With your permission, Sir, I should like to make a personal explanation arising out of some figures which I quoted in the debate last night. I was dealing with Vote 27, Agriculture, and with the increase of that Estimate, and I did not at the time advert to the fact that a very great part of the increase was due to the transfer from the Department of Industry and Commerce to the Department of Agriculture of the food subsidies. My attention was drawn to that later and I understand that the matter was subsequently very effectively dealt with by Deputy Briscoe. As the figures I quoted may have misled some people, I should like to avail of the opportunity to assure you, Sir, and the House that my misreading of the figures was not intentional.
Committee on Finance. - Vote on Account, 1950-51—Motion (Resumed).
I am very pleased at the attitude adopted by Deputy Timoney in intervening to indicate that the way in which he quoted these figures could be misleading but that that was not his intention. Might I suggest that the attitude of Deputy Timoney be adopted by a number of supporters of the present Government because they are to a great extent labouring under similar misapprehensions? Their apprehensions are so varied and so many that it is impossible to correct them unless instances such as we had last night arise. I will give an instance now to demonstrate that.
Various members of the inter-Party Government are extraordinarily vocal about the iniquity of rates of interest charges, particularly where they concern local authorities or the State itself. Are these Deputies aware that under the Fianna Fáil Administration the rate of interest charged to local authorities was reduced from 4¼ per cent. to 2½ per cent.? Since these protestants against high rates of interest came into office they have increased the rates of interest from 2½ per cent. to 3¼ per cent. Surely those who blame us for high rates of interest must be labouring under a misapprehension when we, in fact, reduced them and they themselves are responsible for bringing them back again to a higher level.
Might I point out, too, that when there is a difference of opinion as to the best way to administer the finances of the State, those who hold such opinions should read for themselves often and regularly some of the ministerial statements made by members of the present Government in this House? May I quote in particular the statement of the Minister for Finance when introducing the Budget in 1948? I am somewhat astonished to hear his interpretation of the position we have reached to-day with regard to the attitude of the present Government towards the expenditure of money as between capital expenditure and the ordinary service expenditure treated separately.
I would like to know where we really stand. Are we to take it that, as far as the inter-Party Government and its supporters are concerned, there can be no stable policy, no definite goal towards which they are marching in step, but that, as event succeeds event, and as situation follows situation, policy is changed to meet the particular event or the new situation?
We must remember that when we get a Vote on Account before the House we see for the first time what the housekeeping will cost in the following year. If there is an increase or a decrease in expenditure we do not know how the Minister will meet that because that is something he only discloses in his Budget Statement. But we do know from the Book of Estimates what our commitments will be and we have a fair idea, since each Department is recorded separately, what each Department will do. But then we get this kind of statement. In Volume 110 at column 1039 the Minister for Finance stated in 1948:—
"On 9th March last I informed the Dáil that no Minister of the present Government had had time to examine the details of the printed Estimates for which he had to stand responsible before the House. On that occasion I made it clear that it was the policy of the Government to ensure retrenchment over as wide a field as possible, to limit expenditure to projects and services that were productive or socially desirable and to endeavour to reduce the cost of living in which a very large increase in Government expenditure is a material factor."
Now the Minister there accepts the formula, and one can justifiably describe it as a formula in that particular sense, that the cost of living is affected by Government expenditure and he attributes the then alleged high cost of living, so severely criticised during the election, as being influenced by the fact that Government expenditure was too high. The present Government and its supporters committed themselves in no uncertain terms to reducing the cost of living. I could quote names, dates and places to prove that such statements were made. They promised to reduce the cost of living by 30 per cent. as a result of the economies which would automatically take place in State expenditure if they were returned to office.
On the same occasion the Minister for Finance further on in his speech made reference to food subsidies. He pointed out that the system of subsidies carried into effect by Fianna Fáil in order to ensure that essential commodities would be available to all at a reasonable price inflicted a hardship on a great number of people. He intimated that by degrees these subsidies would be altered or removed altogether. How can one keep the cost of living down by removing subsidies on the main essentials? The Minister quite clearly gave an undertaking to the House and to the country that a certain step would be taken in that direction. He kept his word. Very considerable savings have been effected by introducing new methods of dealing with food subsidies.
We all know that sugar was originally rationed in order to ensure that there would be a sufficient quantity available for all during the emergency years, apart from the fact that it was subsidised too in order to keep it at a reasonable price level. We know that the position now is that you can have all the sugar you want, when it is available, at a certain price. It is being kept rationed now solely to ensure that one will get a limited amount at the subsidised price. I appeal to the members of the Government to recognise what is happening. That kind of juggling does bring about a saving to the taxpayer, but it also inflicts severe hardship on those people for whom some members of the Government profess such solicitude. The same is true of tea. The same applies to flour. If one does not like white bread, one can eat grey bread. If one likes white flour, one can have any quantity one likes without any subsidy being paid.
Hear, hear!
I think somebody said "hear, hear".
What is wrong with that?
What is wrong with the grey flour?
I shall answer both Deputies together. The grey flour was introduced during the emergency because we were not in a position to satisfy our own needs from our own production. In order to make bread available the extraction percentage was altered. We were always accustomed to white bread in this country and we all hoped that when normal conditions returned white bread would be available to us again. Some one referred to the standstill wages Order last night. Bread was subsidised in order that wages would not have to follow a rise in commodities. Whether you buy white bread from your baker or buy white flour from your grocer and bring it home to your wife to bake your bread, the position to-day is that unless-you can afford to pay for white flour you cannot have white bread? Who is denied the white bread? "What is the difference?" asks Deputy Donnellan. The difference is that the vast majority of our workers do not get white bread.
They get a better article of food.
I would ask Deputy O'Higgins to leave that matter to the medical profession.
They are all of one mind on that.
I do not know that that is so. The Deputy is a very young man. He has not reached the stage I have reached of having reared seven children. I think I can say that I have some idea of the kind of bread children like and that I know the kind of bread I like. A great number of my constituents would like a piece of white bread if they could afford it.
What happened next? The shops which made buns for the children are now allowed to make certain classes of confectionery only if they use the high-priced flour. Therefore, the poor child, who is now threatened with the imposition of 2d. a lb. on butter, found that he had to pay more for his little piece of confectionery. Subsidy was to be saved in order to bring down expenditure but it was not to be saved and is not now being saved to bring down the cost of living. It is having the different effect of putting up the cost of living.
I noticed when the Minister was speaking on that occasion that he told the House what 6d. in the £ on income-tax meant from the point of view of income to the Exchequer. He assessed 6d. in the £ as bringing in or taking off, whichever way you work it, approximately £670,000 in a year. I want the Deputies to keep that figure in mind. A sum of 6d. in the £ was taken off the income-tax of those who pay income-tax. They were saved that amount of money. The important question is where was it collected? It was not just forgiven to the whole country. It was taken off the people in another way. There was an increase in the price of stamps under national health insurance. There was an increase on the postage rate. Instead of getting back £670,000 the State made a profit because they got back £900,000. Did they reduce taxation? The term taxation is used in this House without proper understanding.
It is true that there is such a thing as direct tax. In this House, however, we are prone to regard direct taxation as the only taxation. We forget that indirect taxation is the only way in which you can get tax from those people who are under the income-tax-paying level. To transfer direct tax from the backs of the higher income classes to the backs of the lower income classes and to say here that it is a reduction of taxation, well, that is something which is beyond my comprehension. I recommend and urge strongly that those Deputies who are supporting present developments should watch their step and consider the matter carefully because a time will come—maybe in the near future or maybe in the distant future—when we shall have to face the electorate again. We shall be answerable for our housekeeping on behalf of those who sent us here.
It is quite true that a lot of people listened to what was said by members on the opposite benches before the last general election and believed that the things they promised were going to happen. They believed these promises because they were made categorically. I have a few references here which I should like to relate to what I am talking about now. Deputy Cosgrave, the present Parliamentary Secretary to the Minister for Industry and Commerce, speaking at Dún Laoghaire on 9th January, 1948, made the definite statement that high national expenditure was a direct contributing factor to the high cost of living. The people listening to that statement would assume that he stood for a reduction in the cost of living and consequently a reduction in taxation or Government expenditure. But what is happening? The Government is coming in with a much greater bill of State expenditure. The only conclusion the people who believed these statements then can draw now is that if it is correct to say that high national expenditure puts up the cost of living then higher State expenditure is going to put it up even further.
Deputy Fitzpatrick in his election address said:—
"Clann na Poblachta promises to reduce the cost of living by 30 per cent. Defeatists will tell you that this cannot be done. It can and it will be done."
He underlined "it can" and "it will". The people who voted for Deputy Fitzpatrick probably were concerned about their situation in regard to the cost of living. They have now waited two years—it is two years over-due—for a reduction of 30 per cent. in the cost of living.
They have not waited 16 years.
Mr. Boland
And it never will be either——
You are right.
Mr. Boland
——because they will not be there. It is a safe prophecy.
The present Minister for Social Welfare when speaking at Mullingar on 29th January, 1948, said:—
"We advocate a scheme of subsidisation of essential commodities as a step to ameliorate the burden of the cost of living."
A great number of people believed these promises. We were emerging from very hard times as a result of the war. These people probably voted for those who said that they would do these things. What do we find now? We find a removal by degrees, but very effectively, of the subsidisation of the essential commodities. The price is, therefore, dearer to the people, who were better off during the 16 years that they have just changed from.
The Minister for Finance also in that particular Budget speech referred to the state of the debt of the country. He said that the direct State debt was at £104,000,000 as at 31st March of that year. He said:—
"The service of the debt, together with sinking fund, requires an annual payment now"—that was 1948—"of £4,500,000."
I should like Deputy Hickey to make a note of that. What is it going to be at the end of this financial year? What is it going to be after 1952? I can see us heading for a state of affairs where, if we go on in the manner in which the Minister now suggests, our sinking fund and interest charges will reach £7,000,000 or maybe £8,000,000 a year. That will be quite a considerable amount that you can understand when you talk about it as 6d. in the £ or 1/-in the £. We know that £670,000 is the equivalent of 6d. in the £ on income tax. What then is £8,000,000 going to be?
I hope the Deputy, before he sits down, will suggest the remedy.
I am coming to that. However, I want first to get the Deputies to admit that there is need for a remedy and that what is happening is no remedy.
"At a time when taxation is of unprecedented severity and economy in State expenditure is imperative it is more than ever necessary to examine critically proposals for capital expenditure which add to the taxpayers' annual burden and thus tend to stifle incentive and to reduce savings. There is general agreement that housing, though not productive of an adequate direct return in the financial sense, is entitled to special consideration on social grounds. But other plans, however desirable in themselves, which entail heavy expenditure uncompensated by an adequate return, must now be reviewed in the light of the community's capacity to undertake them without undue strain on its resources... Capital outlay in excess of current savings is already exerting a strong inflationary pressure on the national economy. Bank advances, largely for business purposes, increased during 1947-48."
As reported in column 1053, he said:—
"We cannot, however, as has been suggested in certain quarters, sustain a continued trade deficit of this order by drawing on our external capital. Owing to the rise in prices abroad, the community's sterling holdings, though greatly increased during the seven years of reduced imports, 1940-46, have not as much purchasing power now over supplies as they had in 1939. This applies also to the income from these investments. The reduction in this, one of the most certain sources of our external purchasing power, the weakness of our export capacity and the uncertainty of the continuance of income from emigrants' remittances, tourists, etc., at their present high level render is impossible to view with equanimity a continued reduction in external assets on last year's scale. These assets can be consumed now only at the expense of a reduced standard of living for the future. Even their use for productive capital purposes is advantageous only if the real benefits are at least sufficient to compensate for the resultant loss of external income and purchasing power."
The Minister there apparently is not quite in accord with the Minister for External Affairs because, if there is any meaning to be attached to the approach of the Minister for External Affairs to the matter, it would indicate that his remedy is to bring home all the external assets within 24 hours and put them at the disposal of the State for all kinds of capital expenditure and so forth. But the Minister for Finance apparently, in that year certainly, was of the opinion, as most prudent people should be, that you can only repatriate your external assets if you have some means of using them without creating a panic, if you can use them judiciously and by a gradual process absorb them in well-planned advances in your economy with the necessary security for the owners of that capital. The Minister pointed out that you cannot use up all your external assets at once and leave yourself to face the future without any external assets.
I could go on and refer to many other aspects of the problem as it was discussed in the House here. What I am concerned with is that the people should get a reasonable picture of what is happening and that they should not be confused. I must say that I welcome very much the attitude adopted by Deputy Timoney to-day, but it is behind the walls of their Party meetings that they should act. I am not sufficiently in the confidence of Deputies on the opposite side to know whether the inter-Party Government supporters meet all together.
I am sure everyone will acknowledge his error when he makes it.
I am suggesting one of the errors that you must acknowledge —the view that was held before the election that Fianna Fáil was overspending foolishly and ridiculously and running the country into disaster. That error should be admitted now and Deputies opposite should admit that they have found that the administration of Fianna Fáil was carefully planned and that it was an approach to the problem from the point of view of ultimate benefits to the public at large. There is an error that perhaps you would be good enough to admit publicly.
The people did not think that.
As against the approach in this year, I want to make a short reference to a statement of a previous Minister for Finance. I am quoting from Volume 105, column 2251, in which Deputy Aiken, when Minister for Finance, is reported as having told the House:—
"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 building, £40,000 for forestry, £400,000 for airports and £200,000 for employment schemes."
That was where provision was made that, in the event of income not being sufficient to meet the expenditure budgeted, one might have to borrow a certain amount of money for items which could easily be regarded as items coming under the heading of capital expenditure. At the end of the year, when there was a surplus, instead of borrowing, the outlay on these items was met out of income from the taxation of that particular year.
We have got to the position where the Minister for Finance, if I have understood him properly, states that the increased expenditure envisaged in this year's Vote on Account of approximately £20,000,000 has to be divided under two headings, one of approximately £8,000,000 and the other £12,000,000 for capital expenditure. If we examine the items one can only conclude that some of them should normally come under the heading of expenditure from ordinary income.
Deputy Aiken as Minister for Finance made this reference also on the same occasion and perhaps Deputy Hickey will be satisfied that it is a matter that was giving concern to the then Cabinet:—
"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."
What was it?
It was reduced for the local authorities from 4¼ to 2½ per cent. Since then it has been increased from 2½ to 3¼ per cent. Perhaps the Deputy will also remember that after the setting up of the Central Bank there was an idea, a gradual process again, that certain moneys which the bankers deposited and which would be held by the Central Bank would be made available for local authorities for them to borrow from at a cheap rate of interest. One has to admit, whether one likes it or not, that the approach to this matter was considered seriously by the predecessors of the present Government and they were taking the necessary steps to get to a position which would suit all interests concerned.
We have heard a lot about Fianna Fáil in its early days. I want to go back to 1932, because reference was made to the amount of capital debt we found when we took over and the amount we left when the Government changed. I do not think people seem to have sufficiently reasonable memories on matters of urgent importance and of value to the community. When Fianna Fáil took over office there was, according to a statement published at the time, a national debt of some £32,000,000. There was also—and we seem to have forgotten about it now— a debt of £76,000,000 to Britain under what was called land purchase annuities arising from the secret agreement; a local loans annuity of £5,300,000, and a liability under Royal Irish Constabulary pensions of over £11,000,000. In addition to the £32,000,000 we owed over £90,000,000. Fianna Fáil were able to settle that liability—all those three together—for a sum of £10,000,000. Fianna Fáil borrowed £10,000,000 after that settlement and handed it over in full settlement. It was a very considerable reduction of the capital debt.
I would commend this volume to those who want to study these matters —Volume 75 of 1939. There was with the Budget in that year a series of itemised statements showing every item of importance in the State position. You will find all sorts of tables there, including a statement in column 2007 dealing with financial transactions and cash operations of the Exchequer for the period 1st April, 1932, to the 31st March, 1939. In those years the State borrowed, roughly, £41,906,000. That was raised for Exchequer purposes up to that period and the State had paid out some £50,000,000. In other words, in those years the State had reduced the national debt by almost £10,000,000, not increased it. We borrowed £10,000,000—the 3¾ financial agreement loan—and we paid that £10,000,000 to the United Kingdom Government.
Go through the whole lot and you will find that with these payments there was also a list of the liabilities and assets of the State. You will also find an account of investments by the State in State-subsidised or State-helped concerns. I certainly believe all these things. I cannot see how anybody can other than believe a State document of that kind. I often wonder how people, before they come in here, can make certain statements and why, when they have come in here and find that the visa they got on their passport of entry here was a false one, do not say: "Well, we were mistaken about that".
Senator S.T. Ruane, speaking at Kilmaine, said:—
"To-day the national debt of Éire is over £100,000,000; the debts of local bodies total over £37,000,000 and there is an adverse trade balance of £60,000,000. Is it not time there was a change?"
He did not tell the people that what he meant was: Is it not time there was a change for more? That is why we had £24,000,000 last year and we will have £24,000,000 this year and the additional £40,000,000 of the Marshall Aid.
We find people talking about the waste of money it is to import goods from America. We are told that Pierce's will be closed if we do not stop buying machinery from America. Is it not in the Marshall Aid Agreement that we must spend the dollars we get on goods supplied from America, and is it not consequent on the present position that if the Minister has to issue a loan to take up the counterpart of that fund in the Central Bank, if he needs money, it is of interest to him to see that we spend such money as fast as we can in buying goods from America in order that he will have money available for his flotation purposes? Are we not then getting away from the position announced by some of the people over there, that we do not want anything from America?
I could go through a whole list of items I have before me. There was a reference to social services and what was going to be done. I see nothing in the Book of Estimates with regard to this very much publicised scheme of social services which we heard about for the past two years. I do not know whether it is possible to understand what is meant when one hears that it will be introduced very soon. One would expect that if the scheme announced by the Minister for Social Welfare were to be included this year as a State service, it would have been provided for in this year's Estimates. If he is going to bring in a special Bill and if he introduces a Supplementary Estimate during the financial year in connection with it, then I suggest that this Book of Estimates is not a true picture of the situation that will face us, because I understand that scheme will go to £7,000,000 or £8,000,000 a year—that that will be the cost to the State.
Who told you that?
I say I estimate it will cost that. Can the Minister say how much he thinks it will cost?
"If every ducat in 10,000 ducats was in ten parts and every part a ducat..."—does the Deputy remember that?
It was announced that the new social security scheme would be introduced.
At a cost of £7,000,000 to the State?
That was announced, and if it does not cost that, then it was not the scheme that was announced.
It will not cost £7,000,000 to the State; there is no £7,000,000 from the State.
I will correct myself to this extent, that the £7,000,000 will be the total cost, of which £2,500,000 will be borne by the State and the rest by the contributors.
And there is nothing in this Vote on Account about it.
The Deputy has dropped from his original £7,000,000.
The Supplementary Estimates that will be introduced this year will be like what happened last year; they will come singly or in numbers and we will have a considerable increase on this sum of £78,000,000. I want to wind up with one thing. It is quite possible that the present inter-Party Government, including the Minister, may not believe us when we approach this matter as we do, and may think that we are playing politics as they did. Therefore, I will read for the Minister something which he may not have read although I would imagine it has been brought to his notice. I am going to read for him the concluding paragraph in the leading article of his very friendly newspaper, the Irish Independent, in its issue of Saturday, 18th March. It says:—
"We fear that some of Mr. McGilligan's ministerial colleagues, rather than the Minister for Finance himself, must take the blame for the disturbing figures now before us. Mr. McGilligan concluded his Budget speech only ten months ago with these very pregnant words: ‘Agricultural output and exports as a whole are still at dangerously low levels; capital expenditure—some of doubtful productivity—is outstripping current savings; rates and taxes are excessive; dead-weight debt is rapidly expanding; and production costs are unduly high. The primary needs of the moment are increased output at lower unit costs from farm and factory and more saving by the community generally. To this public authorities, central and local, can contribute by reducing their demands on taxpayers and ratepayers.' We find it hard to think that a Minister who so recently endorsed those sound sentiments can be primarily responsible for increasing by £12,750,000 the demands on the taxpayers."
One of the Deputies of this House has a motion down asking for an inquiry into the increase in rates. This the Minister referred to in his speech as spending by public bodies as well as State spending, but a lot of the taxation, direct or indirect, hitherto gathered by the State and handed over to local bodies is now on the backs of the local bodies in the form of excess demands which they have to make on the public. That is why the rates are increasing. I shall welcome that motion when it is brought before the House.
The rates the Minister referred to are brought about by savings by the State in regard to certain matters which hitherto went to subsidise certain parts of the local administration, and, secondly, the withdrawal of what previously had been recognised as State liabilities but which are now part of the expenditure that local authorities have to meet. One must have regard to the requirements of local authorities together with those of the national Exchequer. I hope it will be recognised that if these two things are taken together and if the promises and prophecies that were made to get Fianna Fáil out are ever fulfilled we will get back again to a budget of £36,000,000 a year. If we do get back to that position, then the taxes on the backs of the people will be relieved and we can have a healthy, normal development of our people.
I see the Minister for Health here. I wonder what has he to say to the agreement that there shall be an additional 2d. per lb. put on the butter which the people eat. Is that increased charge going to be conducive to the health of the people for whom he has responsibility? These are some of the points I hope the Deputies opposite will examine. I hope they will soon awaken to the fact that without any great blowing of horns they have taken over gradually a great deal of the policy of Fianna Fáil, and that they will soon come to recognise that it was the only sound policy for the welfare of the country.
I think that members of all Parties in this House, no matter what their views may be on other aspects, will agree that after a generation of self-government our industrial and agricultural advance has not reached that stage which the energies and capabilities of our people deserve. In taking a careful view of the picture, as it presents itself to us, we must, I think, feel that there is something in our system which is operating against a proper advance, no matter what direction that may be. I have given very careful study to the matter of finding out exactly what it is that is clogging us here in our efforts. I have come to the conclusion that, apart from certain other causes which I consider minor to the one I am about to refer to, the question of the control of credit in this State is one that requires very careful examination by this Assembly as representing the people.
Now, since I have in other discussions and on other occasions referred to the question of the control of credit, I would like to make quite clear what I mean by that. Control of credit, in the way in which I introduce the subject to Deputies, consists both, in my submission, in the creating of credit and also in the ebb and flow of credit or the opening and the shutting of the sluice gates of credit. I want to make it quite clear that, in dealing with the control of credit, I am endeavouring to deal with something that is entirely different from and divorced from banking and the banking system. It does impinge upon it here and there and relate to it here and there. In so far as I am trying, or endeavouring, to make my point, I want to make it quite clear that I am dealing with what is distinct from banking, that is the buying and selling of money itself.
Now, when we started our own Government in this country we took over from the British system a large number of their institutions and conventions which had grown up over the centuries. Perhaps they were, and perhaps they were not, particularly suited to the British set up as it affected them in their country, but my submission is that the system of control of credit which exists in this State, and which owed its birth and its graduation to the British system, is not suitable to our democratic system at the moment. I want to make this point, that there are only two systems that exist in the world that are of any account or of any matter, and those two systems are diametrically opposed to each other in fundamentals: a system of dictatorship and a system of democracy. Away back in the past the system of dictatorship was represented by an absolute monarchy; to-day it is represented by a form of government. We exist under the system of democracy. We here as representing the people—I as representing my constituency and those who sent me here to speak on their behalf—have, first of all, the control of legislation; and, secondly, we have control of the Executive in the control that we exercise over the Government by our presence here in the Dáil and by the part we take in debates and otherwise. Now, under a dictatorship such as exists in parts of the world to-day the control of legislation is in the head of the State, the control of administration is in the head of the State and the control of credit is in the head of the State. If we want to carry to their proper conclusion the real tenets of a democratic system, the control of credit should equally reside in this Assembly. We make the laws, we control the Government, but we do not control credit.
I should like to explain exactly what I mean by the control of credit. I do not mean that it is a question of dealing in money. I should like to divorce for a moment the control of credit from dealing in money. What I mean is placing at the disposal of an individual or a group of individuals certain resources and backing as against brains and brawn, and not as against stocks and shares and security. To give an example, if you go to a bank and ask for a loan of £70, you will certainly get it if you produce Guinness' stock with a face value of £100 or something with a good margin over and above the £70. I do not refer to that as credit. That is a commercial transaction akin to pawnbroking, in which security is marketed by way of bargain and sale as against money handed over the counter. The sort of control of credit which I refer to is the right to credit—I shall refer later to the Article in the Constitution on which I rely—and the control of credit that resides in the people of this country and which should find its voice through this Assembly. It is similar to the control of credit which was part of the prerogative and dispensing power of the monarch in the Middle Ages and the control of credit exercised by a dictatorship.
America would not have been discovered at the time it was by Christopher Columbus unless he had been given credit, and America would not have been developed if credit had not been allowed to flow in full measure.
I am not an economist and I know nothing whatever about political economy. I can appreciate that there is in existence the Central Bank with the functions which it has to perform in this State. I do not think, however, that the Central Bank or its functions meet the situation which I envisage. So far as I am concerned, I have no personal quarrel with the banks, and I should like to say that I have received from a particular bank from the time I opened an account there, the utmost consideration. Therefore, so far as I am personally concerned, I have no quarrel as regards the control of credit. But, speaking on behalf of the people I represent, I consider that there is a very serious grievance.
That brings me to the point that the control of credit, instead of residing in us here as the successors in title of the prerogative of the early ages, resides in the banks. I am not for a moment blaming the banks for that. That is the position they found themselves in and that is the position, perhaps, in which they would like to remain. I do say, however, that, unknowingly or unwittingly, the position of credit and its control at present in this country means that there is a State within a State. I shall give you two examples of how that control of credit operates. Those of us who remember the years after the first world war will recall that the value of land soared to an enormous height and that bank managers fought with each other at auctions and in the fields for the right and the privilege to advance money for the purchase of farms. That was something that was done within this State by institutions over which neither the Government nor the Legislature had any control. Now we come to the other extreme. When the recent war was over, whatever the reason was, we know that within a matter of days credit was restricted in this State. I do not wish to impute any evil motives to any one, but we might have the feeling that the bankers did not regard with favour the line-up of the inter-Party Government. I do not want to bring that into it. But, whatever the reason was, credit was restricted, with very serious results to trade and industry in this country.
