was published in the year 1946. The preparation of such a document as that involved a high degree of competence on the part of the compilers. Prior to that we had unofficial estimates of the national income. Professor Dunean had prepared for the Banking Commission an estimate of the national income for the year 1929 and Dr. Kieran, in the Economic Journal of March, 1933, had prepared an estimate of the national income for the year 1926. Various people interested in and qualified to write upon such matters contributed papers to the Statistical Society of Ireland, which has done so much useful work, and that work really provided the background and the groundwork of the work that was done officially by the publication of this White Paper in 1946. There has been no White Paper on the national income since that time. We felt that it was vitally important that there should be, at the earliest possible moment, such a White Paper produced.
We have given this new office a status and an independence of other Departments or of any particular Department which, we believe, will give them freedom to do the work that is required to be done and which requires to be done urgently and in a very timely manner.
Since the Statistical Branch of the Irish Government Service was set up, the reputation of Irish statistics has stood high nationally and internationally. We are fortunate in having had as directors of that office men of ability who have won fame for themselves and for their country in their particular scientific calling. We are fortunate in having a director at present who himself is outstanding in his profession. We were fortunate also in securing the services of a professor of University College, Cork, who gave up his Chair to become Deputy Director of the Statistical Office. In addition, through the medium of the Civil Service Commission, we have secured four young people, three men and a lady, who are highly qualified in statistics and the science of statistics, mathematics and economics, who have joined the Government service in this new office and we are again indebted to the generosity of the United States through the funds that they have placed at the disposal of nations wishing to avail themselves of their service. At least two of these four new statisticians who have joined the Irish service will be given the benefit of training at the expense of the United States Treasury in the United States of America.
The office will be charged with compiling every type of statistical information, while, of course, its primary and possibly its most important function and its most urgent task will be the compilation of figures of national income and expenditure. The office will have the surveillance of any statistics that may be left with particular Departments to prepare themselves, but generally it will be the duty of this office to compile all Government statistics and where the office does not undertake that duty the director and the staff will have the right to direct and survey all statistics that are prepared by any particular Department.
An inter-departmental committee will be appointed to co-ordinate the statistical work of administrative Departments and it is intended that for the purpose of giving advice on statistical matters a statistical council will be set up under the Statistics Act of 1926.
I mention these matters although the Minister for Finance gave an outline of the reasons for this new Department when he introduced the Estimate for the office some few weeks ago. We hope that with the foundation of this branch of my Department we will have available to all Departments and to all Deputies and to all economists really up-to-date information on the statistical developments of this country. I have emphasised the desirability of getting an up-to-date survey and estimate of national income and expenditure, because I think it will be agreed that the aim of all Government financial and economic policy must be to increase the national wealth. How far the efforts of a Government are succeeding in doing that, to what extent it can be seen whether or not a Government is in its policy travelling along the right lines, can only be determined by reference to official statistics of national income prepared in a scientific, up-to-date manner. We have, therefore, set out, as the fundamental basis of our Government policy, to increase the national wealth. All our financial policy, all our economic policy is directed to that end.
Every Deputy knows the demands that are being made, and that are increasingly being made upon the Government for bounties and for services of one sort or another. Everybody knows, or should realise that these demands of necessity result in increased expenditure by the State. Everybody must realise the necessity for keeping down taxation and the burden of taxation on the people. In existing circumstances, that burden is far too great.
If we are to do what is required to be done, and even the minimum of these requirements, we must increase the national wealth of the country if we are to avoid a crippling burden of taxation on the people. By increasing the national wealth, increased revenue can be secured without increased taxation. I should interpolate here for the benefit of Deputies who, perhaps, do not realise it, that the burden of taxation, of high taxation, enters very largely into the cost of living. Deputy Cowan has referred to the fact that he intends to raise the cost of living on this Estimate. I would direct his attention, when considering that aspect of Government policy, to ponder upon that aspect, which is very often forgotten, that high taxation enters very largely into the cost of living. If we can increase the national wealth, we can get more revenue without extra taxation; we can get more productive work and thereby save the State from the claims which are being made for unemployment insurance benefit and for all the social services that, of necessity, a modern State must maintain.