The control of credit should be exercised through the views of the people as expressed by us here. I want to give this example. Suppose we could possibly reach such a high state of perfection that the Government and the Opposition and all other Deputies agreed that it was necessary that a certain law should be passed and administered in a certain way. One would imagine, if this were a perfectly democratic State, as there was 100 per cent. unanimity, that there would be no body or group in this country with a legal right to interfere with the fulfilment of the desire of all the members of this House. I am not saying it would be done, but it would be within the power of the Standing Committee of the Joint Stock Banks to make or to mar such legislation. I say they have done it for various reasons; I do not suggest malicious reasons. I am not referring to this Government or to any particular Government, but they have made or marred plans either through negligence or inadvertence on their part, not realising what the people desired, or to protect their own interests. They are entitled to protect their own interests so long as they are in a position to do so. It is their duty to do so. Protecting their own interests means that there are two things they must do; firstly, they must protect the shareholders and, secondly, they must protect what is referred to as the money at call.
As I understand it, money at call is money that must be available to meet the demands of any customer who has money on deposit or in current account should he wish to withdraw it. Perhaps in those circumstances the banks feel it is better on certain occasions not to give credit over and above the security available. I have already given an illustration on that point. Be that as it may, and advancing that as a defence of the banks, the fact that they have the power to do that places our democratic system in a very shaky position.
Here another consideration enters into the matter. One of the ways, and this is particularly true of our own country, in which the banks earn their dividends is by lending money for short periods on the available markets. The only big one now, of course, is London. I have come across concrete cases of that. It is much more advantageous for the banks to lend a couple of hundred thousand pounds in London for a fortnight, a month or five weeks rather than to lend £10,000 to Irish industry or Irish agriculture over a long term. A particular case of that came to my notice recently. A man had risen in the world. He acquired a farm and, by his industry and diligence, he was subsequently able to acquire a larger farm. He required a sum of £6,000. He would be secured in that amount by one of the safest guarantors in his district, a man of financial stability. The solicitor who was in charge of the matter found that he was getting nowhere. Eventually he made inquiries and the reply he received was: "We do not like longterm loans. The way we like to use our money is to have it available on short notice in London for short-term loans because in that way we get a bigger turnover." That is the position in banking in this country at the moment. I do not want to be regarded as an enemy of the banks. Far from it. I merely point out certain facts. I do say that the sooner the banks realise that their duty is to this country first, consistent with their duty to their shareholders and their customers, the better it will be for them.
I want now to deal with another aspect. At the moment there is a forward movement in housing, but my remarks in this respect apply to practically everything. In that forward movement unlimited credit should be extended to those engaged in the building industry. It should pass from the suppliers to the builders' providers and to the builder. Suppose to-morrow the joint stock banks decided that, in the interests of their money at call apart altogether from any profit they might make in the money market elsewhere, credit would be restricted by 10 per cent. The banks have power to do that. Visualise what happens when steam is suddenly shut off in a goods train as it passes along the main line. Every wagon bangs, one against the other, until eventually the guard's van at the end is hit. If you restrict credit at the source the same effect will be produced in industry and elsewhere. There will be dislocation right through the whole economic fabric.
Now the banks are quite right to do that so long as we allow them to do it. In no sense do I want to be taken as desirous of putting them out of business. They perform a most useful function. Article 45, sub-article 2, subparagraph 4 of the Constitution says:—
"The State shall in particular direct its banks towards securing that in what pertains to the control of credit the constant and predominant aim shall be the welfare of the people as a whole."
A pious aspiration!
Everything I have said is borne out by that rule which governs us here as legislators in this Assembly. If it means what it says, then we are lacking in our interpretation of our duty under the Constitution. We are lacking in our duty if we allow this residue of the prerogative of the people to remain vested in a body running alongside us.
That is logic.
I have dealt with the control of credit outside the country. It is perfectly obvious that it operates to the detriment of the country. I now wish to deal with the ordinary operations of the banks in certain respects. If there is a choice between an Irish customer and an English customer, the English customer will always win. As I said before, every activity here and every industry here is the potential foe of industry and activity on the other side of the Irish sea. We are not a sovereign State. We cannot be a sovereign State unless our sovereignty extends over the whole field of our control and leaves us in the position to say to the banks: "You are quite free to operate here but, remember, if you put Irish signs and Irish names over your banks, you must operate them in this country and, through this country, for the benefit of the country." In the interests of the banks the sooner they realise that the better it will be for themselves and the country. I think the time is arriving when the people will no longer tolerate the present state of affairs. I must apologise to the House for dealing with this matter at some length.
We have listened to something new at any rate.
I have tried on previous occasions within the four walls of other discussions to make the points I consider it necessary to make in the national interest. It is for that reason I have trespassed on the time of the House to-day.
With regard to the Vote on Account itself, I extend my warmest congratulations to the Minister upon the innovation he has made in segregating capital and income items. I know there is a warm and bitter contest on that point. I anticipate that we are going to hear some very trenchant arguments on that point and against the particular framework of this particular Book of Estimates. I can see myself nothing different whatsoever between the way a family should conduct its business and the way the State as a group of families should conduct its business. I think that the wisest family of the lot is the one with a small reasonable income who sets out on the adventure of life—a newly-married couple who expect to rear a family and live in peace, happiness and moderate prosperity. They set up their home, furniture and so forth. In doing so, they look to the system which spreads their capital expenditure over a period of years to such an extent that at the end of that period, with no very great loss to themselves, they have wiped out the original cost of the house and furniture and become the owners of it themselves. In connection with these items of capital expenditure, at the end of the period of 20 years, the group of families which this State represents will be in the same happy position as any thrifty householder who starts his married life under the circumstances I have envisaged.
There is another reason why I congratulate the Minister on the segregation of these items. I believe that by doing so, we will not only be steering in the general direction which I have in view, namely, the control of our own finances and credit to the fullest extent here, but, in addition, we will be paying the way which everybody here has in view, namely, the repatriation of our external assets. I heard the Leader of the Opposition yesterday agreeing that the repatriation of the external assets is desirable if it can be effected. We are all agreed that it is necessary but we do not know how it is going to be done. I believe that the first step in doing it is the particular way in which the housekeeping for the coming year in this country has been approached. I believe it is a step in the right direction. I do not believe that it is a step that alone can accomplish what is desired, but it is moving in the right direction and with its back to the opposite state of affairs. One thing which it may sound rather strange for me to say is that I am sorry that the amount we have down for capital expenditure this year, and under the circumstances in which we have it down, is limited to the amount that appears on the face of the Book of Estimates.
Mr. de Valera
We are presented this year with a bill which has to be met for the services anticipated in the coming year. I am afraid the criticism should come rather from the benches opposite than from us. We have not the store of adjectives at our disposal that those who sit on the opposite benches had when a much smaller Estimate was brought into this House. "Staggering, prodigal, complacent"—all these were the types of adjectives that were used by the present Minister for Finance when he was speaking about the Supplementary Budget of 1947. That Budget was brought in at a very critical time to meet a situation that had to be met if the whole community were not to suffer. That period was a period of an extraordinary rise in prices and of consequent demands for higher wages. The cost of living was going up at a rate which caused everybody anxiety, and the Government of the day, in order to meet that situation, proposed that the necessities of life should be subsidised in order to bring the cost of living down, and to prevent, as a temporary measure, because we felt that it was going to be temporary, hardships on the section of the people who could least bear these hardships. Of that £70,000,000 over a year, some £15,000,000 would go back directly to the people, in relieving them of the extra cost of tea, sugar, bread, butter and so forth. We felt that we were justified in the public interest in meeting the situation, to the extent to which the extra cost was necessary, by imposing taxation on things that were not as essential as bread, butter, tea and sugar. We were denounced from one end of the country to the other as being an extravagant Administration, and as having no concern whatever for the public welfare. Our opponents went to the country and said that £10,000,000 at least would have to come off that expenditure. The moment they came into office, to pretend to the people that they were serious, they cut off the taxes on what were relative luxuries compared with bread, butter, tea and sugar, and they denounced the previous Administration as being extravagant and as having no concern whatever for the public interest.
In the Vote on Account, which was brought in by the present Minister some two years ago, all these adjectives to which I have referred were used by him. In his Budget he continued on the same line and gave hope to those who gave their votes for Fine Gael that now the things which they stood for were going to be accomplished—that there was going to be a revolution in this matter of State expenditure and that the millions were really going to come off. Last year, though to a lesser extent, we had the same attempt by the Minister for Finance to pretend to the people who voted for him and his Party that they were going to keep the promises which they made to the electorate. But what do we find? This book which has been given to us this year has a long sheet in it which shows the audited expenditure on the Supply Services for the last year of Fianna Fáil—the year which included the special Supplementary Budget—and the total audited account for the expenditure on the supply services for that year was £58.9 million, that is less than £59,000,000. For the first year of Fine Gael—the Administration which was going to cut down expenditure and which was telling us that the cake was being eaten too rapidly—the audited accounts for the supply services is £64.7 million, an increase, as you can see, of some £5.8 million so that instead of the £10 million that was going to come off under the Fine Gael Administration, we have an increase of close on £6,000,000.
We shall soon have the White Paper of the Exchequer Issues and Revenue for the present year. These will give figures reasonably comparable with the audited figures; we have not got them, but if we take the column of the total provision that has been made, we find an expenditure of £74.6 million for this year, very nearly again another £10,000,000 added on. I do not say that the issues will actually be equal to that but certainly the direction in which the Government are going is not the direction in which they said to the public they would go. Of course it would be too much to have £78,000,000 as the total on the front of the Book of Estimates for the coming year as was customary. That would be too much of a shock, but we find the total given properly on the inside in this long sheet of which I have spoken. We have then got this device of separating the total in order that there should not appear on the face of the book a figure which could compare with the figure that was denounced in the past. We have two separate figures. But even if you take the smaller of these figures, the one that does not contain any element of this capital expenditure, you have an increase and not a diminution on the bill in our time.
I have said that it is not from this side of the House that criticism ought to come of this Vote on Account but from the other side of the House, from Fine Gael. It is they who told the people that they were going to reduce taxation and public expenditure. I do not mind Clann na Poblachta voting for this; I do not mind Labour voting for it, but I do mind a Minister who spoke as the present Minister spoke about our Administration. I do mind very much for public decency in this State to see him coming along and standing over this. Our position in the past has been well known. It was not when the Minister for External Affairs began to talk that this whole question was considered by us. There has been an attempt here to tie up the Fine Gael Administration with our Administration, to lump both together as if there was one common policy adopted here for the past 20 or 25 years. Everybody who was alive and thinking in the country in that time knows that that is not true. We came into this House for the purpose of putting into operation what we stood for as the Sinn Féin policy—the policy of developing the resources of the country, the policy of trying to keep in this country as many people as the country could maintain, to keep at least the natural surplus of our population here until the population came to such a size that it would be apparent that the area of land we had was quite insufficient to support it. That could not be done without building up industries side by side with agriculture.
We had the present Minister for Industry and Commerce speaking a few days ago, telling us of the wonderful advance in industrial development made in this country during the whole period, including the period of the Fine Gael Administration. How much of it was done when Fianna Fáil was in office? I am sure, if you examine the figures, you will find that some 90 per cent. of it was done during that period. They boast of what has been done in the last year or two. What has occurred in the last year or two, so far as it has been an advance, has been simply an implementation of the plans made by their predecessors. To try to put us in the position that Fine Gael was in, is something that we certainly resent, and I think we have a right to resent it. Fine Gael to-day is in the mud. I had some respect at least for the people who were in it. I felt they stood for something from which I differed, but they stood for it and they represented it in our national life. To-day, I have the same sort of picture of them as I think I would have of a tug-o'-war team who had lost their anchorage and who were being pulled along in the mud. I repeat that it is not from these benches that criticism of this Vote on Account should come but from the Fine Gael benches and from those in this House and in the country who supported them.
We have stood always for the development of this country. We did not have to wait for the birth of Clann na Poblachta to talk about the development of its resources. We have been working for that in Fianna Fáil. We have been working for it for many years. Our policy was based on the conviction, on the belief, that we could, by the use of the resources and the materials of this country, make it a country which would be able, for a considerable period, to supply the greater-part of its own needs by the labour of its own people and, therefore, keep our population to a large extent here. We had no ideas such as the Minister for External Affairs tries to attribute to us in regard to these matters.
The Banking Commission report has been referred to as having been accepted by us. The Banking Commission report was used by Fine Gael when they were here on these benches as a source of ammunition. It was a constant source of attack on the Administration of that time. One of the attacks was that there was a diminution in our external assets. The value of these external assets was shown and I would say this about the Banking Commission report. I did not accept some of the final conclusions of that commission as determining how our national policy should go, but I would recommend it to some of the people who are talking nonsense about financial matters. They might study it for a bit and it will do them a world of good; it will bring them down to some sense of the realities of the situation. We cannot have our loaf and eat it. We can make up our minds if we want to eat the loaf to eat it and be content. but we cannot, if we are going to be honest, go around the country and tell one set of people that we can eat the loaf and tell another set of people that we can have it at the same time. The amount we are to eat and the amount we are to have can, to a certain extent, be regulated. It is for such regulation that we should be meeting here and discussing with great care these proposals that are brought before us.
Keeping for a moment to these external assets, how were they produced? One would imagine, listening to some of the speakers, who can talk so glibly and use such parrot phrases about Financial and monetary matters, that we just sent those assets over and that we placed them there as one would place an account in a bank and it was all a matter of which bank one went to. That is not what happened and everybody knows it. We were sending goods out of this country, agricultural produce, to Britain. We were not able during two great wars— the first world war and the recent world war—to get anything back like the quantity of goods we wanted. Were our farmers not to send their goods then? If we had somewhere else to send them where we could get returning goods for the goods we were sending out, it would have been our duty to do that, whether in the first world war or the recent war. But where was the place to send them? So far as the things we exported are concerned, we exported only that which was surplus to our own needs.
What you were unable to consume?
Mr. de Valera
Surplus to what was required for consumption. The point is that we sent that surplus out and we were not able to get back equivalent merchandise. Our merchandise account, therefore, was unbalanced to the extent that it was building up on the other side, whilst we were not getting any equivalent. Therefore, our assets increased and, as a result of these two situations, we accumulated assets which make us one of the few creditor nations of the world. Is that a bad position to be in? During the period we would not have denied ourselves these goods but, owing to the situation, there was a compulsory saving, so to speak, in the way of consumption of these goods which otherwise we would have got.
We have the results of that abroad to the extent to which they are available and to which they are stable in value. It is, of course, a matter of tremendous concern and must always be to a country situated as we are, as to whether these assets abroad will have a stable value and whether they can be realised as we want them. That is, of course, a matter of fundamental importance and a matter which we must always have in mind. In a time of danger or if they are losing their values we would naturally try to get them back quickly or put them into a place of greater safety if we could. Can we bring these back? Those who talk glibly about these things give the impression that all you have to do is to put in a demand to a bank or otherwise and get them all back. That is not the way in which it can be done.
I do not think anybody would take it so lightly as that.
Mr. de Valera
Some people take it so lightly that I have great difficulty in thinking they regard it in any other way. I have been a long time listening to the Deputy, and in my opinion he is one who would get a great deal of benefit from reading the Banking Commission report. You cannot get these assets back in that way. You will get these assets back by getting the products which these assets will enable you to purchase in the country where the value is current. If we were able to do it, at what speed should we get them back? Assuming they were of stable value and that there was no danger of rapid depreciation or anything of that kind, at what speed should we get them? That is a special feature that has to be considered. Should we not be rather anxious that if they were to be brought back they would be brought back for purposes that would be really productive? I hope to have a few words to say later as to what productive should really mean.
Is it any loss to this country that it should be in a position in which it could bring in some millions of pounds' worth of steel as it wanted it, and that it could come in every year, because it was the produce of these external assets? Suppose, as a result of these external assets, you were able to get imports of steel—say some £5,000,000 worth per year. Suppose you brought the assets over here instead and used them in such a way that you were able with its produce to get only half of the £5,000,000 would that be good business? We heard from Deputy Esmonde that we ought to regard these things in a simple way and perhaps we could give some homely examples from ordinary housekeeping. Let us say a farmer has some source of income other than from his farm and that income can be used by him to send his children to school. Do you not think that farmer would consider very carefully before he would take that money away and use it for other purposes which would deprive him of the income coming from it? He would naturally balance matters up and, if he found that he could get more from it in another way, he would do that. But, if he found that by realising that source of income he was going to have less available for his children to go to school, he would think twice about it. Surely, we ought to take up a similar attitude in regard to these assets?
If there is development here which these assets will enable us to bring about and these are productive either in a narrow economic sense or in the broader social sense, then when you have balanced up and seen that they balanced properly, if your judgment is that you are going to benefit you will bring them here, but if you think you are not, you will not.
We appreciated the criticism of the Banking Commission that to the extent to which these were being realised in our time the income we would ultimately derive from them would be lessened— that there was an important source of income being diminished. We answered that for ourselves, at any rate. We did not enter into a public controversy to any extent with those who had made the Banking Commission report, but we satisfied ourselves that the work we were doing with the money which we were bringing over was being used to good effect and to the national advantage.
We take the same attitude with regard to this Vote. It is only the amount here and the people who bring it in that are a matter for criticism and comment here; but the principle of using Irish capital, external or internal, for the development of Irish resources has been from the beginning one of the fundamental principles on which we have acted. We on this side of the House cannot, therefore, find fault with that principle as a principle. What we do want to have made clear to us is this, is the manner in which that capital is being expended going to increase the national wealth or improve the national well-being? That has to be proved. There are some of us who are very doubtful, and more than doubtful, that that is going to be the result.
There is nothing easier than deficit financing. Had we chosen deficit financing in the critical year, 1947-48, we would at least have deprived our political opponents of one of their principal cries. And that deficit financing, on account of certain overestimations, could probably have been justified in our time as it could not have been justified at any time since. Deficit financing is very facile. One of the checks there are on public expenditure and unwise expenditure in a democratic State is that the Government have to face the bill or, at any rate, have to face the responsibility and the odium for placing the burden on the people. That is always healthy and helpful to any Government that takes its responsibility seriously. It is always helpful, in advance of Budget time when the Ministers in the various Departments are demanding various services which they think are going to be of value to the country to say: "Very good, but remember when Budget time comes we will have to face the bill and the collective responsibility." If the Government decide that they can stand over it and that it is in the national interest then the project can go ahead. Naturally a good deal of discussion does take place on these matters.
Is there any one of us who if our incomes were not limited would not multiply our wants? Is there anybody sitting on these benches who, if to-morrow he found that there was no limit to the money on which he could call for the things he wanted to do, would not multiply his desires? Every one of us is kept to the particular standard that we maintain. We are kept to that standard by the test which each one has to put to himself—can we afford it? If we want some particular thing that is not an absolute necessity, and we find that we can afford it, that our income will meet it, that we can balance at the end, that out of the £20 income our expenditure will be £19 19s. 6d., then we may say to ourselves: "All right, we will have that; we will have the satisfaction of that desire; we can meet the cost." But if we are sensible and find that if we give ourselves this thing the expenditure will be £20 0s. 6d., we will halt and deny it to ourselves.
We have that type of reasonable check on our personal expenditure and on our family's expenditure. It is there as a guide for us. But when you come to State expenditure you are not in the same position. I am not going to say that those who are in charge of the public purse will not exercise over it the same care that they would over their own money. I am not going to make that suggestion though the fact that you have to put your hand in your own pocket is also a sobering consideration, a consideration which is not exactly there in the case of Governments who are handling other people's money. Nevertheless, there is this big difference between the two, even if we do not take such a suggestion into account. The difference is that there is a definite bottom to your own pocket. When you are dealing with State expenditure there is no such definite bottom.
Taxation can be oppressive. Over-taxation of the people can do more damage than all the work that a Government thinks it can do by the proceeds of it. The question for us to determine here is whether the taxation which we put on will be justified—and whether the national position will be bettered or made worse. You have a definite estimate as to what you can put on yourself. You can calculate your £20 0s. 6d. or your £19 19s. 6d. to a nicety, but you cannot do that in the case of the State.
I have more than once spoken about the conservative finance that has been practised here in the past, and there is this to be said about it anyway that as far as the financial situation in this country is concerned it is as sound as any in the world. That is true. Perhaps—and this was our view—the best use of our resources for our own people had not been met by following the rigid policy pursued, but that policy had this element of safety in it.
We here are political groups and political Parties. At election times we go to the people who elect us or support us with some policy which we are anxious that they should accept. No Party wants to tell the people that burdens are going to be placed upon them. Every Party will shirk that to the utmost. It requires a great effort to act up to the best public interest in matters of that kind, to face the unpopularity of extra taxation. We did it and we are here in Opposition. Other Governments and other Parties know full well that that may be their fate. Every instinct of Party is urging and driving them not to put on the taxation that is necessary to meet the services.
It is a splendid thing to tell the people what wonderful services you are going to give them—better health services, better this and better that. We see that here in this House. We used to see it when we were on the other benches. Every single proposal which came in was approved if it meant some service, and the general line of opposition to the Government was that they did not provide services enough. Then, of course, having no responsibility, when it came to Budget time and the charges had to be met, the Government was abused.
Private Deputies will try to have it both ways, but a Government cannot. If the services are provided, the Government of the day must see that the necessary money is found for them. If we are not prepared to face the cost we must deny ourselves the services. The question always arises: how is the money to be found? If there is a way out the Government will avoid putting on the taxation that is necessary. They will go into debt; they will try to work by deficit financing. The danger in the proposals before us is not the question of using money or the national resources for national development. The danger is that the easy way is being provided for any Government that wants to shirk its duty. Whenever there is any difficulty about putting on taxation to meet these needs, all they have to do is to put it into the capital side of their Estimate, and then set out to defend it. Excuses will be easy. If it cannot be defended on the ground of being productive financially or economically it can always be defended on the ground of general welfare. You can always say that the people are better off, that they are enjoying life better, that they can go to the theatres oftener, that they can smoke more tobacco and drink beer at a cheaper price. You can always excuse yourself and say that some good has come from your deficit financing and nobody can prove definitely that you were wrong. There is no definite measure or standard by which it can be judged.
My objection, therefore, to this sort of proposal is that it is highly dangerous in a democratic State. If, for instance, the bodies who form this Government at the present time had to meet their responsibilities to the full, out of current savings or taxation, a very interesting situation could develop, a situation which, in fact, appeared to be developing if we judge by the bleatings of the Minister for Finance and the bellowings of the Minister for Social Welfare which we heard recently. We had, of course, no doubt in our minds as to whether the bleatings and the bellowings were going to triumph. We believe that a situation like that existed and we now know that the easy line was taken, the line of giving in, the line of putting the debt on to-morrow, the line of mortgaging the future. It is because we believe that that has been the line which has been pursued that we look with anxiety upon this Vote on Account.
So far as the policy of developing our resources and the policy of using money for productive purposes are concerned, there will be no difficulty. But the country at the moment is being badly served, because those who should criticise it from the point of view of conviction as regards principles are silent. We on this side are not the body to criticise that. It is known in advance that we could not criticise that as severely as it could be criticised by those who have different convictions. But there are people in the country who have those convictions and they are the people who elected Fine Gael to represent them. They are the people who think that money left in the pockets of the community is going to be better used than if it were forcibly taken from them and applied to some general purpose. There are some who believe that. We have never held that belief as applying in all cases. It may be true or it may be false in a particular case. If you do take the responsibility of taking money out of people's pockets and putting it to some other use, you have to be fully satisfied that the use to which you are putting it is in the general interest and better than the use which the various individuals who contribute to taxation would make of it.
There are no rigid lines by which you can say: "To the right is right and to the left is wrong." It is for that reason that it is very desirable that there should be vocal in this House people who will be able to show the other side of the case. We cannot be vocal in regard to that because of the fact that we did in the past take it into account and decided in many cases in a direction different from those who held these other views. For instance, I have no doubt that the members of the Banking Commission, had they been members of the Government, would in many cases have differed from our view about a certain expansion. We took the step and we believed we were right. We never pretended that there was not another view which had to be very carefully taken into account. The trouble is that that particular aspect of the matter is not going to be put forward in this House with the force and sincerity with which it could be put forward by those who believe fundamentally in it, and they are sitting on the benches opposite. If we are to judge by the past, they were either blatantly dishonest about those things or they are now sitting as meek as mice. In the present situation everything is reversed.
Reference has been made to our past and our programme. We have been asked questions about development. I think I have answered them. We need only point to the development that took place during the period in which we were in office. As I have said before, we had here the other day a picture of the increased output in industry, the number of extra people employed, and so on, presented to us by the Minister for Industry and Commerce. The period chosen was carefully selected so as to cover a period longer than the period in which we were in office. But when one segregates the work that was done and the advances that were made in that period and the work that has naturally continued after it, one sees to whom the credit in the main is due for our present state of development. There is housing. Go around this city and see the new city, so to speak, that has grown up in the suburbs. We have 140,000 houses to show. Our period in office embraced the period of the world war during which there was a shortage of material and during which the progress that had been made could not be continued at the same rate. I happen to have here some notes I had as head of the Government, at a time we were considering post-war problems. We were being constantly and persistently asked what our plans were. I did intend to read them to the House in detail. They are a summary of the various projects which were in hand at the time.
Would you circulate copies of them?
Mr. de Valera
I did intend to put them on the record so that they might be there for all to see, but I do not think the Chair would permit me to do that. Neither would I be able to read them with that ease which would enable me to hold the attention of the House. For the Deputy's information, I refer here to the White Papers. Here is the White Paper on our housing plans. It contains a review of past operations and immediate requirements, indicating what our policy was. Here is a White Paper on agriculture. We had set up a commission to examine that principal industry very closely. The policy in relation to our programme was published. The reports are there for anybody who wishes to see them. If he studies them he will get, just as he will get from studying the report of the Banking Commission, information that will enable him to do his duty as a Deputy here more effectively than he might otherwise do it. They are valuable reports.
In connection with agriculture, there were to be guaranteed markets and satisfactory guaranteed prices for various products. Indeed, looking at this summary, one can realise what a lively topic it would be at the present moment. Here is another one dealing with pasture, fertilisers and feeding stuffs. Here is one dealing with industry. Before the war had ended the then Minister for Industry and Commerce had got in touch with all the industrial concerns in which there was hope of expansion. He had also got in touch with those people who might be interested in establishing new industries. The plans were made. Is it any wonder the present Minister can point to the advances made in the past two years? All the plans were laid. The ground was prepared. I give this information to show that as far as our Party was concerned our policy was quite clear.
I have here the post-war building programme. A sum of £70,000,000 odd was involved in capital expenditure over a period of years. I remember how those who support the Coalition Government to-day dealt with that particular project in relation to building construction.
Here is a White Paper on tourist development. Need I remind the present occupants of the Government Benches of their attitude towards tourism. Need I remind them of what they said about the "spivs" coming in here to eat our food and their suggestion that a tax should be put upon them. Very soon after they took office we were told that the tourist industry was worth something in the region of £33,000,000 a year, as far as my recollection goes. That is more than all our exports in our two principal categories bring us in in any year. Yet, because an effort was made at the right time to get in on the ground floor and make use of the particularly good situation in which we found ourselves in order to develop that industry, we were classified as a spendthrift Government, concerned only with the foreigner, the outsider and the wealthy visitor, and with no concern for our own people. Here is another White Paper indicating the plans that were made and the programme laid down for the development of our bogs, for the erecting on them of power plants in order to ensure that we would be to as great an extent as possible in future independent of foreign fuel.
Have you the secret plan on social security?
Mr. de Valera
Now that the Deputy reminds me of it, here is one on health services.
We have not seen yours yet.
Mr. de Valera
Indeed, I have not got the half of them. I remember one excellent paper dealing with tuberculosis, indicating the attitude to be taken in that matter. The other day I saw where the present Minister for Health opened a new sanatorium. I happen to know something about that, because I finally came into it in a dispute about the site while we were in office. It is like the houses where the foundations were laid by us, but the superstructure has been added since.
It was not Santry Court by any chance?
Mr. de Valera
In Santry Court we had to keep away from the airport. You are keeping away from the airport too.
I am not keeping away from the airport at all.
Mr. de Valera
The other day we had a statement from one Minister to the effect that they have to restrict building there. I think it is necessary to have licences or permits of one kind or another.
We did not throw away £40,000 beforehand.
Mr. de Valera
The point is that one swallow will not make a summer. One fault will not prove that there was not definite planning.
You learned all this from the cover.
You never learned it anyhow.
Mr. de Valera
I did more. I helped to establish a Department of Research.
But you only saw the cover.
Mr. de Valera
That Department did and is doing good work.
But you only saw the cover of the tuberculosis report.
Mr. de Valera
It is coloured differently from the other ones. The others were White Papers. This happens to have an orange cover. I suppose there is some special reason for that. All those papers and reports indicate that this Party stands, as it has always stood, for development; but we have to ask ourselves at every step what the cost will be, whether we can afford it, and whether in the long run the benefits that accrue will outweigh the initial disadvantage of cost. If it can be shown that expenditure will produce worthy, desirable results, we are prepared to face that expenditure. We do believe, however, that the temptation towards deficit financing, the mortgaging of the future instead of facing up to present-day responsibility, is a danger we shall have to watch. I hope the people will watch it.
Why did the people not swallow all these reports?
Mr. de Valera
At the election we got more first preference votes than Fine Gael, Labour and Clann na Poblachta all put together—than the whole lot of you put together. We got more elected representatives here than all your separate organised Parties together.
That is why you are there.
Mr. de Valera
It is easy to gang up.
We had 16 years of it.
Mr. de Valera
Yes. Undoubtedly, 16 years in office is a very heavy load for any Party to carry in an election. We never had any doubts about that. Other Governments that have been a long time in office—irrespective of what good they have done—have gone out of office precisely because people like a change. But the big thing in our case was that we came back after seven general elections with as great a strength in 1948 as we did in 1932. The difference is——
The Labour Party sold out.
Mr. de Valera
——that the Labour Party, which then supported our Party ——
Who was the buyer?
You all got your share.
Mr. de Valera
I remember the Leader of the Labour Party over there looking at Fine Gael here and he pointed at them contemptuously and said: "What! To join up with you who were the rejects of the country!"
The Deputy is travelling a small bit away from the Vote.
Mr. de Valera
What put me on that line, I am afraid, was that I wanted to point out the temptation there is for Parties that have to face the electorate to take the easy way and to avoid the hard way. The hard way is the way of taxation, even when it is within reasonable limits; even when it is, in the view of the Government, justifiable, because nobody—whether he is the income-tax payer or the smoker of tobacco or the consumer of beer—wants to pay more of his income to the State than he possibly can. He certainly does not want to pay anything he can avoid. Therefore, to live up to your responsibilities as a Government in getting the taxation that ought to be imposed to meet your current needs, requires strength and character. It is not a strength that I can see in the Parties that compose the present Government. They have completely different views. As I look across the floor of the House I see the whole spectrum, from infra-red to ultra-violet——
Pale pink.
Mr. de Valera
——and I naturally ask myself what cohesion there is among them and if it is not obvious that to keep together they must take the easy way. I believe that this Vote on Account is an indication of it. It is unfortunate for the country that they can play this trick constantly. Those who want to pull Fine Gael further along can always say: "You can do it with safety because the policy of the Opposition has been a policy of the kind which makes it difficult for them to criticise you as you should be criticised." That is the position in which the country finds itself. I have not the slightest doubt that if things were changed and we were in the benches opposite and brought in a Book of Estimates and proposals of this kind, there would be no words in the English language sufficiently strong to denounce us. I know full well that every one of the papers which are supporting this action now would be very loud in their denunciation of us if we were doing it. I hope that we will be able to do our duty as an Opposition and that we will be able to examine these particular items in close detail. At any rate we will strive to make sure that wherever public money is involved some good justification for the expenses will be given and that it will be proved to us and to the country that it is worth while.
Since this Government came into power we have been listening to the cry that they succeeded in reducing taxation. Naturally, being good showmen, they followed the old example of all good advertisers in the belief that if you tell the people something and tell it to them often they will come to believe it in the end. It is rather surprising that, in the face of this huge bill which is presented to the country, the Minister for Finance even now points out that this Administration has saved the country £7,250,000 in taxation.
As another speaker has pointed out to-day, taxation does not necessarily mean the amount paid by the people in income-tax. Taxation must relate generally to revenue received by the State and the expenditure from that revenue by the State. This year the proposed expenditure amounts to £78,000,000, that is £66,000,000 for Supply Services and £12,000,000 for capital services. When Fianna Fáil left office the entire bill for Supply Services and the Central Fund amounted to £65,000,000. That was described, before these Estimates appeared, as an exorbitant sum. It was said that the country was being run extravagantly. We heard a lot of adjectives such as "megalomania" being used to describe the administration under Fianna Fáil. We were told then that the people could get the same services as were being provided under Fianna Fáil for far less money. We were told, in fact, that, having regard to the services people were getting at that particular time, taxation should be £10,000,000 less.
Do you remember the time you were going to rule the country on £11,000,000?
The Parliamentary Secretary himself does not know what he is spending his money on. If that is an example of the type of administration we are getting, it is no wonder that the bill has gone up so high.
It is difficult to explain things to people who cannot understand.
Will Deputy Donnellan make a speech himself?
Deputy Lynch must be allowed to speak without interruption.
Not only has the present Administration failed to reduce taxation by £10,000,000, but we are now faced with a bill of £78,000,000. Then we must have regard to the fact that during the course of last year Supplementary Estimates were introduced to the extent of something like £8,500,000, and, even at that, we are not finished with Supplementary Estimates because some remain to be passed, amounting to almost £750,000, with the result that before the present financial year concludes, added to the £73,000,000 bill we had last year, we shall have an additional £9,000,000, making a total of £82,000,000. Even, therefore, in that year for which the inter-Party Government must be held completely responsible, they advanced by £17,000,000 over and above the £65,000,000 which was the bill when Fianna Fáil left office. How then can the Minister for Finance even at this stage claim that he has succeeded in reducing taxation by £7,500,000?
Do you believe that? Do you agree that the extra taxes were taken off been and tobacco at a cost of £6,000,000, and do you believe that income-tax was reduced at a cost of £1,000,000?
I do.
That is £7,000,000.
I also believe in the figures placed before me in the Estimates. The money for the Supply Services is got out of revenue and revenue can only be got out of taxation. In the year 1948-49 there was a total of £72,000,000 in revenue receipts. That represents, in the first year in office of the Coalition Government, £6,500,000 over the revenue receipts of the Fianna Fáil Administration. Surely if that £6,500,000 of revenue comes out of taxation that represents an increase in taxation.
At the same time the Deputy agrees that £7,500,000 was thrown overboard in the remission of taxation? That is a bit of a miracle.
If you take a shilling out of a man's pocket and give him back sixpence——
How did I do that?
He gave sixpence and took back a shilling.
I think the Deputy should be allowed to make his own speech.
The Minister can reduce income-tax and increase taxation in other directions.
What did I increase?
Under the 1948 Social Welfare Act, which extended the upper limit of wages of those who might become insurable, in a period of ten months owing to the increased cost of sixpence in insurance stamps and the increase in the upper limit of wages, the Minister was enabled to collect £780,000.
Can you point to the Vote under which that was done?
I want to object to the Minister for Finance, who is an old hand, interrupting a comparatively new Deputy, particularly when he kept his mouth shut while members of the Front Bench here were speaking.
If Deputy Lynch thinks I am embarrassing him I apologise.
I am not a bit embarrassed.
If Deputies on both sides do not uphold the ruling of the Chair it will be impossible to keep order in the debate. Every Deputy is entitled to speak without interruption.
I am apologising to Deputy Lynch. I did not know that I was embarrassing him.
The Minister is not embarrassing Deputy Lynch and I shall continue answering Deputies when I am interrupted. I said that under the 1948 Social Welfare Act there was an increase of 6d. per head in the insurance contributions paid under the national health insurance scheme. That increase brought in in ten months an increased revenue of £780,000 and in a single year it is only reasonable to assume that the increase would represent a sum of £1,000,000. That £1,000,000 is collected by way of taxation in the same manner as taxation is paid by a consumer of tobacco or beer. Therefore, if the Minister relieves taxation in one respect and puts it on in another respect, he cannot in the last analysis, say honestly to the country that he has succeeded in reducing taxation. I seek to prove through the Estimates that not only has he failed to reduce taxation, but he has increased taxation considerably.
We have been listening for the past day and a half to eulogies of the wonderful wizardry of the Minister in introducing this new system of presenting estimates to the people, segregating capital services from other services. It may be an innovation to set it forth on the cover of the Book of Estimates, but certainly the Minister himself will admit that it is not a new procedure in any way to show the difference between capital expenditure and the expenditure on ordinary services. The fact is that, in order to justify capital services at all, there must be reasonable expectation of revenue-earning capacity in such capital undertakings. That may be true of many of the items the Minister has set out in the first couple of pages of his Book of Estimates as capital services, but, at the rate he is going, the Minister will have succeeded in about two years in imposing a capital debt on the country as great as Fianna Fáil did in the entire term of their 16 years of office. I have no quarrel with that in so far as capital expenditure now will bring benefits to the people of this generation or another generation but, so far as I understand, the test that should be applied to capital expenditure is, first of all, that it must be abnormal, secondly, that it must be non-recurrent and, thirdly, that it must have a revenue-earning capacity. In the capital service I see before me, there is an item of £1,635,000 for housing. In the first place, the housing situation is anything but abnormal. I admit it is serious, but it is recurrent and it will always recur. Therefore, it fails under the first two tests. I think it fails utterly in the final test inasmuch as capital expended on housing is non-productive. The Minister admitted that in his own Budget statement last year.
If we are going to have loans raised for the purpose of housing, I say by all means let us have them but the Government should not shirk its responsibility to provide for housing out of taxation. Housing, heretofore, has been provided for out of taxation and nobody will deny that there was a tremendous housing drive in the years from 1932 to 1938. So far as I know no big loan was raised to defray the cost of housing during those years. It was faced honestly by the Administration in office and met out of taxation. I say "honestly" because housing on the Minister's own word is not productive and, therefore, it cannot be treated justly as capital expenditure. If the Minister in those days wanted to raise a loan for the purpose of housing he could have done so. By all means let such housing finances as have been provided heretofore out of revenue be provided along with whatever capital he is going to raise by way of loan. If possible let the housing drive go ahead at a double pace.
We have been listening for some time to Clann na Poblachta telling us that there is no necessity for floating housing loans at all so long as we have £400,000,000 in external assets. We were told to bring our assets home as if all that is required is to send somebody over to walk up and down Threadneedle Street singing "Come Back to Erin" or else to write to the secretary of the Bank of England saying: "Please let me have a cheque for £400,000,000."
That is very childish from the Deputy.
It is not childish. So far as I can understand, the Clann na Poblachta policy was this, that all we had to do was to restore our external assets and we could have capital expenditure on productive schemes all over the country—forestry and God knows what else. Fianna Fáil knew very well that repatriation of assets was desirable as far as it could be achieved, and they set about that in the only manner in which it could be set about. They established industries; they tried to get agriculture on such a solid footing as to make the country as self-sufficient as possible. By doing all that they put our economy in such a position that it would encourage people who, up to this, had been sending their surplus money abroad, to lodge their money in Irish undertakings. By making our own country financially and economically sound was the best method any country could adopt to encourage the repatriation of assets. That was what was being done and, please God, it will be done without bleating emptily of calling back and restoring our external assets. It is a thing that can only be done by organised planning.
Many people examining the Estimates must be perturbed at the alarming increase in the cost of various Departments. It is rather significant that one Department has advanced by something like 133? per cent. When Fianna Fáil left office the Department of External Affairs bill amounted to £153,000. In the current year the Estimate is £359,000. That represents an increase of almost 133? per cent. Everybody realises that some of that increase must be put down to the devaluation of the £ and the advance in the value of the dollar but, nevertheless, it by no means represents the full amount of the increase. If the thing were properly analysed, it could be proved that there is still about 100 per cent. of an advance in the sum to be provided this year over the sum provided in the final year of the Fianna Fáil Government.
The Deputy must admit that a lot of very useful work has been and is being done abroad.
A lot of work has been done, but it does not account for such an enormous increase. A lot of the extra work that is being done could, with a bit of judicious pruning, be done more effectively. I had occasion to refer to this before, that Ministers are going abroad at the slightest provocation and that has been receiving a considerable amount of comment.
Some ex-Ministers went out without any provocation.
But they went at their own expense, whereas the Ministers go at the State's expense, and that is the difference there. Some people are travelling all over the world, Ministers and other members of the present Government, at the State's expense.
On State work.
People are commenting adversely on it. It is little wonder if people nowadays change the old saying "Join the navy and see the world" to "Join the Coalition and see the world". That is what is happening. That represents the minds of the present Government. When Fianna Fáil were in office any increased expenditure was described as extravagance and megalomania. Fianna Fáil as the responsible Opposition realises that some increases may be necessary in the moneys provided to run the country but, having regard to their promises before they came into office and their performances since, the bill that is now presented to the country and which will be subject to the Budget statement when the Minister is imposing new taxes, is out of all proportion to those promises and to the Government's achievements. The Government will have to answer for that, if not in the immediate future, certainly when some of those capital charges will have to be repaid—capital charges which do not deserve the title of capital expenditure.
Referring to capital expenditure, I might be permitted to deal with one particular item and that is the £3,000,000 for land rehabilitation and the £1,750,000 for the Local Authority (Works) Act. Everybody realises that many parts of this country are in a rather backward state from the point of view of irrigation and drainage. That is not due so much to neglect as to the particular shape of the country, which is saucer-like. It is very difficult to drain one area without making another area suffer. What has not been provided in any Estimate I ever examined is a reasonable degree of compensation for people who have been affected by flooding, apart from flooding as the result of drainage. For some years there were occasions when serious flooding took place. I remember one occasion, after a heavy fall of snow during the term of office of the last Government, when a lot of farmers' property was destroyed. They got special treatment in order to restore whatever crops or live stock they lost.
Since this Government came into power I had occasion to refer to particular flooding in the winter of 1948. The flooding, again, was in no way due to any organised scheme of drainage. It was due to an act of God, if you like, inasmuch as there was a particularly heavy fall of rain. Certain people suffer as a result of flooding, be it through organised drainage schemes or an act of God. If they are farmers they can successfully come to a Government and ask for special terms, for a loan or a grant to restore their property. But if it is the case of city dwellers, as I have occasion to remember, they have no redress for flooding.
The Deputy caught himself out by saying there is no redress. He means there is no legislation and he must not advocate legislation.
Can I not deplore the fact that there is no legislation?
The Deputy must not suggest legislation.
I can deplore the fact that a grant cannot be made out of some fund to provide compensation for people who suffer or whose property suffers as a result of flooding. When flooding takes place in rural areas compensation can be provided by way of loan or grant. If it is by way of loan, it is at a reasonable rate of interest. When flooding takes place in city areas there is no means of providing compensation. I suggest that a grant should be made available out of some fund to assist people in city areas who have suffered from flooding. Some help should be given to enable them to restore bedding and furniture destroyed by the flooding. I do not, however, anticipate any particular success on that point.
I want to refer again to the capital debt that is now being imposed on the State by borrowing for purposes which, as I have already alleged, are not proper capital purposes at all. It is a method of providing for essential services other than through taxation. Taxation, naturally, would be unpopular with the people. The raising of capital for unproductive schemes is only postponing the evil day when some generation will have to foot the Bill. It will be taxation, directly, if not in the present day at least in the case of the generation that is now growing up. I think the Minister should, if possible, avoid going too far in that direction. He should have some regard for those who are now growing up and who, in their day, will have to provide for the repayment of unproductive loans out of taxation.
There are many aspects of this Vote on Account that one could explore. It is almost impossible to resist the temptation to speak on each one of them. I shall finish on the note on which I started. It is that the Minister and his colleagues in the Government have been making the claim that over a period of two years they have succeeded in reducing taxation. I want to say that that claim is as false as the Estimate and the burden which he proposes to place on the people are high.
It was pitiable to have to listen to the efforts made by the Opposition in finding fault with the manner in which this Vote on Account was presented to the House. I thought we would have had some constructive suggestions on policy from the Opposition, but, apparently, their whole grievance is that the Vote on Account is being presented in a way that they cannot agree with. They find fault with the segregation of capital expenditure. I think that if Deputy Lynch had any experience as member of a local council, he would know that capital works are not immediately financed out of the rates. They are usually carried out by means of loans. The same principle is being followed here. Surely, posterity should make some contribution for the benefits it will enjoy from the execution of the capital works which are now contemplated.
Deputy Lynch would hardly disagree that the land rehabilitation project is going to be of future benefit and a source of income to the country. Some of us may not be here when the full benefits of it and of other schemes will be accruing to the country. Anybody with any knowledge of land must know that this reclamation scheme is undoubtedly going to put quite a big area of land into production in the future. A lot of that land is, at the moment, unproductive.
As regards housing, Deputy Lynch rightly said that there was a housing drive between 1932 and 1938. Quite a number of houses were built during that period. I want to point out to him that the public body of which I am a member is now making provision to build between 1,400 and 1,500 houses. In that particular area, the number of labourers' cottages built from the passing of the first Labourers Act up to recently was 3,300. Therefore we are building practically 50 per cent. as many houses at the present time as had previously been built over, one might say, a period of 60 years.
You say you are going to build them?
We have decided to build them. I am sure Deputy Lynch will agree that the building of schools is being stepped up at the present time. School building is going on much more quickly than it did in the time of Fianna Fáil. They had plans in 1932, but they never materialised. I think I remember a Parliamentary Secretary to their Minister for Finance saying at one time that they could run the country on £11,000,000 a year and would bring people back from Tanganyika and Australia. I thought that, when Deputy Aiken went out to Australia, he would bring back some with him.
We brought back nearly 13,000 of the number that you sent out.
As I say, these new schools are going to be of great benefit to our children and grandchildren. It is only fair that posterity should pay its fair share of what it is going to cost to provide these new schools. The children of the country are entitled to get their education under the best possible conditions and to enjoy all the amenities which the State can afford to provide for them.
There has been a good deal of talk about road improvement. At a time when such things as tar and bitumen and other things were in very short supply, the Fianna Fáil Government decided to dissipate the Road Fund. They threw out certain sprats to the various councils in Éire. I think it started from 1946. If the council did the same amount of work as was done the year before, they got 90 per cent. of a grant. That was continued. How were the roads improved? The three deputy engineers in Cork reported after an inspection that at least 60 per cent. of the roads were not yet properly finished and would not be for a number of years to come. Yet the Road Fund was dissipated.
In February, 1948, two days before the change of Government, it was indicated by wire to the Cork County Council that the Government were prepared to carry on under the same conditions. That wire was sent after a member of the Government Party stated at an election in Kilkenny that rather than drive the country into another election he was going to join up with any Party that would form a stable Government. The writing was on the wall, hence the wires. I should like to know what amount of money was in the Road Fund at that time. I know that it cost this Government about £2,500,000 to make up the loss and to stand by the promises made by a Party that knew when they made these promises that there was no money in the Road Fund.
We hear a lot of talk about trips round the world. The Department of External Affairs has focussed international attention on the position that exists in Ireland and on the cancer of Partition. Deputy Lynch is a very young member of this House and a member whom I hold in very high regard. Does he realise that, through the External Affairs Department, we are getting world-wide prominence? Deputy McGrath may object to suppers and other things like that. I remember when Fianna Fáil Ministers would not wear a top hat or get into "boiled shirts" when in this country. But, amazingly enough, when they went to Ottawa they wore them there. Of course it was all right in Ottawa, but it would not do here, because if you tell some people here a certain thing they will believe it. The position now is that, with all their concentrated efforts and their vocal ability, the country has realised that these people were not as sincere as they pretended to be.
That is the reason why they are by far the biggest Party in the House.
Some time Deputy Ó Briain will get into hysterics and, in addition to the Deputies who are doctors, we will have to call in a few more doctors to get him out of them.
The Deputy should keep to the Vote on Account.
I heard Deputy Lynch talk about the increased cost of the Departments. I should like to remind him that there is such a thing as esprit de corps. I think he was at one time a departmental official himself, and I am sure he was not satisfied with his salary. This Government went a long way towards satisfying the claims of civil servants for increased salaries. They may not have gone all the way. They secured a rate of wages for the workers of this country which would never have been secured if Fianna Fáil remained in office. Fianna Fáil were more concerned with the racketeers and the exploiters of the people whose charter of freedom appeared in the Irish Press some time before the election, than they were with being the poor man's Government, the guise under which they went into power. I am sure Deputy Lynch did not mean to cavil at the increase of salaries given to civil servants, which no doubt is responsible for much of the increase in the cost of the various Departments. When the Minister is concluding the debate he may be able to give us an idea of the percentage increase in the salaries of civil servants.
I now come to the forestry workers. Their wages have been stepped up, but not, perhaps, as much as we would like them to be. They have been increased by 16/- by this Government since they came into office. These workers have also had certain amenities provided for them so that they can carry on their work under better conditions. Reafforestation will be of great monetary benefit to this country. It will also benefit the low lands convenient to forestry belts by the drainage which will take place. This generation, perhaps, will not benefit by the trees that are planted, except from the drainage provided.
I am sure Deputy Lynch did not mean to criticise the farming community when he spoke about the services being provided for them under the Local Authorities (Works) Act. I quite agree that city men will not reap any advantages from this particular work, but surely Deputy Lynch will not cavil because we give those people who have laboured for years under the most primitive conditions an opportunity now of carrying on their work under better conditions. In the past 12 months a certain amount of drainage has been done. That is beneficial to the farmers living in proximity to it. I remember Deputy Moylan saying in Fermoy that arterial drainage would take at least 20 years. I am inclined to agree with him. The project is an immense one and will take a long time to reach completion.
I have been disappointed at the Opposition's approach to this Vote on Account. They had an opportunity of putting forward constructive proposals, but they did not take that opportunity. They dealt with petty matters like functions, teas and suppers. During the emergency Deputy Aiken made a trip to America to purchase rifles for the Defence Forces. The fruits of his labour were Springfield rifles that had been left in England by the American troops in 1917. They were Springfield rifles, but they came from England. They were quite safe for the man in front but not so safe for the man pulling the trigger. Perhaps even at this late hour we may have some contribution from the Opposition of a constructive nature, a contribution which we can assimilate and digest and perhaps ultimately draw benefit from. I appeal to them to drop this silly attitude of everybody being out of step but themselves.
I suggest to Deputy Keane that he should ask the Government to reduce the rate of interest charged to local authorities to the 2½ per cent. to which Fianna Fáil reduced it while they were in office. Before I had any intention of becoming a member of this House, I remember Deputy Hickey explaining to me the effect of these interest charges on the rents of houses. He calculated that the effect put about 10/- a week on a corporation house at that time. According to him then these charges were scandalous ones. Fianna Fáil reduced the rate of interest to 2½ per cent. They gave a grant of £400 from the Transition Fund to local authorities. They made a grant of £275 available to those who wished to build houses under the Small Dwellings Act. Yet, there are some people who now have the impudence to tell us what Fianna Fáil did not do for housing. There is no necessity to dwell on what they did do. Everybody knows it.
I did not say anything about their housing programme.
You did not, but it was said by other speakers yesterday. We built 140,000 houses in seven years. We built them during an economic war when even the people at home stabbed us in the back and threatened to march in here.
You are including the reconstructed houses, of course.
I suggest that Deputy Keane, too, should ask the Government to give back the road grants. We got nothing for road improvement in Cork City this year. We had a deputation to the Minister recently and he told us that he was considering giving us a grant in the coming year, but I take it he will have to deal with the man introducing this Vote on Account first.
Deputy Keane referred to Deputy Lynch's remarks about the Department of External Affairs and the expenditure incurred by that Department. In 1947 Fianna Fáil introduced an Estimate for £52,000,000. At that time the present Minister for Defence described that Estimate as "a crazy demand and unjust extortion." He said at column 1986, Volume 104 of Dáil Debates, 12th March, 1947:—
"We have far more expense, pomp and ceremony attaching to every Minister, every one of whom travels in a car de luxe irrespective of price. This is the result of 16 years of insane extravagant administration.”