So far as our financial policy is concerned, it has been stated and restated. It is not necessary for me to underline it again. We wish to keep down high taxation; we wish to curtail, so far as is reasonably possible, Governmental expenditure. Our general policy on that has been stated—to save public moneys that might be spent better and more productively. A little over 12 months ago, on the 26th May of last year, I addressed the Dublin Chamber of Commerce on certain aspects of the problems that appeared to us at that time to be awaiting solution by the Government. I stated, in the course of that speech to the chamber of commerce, as follows:—
"The two main long term economic problems confronting this country are the necessity for greatly increased agricultural and industrial output, and the rectification of the unhealthy condition of our balance of international payments. The first of these problems is the more important. If we can solve it, we will have gone a long way towards improving the balance of payments position as well."
In other words, it appeared to us at that time that we were not producing enough or selling enough, and that we were buying too much, and that Government policy had to be directed in order to increase the national wealth of the country, to secure conditions within it to increase agricultural and industrial production so that greater productive employment would be obtained, the adverse balance of trade rectified, improved social conditions obtained, and the highest possible level of prosperity for all sections of our people.
I can assure the House that that was the headline we set ourselves 12 months ago. I think we can claim that, with that headline before us, we have made, at least, some substantial progress towards solving those two problems to which I adverted over 12 months ago. We set ourselves out to increase agricultural and industrial output. We had not at that time, nor have we even yet, recovered in this country from the impact of the war upon us. We are still depending, to a very considerable extent, on the success of the efforts that are being made in Europe and elsewhere throughout the world, to restore the disequilibrium of international trade and give some sort of stability in particular to European economic conditions. We can only do a certain amount towards helping the recovery of European economy, and because we cannot escape in this country the effects of the disruption that came upon European economy as the result of the war and in consequence of the peace following the war, we have given throughout the last 12 or 16 months that we have been in office, every possible assistance that we could towards the amelioration of European economic conditions and to the success of the United States European Recovery Programme.
We cannot, even though we are isolated to a certain extent from Europe, hope to escape the effects of the economic disturbances in Europe or even further afield, but there are certain things that we have within our own power, and with our own materials we set ourselves out to increase the capital value of our own economy and to create conditions within which industrial and agricultural production could be achieved and our balance of payments position ameliorated.
Over the last 50 years there has been practically no opportunity for determining a long-term policy for the economic recovery of this country. Other countries have suffered from certain economic ills which have passed us by. There have been, perhaps, in England and other places, industrial fluctuations and normal unemployment: industrial fluctuations due to a falling off in the demands for particular commodities or unemployment because of a falling off in the demand for a variety of products. That is not our problem here. Our economy has been relatively unproductive and relatively under-invested. We have to face the fact that we have an economy which has a great potential source of wealth for the people and which has not yet really been developed in the way that it should have been. Our economy has suffered from what has been described as chronic under-investment. We have had the position here in years gone by where we have had resources available to us for the development of our own economy, and those resources in land, in labour and in capital have been left idle here at home or else have been exported abroad: a position where Irish labour and Irish capital have been used for the development of countries other than our own. Our policy generally in that respect has been a policy of constructive development of our own economy. People have invested their moneys abroad and men have gone to work for other peoples abroad. In connection with our land, which is the real source of the wealth of this country, and in connection with our agricultural industry, it is in those respects that our most valuable resources have remained completely idle and unemployed.
We have been suffering from a condition which has been described by economists as under-employment, a condition in which labour, capital and land have been either not used at all, or not used in such a way or in such a combination as will increase the national wealth. We have set ourselves out to see that all our resources, so far as possible, are invested in this country, both labour and capital, and that the land, which is the greatest source of our potential wealth, will get a chance it has never got before. We believe that large-scale investments of our own moneys will produce better dividends for the Irish people, if invested in the land of Ireland, than if invested anywhere else. Even before the war years, even before the impact of the war on our agricultural economy, agricultural output was stationary and it is merely a truism of Irish economics to say that everybody in this country, directly or indirectly, relies for his prosperity upon a prosperous agricultural industry.
Accordingly, to deal with the situation of under-investment that is such an outstanding feature of our economy in connection with our land and our agricultural industry, we have decided to invest the greatest amount of money available to us in increasing the fertility of the land and developing the land as our best source of potential wealth. In doing so, we were not concerned at all with increasing the wealth or the prosperity of any individual farmer. The whole purpose was to develop the agricultural industry by means of the investment of Irish capital to increase the fertility of the land, so that our national income might be increased and general prosperity produced throughout the country, productive employment given to our people and this greatest national asset of ours, the land of Ireland, developed to the fullest possible extent.