Deputy Keane says that we have got far more prominence in the world to-day through the medium of the Department of External Affairs than we had hitherto. I was rather disgusted a couple of weeks ago when I saw in a paper that the only solution we have now towards the ending of Partition is to appeal to that lionhearted man, Winston Churchill, to do it. If that is the only solution this Government can offer after all their promises, I say "May God help us."
Perhaps the Deputy would quote.
Does the Minister deny the statement?
The Minister is asking the Deputy to quote the statement.
It appeared in every daily paper in the country.
Would the Deputy quote one of them?
To appeal to that lionhearted man, Winston Churchill.
Would the Deputy quote?
Is the Minister denying it?
I am denying the interpretation the Deputy is putting on my words.
You said:—
"I think we should appeal to that lionhearted statesman, Winston Churchill."
On a point of order. I think that if a Deputy presumes to quote either another Deputy or a Minister, he is entitled to be asked through the Chair to produce the quotation.
Did the Deputy intend to quote?
On a point of order. Surely it is not fair to interrupt a Deputy when he is speaking, especially when the Minister will have a full opportunity of explaining exactly what he said in his own time.
I made a point of order.
Acting-Chairman
The Deputy did not purport to quote exactly what was said.
I said that the Minister for Defence suggested appealing to Winston Churchill to end Partition. The Minister has any amount of opportunity to deny that.
Is it not the rule that if a person purports to quote he produces the quotation or withdraws it?
Acting-Chairman
The Deputy did not purport to quote.
That is not a quotation.
It is a distortion.
It is his dense misunderstanding.
I would not be so dense as to appeal to Churchill to end the partition of this country. There was a lot of talk about all that Fianna Fáil did and did not do and about workers' wages. Surely Deputy Keane knows very well that Fianna Fáil brought in the Conditions of Employment Act? Surely he knows that we were the first people to consider giving holidays with pay to workers?
What about the Wages (Standstill) Order?
It was the saving of this country. I have no doubt about that. I was a trade unionist before you were.
And an Irish one too.
I had to work and I was not paid for being a trade unionist.
Neither was I.
You cannot take it when you are getting it.
Acting-Chairman
Deputy McGrath.
Fianna Fáil brought in plenty of social welfare schemes. There is no provision whatsoever in this Estimate for the much-talked-of social welfare scheme. I suppose the only conclusion we can come to in regard to it is that it is being shelved. I suppose that the only thing that will happen is that they will be able to confiscate the national health funds and buy Store Street.
The Minister for Health will not deny that he has got all the help possible from the people of Cork City and County. The position, however, is that the people on the joint bodies attached to Cork—the board of assistance in particular—do not know where they are. We asked the Minister six months ago, on a deputation, about setting up an orthopædic unit in the county home. He was all for it. He said his intention was to make Cork an orthopædic centre. We said that we would get our engineer to draw up plans for the reconstruction of a portion of the hospital that we could vacate at the time, and the Minister said: "All right". Our engineers sent up the plans, but the Minister's technical advisers told him that we had better get an architect. We advertised for an architect and secured the services of a famous man. He gave us an approximate estimate of £34,000. I attended the meeting of the board of assistance on a Monday. I had just read my agenda for the Cork Corporation, which was to meet on the following night. I saw that the Minister was asking the Cork Corporation to hand over the new fever hospital in Cork to be used as an orthopædic-adjunct to the regional sanatorium at Sarsfield's Court. I suggested to the board of assistance that it would be better to find out if the £34,000 job was required at all. I said that I was sure that the corporation would go out of their way to facilitate the Minister as they had promised to give him this fever hospital as a sanatorium until the one at Sarsfield's Court was finished. We, therefore, came up on a deputation a fortnight ago. We asked the Minister, if the corporation was giving the fever hospital as an orthopædic unit, whether he would still require the one in the district hospital. The answer was that he would not. We have now spent, I am sure, £300 or £400 on architects' fees for work done, and then we are coolly and politely told that the Minister will not want it at all when he gets the other place. I suggest to the Minister that he ought to try and come to some firm plan, as far as Cork City and County is concerned, in regard to what he really wants. I am very much afraid that there is a great deal of waste in officials' time and in architects' time in going into those plans, costing money, and then finding that we do not want that one at all but the other. I appreciate that the Minister is doing good work and he is, undoubtedly, getting a lot of help. However, I am sure he realises now that he is not able to go ahead at the speed at which he thought he would be able to go ahead before he came into office.
I should like to refer to tourism, as far as Cork is concerned. All the Deputies of Cork City and East Cork, members of the harbour board, the tourist association and the tourist board, met the Minister for Industry and Commerce well over a year ago in connection with landing facilities at Cobh. We would not be listened to. We were told that no money would be spent on it. We were told that it was the duty of the harbour board or of somebody else. Notwithstanding the very good case put up to him—the Minister for Defence was one of the deputation—that it should be a national cost, we would not be listened to. Well, some months after that, the famous Colonel Pozzi came along and said that there were not proper facilities in Cobh for tourists. Adopting the attitude of the man who has an overdraft taking off his hat to the bank manager, they then bowed down and decided that something would have to be done about Cobh. A departmental inquiry was held. I understand that negotiations are in progress at the moment which may turn out to be successful. I want to point out to the House, however, that because of that attitude, another season was wasted as far as tourism was concerned. They would not do anything until they were in the position of the man with the overdraft.
You know all that for a fact?
I know that, in reply to a question put down by Deputy Sheehan as to complaints which were made by Colonel Pozzi, a departmental inquiry was set up. I know they met in Cobh. I know the results. I know they have asked the Cork Harbour Board to contribute towards the cost and that the Cork Harbour Board have agreed to contribute 10 per cent. of the cost.
As a result of that man's interview?
Yes. We got a reply previous to that saying that nothing would be done. The Minister knows that quite well.
I do.
It was not as a result of any effect anyone in Cork had on him, anyway. If Deputy Keane were here, I would ask him to restore the amount of the home assistance money in the form of subsidies that he withdrew from them.
I am sure there is no necessity for any Deputy to tell the Minister for Finance anything about this Vote on Account because I know that there is nobody in the country more "fed up" than he is for having to bring in a demand like this. Deputy Briscoe read out for him the leader in last Saturday's Independent in which it was stated that they could not understand a man like him, holding the views he had expressed before, doing the things he is doing now. We all know that that is the result of agitation by different bodies in the inter-Party Government. They want this and they want that and in order to keep them together he must try to satisfy everybody. I am sure, as the Independent stated last Saturday, that it came as a big shock to everybody to see him bringing in a demand for £78,000,000.
Everyone agrees that it is a serious matter to consider that, in the Book of Estimates before us, we have figures for the past ten years which reveal the rather astonishing fact that in those ten years the cost of the State services has risen from £35,000,000 to £78,000,000. Every year we have had an upward tendency in expenditure. Starting with £35,000,000 in 1941, the total rose by £3,000,000 or £4,000,000 each year, until we have now reached the present high level of £78,000,000. I do not think the Minister regards that situation lightly. I do not think any Deputy regards it lightly, realising that £78,000,000 is required for Supply Services and, in addition, £8,000,000 for the Central Fund Services. In addition we have a sum of approximately £10,000,000 raised by rates, making a total collected from taxpayers and ratepayers generally of close on £100,000,000. That is equal to the total income of the agricultural industry and to one-third of the total national income. Realising this, I think every Deputy will support any measures which the Minister for Finance may take to introduce into Government Departments a greater amount of efficiency and economy. I think that it would be desirable to have a public investigation into administration generally. I was one of those who, some years ago, asked that a commission be set up to inquire into expenditure. I think that the motion was supported by all the then Opposition Parties. I think that it is important that that should be taken up again. It is disconcerting to find that expenditure is mounting year by year and, so far as we can see, there is no indication of any limit being fixed to expenditure. During the past three or four years, there was a similar tendency in regard to local rates, but in the present year public opinion was aroused to such an extent that there has been a check in the upward tendency of expenditure, for the present year at all events. I think it is time there was a similar check in regard to the upward tendency of Government expenditure.
I have no serious objection to the division of the Estimates under two headings—capital services and other services. Farmers in this House, including Deputy Corry and Deputies of other Parties, have all talked a good deal about the dual purpose cow and the dual purpose bull. I think it is only natural that the Minister for Finance should decide to bring in a dual purpose Estimate. What is the purpose of dividing the Estimates into two categories? I think the Minister is quite legitimately making an effort to distinguish between services which are of a recurrent nature and services which are of an investment nature and which might be hoped to recoup the taxpayer in the years to come. I am not sure, however, that it is sound financial policy to borrow all the money that might come under the heading of capital services. I think the whole question of drawing a dividing line between the amount of money that has to be raised by taxation and the amount that has to be found by borrowing depends not so much on what the nature of the services is as upon the monetary position in the country generally. If there is a tendency to inflation it is desirable to raise all the revenue required by taxation. If there is the opposite tendency, a tendency towards deflation, then it is sound policy to borrow. That I think should be the guiding principle more than the question of whether the services may be regarded as capital services or otherwise. Of course, it has always been the policy of successive Governments to borrow for certain items. I think Ministers for Finance have in the main been guided by the general financial position in the country rather than by the nature of the services.
Some Deputies pointed out that during the emergency the then Government sought to raise practically all the money required by taxation rather than by borrowing. I think that was a sound and reasonable policy, because it was very undesirable to have any inflationary tendency at a time when goods were generally in short supply. I think at this particular time the Minister will have to be guided by somewhat similar principles. If there is, in the Minister's opinion, too much money in circulation, if prices are showing a tendency to rise, it would be unwise to borrow to too great an extent, and thus add to that inflationary tendency. I am sure the Minister will take all those facts into consideration.
When we decide that a certain amount of money required for our State services is to be raised by borrowing, the next question that naturally arises is whether we are to borrow by orthodox methods such as the flotation of loans at a fairly stiff rate of interest, or whether we are to adopt the suggestion that was made by Deputy Sir John Esmonde, namely, that we should use the State's own credit to finance works of development. I think that is a matter that requires serious consideration.
I was glad to see Deputy Esmonde approaching this matter in a calm, non-Party and serious way. The case that he made was a strong one and a very logical one. It is a case that has never yet been answered. There is no use in anybody saying that the raising of money for development work by utilising our own national credit would cause inflation. You can cause inflation to the same extent by borrowing money at a high rate of interest. In the same way, inflation can be caused by people with money, people with sterling, coming into this country and adding to the issue of currency here by demanding our national currency in exchange for their sterling.
I think it is desirable that the State here should control our national credit, that it is necessary and desirable that the State should control the amount of credit available in the country and the cost or the interest charged on that credit. I think the problems that face this country are very much different from those that face Great Britain, or perhaps that face other industrial countries. We are an undeveloped country, to a great extent still an undeveloped nation. What is more, the development work which is urgently desirable in this country is work which requires the outlay of a very large amount of money. It is work which will bring a small return.
What are the works of development that are urgently needed? We have the extension of turf development, the extension of the production of electricity, the reclamation and improvement of land, and afforestation. These are all long term development works involving a very high capital expenditure and giving a comparatively low annual return. They are not the types of work that can be financed by loans raised at the ordinary commercial rates of interest. They are the types of work which ought to be financed by the cheapest credit that can be obtained. That is why I think the Government should go all out to investigate this financial and credit problem and endeavour to meet the demands which have been made in this House by a number of Deputies over a good number of years—demands which were expressed very clearly and lucidly by Deputy Esmonde to-day. In addition to the works which I have mentioned we have also housing, the development of the fishing industry and mineral development.
Housing finance is at a comparatively high rate of interest. For purposes such as housing anything over 3 per cent. is a high rate of interest because, in the course of the years which are required to repay a loan on housing development, the amount of capital involved doubles itself. The ordinary life of the loan would be 35 or 40 years. That is a matter that ought to be attended to immediately, because I believe that the whole development of housing is being slowed down by the high cost of money required as a result of the rates of interest charged. That is a burden both on the taxpayer and on the people who require the houses, and it is a matter that should be faced at once. I do not know what we are waiting for.
Quite a number of Deputies on this side have put this proposal to the Minister in various ways, but so far, we have got neither a reply nor any indication that any action will be taken. By the proper utilisation of the credit of the country we could expand and develop our resources sufficiently, not only to maintain our present population at a decent standard, but also to provide for the increasing population which has had to be exported up to the present.
Afforestation is one of those particular branches of development which offer a return over a considerable number of years. It is not only an industry in itself, but it could be the foundation of a number of other productive industries. I do not think this problem ought to be approached from any Party angle. I was glad that Deputy Sir John Esmonde did not approach this from a Party angle, because no matter what Government is in power the people of this nation will have to depend entirely upon the output of their industry and on the output of agriculture. I think it is gratifying to see that there has been some expansion in the output of our secondary industries. There is no doubt but that production has been stepped up somewhat, but there is a wide field for further development. For example, there is no reason why there should be a shortage of cement for building in this country or why that industry should not be expanded to meet our full requirements in housing and other development work.
With regard to agriculture, I am not satisfied that there has been the expansion in output that is urgently necessary. There is no industry so capable of providing an expansion in production as agriculture, or one as capable of adding to the wealth of this country as the land. I think it is regrettable that we have not had a much greater expansion. I do not think that the figures of agricultural output for 1949 have yet been published. I asked for them, by way of question in the Dáil some weeks ago, and I was told that they were not yet available. We know that in the statistical survey for 1948-49 figures are given of net agricultural output for ten years from 1938. Those figures show that during a couple of the war years net output went fairly high, as high as 112, compared to 100 in 1938. That, in my opinion, is not good enough. We ought to be able to expand production in the agricultural industry high above the 1938 figure.
It is true that a good deal of capital expenditure is being put into the work of land reclamation and drainage. Most of this money, however, is being spent upon the water-logged land of the country. It will give a return, but I think we would get a more rapid return if something worth while were done for the high land and the sound land which at the moment is deficient in manures and fertilisers. If something were done to raise the fertility of that land, I think we would have, in a shorter time at any rate, a real expansion in our net agricultural output. It is saddening to see millions of acres of poor pasture land growing nothing but moss, bent grass and herbage that is unfit for food for any animal. I think that land could be quickly restored if capital were made available.
I think that, as we are making provision in this Estimate for capital development on a large scale, it would be no harm to consider the question of capitalising the agricultural industry. There is no industry which is so sadly under-capitalised as agriculture. One has only to go to the country and see the little farmsteads, the out-offices out of date and the inadequate use that is being made of land that should be producing the maximum. One has only to see these things in order to realise the mistake that has been made by successive Governments over a number of years, and the mistake that is still being made by our Government, in not restoring that land, and the agricultural industry generally, to full production. Unfortunately, the majority of our farmers have not the capital to put into the industry, and no industry can develop without capital. So far, no real attempt has been made to face this problem. I think it was the Minister for Finance who, in reply to a question some time ago, referred to the fact that, of the applications received by the Agricultural Credit Corporation for loans, over 50 per cent. of them had been turned down. He made that statement in reply to a question by Deputy O'Higgins. It shows how inadequate is the provision of capital for our agriculture.
I do not know why the Ministers concerned have set their faces so sternly against promoting the development of the agricultural industry by refusing to increase the capital necessary for it. Deputy Sir John Esmonde, in referring to this matter, pointed out how unwilling our ordinary commercial banks are to provide the type of credit that we require for agriculture, and indeed the type of credit that we require for all our big development works. He said he had discovered that the banks derive far more profit from short-term investments and short-term loans in the City of London. I think that is a terrible state of affairs. It is an unfortunate thing that some of our Ministers are so blind to the real interests of the nation, and I think it is time that they should wake up. This country cannot go on spending one-third of the national income mainly on unproductive work. Neither can we go on piling up a burden of debt. We must get down to increased production, and in this regard the first step is the capitalisation of the agricultural industry.
I think, also, that if we are to get an all-out effort in agriculture there must be some appreciation of the hard and difficult struggle which farmers are making. I can quite understand how necessary the Minister for Agriculture may think it is to proclaim that agriculture was never so prosperous, and that farmers are more prosperous, in fact, than any other section of the community. I pointed out to him last week that the average income of each person working in agriculture is, approximately, £3 4s. per week. The Minister stated that he would completely indicate, when replying to that debate, the falsity and inaccuracy of my statement. However, when he was replying to the debate he did not refer to the matter further. Therefore, I am taking it that the figure which I gave was quite accurate, and that it could not be controverted. Therefore, we have a position in which the largest section of our producers, those engaged in agriculture, have an average income for each worker of approximately £3 4s. 0d. per week. That is not a high income. It is not an income upon which you can base very extensive increases in taxation. Neither is it an income upon which you can base very extensive borrowing. I think, therefore, that the suggestion which I have made, that we should have a thorough investigation into departmental expenditure at the earliest date with a view to effecting economies in every Government Department should be adopted. It is not a question of reducing the salaries of officials or of dismissing established officials. It is a question of ensuring that all the Departments are run with the maximum amount of efficiency.
It is also desirable that we should get down in a business-like way to the investigation of money in our real, internal national assets. I quite agree with those who say that it is desirable to repatriate our external assets, to bring back the money invested abroad. But I quite agree, at the same time while it is desirable, it is not so very easy. The simple way and the only way to bring back the money invested abroad is by importing goods. We all know that if we were to increase our imports of consumer goods in order to secure the return of this money we would be only dissipating our external assets without adding anything to the wealth of the country. Therefore, if we are to get this money invested at home we have to import plant for our industry, fertilisers for our land and commodities of that kind which will add to the wealth of our nation and to the productivity of our land and of our industries. That, I think, will be accepted as absolutely sound national policy. So far we have not been doing very much in that direction, but I can see no reason why we should not strain every nerve to bring back the money invested abroad in the shape of capital goods which will add to our wealth.
I cannot see very much wisdom in borrowing extensively from the United States. While borrowing may be justifiable internally, that is Government borrowing from our own people either by way of flotation of loans or by the utilisation of our national credit, there are very many objections to our nation going deeply into debt to another nation, particularly to a nation to which we cannot export very much of our own produce. The sound policy would be to cut down as far as possible our imports from the United States. We should go all out to produce practically all our own wheat in the coming couple of years. We should go all out to produce as much as possible, if not all, of our own animal feeding stuffs. That would be sound national policy in the present circumstances and I do not see any reason why we should not aim at achieving it at any rate.
Nothing is calculated to lower the output of this country more than adding to the embarrassments and the difficulties of those engaged in the farming industry. I was shocked to find our Minister for Agriculture advocating a reduction in the price of milk. I was equally shocked last year when there were reductions in other prices for farm produce, such as oats, farmers' butter and other commodities of that kind. Having regard to present agricultural costs, the increase which has taken place in local rates and in wages, I think that agricultural prices, if not increased, should be at least stabilised. They certainly should not be reduced. No amount of argument from any Minister or from any particularly well-equipped people who may put up various types of argument on this question, will convince farmers that they ought to accept reductions in the prices of farm produce at the present time. I do not object to agricultural prices being reduced provided costs are brought down first. But we have not that position. We have the position that the farmer is expected to accept reductions in the hope that costs will come down. I do not think that the farmer would be so foolish as to accept that plea. I think that those who are administering the affairs of our country will find that the farmer, whatever may be said about him, has a good deal of common-sense and that he is no fool.
I am afraid that the Deputy is discussing farming rather than the Vote on Account.
I am sorry if I have dwelt unduly on the farming side of our national economy. I think you will excuse me, Sir, when I point out that it is by far the most important side of our national economy. I have referred briefly to the other side of our national economy, namely, industry generally and pointed out that there has been some expansion but not by any means sufficient expansion. The years facing us are difficult years and we want an all-out effort both in regard to agriculture and to industry. I think that the few words that I have said in regard to agriculture will at least indicate to Ministers that they ought not to be trying to bring down farmers' prices. On this particular debate last year I made an appeal which seems to have fallen on the deafest of deaf ears as far as the Government Front Bench and the Opposition Front Bench are concerned. I pointed out that the economic position of the country was grave and that we were facing problems of great complexity. We are a small nation and our resources are limited. Their development will be expensive and difficult. It will require an all-out effort on the part of all sections of the community to put the country on its feet. I suggested last year, therefore, that all Parties should take part in the government of the country. I make the same appeal this year and I hope that it will not continue to be ignored. I think an all-Party Government would enable the nation to face up to its problems.
That is not expenditure surely.
It is very important that we should get away from narrow Party argument and conflict in regard to this matter of national expenditure. The burden has increased each year, and the time is now opportune to bring about some reduction. I am satisfied that there can be no serious objection to the classification made in the coming financial year. I think, however, that the cost of the services generally must be reduced, particularly those services which are unproductive. I think Government Departments must be reorganised. There is too much centralisation of government in the City of Dublin. Dublin is the most expensive place in which to live or to do business at the present time. It is not unusual for a business man in some remote part of the country to be visited by two or three different departmental officials on the same day. They travel from Dublin to the country and back again. Added to that, we have this perpetual passing of files and documents from the country to the city, and back again. That was brought forcibly to our notice recently in connection with the Department of Lands. What is true of the Department of Lands is equally true of other Departments. I think State Departments should be reorganised and that certain officials should be appointed in certain areas, officials who would know the people in those areas and who would be competent to deal not only with one particular Department but with a group of Departments if necessary. That is one way in which expenditure could be reduced. There is too much duplication and overlapping. I think if there was a proper investigation into the way in which Departments are run considerable waste and overlapping could be avoided. I am sorry the Minister for Finance turned down my request for an inquiry into local government. I hope he will not reject my request for an inquiry now into all Government Departments.
A considerable amount of ground has already been covered in this debate, so much so that I feel there is only one aspect to which I would like now to devote myself. It is a very important aspect. It is a very urgent one, and to a great extent it has been ignored. I refer to the tourist traffic. That is now the biggest industry we have in the country. Yet, the Government is doing little or nothing to help it. This year the estimate for the tourist board is actually decreased. So far as one can judge from ministerial statements, the Government is anxious to encourage tourism, but is leaving it entirely to private enterprise. Other countries give a great deal more governmental attention to building up their tourist industry, and subsequently maintaining it. In our case the time factor is very important. We have already lost two of the best years because of the attitude of the present Government. They started in office by referring to tourists as "spivs." More than one Minister suggested that tourists should be taxed. Tourism was described as having an inflationary effect on the whole. Then Mr. McMullan, who is, I think, President of Irish Transport Workers' Union, made a statement pointing out how important tourism was and how damaging these cheap gibes were. Subsequent to that the Tánaiste was invited to open Mosney camp, and he paid lip service there to the value of our tourist trade. From that time on ministerial statements were encouraging, but quite in contrast to the complete neglect of what is now our biggest industry. One of the experts of the Marshall Aid Plan pointed out that it was very important that this country should develop its tourist traffic. I think he said in 1948 that we had up to 1952 to equalise our exports in the dollar market because Marshall Aid would then end.
Despite that warning nothing has been done. Mr. Taft, another official of Marshall Aid, said that.
"a forthright and determined policy is needed and that is what Ireland does not have."
That statement was made some time ago, but the Government has not yet adverted to the tremendous importance of this industry. They have continued their policy of closing down the channels of tourism. Recently the Parliamentary Secretary to the Taoiseach said that our development of an air service with America was squandermania and they had closed it down, showing thereby that the mind of the Government still persists in believing that would have been a source of loss rather than a most valuable dollar-earning agency.
We do not yet know the policy of the Government with regard to the shortwave station, which can be used for very valuable purposes in relation to tourism. They were determined to shut it down at first. The only indication we can now get is that it is in an experimental stage. The Minister for Posts and Telegraphs has suggested that owing to modern developments it might not prove to be of very much value. The answer to that is that no other country is shutting down its shortwave station, but that, in fact, other countries are actually increasing their power for future use.
The Government sold the five hotels which had been under the control of the Tourist Board and they are now controlled by private enterprise. Cobh and Cork are the bottle-neck of the American trade. The larger part of American tourism comes through Cork. We have heard what Deputy McGrath had to say on that matter. If one looks back on the newspapers of the time one will see how completely discouraged a most representative deputation was by the Minister for Industry and Commerce.
With regard to the development of Cobh and accommodation in Cobh, no serious effort has been made to increase hotel accommodation, guest-house accommodation or the taking over of other houses or anything of that sort for the purpose of accommodating the tourists during the next few years—although the chairman of the Tourist Board himself pointed out what a shortage of beds there was and that this year in particular, being Holy Year, with a number of Americans passing through, it would probably give us a chance of having a boom year. One of the American experts already pointed out that a number of Americans had to leave this country because of lack of accommodation and could not take a holiday here. It was also pointed out that for the first time in history a country was actually giving Government assistance to its own nationals to travel and that it was a thing that had never occurred before until the United States Government adopted that policy. Therefore, every factor of advantage is there if we were only in a position to avail of it. There is the whole question of the increased transport facilities which would have arisen out of the use of Store Street for its original purpose——
The Deputy is wandering from the point.
I am giving a list of these things—I am not elaborating on them—to show that they all come under public Departments and that they all indicate a general attitude of policy. Again, the cutting down on the money provided for the maintenance of the roads throughout the country will not help to attract tourists to come back again for a further holiday. Another item is the shutting down of the building of the concert hall at Rotunda which would have served for international conferences, for public functions, for the orchestra and for other cultural developments— art exhibitions and so on. The Academy of Art has no really satisfactory place at all. These are cultural things to which other European countries give immense attention as a means of attracting tourists. It has the further advantage that you get quality as well as quantity of people. The people who frequent these cultural places are people who come back again and again and they are the type of tourists who have a far better effect on a country than any other type. One often hears the criticism that tourists are undesirable because they have a cheapening effect upon the standard of general public opinion of a country. The best answer to that is to try to get the type of tourists to come to this country who will place us high in world estimation from a cultural point of view. There was also a question of the building of our theatres——
I am afraid the Deputy is not keeping to the point.
Am I not entitled to give what one might call a washing list of what ought to be done and has not been done, indicating that the Government is dominated by a certain policy and showing what should be done in order to attract tourists? These are some of the shortcomings of the Government in reference to the tourist trade which indicate an entirely wrong attitude in the matter. The trade itself is of enormous importance. It supplies a near market for the farmers to sell their agricultural produce. It is infinitely preferable to sending cattle out on hoof, where you lose the hoof, the horns and the hide, and it is a market which, over a period of years, is subject to greater fluctuations than any other market because we have only one market.
The Minister for External Affairs seems to be gradually realising that he cannot carry out the magnificent promise he made to reduce the cost of living by 30 per cent. It was one of those gestures upon which he rode into power. He is beginning to realise that inflationary tendencies are not under our control. It was interesting to get that admission from him because it shows that the policy on which he set out was entirely fantastic. Whether he believed in it originally or not it is difficult to say. Now that he has come up against the fact, he has, at least, publicly been able to state—by implication in any case—that it is not possible entirely to control the cost of living in this country. He pointed out that, owing to the prices of goods which were imported into this country, and through other factors, the question of inflation is one that could not be controlled. The fact of the matter is that quite a number of different factors make it impossible to see any future for the hope that the cost of living will be reduced.
I shall not detain the House any longer. The subject I was mainly interested in was the question of the tourist traffic which bears very much upon the whole policy of the Government.
I should like to give the House some indication of some improvements that have taken place and some attractions that probably influence tourists in coming here. Since this Government took up office it has improved the supply of a number of commodities which attract tourists —notably the supply of butter, bacon and eggs. It has provided these foodstuffs at the same prices and in some cases cheaper than they were available when Deputy Little's Party was in power. There are now adequate supplies of butter, bacon and eggs, and in the case of bacon, the price is much lower than it was in recent years. The turnover of the bacon factories has increased and the supply of food available to tourists is not merely adequate for their needs but ample supplies are available for home needs as well. I think it is no harm to realise that, when we consider what is essential to attract toursits and whether it is more beneficial to provide good fare, attractive food and conditions under which tourists will come here, as a policy likely to achieve results, rather than the policy that was in operation, one which had as a feature of its programme the running of State hotels under the Tourist Board. That policy succeeded in demonstrating at a time when hoteliers throughout the country were all making money, at a time when every guest house of every sort and description entitled to claim that title was overcrowded with guests, that the State hotels were the only hotels in the country that lost money.
They did not.
Of course they did.
They did not.
As the Deputy knows under any normal system of accountancy, in which account is taken of depreciation and interest on loans, they did not pay. If these items were left out it might be possible to show that they made a small profit. Under normal accountancy practice, it was clear that the State hotels failed to make a profit. That was a remarkable fact at a time when every hotel was not only making a profit but was able to book ahead in the knowledge that when the guests there had already departed, there were others willing to come to take their place.
The Deputy went on to criticise the decision to abandon the transatlantic air service as one example of a line of policy that is not designed to promote tourism. I have yet to learn that tourists wishing to come to this country, if they could get cheap accommodation would have been more likely to come if the transatlantic service were available. All the services operating the transatlantic route at the moment have failed to operate at a profit. I do not know whether it is sound policy to bring people here on a subsidised air service and to meet whatever deficit arises on the operation of that service out of the taxpayer's pocket, without some information in the background that when they come here they will be a dollar asset other than from the narrow point of view of the people in whose hotels they stay. I think that from the national point of view on any system of accountancy that is not a policy that would yield a dividend or that would find any support in the country.
I should like to tell the House that the Government is alive to the necessity for providing facilities for tourists and is taking certain steps in that regard. Some Deputies referred to Cobh. A scheme has been sanctioned which will involve an expenditure of £75,000 in providing better landing facilities at Cobh. A contract has already been entered into for the trial borings necessary before the general development takes place there. At the same time, a delegation has returned to this country after a tour in America, which was made possible under Economic Co-operation Administration facilities and through Economic Co-operation Administration finances, which delegation has studied American methods, American technique, American training and, generally, the outlook which Americans have on tourism and on the facilities and standards which they expect to find when they visit this country. I believe that the results which will flow from the visit of that delegation to America are likely to be more beneficial to tourism than any operation of State hotels or any possible gain which a transatlantic air service as tourist attractor might provide. In addition, I am glad to say that a proposal is in train for the dispatch of a number of hoteliers to America on a course provided for by Economic Co-operation Administration facilities so that we can get for our hoteliers practical experience in tourist facilities, general training and technique in the United States.
I think that these definite lines of policy are likely to be more beneficial than the mere spending of money by a State company competing with private enterprise in a sphere in which it should not be the responsibility or the duty of the State to enter. It has never been part of our policy that the State should enter into spheres in which private enterprise is already engaged and in which private enterprise is, as far as it is possible to see, meeting the requirements. It is true to say that at peak periods of the year there is a shortage of accommodation in certain parts of the country but the mere fact that there is a shortage at periods does not justify the expenditure of public money on the provision of accommodation for a limited number of people and for a very limited period. With the general improvements in the tourist trade, as well as the facilities which are now available for hoteliers who want to reconstruct or rebuild their hotels, any lack there is in existing facilities for the accommodation of tourists should be made good, and I believe will be made good, by private enterprise. I have taken the view and have given expression to it on a number of occasions that, as far as tourism is concerned, hoteliers should not regard the present boom as one that will continue indefinitely unless they themselves make available to tourists the facilities which tourists expect. Unless we are prepared to provide standards of cleanliness, cooking and other amenities, which particularly American tourists expect, we cannot hope indefinitely, particularly with the opening of continental resorts, to attract tourists from America.
In view of the successful years which the hoteliers have had since the end of the war, they have made profits which, I believe, many of them are prepared to plough back, and are in process of ploughing back into providing more up-to-date amenities and more attractive accommodation than was provided in the past. It is generally understood in the country that if we are to attract tourists we must provide them with facilities which they expect and which they will get elsewhere if they do not get them here.
I listened to-day to the criticism voiced against the Fine Gael Party, particularly by the Leader of the Opposition, and the objections which he had to the capital Budget as well as to the form in which it was presented, mainly, I suppose, because it was presented, as he described it, by a Fine Gael Minister. Normally he would have expected that if a Budget of this sort was presented by anybody else, the first persons to attack it would be the Fine Gael Party. He went on to assert that the Fine Gael Party was in the mud, that its name was in low water. All I have to say to that is that if we can continue to win, in association with the other Parties represented in the inter-Party Government, by-elections such as the recent one in Donegal, then it is a pleasant place to be in the mud.
I believe that the country is satisfied with the present Government; that it is satisfied with the development that has taken place and it will in time realise that the present form of the Estimates is one which should have been adopted before and which will be looked on as the proper system of accounting and the proper system under which capital development in the country should take place. I believe that it will be appreciated that the form in which the Estimates are presented is more appropriate, particularly when the gigantic nature of the capital investment at present being undertaken is recognised.
In the course of the Deputy's observations, he said that Fianna Fáil always favoured development. He instanced a number of projects which they favoured and which they continue to regard as desirable. In the course of his remarks he criticised Clann na Poblachta and other Parties, saying they thought it was possible to go more quickly, but that Fianna Fáil knew from experience that you could only do certain things. He omitted to inform the House that two of the most successful enterprises in the country, two of the projects which are good examples of State enterprise or of schemes promoted by the State, were started by the present Minister for Finance when he was Minister for Industry and Commerce.
It is no harm to recall just a phrase or two which Deputy MacEntee used before Fianna Fáil assumed responsibility for these two schemes. He spoke in Tallaght, and was reported in the Irish Independent of 14th December, 1931. He said that the Government had squandered £14,000,000 on the Army, £10,000,000 on the Shannon scheme, and £2,000,000 on sugar and beet. One of the criticisms which the Opposition has voiced against this Government is that the Defence Estimates are not big enough, but we will leave that aside for the moment. Two of the schemes which Deputy MacEntee criticised at that time are schemes which, I believe, everyone in the country realises have proved of immense benefit; in fact, from the point of view of the nation it is difficult to assess the value of the Shannon scheme or the sugar beet scheme. The only criticism which Deputy Lemass has offered about the Shannon scheme or about other Electricity Supply Board schemes is that they are not going fast enough.
I believe anyone who has examined the position, and who appreciates the situation both during and since the war, must realise that the sugar beet scheme is of immense benefit. It was essential to have it started, and it is to the credit of the Fianna Fáil Party that they extended it. These are two schemes which, in earlier years, the Fianna Fáil Party, when in opposition, criticised. I believe the only drawback with regard to the electricity supply scheme is that it has not been as rapid as all Parties would like. Everyone who has had experience of the benefits which flow from electrification from the point of view of industry, and possibly more so from the point of view of agriculture, will realise that a rapid extension of rural electrification is desirable.
When we come to consider the nature of this capital and supply Budget, I think it is worth while examining what projects are under consideration and what projects money is being spent upon. This year it is proposed to spend £3,100,000 on the land rehabilitation scheme. I listened a short time ago to Deputy Cogan speaking on the need for capitalising agriculture, developing land that is not up to optimum production. I believe that everyone agrees with the view that we should develop our land to the utmost by providing drainage, fertilisers, seeding and all the advantages which scientific knowledge now makes available to the agricultural community.
I am sure nobody will criticise the proposal to spend £3,100,000 on land rehabilitation. I understand it is part of the land rehabilitation scheme that what Deputy Cogan referred to as marginal land will be attended to. It is not entirely confined to drainage. If any farmer wants to avail of the scheme for dealing with that type of land there is nothing to prevent him availing of the facilities under the scheme. If a farmer does not avail of it he can apply to the Department and they will carry out the work for him.
There is a big sum devoted to housing under the Housing (Miscellaneous Provisions) Act. It represents an increase of almost £600,000 over last year. I think all Parties are satisfied that in this sphere of activity the only regret is that it has not been possible to proceed with the housing of our people more rapidly. It is only right to point out that the housing programme is much more rapid now than it was this time two years. There are now in course of construction by local authorities over 10,500 houses. Last year the local authorities completed 4,200 houses. At present there are over 11,000 persons employed on that work. At the moment, by virtue of local authority houses being built by persons availing of subsidies and State grants, or persons availing of reconstruction grants under the Housing Acts, there are in course of construction, aided directly or indirectly by the State, a total of 22,000 houses. They include new houses being built and houses being reconstructed. The rate of construction is satisfactory. It may be that with greater numbers of skilled men and increased supplies of essential materials it will be possible to improve this position, but at least it means three houses now for every one in course of construction this time two years ago.
Another capital item which the country generally is satisfied represents desirable expenditure is the money that is being provided for harbours. Deputies of all Parties appreciate that not only are some of the major harbours in need of repair and construction but that many of the smaller harbours which serve the smaller towns and provide facilities for people in remote rural areas are badly in need of repair and construction. There is the sum of £340,000 for harbour development work. Two hundred and fifty thousand pounds of that sum are for capital work. Incidentally, there is an increase in the sum devoted to harbours of over £100,000. I do not think anybody in the country will object to the provision which is being made in regard to these items of capital expenditure, or that anybody will find fault with these schemes of development. Similarly, under the Drainage Acts and the schemes operated by the Board of Works, there is over £300,000 available for drainage and the ancillary works connected with it.
Now, the chief criticism which Deputy Aiken made yesterday was that this Government had no plan for increasing production and said the object of the Fianna Fáil Party was to increase production, both agricultural and industrial and to provide increased employment. I do not want to weary the House with extensive quotations from statistics to show what has been accomplished over the last 12 months, some of it over the last two years. In 1949 our agricultural exports were over £11,000,000 above those for 1948. Our industrial exports were over £1,500,000 above 1948, the figures for which showed a rise of £2,000,000 over 1947. Deputies who are familiar with the returns for those employed in insurable occupations realise that there are now over 200,000 persons in insurable occupations. The figure for December, 1947, was 183,000. I am sure all Parties are glad to know that right from the start of protection, away back in 1926, that the first census of those employed in insurable occupations in 1926 showed that there were 102,000 persons employed. I believe that the figures for last year will show that there are approximately double that number in insurable employment at the moment.
I believe that the policy of protection carried on by three Governments, irrespective of whether the Governments agreed or disagreed with each other on the form or type of protection — that the national policy to protect secondary industries here is one which has been more than justified by results. It was decided on a long time ago. I think one of the first Ministers responsible for it was the present Minister for Finance. The decision taken at that time to provide protection was continued by the first Government. It was followed by Fianna Fáil with, perhaps, a different form of protection, and it has been continued by the present Government. Anybody who examines the figures will, I believe, accept the view that it is good national policy. No one questions the wisdom of the policy of providing protection for industry. It is, I think, significant that the substantial rise in the numbers of persons employed in the last two years has continued. When we hear, as we did hear, criticism that this Government had not a policy for industry, or that it had substituted talk for a policy, one can say that the results are the best test of any policy. These figures have not yet been finally checked. They are only tentative, but when they are checked I believe it will be found that they represent an intake in employment over the last two years, which has been higher than in any similar period since the State was established.
In that connection, I think it is no harm to say that we have heard from Fianna Fáil that they had plans, and that they had programmes. One of the plans which Deputy de Valera mentioned, and which has an attractive cover, was a health scheme. Again, I do not know whether any plan is a substitute for a policy or whether it is a good thing to have plans if they are not put into operation. The plans that have been implemented over the last two years have borne results. There is now available, in hospital accommodation, over 1,800 additional beds. At the same time, the social services have been increased to the tune of over £2,500,000 for old age pensions, widows' pensions and blind pensions. The pensions for old age pensioners, for widows and blind persons have been raised, and at the same time the penal taxes on beer, tobacco and cigarettes have been lifted to the tune of over £6,000,000. Additional salaries and wages have been granted to civil servants, the Gardaí and the Army and to a variety of other workers throughout the country and directly from the State there has been an increase, by means of a reduction in the penal taxes imposed by the Supplementary Budget, as well as increases in the form of increased pay and allowances to the more lowly paid workers of £4,500,000. That is approximately £11,000,000 in the last two years. I think that however the Opposition may criticise or may find fault with the alleged inconsistencies in policy, the fact is that these taxes have been taken off, that social services have been improved, that employment in the country has increased, that housing has increased, that there are more beds available in hospitals and that health schemes have been increased and extended. I think all these are objects which the country realise are essential. I think, too, that the country favours them in so far as it has had an opportunity of expressing an opinion.
I think it is no harm in that connection to consider what has been accomplished and to put what has been accomplished against criticism on the other hand. I know that the last Government had a number of plans. One of the plans which the Opposition did not tell us about to-day was the spend ing of, I think, £11,000,000 on new Parliament buildings. The Minister for Finance gave a vivid description here before of that particular scheme — that if they could not get sites in the city they were going to the Phoenix Park; that if the people were not satisfied with having no Phoenix Park they were going to extend the park to Lucan, and if that was not far enough they were going to Leixlip. I do not at all know whether these were some of the plans which the Opposition did not get the opportunity of implementing. I believe that if the £11,000,000 was spent on that sort of work instead of increasing the salaries of lowly-paid workers or of providing increased hospital accommodation, and if the public had the opportunity of assessing and deciding which of these policies would be the more beneficial for the community, there can be no doubt but that the policy implemented over the last two years is the one which would find support and favour from the vast majority of the people.
I think that the form in which the Estimate has been presented this year is one which will enable the people to realise much more clearly the extent to which capital expenditure and capital development is being undertaken in the country, the extent to which we are proceeding with work which will not merely provide benefits for the present generation but which will provide lasting benefits for the community as a whole, benefits which it is difficult to measure in terms of money. Many of these undertakings will ultimately increase the level of production and increase the national income.
I believe that the form of presentation is one which will bring home in a clear manner, in a manner which the former presentation failed to bring home unless a person was prepared to examine closely and carefully the Estimates, the extent of the expenditure on capital development. I believe that the present presentation not only finds favour with the Parties supporting the Government but that, in fact, the Opposition favour it as well. It is quite true that if this form of presentation was not carefully scrutinised, if the various items grouped under the capital expenditure were not carefully examined to see whether they were proper to be met under that heading and proper to finance from borrowing, it could lead to dangers and that there are objections inherent in it. But the same objections could have been made at any time during the last 28 years. The same objections could be made to the items included in the capital end of the Budget at any time, with this difference — that it will now be possible for those interested and for the people generally to get an accurate picture of the total expenditure on capital development segregated from the ordinary Supply Services.
The Parliamentary Secretary has given us a list of the services upon which the Government are going to spend more money this year. That is not denied. Nobody has, in fact, objected to the provision of additional money for any of these services. We do not even object to the proposal to spend in this year £1,166,000 on new Government buildings or £659,000 on repairs and decorations to Government buildings. We are raising as the first issue here a question of morality and, secondly, a question of policy. What the Government do now must somehow be related to what they undertook to do. That applies to every aspect of Government policy.
The Parliamentary Secretary opened his remarks by describing in detail projects for the development of the tourist trade. We welcome these projects. We shall have another opportunity of discussing whether they are adequate or not. But is it unfair to remind the Parliamentary Secretary and the members of his Party that their Taoiseach, Deputy Costello, as a candidate in the recent general election in the constituency of Dublin South East, declared as part of his policy that he intended to put a tax upon tourists? That was a nonsensical suggestion in our view. The Government were wise in abandoning the idea and, in fact, executing a complete reversal of viewpoint as indicated in the Parliamentary Secretary's speech this evening. But somewhere in South East Dublin there is a number of citizens who agreed with that suggestion, and who wanted to send into this Dáil a Deputy who would advocate it here, and these people have been deprived of the service which they thought they were going to get from the representative they elected.
I never knew that was part of Fine Gael policy.
The suggestion is therefore that it was the personal policy of the Taoiseach. It was not merely his policy, it was the policy also of many of the constituent groups of the Coalition. However, let us get down to a specific matter, the matter of Government expenditure. Nobody is denying that the Government are proposing to spend more. The fact is that they got elected because they undertook to spend less. Is not that so?
Less foolishly.
Less money. There was a specific assurance given by the present Minister for Finance that the cost of Government services in the year 1947, amounting then to £58,000,000, could be reduced by £10,000,000. When he became Minister for Finance in the Coalition Government he came here with his first Budget in 1948 and he informed the Dáil that the Estimates, which were the basis of that Budget, were not of his making and that he intended to go through them with a fine comb for the purpose of eliminating from them every item which could, in his view, be dropped. He told the Dáil then that if he did not succeed in reducing the cost of Government services by £6,000,000 he would not object if the Opposition described him as a failure. These were his words.
Quote.
The Deputy can find the precise words to which I have referred in the speech of the Minister for Finance replying to the Budget debate in 1948. That is on the record. Can we forget about the record? I shall undertake to quote no speech by any member of the Government made before the most recent general election if the Parliamentary Secretary will agree to ignore speeches made 20 years ago.
It is no harm to refresh our memory.
If memory refreshing is necessary I will undertake to do my share of it. We have a bill here for Government services amounting to £78,000,000. Can we start off this discussion by assuming that it is agreed that all the talk we used to hear about the cost of Government under Fianna Fáil, about Fianna Fáil squandermania. was so much eyewash?
Certainly you cannot.
That is going to make it rather difficult to reconcile the present attitude of the Government with declarations of that kind which they made previously. They argued strongly that under Fianna Fáil, when the cost of the Supply Services amounted to £58,000,000, the country was being taxed beyond its capacity to pay. They described the policy of their predecessors in regard to finance as prodigal and thriftless—in relation to a figure of £58,000,000. If Deputy Collins tells me that he is not prepared to agree that that was all eyewash, the figures speak for themselves. The audited cost of the Supply Services of this State in the year 1947-48, the last year in which the Fianna Fáil Government were in office, was just under £59,000,000. Then Deputy McGilligan became Minister for Finance and the policy of economy and retrenchment, as he described it, came into operation, and, under the Coalition type of economy and retrenchment, in the following year the cost of these services rose from £59,000,000, in Fianna Fáil's last year, to £65,000,000 in the Coalition's first year. But they were only getting into their stride then. In the following year, the year which is just now drawing to its ignominious close, the cost of these services was estimated to reach a figure of £75,000,000. That is not an end of their Rake's Progress, because they tell us in this booklet that in the coming year, the year commencing 1st April next, the cost of these same services will reach a minimum of £78,000,000. Is it agreed that all the talk we had about the cost of Government under Fianna Fáil, involving taxation beyond the country's capacity to bear, was so much eyewash?
Not at all. You are not even codding yourself.
Will Deputies at least agree that all the promises that were made of economy and retrenchment— the pre-election promise to reduce the cost of Government as established under Fianna Fáil by £10,000,000, the post-election promise to reduce the cost of Government as it appeared in the Estimates for 1948 by £6,000,000 — were all phoney? Will it be agreed, at least, that the promises have not been kept? If we could get agreement on these things, if we could have it established as common ground here that when the Parties opposite were fighting the election on the issue of reducing the cost of Government, they were hoodwinking the electors and that they did it successfully; if we could get it agreed here that the promises they made then cannot be kept, we might be able to discuss the particular matters that arise out of this Book of Estimates and the totals on the cover of it in a more realistic way. We can proceed then to discuss the expenditure that is needed in order to effect a desirable extension in the activities of the Government. We can under certain obvious handicaps discuss the question of the country's taxable capacity and discuss also, as I think we must at some stage, whether now or on the Budget, the question of the practicability and the consequences of borrowing for Government services which were previously financed out of tax revenue. That latter is, I think, the main issue that arises.
In order to make my point of view quite clear, I want to say that I personally have gone through this Book of Estimates for the purpose of noting any possible sub-heads in any Vote which I could urge represented an unnecessary expenditure or offered scope for economy. If I were Minister for Finance, facing the task of delimiting the scope of Government expenditure in this year, I would cut out some minor items like the unnecessary News Agency. I would avoid certain costs which are consequential upon the desire of Ministers to farm out their responsibilities to commissions. But, with the exception of one or two items of that kind, there is nothing in this Book which I would urge should be changed solely in the interests of economy. I think that economies may be possible, but I have not available to me the information which would enable me to pinpoint them.
We note the fact that the actual cost of administration has increased in every Department of the Government in the last two years. As we cannot see any evidence of increased activity in these Departments we may reasonably conclude that an efficient Minister for Finance would find some scope for economy. But on the most optimistic assumption as to the possibilities of economy in all the Departments of Government and cutting out the few items of expenditure which I would regard as unnecessary or undesirable, the maximum saving I could hope to effect upon the services indicated in this Book would not reach anything like £1,000,000. I want to put that point of view before the House because I do not want to be taken as arguing in favour of a reduction of Government expenditure merely to keep down the total cost and without regard to other consequences.
On the contrary, it is obvious that this Book of Estimates is in fact not an honest presentation of the probable cost of the Supply Services of the Government in this year. We know, unless the Government has changed its policy in many matters, that later in the year there must be produced to us a whole series of Supplementary Estimates which will represent a considerable inflation of the total bill. We know that last year, having been presented with a Book of Estimates which indicated on the cover that the Supply Services would amount to £65,000,000, we were subsequently given Supplementary Estimates amounting in total to over £9,000,000, which indicates presumably that last year's Budget, if the Minister for Finance's revenue estimates were accurate, must have closed with a very substantial deficit.
If the Government has not changed its policy in relation to transport, the policy of subsidising Córas Iompair Éireann, to make good losses incurred in the operation of its services, there will presumably be a Supplementary Estimate for that purpose.
I do not know what the significance of the sub-head of the Department of Industry and Commerce Estimate relating to rural electrification may be. If it has its obvious meaning, rural electrification has been brought to a standstill. I do not believe that. I do not believe that even the Deputies who sit behind the Government will agree to that. Yet, we see that there is provided for capital subsidy for this scheme a meagre £25,000 in this Book, whereas last year it was £325,000, and it should be £1,000,000 if the scheme was proceeding at the rate planned. We know, however, that that figure of £25,000 could have been £5,000, for what has taken place has been merely an arbitrary writing-down of the figure in order to reduce the total on the face of the Book and with the intention of producing a Supplementary Estimate later. We know that there is nothing in this Book which would indicate any intention on the part of the Government to proceed this year with an expansion of social welfare services. It is clear, therefore, that we have here before us a figure which represents the very minimum cost of Government services in this year, and the only observation I want to make in that regard is that I am more perturbed by the absence of certain provisions in the Book than by the magnitude of the sum.
In addition to the cost of Supply Services, the Exchequer will also have to meet the cost of Central Fund Services which will exceed £8,000,000 in the coming year and it will also have to find some further sum, probably in excess of £12,000,000, to meet the capital needs of the Electricity Supply Board, of the Turf Development Board, of the Department of Posts and Telegraphs for telephone development and of other capital services which have always been defrayed out of borrowed moneys. It is clear, therefore, that the total amount which the Exchequer will have to find in this year will be approximately £100,000,000. The issue I am putting before the Dáil now is not whether it is good politics and likely to win by-elections to make increased provision for various Government services but what the economic and social consequences to this country will be if the Exchequer draws unto itself from its citizens, whether through taxation or borrowing, in this year approximately one-third of the total national income. We have been informed that the total national income is now estimated at about £320,000,000. All the work done by all our people in farms and in factories—the total value of all the products resulting from their labours is £320,000,000. Out of that £320,000,000 the Exchequer is proposing to take £100,000,000, which is one-third of the total, for the financing of Government services in this year.
Let me digress for a moment to refer to that estimate of the national income and to protest most emphatically against the extraordinary delays in the publication of official statistics since the Statistics Office was transferred to the Department of the Taoiseach. The most recent figures we have here relating to national income and expenditure are for the year 1944. They are now six years old. Perhaps it will help the Dáil to understand my protest if I read one paragraph from the introductory chapter of that publication:—
"For the proper consideration of public policy during the post-war period, more detailed and coordinated knowledge of the monetary value and the real value of the national output of goods and services has become essential. These statistics are indispensable for the study of such questions as taxable capacity, social insurance, savings and investment policies."