We have debated here on a number of occasions the policy underlying the land reclamation scheme of the Minister for Agriculture. I do not intend to develop that any further than has already been done. I mention it for the purpose of showing that that scheme is perhaps the outstanding example of the Government policy of constructive investment in our own economy, an investment designed to increase the national wealth, to increase agricultural products for export, to increase the productivity of the land and to give genuine productive employment to our people on the land and, through prosperous conditions on the land, to our industrial workers.
Through the operation of the trade agreement which was negotiated and signed last year between this country and Great Britain, we have brought stable conditions to the agricultural industry, and in the course of the various debates on different agricultural topics that have taken place here within the last few months, it has been demonstrated that our agricultural production has increased to a satisfactory extent.
We rely upon an increase in our agricultural production, upon the export of our surplus agricultural products, to a very large extent to meet the second problem to which I referred and which I quoted to the Chamber of Commerce last year, namely, the rectification of our balance of payments. I hope in a few moments to refer to what has been achieved in that respect. So far as that very serious position has been tackled and, to some extent, if not solved, at least put into the course of solution, it has been due to the improvement in our agricultural industry and to the increase in our agricultural exports. While that is the general policy for agriculture, and while we assert it as our fundamental policy, because more than half of our people are employed on the land, and because nearly everybody in Ireland depends directly or indirectly for his well-being on a prosperous agriculture, we have directed all our efforts primarily to creating the conditions whereby a prosperous agricultural industry can be achieved and a greatly increased productivity in agricultural products secured.
We recognise that there must be a balanced economy in our country, and I think we are entitled to claim that we have, in the course of the last 12 months, achieved something towards the development of industrial employment and our manufacturing industries as a whole. We have, as Deputies are aware, given an indication of general Government policy in reference to our secondary industries by the setting up of the Industrial Development Authority. That authority is at present functioning and it will be given statutory form and effect if and when the Bill which has been introduced into this House is passed into law. The main purpose of that is to see that we have our manufacturing industries built up in a coherent, co-ordinated fashion; that that is not done merely in a patchwork way; that new industries will be fostered and given every possible encouragement, and that the development of Irish industry will be upon a coherent, welldirected, well-ordered line; that if one industry is protected or given certain advantages, that those advantages or that protection will not be given at the expense of other industries, and that the impact of all manufacturing industries on our agricultural industry, when they are producing the goods we expect them to produce, will also be carefully watched and the inter-action of Irish industry and our agricultural industry will be watched and safe-guarded.
I have stated that we have succeeded in increasing greatly our agricultural production, thereby helping towards the rectification of our balance of payments. We have also been able to show during the past year a steady improvement in industrial activity, industrial productivity and industrial employment. May I give a few figures to emphasise and underline these matters? As regards industrial employment, in the year 1938 there were 166,000 people employed in Irish industry; in the year 1947 there were 177,000 people employed; in 1948 there were 184,000 people employed, so that within the last year 7,000 additional people were employed compared with the year before. That is the position as regards people put into employment in Irish industry. There was a 4 per cent. increase on 1947 and an 11 per cent. increase over the year 1938. The year that has just ended was a year in which the highest level of industrial employment in the history of this State was achieved.
So far as industrial protection is concerned, the figures are equally revealing and satisfactory. In 1948 the volume of production for all industries was 16 per cent. above the 1947 volume. It was 28 per cent., above the 1938 volume. Since February of last year the Minister for Industry and Commerce has approved 104 new industrial projects, in 24 of which production has already begun. There are 77 proposals for new industries in process of advancement towards completion.
The year 1948, in addition to being a year where the highest level of industrial employment in the history of the State was achieved, was also the year in which the highest level of industrial production was achieved. That year was remarkable, too, for the increase in our export trade. Deputies are aware of the difficulties that had arisen in connection with the interpretation of one of the clauses in the trade agreement entered into between Great Britain and this country in the year 1938. In the year 1938 our industrial exports were of the value or order of 2.1 millions. In 1947 they were of the order of 6.2 millions. In 1948—that is last year—they were 8.2 millions. During last year, in addition to achieving a record in industrial employment and industrial production, our exports of Irish manufacturing products increased by £2,000,000 on the figures for 1947, a 32 per cent. increase on those figures, and increased by 6.1 million, or 290 per cent., on 1938 figures. I think, therefore, that we are entitled to claim credit that we have gone at least a considerable way towards the solution of the first of those two problems to which I adverted in May of last year when I addressed the Dublin Chamber of Commerce.