We, however, are being forced by the Government to take major decisions bearing upon taxable capacity and investment policy without a shred of the information which we would need to assure ourselves that our decisions are sound. I think it is preposterous that the statistics relating to the population of this country, secured by a census taken in 1946, are not yet published. I should like to get some excuse or explanation, if one is possible, for the delay. It is, I think, futile for us to be discussing these vital matters of public policy here without having available to us the essential details to enable us to do the job properly.
We are only guessing at facts and, unfortunately, experience has taught us that we cannot rely with any confidence on many of the statements relating to economic and social conditions which are occasionally made by Ministers. If the Government have come here with proposals to change the method of financing the cost of Government services — to meet, in future, by borrowing the cost of various services which in the past was defrayed out of tax revenue — have they done so in consequence of any examination of the people's taxable capacity, of the annual accrual of savings available for investment, of any of the essential facts which they should have examined before recommending a major change like that? Have they any views to express upon these matters or are they, like ourselves, groping around in the dark, trying to make deductions on the basis of obsolete statistics or, as was stated here, going ahead any old how regardless of possible economic or social consequence of their actions? This we are told is a change of policy. It is devised to disguise the enormous increase that has taken place in the cost of Government services, under a Government that promised to reduce that cost and that it represents an innovation. The only innovation is that Deputies have been put to the trouble of adding up two figures in order to get the total whereas previously the addition was done for them by officials in the Department of Finance.
Is that the only difference?
It is the only difference so far as the Book of Estimates is concerned but, of course, it is a fundamental change if, as was indicated, that method of presentation represents an intention on the part of the Minister for Finance to base his Budget upon the idea of defraying the cost of a substantial proportion of these services out of borrowing instead of out of taxation. Let us be quite clear that that is what is happening. In so far as this discussion has revealed any clear intention on the part of the Government, it is that they are now going to propose to the Dáil that the cost of various Government services, previously defrayed out of taxation, will in future be met by borrowing, not merely this year, but in every year.
Capital services.
All the talk we have heard here in this debate about capital investment, about Ireland's need for increased capital investment, all the talk that has been going for some weeks past, in and outside the Dáil, about the repatriation of external assets is all fraudulent. It is all part of the camouflage which is being built up to disguise the fact that the Government is going to meet the cost of services by borrowing instead of by taxation. We all know what that means. They are playing for popularity. The speech we have just heard from the Parliamentary Secretary indicated clearly the manner in which this financial problem facing us is going to be presented to the public. The public are going to be told about the benefits they will get from the increased provision made for various services. They will be relieved to know that they are not to be asked to pay for them — that the obligation of pay for the benefits we enjoy in 1950 is being passed on to posterity. Why is it being passed on to posterity? For one reason and one reason only — posterity will have no votes in the next election. The Minister for Finance asked Deputies to scrutinise carefully the items set out on page 3 of this book, in respect of which the Government proposes to borrow, and to satisfy ourselves that these items are really capital ones properly met by borrowing.
The Minister for Finance did not give us a definition of "capital items properly met by borrowing". I wonder could we get agreement as to what constitutes a capital item for which it is legitimate for the Exchequer to borrow? I think we will all agree that it is proper for the Exchequer to borrow money when its expenditure is reasonably certain to create an Exchequer asset, that is to say, when in consequence of the expenditure there will come back into the Exchequer over future years an amount of money which will enable the Exchequer to meet the capital charges involved in that borrowing, the interest and the sinking fund charges which otherwise would have to be defrayed out of taxation. I think it is legitimate for the Exchequer to borrow to meet abnormal and non-recurrent expenditure where it would be deemed undesirable or impracticable to require the taxpayer to meet the whole of the cost in a single year. I do not think that it is legitimate for the Government to borrow for any other purpose.
What about increased production?
I am prepared to agree that in times of depression or to check a serious deflationary trend, the Government can deliberately leave the Budget unbalanced, fail to meet the whole cost of Government out of revenue and borrow to meet a deficiency in order to ease the burden of taxation and to stimulate trade. I take it that it is not being seriously contended by any Government spokesman that the device of borrowing for the Supply Services in this year is being adopted for that purpose, because they spend most of their time telling us how well off the country is under their beneficent rule. May I say to the Parliamentary Secretary that I concede at once that the output of bacon and of eggs is higher now than we found it possible to maintain during the war.
Or even before it.
Can the Parliamentary Secretary imagine himself coming in here and speaking on behalf of a Government in office five years after the war is over and saying that they were not better off than they had been during the war?
You were two years after the war and you could not produce bacon.
O.K. We admit the difficulties have passed and, of course, production has increased.
Two years after the war we were still on two ounces of butter.
The Parliamentary Secretary can take to himself all the credit he likes but he had as much to do with it as Chiang Kai Shek on the Island of Formosa.
You need not tell us that you had anything to do with it.
However, I have given a definition of the purposes for which the Government can borrow. It can borrow where expenditure will create an Exchequer asset which will enable the Exchequer to meet future charges arising out of that borrowing. It can borrow for non-recurrent abnormal expenditure. How many of these sub-heads, for which the present Minister for Finance proposes to borrow, conform to that definition? Borrowing for other purposes, borrowing in normal times to meet the recurring cost of Government services is not merely bad finance, not merely a thriftless policy but is evidence of moral cowardice on the part of the Government concerned. I think the real explanation of the proposal which we have before us is to be found in that term. However, the Government is going to borrow £12,000,000 for these purposes.
Let us take the case of building grants. The Minister for Finance said, in justification of his proposal to borrow for building grants, that, of course, we are all in favour of getting on with the housing programme — which has nothing to do with the point. Of course, we are all in favour of getting on with the housing programme but that has nothing to do with the specific issue of whether the cost of building grants should be met out of taxation or be met out of borrowing. We had the Minister for External Affairs giving us the false analogy of the individual who bought his house and arranged to pay for the house over a number of years. That is not the position of the State. The State is not like an individual who is buying one house intending to defray the cost of it over ten or 15 years. The State is in the position of a building contractor who is building houses every year and selling them at a loss and who is now going to borrow to meet the loss. There was never any question of borrowing against the sale value of the house. Whether the money was raised out of the Local Loans Fund or raised by the local authorities directly, the actual capital value of the house as represented by the rent charged for it, was defrayed out of borrowed moneys but in so far as the house was sold at a loss, the loss was made good by a grant from the Exchequer. This was a grant which in the past was defrayed out of taxation and should in future be defrayed out of taxation. There is no Exchequer asset; this is not a non-recurrent type of expenditure unless we are to assume that the building programme will stop after this year. Year after year the Government will have to continue to meet the cost of these grants. It will, presumably, have to increase its borrowing every year because these grants must increase as the building programme advances. There is no Exchequer asset being created.
The house is an asset.
There is no cash return coming into the Exchequer.
It is something of an asset.
Of course it is something of an asset.
They are getting the benefit.
The Deputy is missing the point. I want the amount provided for housing grants to be increased. The more that figure expands the better I shall be pleased.
The house will be there for years.
Of course it will, and the cost of the loan will be there. Under this policy of borrowing you are not avoiding the loss; you are merely passing it on from year to year. Do you not understand that it is merely a political stunt to decrease the apparent cost of Government in this year, to avoid increasing taxation until such time as some other Government will have to come in to clean up the mess you have left behind you?
Do not get excited.
Keep cool.
The same applies to all these grants. The harbour grants were met out of tax revenue before. Every time the Government make a free gift of money their duty is to meet the cost of that gift out of tax revenue. Why is it not being done now? It is not because there is any idea that it is better policy to borrow; it is because the Minister has not the moral courage to tax for it.
Nonsense.
The Parliamentary Secretary is a good judge of nonsense — I will give him first-class honours. To meet this policy, this policy begot of moral cowardice, of borrowing for services for which previous Governments imposed taxation, the Minister has to raise £12,000,000 and, in addition to that, a further sum of not less than £12,000,000 to meet the normal demands on the Exchequer for capital, for Electricity Supply Board and other development purposes. That means £24,000,000. Where is he going to get it? Has there been any examination by the Minister which suggested to him that it is possible for him to go to the Irish public this year and raise £24,000,000 on Exchequer bonds, and has he assured himself there will be no economic or social consequences arising from it?
He did not say he would raise it this year.
He said he was going to get it from the counterpart fund. How much will accure to the counterpart fund this year? Is there any reason why that information should be kept secret? Deputies know what the counterpart fund is. It represents the counterpart of the money we are borrowing from America, borrowing in dollars, and which we will have to repay in dollars, beginning repayment in 1956. If that money is going to be drawn on now to meet housing grants or land rehabilitation grants or other similar purposes there will be nothing going back to the fund to meet the obligation for repayment when it arises. When the repayment obligation develops taxation will have to provide the money, and it cannot be dodged then. You can dodge it this year or next year, but the Government in office after that will not be able to dodge it as successfully.
Some of it will be raised from other funds under Government control. The Government control various funds entrusted to it through the Post Office Savings Bank and under the Unemployment Insurance Acts and the National Health Insurance Acts. There are certain funds held at the present time in the main in British Government securities. I am sure the Minister for Finance has a keen appreciation of the consequences of transferring the assets of these funds from the securities in which they are now invested into Irish Government stocks. I am not going to elaborate on that point. It is for the Minister for Finance to decide whether that course is wise.
There are some Deputies who have an idea of the loss which might accrue to the State if circumstances developed in which the capital assets of any of these funds had to be quickly realised in order to meet claims. There are some Deputies who will appreciate the difficulty which anybody would have in selling quickly upon the Dublin Stock Exchange any substantial block of Government stock without depreciating its market value. There are Deputies who will understand the consequences of a serious depression of market values of Government stocks upon the State's credit, upon the assets of the funds themselves and upon trade and industry in the country which is, to a large extent, financed by bank overdrafts granted on the security of that kind of stock the value of which determines the amount of the accommodation given.
I feel sure that not even the present Minister for Finance would be reckless enough so to alter the investment of these funds as to make it impossible for them to meet sudden or large demands upon them without incurring serious loss through the causes to which I have referred. The balance, we are told, is to be raised from the public when the market settles down. What does that mean? What has unsettled the market?
This kind of speech of yours.
I wonder? There have been speeches other than mine in recent weeks which may have unsettled the market. Is that what the Minister referred to? I am only asking a question — what has unsettled the market? It is quite easy for the Minister for Finance and other members of the Government and Deputies behind them to decide to solve their political problems by borrowing to meet the cost of Government services instead of increasing taxation. It was the easiest decision to make, but it is not going to be quite so easy to accomplish it, and I think we are entitled to get some information from the Minister which would indicate that the difficulties of accomplishing it without adverse economic consequences have been considered by him.
We know that in 1949 an issue of £12,000,000 3 per cent. Exchequer Bonds attracted public subscriptions only to the extent of £7.7 million. We know that in 1948, according to the report of the Central Bank, new capital known to the bank to have been raised from the public in that year for all purposes — for Government purposes, by local authorities, by other public authorities and by all private business firms — amounted to a total cash value of about £16.4 million. The Government are going to the market this year to raise some proportion of the £24,000,000 which they will require if the Minister adheres to his decision to borrow the cost of these Supply Services.
If the State is going to borrow from the public anything approaching the amount which would appear to be needed to supplement what can be drawn from the counterpart fund or transferred from other funds under Government control — and we know that it can get enough provided it is prepared to make the terms of the issue attractive enough — then it is going to absorb the whole of the money available for investment and it is going to create a situation in which it will be impossible for any local authority, any other public authority or any private firm embarking on a new enterprise or an extension of its existing enterprise to raise new capital, or else it is going to create a situation in which these other authorities and private firms will be forced to offer such terms for the new capital they desire that will attract it against the Government effort to bring it into the Government funds.
More power to the financiers.
The Deputy can ignore these difficulties if he likes, but I do not think the Dáil should.
That is the profit motive again.
And well they can realise their power.
I wish Deputy Davin, if he has not spoken, would elaborate that remark. It is, of course, possible for a Government to confiscate anybody's property.
You coined the phrase yourself.
Who told you?
I am telling you that, according to the statistical information available to me, according to the report of the Central Bank, according to the Estimates of national income and expenditure published by the Department of Statistics, according to the Irish Statistical Survey, published last year by the Central Statistics Office, the amount of new money that will become available for investment in 1950 will be substantially below the amount which the Government proposes to borrow.
When I assert that the State can get it at the same terms, I am brought up against this issue of external assets about which we have been hearing a good deal lately. Let me express right away my view that a great deal of what we have been hearing from the Minister for External Affairs and other Ministers about our external assets is just ballyhoo. I think it was intended as a prelude to the announcement that the Government were going to shirk their responsibilities and borrow instead of tax to meet the cost of Government services. It may be that the Minister for External Affairs has merely failed to check his theories against any facts. Let us get the facts right. All this talk of external assets, and their repatriation, has been initiated in order to suggest that this Government is doing something that was not done before. I think the Minister for External Affairs has the political idea of grouping, in the public mind, Fianna Fáil with Fine Gael, two Governments with a dark past which neglected the national interest, or were unaware of where the national interest lay, until the bright light of Mr. MacBride's genius was thrown upon these matters.
If any Deputy is under the illusion that there has been any repatriation of our external assets let us get him disillusioned straightway. We know that the value of sterling assets in Government funds has increased. The figure of £4,000,000 has been mentioned. The only precise figure I have is from the Central Bank report, which indicates that so far as the Post Office Savings Bank is concerned they have increased by £2,500,000. I want to read this from the Irish Statistical Survey published by the Stationary Office in 1949:—
"In this connection it may be observed that between the third quarter of 1948 and the second quarter of 1949 the external assets of the commercial banks increased by 5.2 million as compared with a decrease of 16.1 million in the corresponding nine-months' period of 1947-48."
In case any Deputy thinks that that process has stopped, I will quote from the quarterly statistical bulletin of the Central Bank of Ireland for January, 1950, where the value of the external assets of the banks is shown at the end of last year at £266,000,000 as against £260,000,000 on the same date in 1948 and £261,000,000 on the same date in 1947.
There was, of course, some repatriation of external assets, but it was effected almost entirely upon the initiative of private citizens who were realising their sterling holdings in order to pay the cost of goods imported in excess of exports, to meet through their efforts, the deficit in our balance of trade in each of the past two years. It is a fact worth noting that of the total accretion of sterling assets during the whole of the war years amounting to £162,000,000, already one-third has been expended in meeting trade deficits in 1948 and 1949. Let it be quite clear that these external assets were used for purposes which created no corresponding asset here. We were just unable to pay our way during these two years and had to draw upon capital resources to enable us to do it
However, the facts which I want to get over are slightly different. The first fact which I do not think will be denied is that the yield of these external assets, amounting roughly to the gross figures of about £18,000,000 per year, is part of the national income, part of the resources available to us to pay our way abroad, and that if these assets are utilised in any way which does not create a corresponding asset here, and which does not enable us to reduce our imports or to increase our exports in a corresponding degree, then the only consequence of their repatriation will be a reduction in our capacity to pay our way, and by that I mean a lowering of the standard of living of our people and a lessening of our capacity to maintain them in employment.
Now, the Taoiseach pointed out, in reply to a parliamentary question recently, that the only way in which these sterling assets can be repatriated is in the form of goods or services. That may not be wholly true, but it is true enough for the purposes of this discussion. When Deputies talk, therefore, about the repatriation of external assets, I want them to visualise it in the shape of ships at the North Wall unloading goods for this country. That is the only way in which we can bring them back. When Deputies talk about bringing them back, that is what they mean.
Even consumer goods?
Any class of goods. I do not know if we can get agreement upon certain things. We do not want to use them in order to buy goods when we can make them ourselves. We do not want to use them to go on a spending spree to buy any other class of goods in excess of our immediate needs. Are we to proceed on the assumption that there is something undesirable about having assets abroad and that we should get rid of them as quickly as possible, even if we are to do it wastefully? If we are to utilise them for the national benefit we must do so only for the purchase of plant and equipment which will increase our productivity.
Now, I want to assert that all the proposals of the Minister for Finance in relation to borrowing to meet the cost of the Supplies Services, and of utilising for this purpose funds under Government control now invested in British Government stocks, will not repatriate one penny of our external assets and is far more likely to add to them.
Let us consider what happens when the Government sell some British Government stock in which some of its funds are now invested and transfer the proceeds of the sale into a loan to the Government. Money becomes available to the Government because these sterling assets are sold and that money is paid out through the Government Supply Services, to officials and workers throughout the country and, inevitably, it comes back into the banking system and must reappear in the form of an increase in the sterling assets of the banking system. It cannot appear in any other way. The only way to repatriate them is in the form of goods. If the effect of Government borrowing upon the scale now contemplated is to dry up ordinary commercial enterprise, to make it impossible for business firms or other borrowers to raise money in the Irish market, money that might be utilised in the purchase of capital equipment abroad, then the net result of the whole transaction may well be an increase in our sterling assets and not a decrease. That increase took place last year. It will take place on an expanding scale this year if this nonsensical policy of the Government is pursued.
I submit these observations as indicating some of the possible economic consequences of the policy the Government are proposing to follow. Have the Government considered these matters? Do Deputies not think it reasonable to expect that a Minister for Finance coming with this extraordinary innovation in Government finance to the House would have elaborated the views of the Government concerning it and its consequences? Did we get from the Minister the slightest suggestion that the Government had considered all the ramifications of the course they are now proposing to adopt?
The importation of production goods in 1949 represented about £14,500,000 of the total imports in that year and probably the whole of that volume of production goods could have been financed out of savings arising in the normal course in that period. Again, that reinforces my argument that borrowing for Government purposes, even though the borrowing does appear to involve the sale of sterling assts from Government funds, cannot in itself alter the total of our external assets in the least and can indirectly, as I said, have the consequence of expanding it.
There is one further point which I want to make in this regard. The Minister for External Affairs and some other Ministers have been making speeches which appear to suggest that the Government contemplates doing something in relation either to the currency laws or to the reorganisation of the banking system. Do they intena to do anything about it? Even the Minister for Finance must surely realise the adverse consequences to the nation and the problems created by himself, in a year in which he has to undertake substantial borrowing, of leaving statements of that kind in the air without following them up by a precise indication of what the Government are going to do, if anything. We may regard, and I personally do regard, the observations of the Minister for External Affairs as indicative of a very shallow view of our financial problems.
You cannot do everything at once.
I agree. What I want to know is, what is going to be done? I think that it is undesirable from every point of view, from the public point of view or the Government point of view, to have statements of that kind made by a Minister unless they are a prelude to action by the Government. It is inevitable that anxieties will be caused, that people will be speculating on the possible course the Government may follow, that people may hesitate to invest in Government funds except on attractive terms when there is uncertainty as to the possible action the Government may take in relation to the currency or to the banking system.
If the Minister does in fact intend to go to the public for a loan this year, then before he does it he must say precisely what the Government intend to do or, if the Government intend to do nothing, he must say that also. It is playing with the serious problems confronting the people to have speeches made, perhaps for political purposes, perhaps as an indication of some intended action, and to leave them unsupported by an authoritative statement from the member of the Government on whom the responsibility for enunciating Government policy in that field primarily rests—the Minister for Finance.
I am sure you agree it is time to start.
I also agree that this is about the worst possible time to start.
When was there a good time?
The Deputy has me there. I know that some Deputies have criticised the previous Government for not having effected certain changes before the war. They have chosen to ignore the circumstances that existed before the war. Deputy Hickey, I think, will recollect the internal conditions that prevailed during the days of the so-called economic war and the difficulties the Government would have had then in effecting changes of that character. He will also, perhaps, remember because this discussion has followed upon the devaluation of the £, which in turn enhanced the stability of the dollar, that in the middle of our pre-war term of office, in 1936, it was the dollar which was devalued, devalued 50 per cent. in one stroke, and that at that time the only stable currency in the world appeared to be sterling.
There is one other thing I should like to say and it is no harm that it should be on record, that just before the outbreak of the war I was given by the Government responsibility for making preparations against possible shortages. One of the matters that naturally rose for consideration was the means by which we could finance imports from the dollar area while the war was in progress, and it naturally occurred to us to transfer a substantial part of the funds of the Central Bank into dollars or into gold, a course which would have had serious consequences at that time upon the international value of sterling, and it would have been, in any event, a rather difficult operation to conclude. However, the British authorities, being anxious to prevent any developments that might appear to suggest a run on sterling, discussed our needs with us and they entered into an arrangement with us, in consideration of our not taking the course we were contemplating, agreeing to maintain here the same type of exchange control that they considered necessary during the war. They undertook to provide during the whole of the period of the war all the dollars we required to meet essential imports from the dollar area.
By their consent.
And they fulfilled that undertaking faithfully.
Of course, they did.
In consequence of that undertaking we had made available to us dollar exchange far in excess of anything we could have accumulated for ourselves in the pre-war years and the arrangement lasted until the convertibility of sterling was restored for a brief period in 1947.
In other words, the Bank of England was our boss during that time.
It was also our friend. I am quite prepared to discuss these matters fully with the Deputy, but I think this is hardly the appropriate occasion for such a discussion. It is obvious to everybody that our position is onerous at the present time. We would much prefer to have a means of escape from the present situation. It is unrealistic, however, to suggest that there is an easy means of escape.
There is not. It will be some considerable time before we can effect any fundamental reorganisation; but let me say that the last stage in the transformation that the Deputy desires will be the amendment of our currency Acts. Long before that stage is reached we shall have to deal with the situation that five of our commercial banks have their head offices outside the country, that there is no active capital market, and no money market worth talking about. These are the deficiencies which truly represent the weakness of our position and the remedying of these deficiencies will be a far more difficult operation than will any verbal changes in our currency laws.
You dodged it for 16 years.
No. At no time during the period we were in office did we consider it to be in the national interest to effect a change. But circumstances have changed since then.
They have changed.
Exactly. There is now upon the Opposition Benches a Party which will not criticise any proposition the Government has to make from any other viewpoint except that of pushing them further upon the road of national development. Deputy Davin was in this House during the economic war when some of the Deputies now sitting on the Government Benches were wearing blue shirts, and he must know that it was quite likely then they would not refuse to avail of any situation arising from a proposal on our part to change the currency laws to enable them to bring down the Government at that time. Of course, in a subsequent period, when war did come it could not just be done, any more than it can be done now, and it is a futile pretence to suggest that it is possible to do anything.
There were not half enough wars for Fianna Fáil. You got out of them well.
You ran away from the war.
Deputy Lemass must be allowed to speak without interruption.
I shall sum up to this extent. We do not object to the expansion in the cost of Government services. We always believed it both necessary and desirable. It was the men who thought it unnecessary and undesirable who are now sitting on the Government Benches. We think, however, that the expansion in the Government services must be related to the country's taxable capacity. We want information, which we have not got, concerning the country's taxable capacity. We object to this proposal, because we regard it as a demonstration of moral cowardice, to meet out of borrowed money the cost of services that should be a legitimate charge upon tax revenue. We think that will create in the immediate future economic and social problems of major import. We think it will prove disasterous in the long run. If the Minister for Finance persists in this course, I am quite certain he will go down in history as the greatest disaster that ever befell this country. There must be some Deputies on the Government Benches who realise that as well as I do and who can pull him back a bit now so that he will face up to his responsibilities. Be assured that—and I speak now as a politician with some experience—if he does stand up to his responsibilities and carries them courageously he will get more votes than he will if he runs away from them as he proposes to do here.
This Vote on Account is a matter which should compel the interest of all Deputies. By means of this the Minister will be provided with the money to carry on the essential services in the coming financial year. It is to be regretted and deplored that a discussion of such importance to the country should take the line it has taken during the last two days. Most of us on the Government Benches are always ready and willing to co-operate in so far as that co-operation is consistent with the views we hold and in so far as a particular Government is doing something it believes to be in the national interest. I regretted the tone of the speeches delivered by the Leader of the Opposition and by Deputy Lemass to-day. The burden of Deputy de Valera's speech was that, in so far as it lay within his power, he would see to it that the Government got as little support and co-operation as possible from the people. Instead of discussing the Book of Estimates he devoted most of his time to dealing with the policy of his Government during the period in which they were in office.
It looks to me as if the Opposition does not yet realise that there has been a change of Government. Whether that is good or bad for the country is a moot point. Judging by the success that has attended the efforts of the Government in the last two years one must conclude that the present holders of ministerial posts have some little brains and some little practical commonsense. No matter how one may agree or disagree with the Minister for Finance, one has to recognised his ability as an economist and as an expert on finance. I am sure he has nothing to learn from the Opposition, even from Deputy de Valera or Deputy Lemass. One is at a loss, therefore, to understand the tone of the speeches here to-day.
This Book of Estimates merely asks for a certain amount of money, about one-third of the total revenue that will be required if and when the Budget is introduced. It is divided into two parts, one part dealing with supply services and the other with expenditure of a capital nature. There is no reason why we should spend any considerable time talking about the Supply Services because a large portion of the money applied to them will go in old age pensions, widows' pensions, children's allowances and so on. These items recur every year. Due to certain circumstances over which the Minister has no control, there is an increase this year in the cost of the Supply Services. In so far as the introduction of this Vote on Account is concerned, the Opposition choose to regard it as an "innovation", because it segregates for the first time the cost of the Supply Services from expenditure of a capital nature.
I have been a member of this House for many years. I always understood —and I have heard this view expressed on both sides of the House—that it was good policy to invest all the money we could within the country for the purpose of developing new industries or expanding those already in existence, and for the purpose of extending and increasing our productivity, especially in regard to agriculture. Nobody can deny that during the last two years the income derived from both agriculture and industrial production has increased very considerably compared with the year 1947-48. The members of the Opposition must admit that after two years of government by those who comprise the inter-Party Government, the results speak for themselves and that the revenue derived from our exports has never been greater. I think that that in itself is a fitting answer to the doleful prophecies that were made especially, I regret to say, by the Leader of the Opposition when he stated very early on that if he and his Party were not returned to power the country was doomed. Thank God, it is not doomed yet. It is very much alive.
Instead of endeavouring to thwart in every way the bona fide efforts of the Government, the Opposition should co-operate, not so much in the interests of the inter-Party Government as simply and solely in the interests of the people of this country as a whole, a very large section of which they themselves represent and whose interests they are bound to protect even though they are in opposition. They owe a duty to that section of the people they represent to give of their best in this House and, instead of indulging in the destructive criticism to which we have been listening for the past day or two, they should turn over a new leaf and give the Government a chance.