We have greatly increased agricultural and industrial output. When I said that we were able to solve the first of those problems, the second of our problems—the rectification of our balance of payments—will follow as a matter of course. I think we are entitled to say that in the 12 months following on that speech we have made considerable progress in solving those problems. While I say that we have made considerable progress in solving those problems, I do not wish it to be stated that we are merely asserting these matters in a mood of smug complacency. We are fully alive to the difficulties that still confront this country. We are quite keenly appreciative of the problems we still have to tackle and to solve. But we are, at least, entitled to say that at the end of this 12 months progress has been made and we appear to be on the right lines so far as our agricultural, industrial and financial policy is concerned.
The balance of payments position, which was the second problem to which I adverted last year, shows a trend that, while we cannot again regard it with smug complacency, is at least satisfactory in its general direction. We had last year when we came into office a condition in which the unfavourable balance of trade had reached rather extraordinary heights. It is, perhaps, right that it should be mentioned and appreciated that the high excess of our imports over our exports in the year 1947 was probably due to the necessity for stocking-up following upon the decline in imports during the war years.
The figures which I would like the House to consider in connection with our balance of payments and our balance of trade are as follows: For the year 1947 our exports were £39,500,000; our imports were £131,300,000; for that year on the balance of imports and exports there was a deficit of £91,800,000. As against that, crediting ourselves with invisible items, the balance of invisible items amounted to a figure of £62,000,000 approximately; so that, taking our exports, our imports and our invisible items into account for the year 1947, the unfavourable balance against us was a sum of £29,800,000. In the year 1948 our exports were £47,500,000, an increase of £8,000,000. Our imports were £136,700,000, an increase of something over £5,000,000. Now, our adverse balance of trade on these two figures of exports and imports amounted to £89,200,000. As against that we had to take credit for the invisible items of a figure of £74,000,000, leaving our unfavourable balance last year at £15,200,000. Therefore, during last year we had reduced our unfavourable balance of payments from a figure of £29,800,000 to £15,200,000, leaving a reduction of £14,600,000.
We endeavoured to check the trend as revealed by those figures by reference to the figures available during the first five months of this year as compared with the first five months of the year 1947. For the first five months of the year 1947, from January to May, the export figure was £13,000,000 and the import £40.82 million, leaving an unfavourable balance for those five months of £27.82 millions. For the first five months of 1948 our exports were £17.05 million and our imports were £63.91 million, leaving an adverse balance for those five months of 1948 of £46.86 million. For the year 1949 the exports for the first five months were £22.70 million; in 1947 the figure was £13,000,000; in 1948 £17.05 million and for the first five months of this year our exports were, as I have said, £22.70 million, an increase of £5,000,000 over the first five months of last year. Our imports during the corresponding period were: in 1947, £40.82 million, leaving for the first five months of that year an unfavourable balance of £27.82 million; for the year 1948 the imports were £63.91 million, leaving an unfavourable balance of £46.86 million; for the first five months of this year our imports were £53.81 million, leaving an unfavourable balance of £31.11 million. For the first five months of this year the unfavourable balance of trade has been reduced by £15.75 million as compared with the first five months of last year. In the first five months of this year the total exports were increased by £5.65 million and the total imports were reduced by £10.10 million as compared with the first five months of 1948. I do not want Deputies to think that we place any more reliance on those figures than we ought to place on them. We are entitled to say this, that if the trend indicated by those figures continues, as we hope it will continue, during the next few months and the next few years, then we will have gone very far to lessen the gap between our imports and exports and our payments out and our payments in.
Deputies will have noticed that in those figures there is one item of very considerable importance. Hidden away in the item that is referred to as "invisible items" there is, of course, the amount of money that comes into this country through the tourist industry. We hope that American visitors will come here in increasing numbers. Our American tourist trade is one of the ways in which we can earn dollars which are so necessary for us to earn, by reason of the necessity for importing goods from hard currency areas. Many of our kith and kin are coming from America this year and we hope they will come in increasing numbers. Some of the American visitors merely regard the Shannon airport as the French call it, pied-á-terre—a spot where they can rest and refresh themselves before they pass on to the Continent or elsewhere. However, even those visitors can be made the source of the earning of much needed dollars for us. We have also had an influx of visitors from Scotland, England and Wales and we hope that that trend will continue this year.