Everybody realises that things cannot be done overnight. Everybody realises that in so far as the expenditure of money is concerned care must be taken that it will yield satisfactory results. I think that the immediate needs of this country are: (1) increased production, and (2) production at a lesser cost than what it is at the moment. If this country is to get back to anything like a balance of trade, if it is ever going to set things right, the first essential is to increase our exports and to reduce our imports. I think it will be generally agreed that anybody who has given any thought to the situation as it has been developing during the last year must realise that our exports have been increasing and that there has been a reduction in our imports, thus putting this country in a better financial position than it was in prior to the advent of this Government.
In saying that I am not reflecting in any way on the state of affairs that existed prior to the advent of this Government. Several of our Ministers have already paid tribute to the work of the recent Government and the only thanks they got to-day from the Leader of the Opposition was destructive criticism. The Minister for Industry and Commerce referred to the progress that had been made in industrial production in this country from 1926 until 1948 or 1949 — a period of almost 24 years, during 16 of which the Fianna Fáil Government was in power. If that is not paying a tribute to the Fianna Fáil Government—when the Minister referred to the progress that had been made during those 24 years — I do not know what is. Therefore, I say that if the Opposition would seriously consider their position and do what is possible by way of co-operation with the honest efforts that are being made by the present Government to increase the prosperity of this country they will be representing more fully and more realistically the views of their opponents than they have been doing during the past year or two. I think that, taking everything into consideration, the Government has done very well during the past two years. If they are going to invest large sums here by way of development they are only going to do that after giving everything in connection with those investments very careful consideration.
I was amused with the tone of Deputy Lemass's remarks when he was dealing with our sterling assets. One would imagine that this Government was going to transfer the £400,000,000 of our sterling assets overnight. It was never the intention of the Government to do that. What they said was that they thought it would be a patriotic thing if we could invest some of our sterling assets here in the manner in which they intend to invest them. Everybody knows, as well as Deputy Lemass, that our increased exports have increased our sterling assets during the last year or two. During Deputy Lemass's régime they decreased for many years. It shows in a way that the capacity of this country to earn sterling assets has never been as good as it is at the present time. We on this side of the House have no doubt at all that the Minister for Finance has given very serious consideration to the proposals which he has in regard to this Book of Estimates and which, during the coming year, he intends to put into operation. Very few Deputies in this House like to spend money just for the sake of spending it. However, we believe—and the Opposition believed it many years ago — that it does not matter how much money is raised by way of taxation so long as that money is well and wisely spent. We believe it will be well and wisely spent if and when these projects which the present Government have in view are put into operation.
I want to issue this warning to the members of the Opposition and they may take it for what it is worth. The success of the efforts of the Government on behalf of the people of this country will depend to a very large extent on the co-operation you are prepared to give here along with the co-operation which you are bound to ask for in the interests of the people all over the country whom you represent. A nation divided against itself cannot succeed. It is all right to come in here and criticise but remember you have a duty to the country. This is the Government which is in power. It can only be put out of power by the votes of the people. You can have your remedy if and when a general election comes. Until that event, it is the duty I respectfully submit of the Opposition, if they cannot give active co-operation, at least to give co-operation of a tentative nature. Let us have less of this destructive criticism to which we have been listening for the last year or two.
The Vote on Account every year produces a very interesting debate. Looking back over the last few years and comparing the speeches of various Deputies on this Vote on Account with the speeches which they made in similar debates in former years, one can notice a remarkable change in the views expressed, particularly from the far side of the House. In fact the speeches of Opposition Deputies are very amusing for, where formerly they were very wild, they are now restrained and conservative. Personally I am satisfied that there is altogether too much make-believe in public life in this country and there is altogether too much tommy-rot spoken here and all over the country. The ordinary general public have the wool pulled over their eyes by a lot of tongue-twisting politicians who carry on this high-falutin nonsense. The ordinary people want nothing better than an opportunity to earn their bread in peace and honour and to see national progress maintained.
Since the change of Government there is a revolutionary outlook in this country. The old order of things has been left behind for ever and Fianna Fáil must face up to that. For over 25 years, we have had control of our own affairs and during that time we had two Governments, both of whom have now lost power. During that time we saw national energies being wasted in futile quarrels, emigration increasing, the work of national construction left in abeyance and the country generally marking time. We had the political Parties carrying on that tomfoolery and tommy-rot while the main national issues were neglected. Thanks to the formation of the Coalition Government there is now a new approach to things. We have Labour, Conservatives, Radicals and Republicans all joined together in an united effort to bring peace and order to the country. It has brought into existence the things we have been waiting for for 25 years and I would ask Fianna Fáil to try to grow up and to become politically mature. For the past 20 years they acted as if they had a monopoly of patriotism in this country. They were intolerant, cantankerous and contemptuous of all others. Do they realise what they cost this country in lives, in money and in many other things? They speak about Fine Gael and Cumann na nGaedheal. Do they realise that Cumann na nGaedheal had to lay the foundations of this State? Do they realise that that Party had to fight with one hand and build up with the other. Do they realise that certain members of that Party were shot down doing their duty and that immediately new members stepped into their place to carry on the good work? They forget all this now but we who went through all that do not forget.
I am glad to say that at the present moment the country is peaceful, happy and progressive. At the present moment there are gigantic schemes in operation which should have been initiated 15 or 20 years ago. We have schemes of land reclamation, drainage, afforestation and housing. We have a hospitalisation programme and a national drive to stop emigration and one of the main efforts of the present inter-Party Government is to bring about national reunion. I would ask Fianna Fáil to fall into line in all this great work, to stop the bickering and to realise that the country is sick and tired of it. The country as I say at present is in a happy mood. The people see our problems being tackled in a national way and in a big way. Agricultural production is going up and prices are steady. Why should the country be unhappy? Why should Fianna Fáil be so down in the mouth? I know — because things are good for the country. When things are good for the country they are bad for Fianna Fáil.
Social services have improved enormously. Old age pensions have been increased and the sick and infirm are looked after adequately. Wages have increased and housing and hospitalisation are being pushed forward. What more can a Government do? If this Government remains in office for a further three years, then we shall reach the position in which this country should have been 15 or 20 years ago. I say to the Fianna Fáil Party: "You have not learned one thing after all your years in office and you will be where you are for the next 15 or 20 years if you do not mend your hand."
I listened to the Leader of the Opposition this evening in a speech which was mostly a whine. He is now a great conservative but I saw the time when he was not a conservative. Deputy Lemass was just the same. We had a tirade of abuse, until he almost frothed at the mouth, directed against the Minister for External Affairs. I saw the time when the Minister for External Affairs was regarded as a loyal colleague by members of Fianna Fáil. They were glad enough then to clap him on the back but he has since seen the light of day. He saw that our national forces were being wasted away and he was man enough to change the order and to unite with other Parties in an effort finally to right the wrongs of this country. Now he is all wrong with the Fianna Fáil Party because he came over here. As I say that Party should remember that they have no monopoly of brains or of national outlook. At present they are narrow, sour and vindictive. I do hope they will examine their consciences and try to get a normal outlook on things, try to realise that in all Parties in the country there are some very good men and also some damned bad ones. I would ask them to clean up their Party before starting to make little of other Parties. Until they clean up their Party and get shut of the racketeers and hucksters, they will remain where they are at present.
Since the change of Government, the racketeers have taken a back seat, the smugglers along the Border are fewer in number. Honesty, straightforwardness and fair dealings are now taking the place of all the trickery that we experienced in past years. I am glad that I have lived to see the day when we can forget our differences and when men of different political outlook can come together for the good of our native country. This old country of ours awaits the best efforts of all its citizens; it needs only to be given a chance to raise itself up and to take its proper place among the nations of the world. Soon it will take its place at the head of all civilised Christian communities and will give of its best to see that the sick and infirm and the aged are properly looked after and that every man will be given a chance of working in his own interest and in the interests of his country towards an era of peace, freedom and happiness. That is the aim of this Government and I feel sure that every decent-minded, solid man with a sound national outlook will be behind them. I say to Fianna Fáil: "Examine your consciences."
It was very amusing to listen to Deputy Giles, particularly when he was attacking Fianna Fáil. It was remarkable, and it was very conspicuous by its absence, that he did not offer any constructive criticism. So far as I am aware, he did not say anything of a constructive character. He has not told the people why it was necessary for the Government to present the Estimates now before us or who are the people, who will benefit under those Estimates.
Going through the Estimates, one finds many disturbing features. Generally speaking, increases are shown in every Department, largely due to increases in salaries and administrative costs. So far as the chief industry of this country is concerned — agriculture — many of the things which the Minister in charge of that Department proposes to do are not, in my opinion, in the best interests of the people. For instance, we have a land project which will cost £3,100,000 in the coming year. I wonder if the Minister and those who support him will argue that that is the best way in which that money could be spent — the reclamation of bogs?
Have the Government given serious consideration to that aspect? Have they not considered another and, in my opinion, a better way of helping our people to be more productive? Would it not be better if we were to make the marginal land more productive? Is there any farmer in this House who will argue that it is a wise policy for any Department to spend £18 per acre on land when possibly the Department of Lands will come along in a few years' time and offer, as the Minister said some days ago, a sum of £4 an acre for that land?
What Minister said that?
I think it was the Minister for Lands who said that the average price paid for land during the past 12 months was £4 per acre.
For what purpose?
For afforestation — that is the purpose. Many of the lands now being improved under this rehabilitation scheme at a cost of £3,100,000 in the coming year may in the future, if the Minister for Lands is going to carry out his programme of afforestation, be taken by him at £4 per acre. That is the type of land that the Government propose, on borrowed money, to reclaim at a cost of £18 per acre. Will the Minister say that it will be done at less? I know of cases where applications have been made for grants for the reclamation of land and when the inspectors called those people were told that the cost of the reclamation would be £18 per acre.
There is another way in which much of that money can be spent to better advantage than by the reclamation of bogs and it is by supplying fertilisers at reduced cost to those people who grew large quantities of wheat during the emergency period. We know that from 1940 to 1945 and 1946, when fertilizers were almost unobtainable in this country, the people set out to produce wheat on land that possibly was not in a proper condition to produce it. That land was starved in order to produce bread for the people. In the years that followed these lands were robbed of their fertility. If fertilisers were made available at a low price it would be a much better policy for the Government to adopt. In the later years of the Fianna Fáil Government there was a subsidy of £198,000 made available to reduce the price of fertilisers.
How much of it was spent?
That money is not there now; there is no subsidy on fertilisers. That is one of the things the Minister for Agriculture has done—he has taken away that subsidy. Would it not be a better policy if some of the £3,100,000 was devoted to putting fertilisers into the land? Why is some of that money not used to provide markets for barley and oats? In my own constituency in Kilkenny there is a big proportion of land where barley was grown extensively but there was no market. The people are told this year that if they grow barley they will not find a market for it. We had similar conditions two years ago when there was no market for oats. The same conditions applied in 1948 and 1949 when there was no market for potatoes. Why has not the Department formulated some scheme whereby the people prepared to produce commodities will find a market for them, and stability and security?
There is nothing in these Estimates to indicate that the Government are concerned for those people who are prepared to produce crops from their land. There was a scheme initiated by Fianna Fáil under which a sum of £50,000 was allocated each year for the purpose of marketing potatoes. That £50,000 does not appear in the Estimates this year. That scheme has been forgotten. We also had an experimental scheme in Donegal for the production of tomatoes, and £100,000 was allocated for that purpose. Why was not that scheme continued? Was it because it was a Fianna Fáil scheme? Does the inter-Party Government believe that it was not a success? Any people who have been through Donegal and who have met those who worked that scheme are aware that it was perfectly satisfactory, but in order to give the Dublin people — as the Minister for Agriculture said, the people of Dominick Street — a cheap tomato the people of Donegal were denied the right to produce tomatoes at an economic price. They could not be produced at an economic price when the Minister would not find a market for them.
In that Department travelling expenses have gone up. I know the Minister for Agriculture has travelled all over the Continent and he has also gone to America. Was it for the purpose of helping our farmers that he went to those countries? He has been travelling through our country making wild statements. He has reduced his Estimate by £160, which was to be devoted to a consultative council. It would have been well if he retained that consultative council because then he might not make so many wild statements as he has made during the past 12 months. The administrative costs and salaries have increased, but the benefits that accrue to the agricultural community have not increased.
Let me take one item, and that is the price of milk. We heard during the past month or so of the Minister's determination to reduce the price of milk. What authority had the Minister to go through the country and tell the farmers that he was going to reduce the price of milk in view of the fact that, since 1947, the dairy people had a guarantee of a long term policy? At that time the price of milk was fixed at 1/2d. per gallon during the summer months and at 1/4d. for the winter months. The Minister for Agriculture, in order that the Minister for Finance could produce a good Budget this year, thought he would go down the country and deceive the people as he has done on many occasions during the past few years by telling them that he would give them a long term policy and would fix the price of milk at 1/-per gallon for the next five years, and that in order to further reduce the subsidy which the Government must find for butter production he would increase the price of butter by 2d. per lb.
Of course, in doing that he was carrying out the policy in operation in other Departments with regard to the cost of living. He was placing butter in the same category as other Departments have put tea, sugar, coffee and many other things. The December issue of the Trade Journal gives a number of items which prove that the cost of living has gone up. A table shows that the cost of beef, mutton, bacon, pork, eggs, butter, cheese, margarine, flour, tea, sugar, jams and other things has gone up. Members of the inter-Party Government contend that, in many cases, the cost of living has come down. Their speakers all over the country have to put up a case like that because it was by promising a reduction in taxation and in the cost of living that they got into the seats which they now occupy. It is by reason of the deception which they practised on the people at the end of 1947 and the beginning of 1948 that they are now enjoying the fruits of office. How long more are they going to continue deceiving the people? They did so deliberately in 1948. Is it not time that they went back and told the people that they did deceive them? How long more shall we have to wait until they present to the people a true indication of what the taxation of the country is?
Last year the actual amount collected in revenue from all sources was £99,467,000. In 1946 the collection of all moneys by the State amounted to £62,626,000. The expenditure in that year was £62,000,000, less £542,000 which remained in the Exchequer on the 31st March. In 1947-48 the figure was increased by £14,000,000, bringing the total £76,648,000. In 1948-49 the grand total collected by way of revenue, other receipts and other issues amounted to £99,467,000, and in the coming year, basing one's figure on the Estimates which have been placed before us, the people of this country are going to contribute to the Exchequer well over £100,000,000. The people of the country have not been told these things. They believe that what appears on the Estimates is the true figure, but it is not. It is financial juggling that the people are getting.
We have been told about borrowing for capital works and capital expenditure. Deputy Lemass pointed out that house building should not be regarded as capital expenditure. House building is one of the great industries in the country, particularly in Dublin. It is going to continue so, not for two, three or four years, but as long as Dublin continues to extend itself. We have people coming up from the country to build houses for those now resident in Dublin. The same thing will be happening in five years' time. People will be required to come here to build houses for those who left the country five years before. I believe that will go on for the next 15 or 20 years.
Dublin City has now extended down to the sea. Therefore, I say, borrowing for the purpose of building houses is wrong. House building should come out of current expenditure. It would be far better if there were no grants for the building of houses. The grant that is available for those living on small farms is not sufficient to enable them to build a house for themselves, but of course the white-collared worker in Dublin must be provided with a grant in order that he may provide himself with a house.
During their last year in office Fianna Fáil provided well over £12,000,000 by way of food subsidies. In the year 1950-51 these subsidies have been reduced by £3,370,000. The fuel subsidy which was in operation under Fianna Fáil has been completely cut away. That means that practically £5,000,000, which was being expended in the way of subsidies, has now been taken from those who can least afford to bear the loss — the poor sections of the community. Turf production has ceased and the subsidy on fuel has been denied to those people.
We all know that we have untold wealth in our bogs. Yet, in spite of that, the inter-Party Government last year permitted the importation of English coal to the extent of 1,250,000 tons. At the same time they stopped work on our bogs and so hindered the production of fuel that would be equally as good as coal. The people who had been employed in the bogs lost their employment. That is the policy that has obtained during the last two years under the inter-Party Government. The members of it were not hot in their seats on the benches opposite when they decided to stop turf production. Why? Not because they did not think it a good scheme, but because it was Fianna Fáil who had initiated it.
And who stopped it? You stopped it.
Your Government stopped it and you did not restore it. You stopped it and thereby caused unemployment. Unemployment increased in the areas where turf had been produced.
That is not so. It was stopped before we came into office.
We were also told during that period when you were out on the hustings that the cost of living was going to be reduced. It is because of the deception practised on the people that you are on those benches now. Let me quote some of the statements made by Ministers. Deputy MacBride, Minister for External Affairs, speaking at Carlow on the 6/9/'47, stated:
"It was his intention to provide subsidies on all food produced on a sufficient scale to enable the producer to provide for himself and the agricultural worker whom he employs an adequate family wage, having regard to the present cost of living and modern requirements."
Notwithstanding that statement, the food subsidies were reduced by £3,700,000. Has he carried out his promise to the people who sent him here? He also said:
"The subsidies provided should be sufficient to bring about a reduction of at least 30 per cent. on the existing cost of all food produced and consumed here and should be accompanied by a strict control of prices."
He also said:
"Supply all agricultural producers with fertilisers free of charge to increase the production of the land."
Notwithstanding the fact that that Minister is a member of the Government, one of the things that this Government have done is to take away the subsidy of £198,000 on fertilisers which was provided by Fianna Fáil. He also said:—
"Cease wasting shipping space and credits on imported luxury articles such as motor cars, wines, brandy, canned fruits, etc., and utilise that shipping space and those credits to obtain fertilisers and agricultural machinery."
What a change of front in two years! He was not, of course, in office then. He was looking for the fruits of office. Now that he has found them, he has forgotten the people whom he deceived and misled at Carlow. He also stated:—
"Food subsidies would enable the farmer to pay wages which would stem emigration. They would also bring about a reduction in the cost of living. Reduction in the cost of living is far sounder policy than an increase of salaries which must inevitably result in a further increase in the cost of living and an economic spiral."
Let us see what has happened since in regard to all these things. There has been a rise of approximately 10 per cent. in the cost of cement. Does that affect the cost of living? Of course it does. We have our housing programme to provide houses, particularly in the rural area, and I am sure that that has the support of every Party in the House. If the price of cement goes up, it must automatically follow that the rent of the houses will go up. If the people who get these houses are unable to pay an economic rent, it will mean that the ratepayers are going to be burdened. No matter what way you look at it, you will find that either the ratepayers' cost of living or the workers' cost of living must go up as a result of the increase in the price of cement.
The price of tyres has gone up as is shown by this extract:—
"It was announced yesterday (that is the 14th January, 1950), that as a result of increases in the cost of imported materials the Minister for Industry and Commerce has made an Order with effect as from Monday fixing revised maximum prices for tyres and tubes. The increase is equivalent to 10 per cent. in the case of motor and bicycle tyres."
Everyone must agree that cycle or motor car tyres are essential for the people no matter what their station in life is and, consequently, their costs have gone up.
We had an increase in the price of fertilisers. The farmer, of course, had to pay the increase, notwithstanding the statement made by the Minister for Agriculture. The Minister has given us a lot of gems, but that statement was certainly a gem. This is an announcement made on the 3rd October, 1949:
"Beet growers have been notified by the Irish Sugar Company that the compound beet fertiliser, which has been selling at £22 a ton, will cost £24 a ton as from Saturday last."
Speaking at Portumna Show on September 20th, the Minister for Agriculture said:
"Some people have expressed apprehension that the price of artificial fertilisers will go up. I am your Minister for fertilisers, and I want to tell you that the price of fertilisers will not be increased in Ireland by one penny piece in foreseeable time and that supplies will be equal to any demand you make upon them."
The fact remains that the price of fertilisers has been increased and any increase in the cost of fertilisers must react on the farmer who is purchasing them.
Then we have the question of porridge. Two or three years ago we had a surplus of oats in the country for which there was no market. A remedy had been found by Fianna Fáil when there was a surplus of oats before and there was a price fixed for it. But the inter-Party Government were unable to find a market for the surplus oats and did not fix a price. A couple of weeks ago when the question of an increased price for milk came up we saw how the farmers' representatives supporting the inter-Party Government voted against the interests of the people who sent them here. I hope that when the opportunity occurs the people would take full notice of what happened then. That was more deception and trickery. But trickery and deception cannot always continue and one day or other there will be a reckoning and those who deceive will have to answer to the people. I hope that day is not far off.
If it is 16 years off it will be long enough.
Too long!
Sixteen years was your period.
If we have to suffer as we have suffered in the last two years there will be no people left in the country. They are running out of it in shoals. Mr. Norton told us in April, 1947, that emigration would stop.
The Tánaiste.
The Tánaiste. What is the position?
You are sitting over there.
The last year in which Fianna Fáil was in office we had a net gain to the country of 7,000 people. In the last nine months, according to statistics, 21,000 people have left the country. A commission was set up to inquire into emigration, moryah, on the 1st April, 1948.
It is your own commission.
But it has not reported yet. I take it it will report a week or two before this Government goes out of office. That was merely a continuation of the fooling that has been going on since November, 1947.
November, 1947, is a good date.
That was when the County Dublin by-election took place and the people were first fooled.
And when the commission was first announced.
Yes, and the people were first fooled.
Who was in power then?
Fianna Fáil were in power, but the by-election in County Dublin started the fooling. That started the racket.
Not the racket, the rout.
That started the racket. I was referring some time ago to the market for oats. There is at the moment no flake-meal in the country and the people have no porridge. The farmers were always anxious to produce oats but they are no longer producing them because there is no market. If there was a market they would produce them. This year the price of oats has jumped from 30/- to close on 46/- because of lack of stability. One thing the inter-Party Government has given to the farmers is insecurity and instability.
That is why the pigs are running to the factories.
Quite so, and they will continue to run out of them.
They are running out as bacon.
Why are you not reducing the price of bacon then to the consumer?
It is being reduced.
Why has it gone up 2d. a lb.?
That was only for a week or two, and it was done by the curers.
The price went up.
Deputy Walsh is in possession.
I thought for a moment the pigs were in possession.
Is it not the first time, and I am sure the Parliamentary Secretary to the Minister for Finance will bear me out in this, in the history of this country that bacon was dearer than butter? Is it not the first time that has happened?
It is only lately that we have had either and it is hard to tell.
Is it not the first time? You know it is. You know the reason why.
The Deputy should not invite interruption.
We have the best cattle market Ireland ever had to-day.
Who is responsible for that?
We are because the calves are coming up.
Mr. Walsh
The people have no porridge. Flake-meal, the basic ingredient of porridge, jumped to a new high record this week of 7/8 per stone. Even during the war period flake-meal was not as high in price as it is at the present time. These are the things in which the people are interested. These are the things from which the Government cannot hide. These are the things for which the Government will be answerable when they go to the people. The trickery and the deception will no longer help you when you go to the people. You are quite smug sitting here in Dublin, but go down to the people——
I take it the Deputy is not intentionally addressing the Chair.
I am speaking to the inter-Party Government.
And supposed to address the Chair.
Through you, Sir.
And supposed to address the Chair.
We seem to have a new Chair here. A leader of one of the Labour groups, the Minister for Posts and Telegraphs, speaking at Tinahely last month is reported as saying that:
"He was pleased to say that since this Government was elected there had been no increase in the cost of living. The upward trend of the index had been halted and everything possible was being done to reduce it."
I am quoting from a report which appeared in the Irish Times on 7th February, 1950.
It is not the Irish Press.
No, even the Irish Times published it — the Coalition paper.
It must be an intelligent report so.
Who is talking about intelligence?
You should not, anyway.
That was the statement made by the Minister for Posts and Telegraphs notwithstanding the fact that the price of flake-meal is now 7/8 per stone, the highest level it has ever reached. Even during the emergency it did not reach anything like that figure. The price of fertilisers has gone up despite the Minister for Agriculture saying it would not. Tyres have gone up in price; cement has gone up in price, and costs generally of other commodities have also gone up.
And you want to bring up the price of milk.
Mr. Walsh
Certainly, in conformity with all the other things that have gone up. That is perfectly legitimate. Why should agriculture not benefit when other sections are benefiting? We are entitled to some remuneration for our work.
The farmers are doing all right.
We were told a few years ago that we would not have any unemployment in this country. I would like to quote a statement in connection with that. It is reported in Volume 105, column 847 of Dáil Debates. It is a statement by the present Minister for Industry and Commerce.
Column 847.
I will find it in good time. There is no immediate hurry. We have until midnight.
That is quite evident.
The Minister said — he was then an Opposition Deputy — that:—
"It is an amazing thing that, notwithstanding all the bog developments, the increased tillage, and the increased housing activities, the Minister tells us about, notwithstanding 260,000 emigrants, we still have the hard core of 70,000 unemployed."
Have you got them now?
Mr. Walsh
As a matter of fact I have the figures here for 11th March, 1950. There were actually 70,772 people unemployed in this country on that date.
I think it represents a reduction of 12,000 on the previous year.
Yet, we are told we are making progress under the inter-Party Government.
Better stick to the porridge, Deputy.
I will try to make porridge of some of the statements which were made by the Minister for Industry and Commerce.
You are more at home with porridge.
In effect, the statement made by the Minister was that he saw no reason why this country could not find productive work for every able-bodied man in the country. We are to assume from that statement that if he were the Minister in charge and had the responsibility of finding employment for every unemployed person in the country he would have done so. But he has not done so. Peculiarly enough, he is the Minister who is responsible at the present time for finding employment for the people of this country. But it has not been found. Even though we are able to export over 20,000 people in nine months — against the fact that Fianna Fáil brought back 7,000 — we still have 70,000 unemployed. I know that representations have been made to the Minister from many counties to start new industries. For instance, he has been asked to start a cement factory in my constituency in Kilkenny. He has not done it. It would give employment to 150 or 200 people, possibly, of the 70,000 unemployed. I suppose he is waiting for this new council he has set up to examine the details in connection with that factory.
That is something of a detail and it might be demanded by other Deputies for other counties. It is not general policy.
The fact remains that it has not been started in Kilkenny nor in any other county as far as I know. We must not forget that it will provide employment for some of the 70,000 who are unemployed.
Another very peculiar feature in the country since this Government came into office is that the number of people now employed on the land has steadily decreased. We find that in the year 1946, which was the last year of the emergency, 519,634 people were employed on the land. In 1947, which was a very bad year — we all remember the bad harvest, and so forth — the number had fallen to 507,568. In 1948, the first year the inter-Party Government were in office, the figure dwindled to 499, 542.
I should like to know and I am sure I will find out later the number of people now employed on the land particularly as a result of the policy laid down by the present Minister for Agriculture, that is, the grass policy. Possibly later on I shall have an opportunity of putting my point before the Minister as to which is the better policy for employment on the land — the production of food or the production of cheap meat for Britain. That seems to be the policy the Minister has in mind now — cheap food. As recently as last week or the week before he suggested that we might export some of our surplus butter. I would impress on the House that the price of butter in England is 1/8 per lb. and the price of butter in this country is 2/8 per lb. It would mean, therefore, that we would have to subsidise the butter we would be sending across to Britain. That also would be in conformity with the policy here since 1948 of giving cheap food to the British. We gave them cheap beef. We could have had a better price from the Belgians or the Germans but we would not give it to them. We had an old and valued customer and we had to supply that customer with cheap food. That, possibly, is still going to be the policy of the present Minister while he is there. Those people who fed the country during the war, when this country was unable to get foodstuffs from outside, are now being denied their inalienable right of getting a market for their produce. I refer now to the people growing barley, oats, flax and potatoes. Only two crops are guaranteed in this country as far as agriculture is concerned and those two crops which are guaranteed were initiated by Fianna Fáil — wheat and beet. Notwithstanding all the Minister for Agriculture had to say regarding wheat and beet in the past, he has to swallow and had to swallow——
This is not an Estimate for Agriculture.
But the Minister for Agriculture is looming very large in it.
Evidently, but it is not the Vote. He is looming very much in the Deputy's speech.
He has a very big sum here — £15,000,000 of the taxpayers' money — to expend for agriculture in the coming year, and subsidies.
He is a good Minister for Agriculture, more so than any Minister for Agriculture who ever came before him in this country
The Deputy is in possession.
The Minister for Agriculture has £15,000,000 under his command in the coming year. I do not know why, but apparently it was good policy on the part of the Government to transfer the food subsidies from the Department of Industry and Commerce. No man, I am sure, can deal with them better than the Minister for Agriculture. If he deals with them in the same way as he has dealt with the butter question he will certainly be able to relieve the taxpayer of a lot of the money now going in subsidy.
Will you give him credit for anything?
£10 for a calf.
Oats from the Argentine and spuds from Amsterdam.
He is not killing calves.
Some of them.
Does Deputy Ó Briain understand what I said? He is not killing calves any longer.
There is no necessity. Has he not found a good market for them? If Deputy Fagan were in the House now he would tell us about the good price that obtains for calves. He is very fond of the high price paid for calves now — very fond of it.
The Deputy is in possession and he should be given a hearing.
The principal increases, so far as I can see, in the Estimates are for salaries and administrative purposes. The Minister for Education, speaking at Callan, County Kilkenny, on 30th January, 1948, stated that one of the first things Fine Gael would do if they were returned to office — of course he did not think at the time that they would be returned to office——
Neither did you.
And they were not.
Oh!
The Minister for Education said at Callan in January, 1948, that Fine Gael proposed as a first step that the expenditure of every Government Department should be rationed. Has that been done?
The ration was increased.
The expenditure in every Department was increased and it has continued to increase. The Department of Agriculture is up by £27,000 plus the travelling expenses, which are up by £9,000. If we went to the Book of Estimates we would find, I am sure, for the Department of External Affairs that the wine bill has gone up by about £60,000 or £70,000. I do not know what the increase is in travelling expenses.
Will the Deputy tell me where the wine bill is referred to? The Deputy had better get back to porridge. He is more at home on that.
The Minister for External Affairs, speaking at Portlaoighise on the 24th January, 1948, said that another source of danger or corruption was the practice of erecting vast Government monopolies and State corporations. He evidently went and set up one himself in the news agency. He has followed the good example set by Fianna Fáil. That has been the policy of the Government — to carry out the Fianna Fáil policy. They have no policy. They are bereft of policy.
If it was Fianna Fáil policy, why all the attacks on it?
On which?
And why did a Fianna Fáil man join the board?
Join which board?
The News Agency Board.
What Fianna Fáil man joined it?
Robert Brennan.
An ex-civil servant.
And an ex-director of the Irish Press.
He was never a director of the Irish Press.
He was managing director.
The Minister for External Affairs has fallen in with the Fianna Fáil policy. He now has a monopoly and he can deal with corruption.
Robert Brennan will see to that.
A Deputy
Who invited him to join the board?
Are you annoyed because he accepted it?
Not at all.
You should not cast it up in this House then.
No, no. I did not think a man of that type would join a vicious monopoly.
Deputy Walsh.
When I am permitted to speak by the Minister, I shall continue. The Minister for External Affairs at that time seemed to be very concerned as I have already pointed out, about the cost of living and about food subsidies. I cannot for the life of me understand why he, as a member of the Government at present, has permitted other Ministers to withdraw subsidies from the people who are least able to bear the burden of the high cost of living, the poorer sections of the people. Subsidies on food have been reduced this year by £3,370,000. The fuel subsidy has been cut away. The only people who were gaining any benefit from the fuel subsidy were people who are now relying on home assistance and on the St. Vincent de Paul Society to get cheap fuel. That is what has been done by the inter-Party Government for these people. Yet we have people from the Labour Benches and they will tell you what they have been doing for the poorer sections of the community.
Mr. Murphy
Are they not getting 17/6 a week now as an old age pension?
And you promised them 26/-.
Mr. Murphy
Is that not a good start?
If Deputy Walsh would address the Chair he would have fewer interruptions.
It is a fact that in 1948 when these people were looking for votes they deceived the old age pensioners to the extent of promising them 26/- a week. They have not even carried out that promise.
And at 65.
They have not carried out their promise there either. They do not deny that they misled the people then. The Estimates with which we are now presented are also misleading the people. We have a bill there which on the surface sets out £66,000,000 plus £12,000,000, that is £78,000,000, but in reality that bill is going to creep up until it is £100,000,000 as happened last year when £99,677,000 was collected by the Exchequer. It is time anyway that the inter-Party Government should get away from the position that they created for themselves in 1948, be honest with the people and tell them that what they see in the papers is not correct, that that is not the bill that the taxpayers of this country will have to contribute and that in fact it is a misleading description of the amount to be collected in the coming year.
Major de Valera
In relating these Estimates to the progress of the Minister since he assumed office, it is just as well at the start to go back to the first Estimate the Minister brought in because I presume it is legitimate to ask ourselves on this Vote whether the Minister has been pursuing a consistent line of policy or whether we have something radically different at the moment from the viewpoint with which he approached the matter initially. We cannot doubt that he started off on what one might call an economy campaign. The Minister and his Party paid great attention to a programme which implied three things — a reduction in State expenditure, a reduction in taxation and economies, particularly in administration. How far has he succeeded in this? How far does the policy which apparently activates his approach to his problems this year, conform to that initial approach and if it does not conform, what are the reasons or the explanation for the change? In any event what is the effect of the Minister's consistency or lack of consistency on the affairs of the country? When the Minister came into office he found prepared before him a Book of Estimates showing on its face a total of £70,520,477. The Minister straightway cut that in a number of places by approximately £6,000,000. I have tried to ascertain it accurately from the figures furnished from time to time but, so far as I can find out, it works out at about £6,000,000, leaving the Minister starting office with an Estimate of somewhere in the region of £64,000,000. That Estimate was an omnibus Estimate, so to speak, for the servicing of the State. For that year, to make up his total Estimates, his Supplementary Estimate must be added to that, and that can be taken from the Estimates for the following year.
Incidentally, there is quite a misleading thing in the Book of Estimates before us, and in making this comparision there is no harm in getting the figure straight. In the Estimates presented by the Minister last year, in the long table, there are in the second last column figures given for the 1948-49 Estimates, including supplementaries. The total for the Estimates for that year is given in that column as £71,801,298. If I read that aright, it seems to me that that is, in effect, the original printed Estimates, plus the Supplementary Estimates. I think that is misleading straightway. Supposing we concede to the Minister that he commenced business, so to speak, as Minister, with an Estimate in the region of £64,000,000, he himself brought in the Supplementary Estimates during the rest of the year. Surely the proper comparative figure to be shown there in that column is the total of his own Estimates, not the Estimates of his predecessor, plus the Supplementary Estimates passed by him?
Let me, then, take, and I think I can fairly take, the figure which the Minister at that time wished us to take as being the figure representing his Estimates for his first year of office. I think we will find that his Estimates were in the region of £65,000,000 or £66,000,000, that they are, in fact, the total Estimates upon which the Minister based his calculations and policy for that year. Going to the Book of Estimates for this year, he estimated on the Book of Estimates for last year £65,406,570. As was pointed out in the debate last year, the Minister, in effect, after all the talk which his Party and he himself had on this matter, could do no better than bring in the same Estimates as he had, in fact, worked upon in the previous year.
We asked at that time where were the economies, where were the reductions in taxation. You can shift the burden of taxation, certainly you can shift its incidence, but ultimately the money has to be found. We asked where was the economy in administration, pointing out, in the case of the Department of External Affairs, for one example, that the cost of administration had radically increased. There were some speakers, if my memory serves me aright, if not in the House, out of it, supporting the Minister and the Government, who said: "Give us time. After all, we have been only a year in office and we had to adjust your figures and work from the baseline you gave us. Give us time and we will show results for our policy."
For the second time the Minister comes before us to-day, and what is the position? I am going to take the figures on the Book of Estimates as now produced, but let us note two things. Let us note that, on the best showing the Minister wanted to make, the Estimates for the first year in which he came into office were in the neighbourhood of £65,000,000. Let us also recollect that, having a year to work out his economy programme and keep all the promises he and his Party made on so many occasions, with a year to go he could come in and do, as many of us said last year, no better than he did the year before. He came in with £65,000,000 as his Estimate, and some of us said on these benches last year: "We will give the Minister as much latitude as we can; we will leave it in the position that you merely had an as-you-were Budget." We conceded that for the purpose of argument.
Notwithstanding the favourable trends that were anticipated, such as relief in regard to subsidies and all the other matters discussed in last year's debate, what do we find when we open the present Book of Estimates? When we go to the summary table, we find that the Estimates for the 1949-50 period, including supplementaries, represent a figure of £74,607,444. It will be noted that in the previous year the audited expenditure approximated closer to what the Minister had disclosed, or, rather, was disclosed in the Estimates, as being the figure upon which he was working. But during last year, having come here with a figure of £65,406,570, we, nevertheless, found that at the end of the year, by means of Supplementary Estimates, the Minister, in fact, budgeted for something over £74,500,000. In other words, there were Supplementary Estimates brought in in the course of the year in excess of what has been, I think, normal.
I, unfortunately, have not had the time to tot up all the Supplementary Estimates introduced, but it does appear from those figures that the net amount of the supplementaries for last year was rather in excess of what should be the margin for such purposes. It seems to indicate that the Minister, in bringing in his Estimates last year, under-estimated. Perhaps it was in an effort to show that at least he was not increasing the Estimates over what he alleged his Estimates for the previous year were, but whatever the reason is, the fact remains that it is patent he under-estimated the figure last year, at this time necessitating his bringing in further Supplementary Estimates, so that, in fact, last year, on Estimates only — and I am dealing with Estimates, and this is the proper time — according to his own Book of Estimates he estimated for more than £74,500,000 for the services of the State.
Even when he adopted the device in the previous Book of Estimates of adding Supplementary Estimates brought in by himself to the Estimates on the Book of Estimates introduced by his predecessor, which he rejected with great noise and with great publicity, the total of the figure which he estimated, even if you add his predecessor's Estimates to his Supplementary Estimates, will give you something less than £72,000,000 — that is, £71.8 million. That is an interesting comment. It means that with all the talk about economy in the services, cutting costs and squandermania, even when he takes his predecessor's Estimate with his own Supplementary Estimate and puts it in the trying to have it both ways, even with that device, when you take the total Estimates last year they are in excess. Finally, this year we are asked to pass an Estimate which in the total is in the region of £78,000,000, the greatest, I think, that has been introduced.
Is the Deputy objecting to the increase?
Major de Valera
I am merely trying to get the Minister's background with a view to trying to find out where he is going. By their fruits you shall know them. £78,000,000 is estimated as the expenditure for the coming year. Even taking these columns of tables as they stand in the book and which are very favourable indeed to the Minister for comparison purposes, they show a progressive increase since the Minister came into office. Even on the Minister's phoney figures for the year he came into office there has been an increase from £71.6 million to £78.1 million. That is what we have to face. Even the fact that this year's Estimate purports to segregate the same into capital services and other services does that affect that comparison. All of us concede and it is only fair to concede to the Minister — his course might have been very much easier had he in criticising such trends been equally fair and objective — that with modern post-war trends, devaluation and so forth, some increases were likely to occur in the period. I am not raising this matter from the point of view of throwing back in the Minister's face his own special pleadings of the past, but what I am concerned with is what we are to expect for the future. Rumours have been going around — they are only rumours ——
The Irish Press offices.
Major de Valera
No, I could give the Deputy the source if the Deputy wants it. These rumours suggest that we may have to face further Supplementary Estimates this year of a substantial amount. There is ground for apprehension when one sees that an Estimate of £65,000,000 for last year becomes in the total £74.6 millions at the end of the year. It seems to me that Supplementary Estimates of that order are a pernicious and a dangerous thing. It seems to me that it should be possible for the Minister and his Department in present circumstances to estimate the sum more closely rather than that it should be necessary in normal or fairly normal times to have excess Estimates of that amount. There are always explanations for these things, but the question I should like to ask the Minister — and I ask it objectively — is whether he can give us any definite limit to the value of the Supplementary Estimates that may be introduced during the year or whether we are to expect that they will approximate to the same figure as last year in spite of the increase we are at present facing. At any rate, will the Minister say that they will not be any greater than they were last year?
One simply making a case would be tempted to pursue the Minister a little further on questions of promise and performance, but the real net question for us now is how far we can rely on the Minister in this regard, how far, in fact, we can rely on what the Minister tells us regarding these Estimates, how they will work out in the end and whether they are a fair picture for the year. That, to some extent, is our problem. Numerous things have been broached, notably a social services scheme and apparently there is no adequate provision in the Estimates for it. What conclusion are we to draw from that? It seems as if we have the choice of one or two guesses. Does it mean in fact that no expenditure under these heads will be incurred or does it mean that we have to face a supplementary Estimate? If we have, by what method will the money be raised? That might be a question to which we could have an answer before this debate closes.
We are faced this year with expenditure of £66,000,000 on services other than capital services. Let us relate that to the Minister's own Estimates. Taking the view most favourable to the Minister, the view which he adumbrated himself when he came into office, the Estimate for that year was £65,000,000; last year it was £65,000,000 and this year it is £66,000,000. Therefore the cost of administration, of ordinary services, has certainly not been reduced. In so far as any suggestion is made that the increases are capital increases which will be met in a particular way, a way different from the rest of the Estimate, it is hard to see that any economy is being effected. Therefore, I take it that the Minister now finds himself in the position that all this talk about economy and saving on the public services must be adjusted in the light of present conditions. We now have these capital services. These have been dealt with pretty thoroughly by a number of other people and the remarks I would have to offer on them are merely a gloss. We are all at one now apparently in our desire to see investment here with a view to production, to see development here and we are ready to spend money on developing this country.
There is a change of policy.
Major de Valera
It certainly is a change of policy for Fine Gael.
Did the Deputy ever hear of the Shannon scheme?
Major de Valera
During the whole long period, the Deputy and his Party voted against all the developments that took place here.
The Shannon scheme was the greatest capital investment this country ever saw. There was no greater capital investment.
A sum of £60,000 for yellow phosphorus was a capital development.
Major de Valera
The Deputy and the Minister will find some sorry reading from their own point of view from 1932 to the present. However, now that they have changed, we are concerned with the present, and, as I have said, we are agreed on the desirability of developing the country, but as to the nature of what is capital and what is not some questions may arise. From one point of view, for instance, the development of housing, hospitals and so forth is admittedly capital development and capital expenditure, but it has another slightly different attribute from that which will result in reproductive activity, whether agricultural or industrial. The trouble about such capital expenditure (which is socially desirable and socially good) in respect of such matters as housing or the building of hospitals is that, instead of, so to speak, producing as time goes on, they are from another point of view, a continuing liability. Take, for instance, the case of a hospital. There is the capital expenditure involved in building the hospital — very good and very desirable socially — but thereafter the maintenance and running of that institution will continue to be a charge on the community. It is certainly an investment from the health point of view and you will probably get benefits in that way, but financially you will constantly find it a charge. In the case of such an institution is it desirable to saddle the burden of the capital development of that institution on the the future? Would it not be better in that case, since there will always be continuing expenditure associated with it, to try to find the capital for its development more immediately in the present——
That is the trouble — like Santry Court.
Major de Valera
——and then deal with its maintenance in the years that follow? A somewhat similar consideration can apply in the case of housing because expenditure will be anticipated to occur for a number of years in succession. Is it desirable to develop in this respect by way of loans? I may have taken the Minister up wrongly, but I understood him to say that he is proposing to raise the £12,000,000 for capital services largely by way of loan. What capital services are involved? One can certainly say that in relation to some a strong case can be made for financing them by that method, but is that case to be made in regard to such things as housing? Having regard to the considerations which have been mentioned, it simply means that the future has to carry the burden.
Is that not right in respect of hospitals and houses? Would you not agree?
Apart from whether it is right or not, has it not been done in that way?
Major de Valera
The Minister is making a certain proposal at the moment and I am attempting to see where we are going in its regard.
And I am trying to see where we have gone.
Major de Valera
The more you raise by loan and the more you proceed in that way, if there is no limit to it, the greater the danger ultimately of clogging up the possibilities for development in the future, or, at least, the greater that risk. Is the Minister not at the moment seeking to raise too much by that method? As I see it, it is borrowing from the future. I do not know if economists will agree, but one can draw a rough and ready analogy between the individual and the State, as I think another Minister did here. If an individual finds himself in difficulties, if he wants to do something, there is a limit to the extent to which he can borrow on his future prospects, as everybody knows. Take the case of a man who wants to get married. It is very desirable for him to raise a loan for the capital investment of getting married, with all its attendant housing difficulties and so on.
Such as building a house.
Major de Valera
Exactly. Do we not all know that, in actual practice, that problem is limited for such a man by what he can bear, by what he can repay in the future or is likely to be able to bear?
And on what his security is.
Major de Valera
If he exceeds that, the liability will pile up against him and break him. Worse still, if he incurs an over-heavy debt in the beginning, finds that he cannot meet it and tries to meet that later situation by incurring a further debt, he is simply going to run himself into an inextricable mess. It is a very naive thing to ask, I know, but cannot something the same happen with the State?
He would be a big fool to go into debt to get married.
Major de Valera
The point I am making is: may not the State, if it pursues that policy, be a big fool, too, in the long run? That is more or less the point we are trying to make. Within the last year or so, we had two loans and now we are to look for more. Are we going to look for more in the next year and go on increasing our liabilities in interest and sinking fund?
If war breaks out?
Major de Valera
I grant you that one may bank on getting out of difficulties in that way, but that is another story. Taking a reasonable view of events, if you go along like that, where is this going to end? I have here a statement by the Minister, which many people thought was reasonable enough, made in the Seanad on the 12th March, 1948. He was dealing with general finance and his approach to it, and he said:
"I think it would not be a bad thing to have the five Budgets considered as a series, not entirely disconnected as to speak of the one year as being divorced from another, but having the finances considered over a limited period of five years. That is a point of view which I shall try to make more clear in debates later in this House. I shall try to make some progress along those lines.
I should like to make that point of view even clearer at this point. I do think that the State is landed into unnecessary difficulties because it is tied to making ends meet inside 12 months. I do not see why it should not be allowed to go outside that period and, say, iron out the finances for two, three, four or five years following. If I see myself in these five years ahead facing two years of difficulty and depression and three years in which things might be easier, I think I might arrive more speedily at the three easy years if I eased things in the two difficult years by relying on the future to ease the situation. That is the mood that is on me and it is one which I shall try to work out."
It would be interesting to know if that is still the Minister's point of view. It would be interesting to know whether this year is to be the critical year and whether thereafter this process will stop, without increasing the load. The Minister's approach depends very much on easier years ahead. Is he going to get them? That is something we would like to know. Will the Minister say this is just a difficult period, a single separate thing for this year, or are we going to face the same type of thing next year, and so on?
That matters from the point of view of the credit-worthiness of the State. I may be wrong. I do not profess to have any deep knowledge of these matters, but the analogy with an individual does suggest something to you. If one goes on borrowing and borrowing without apparently being able to meet one's debts out of one's current earnings, or failing to balance one's yearly budget, does one not become uncredit-worthy? If I get a loan from anyone, be it bank or fellow citizen and I so adjust my ordinary day to day working that I can repay it in a limited space of time and in a definite way, I am likely to get another loan if I require it. But if, having got a loan — or, worse still, having got more than one loan — I fail to balance my own personal economies or only barely balance them and get for myself the reputation of a man who is already in debt, does not my personal credit contract and will I not find it much more difficult in future to secure money on loan?
Are you suggesting that your country is not credit-worthy?
Major de Valera
I am not suggesting anything at the moment. I am wondering will it be so if this situation goes on. If one gambles with the country and raises loan after loan, will we be credit-worthy in the end and will money be available when it might be wanted? Will we be in a position, without altogether overloading the generation that will be called upon to pay, to meet our debts if we go on as we are going? The Minister, as he has said himself, obtained one loan without difficulty. His next loan was not completely subscribed. That might have been due to competition and a lot of other things but nevertheless that fact exists. The fact that that loan was not subscribed was the cause of comments, to say the least, that would tend to damage confidence.
Which the Deputy is helping to restore, of course?
Major de Valera
I am doing no more than the Minister and I think I am perfectly entitled, as a Deputy, to look forward to see what the effect would be. If the Minister is talking about confidence, I have at least the right to quote, in this regard, what the Minister said about the Dublin Corporation. There was a body which, for the most laudable purpose, for a most urgent necessity, was seeking a loan and could not get it. What did the Minister say about it? I will read it now. This is from the Seanad Official Report for Wednesday, 26th October, 1949, column 131:—
"But when he comes to the attitude of the banks to the Corporation of Dublin, in its recent effort to float a loan, he gets into financial considerations of the private type. The view has been expressed recently that the Corporation of Dublin could stand as the most credit-worthy corporation in the world. Without at all wanting to depreciate the standing of the corporation, I doubt if that phrase is a good phrase—I doubt if they are that. At all events, they approached the private banks for a loan of £5,000,000 and, for reasons best known to the banks, but about which we can speculate, the banks informed them that they had decided they would not advance them the amount of money they required, £5,000,000 at that particular time, but they did say they would advance half of it at a particular rate. The rate has been questioned. It bears a good comparison with the rate prevailing for sterling investments. No doubt, the banks had in mind the question of the price stability of corporation stocks and how freely they are marketable at any given time and also how freely they are marketable if thrown on the market in any big quantities, and, having taken a view of that the banks made up their minds that in regard to the corporation they had alternative investments of a better type. One cannot blame the commercial banks for taking that financial consideration into account. There is a good deal of clamour that the banks should think more about the provision of amenities like housing. But the banks probably say that it is for some authority other than banks to deal with that. They would probably pass the matter on to the Government and say: ‘If you can improve the situation by some other method, maybe we could lend you the money, because the investment might become a more profitable one.' However, I do not think, at any rate, that Senator O'Farrell said anything against the banks of the type that used to be said about them — that the commercial banks were against housing. They are not. They have their own standards and we cannot object to their having them in regard to the particular proposals which come before them from time to time."
If I am damaging confidence, what was the Minister doing?
What is wrong with that?
Major de Valera
I am not saying there was anything wrong with it. I am quoting it back to him. If the Minister can comment like that, surely I can comment here as to the possibilities of the future.
What is wrong with that statement?
Major de Valera
I have quoted that for the purpose of saying to the Minister that, if my comments here are damaging to confidence, the Minister has made statements equally damaging to confidence.
I do not see the point. There is nothing wrong with that statement.
Major de Valera
I am not dealing with the Minister's statement. The point is — if the Minister will allow me to make it — that, for whatever reason, the corporation were not able to raise that amount of money; that one of the considerations in that regard was the matter which the Minister mentioned; and another was, undoubtedly, the commitments of that body, and high rates.
That is not in my statement.
Major de Valera
It is not in your statement. I know that.
Do not add anything to it. That is a good statement.
There is quite enough in it.
It is not to be distorted.
Major de Valera
In any event, the position is this — and I think it is perfectly legitimate for me to draw attention to it — if we go on borrowing and saddling the future, where are we going to end? I am not an economist and do not pretend to be.
That is obvious.
Major de Valera
But a little common-sense often helps one in these things. If the Minister will tell us how one gets out of these difficulties, well and good.
I do not know what the difficulty is.
Major de Valera
I forget the figure the Minister has already borrowed. He has already saddled the State with that expenditure, to be repaid in future. He is proposing to borrow more, increasing the total liability which must be paid some time. Am I right in that?
For what purpose is he borrowing it?
Major de Valera
Leave out the purpose.
Cash down for hospitals?
Major de Valera
Will that not have to be repaid? Coming back to what the Minister said, the mood that was on him was, he was easing it out over years to come. I grant you, this year is within the two years the Minister mentioned. Is the burden going to stop next year?
I hope not.
Major de Valera
Therefore, we have a general policy of deferring these burdens into the future and letting them pile up.
Of investing in the country, yes.
Major de Valera
Is not that what it means?
Of investing in the country.
Major de Valera
It is letting the debts pile up.
That is what investment means.
Major de Valera
How is it going to be paid back?
By increased production.
Major de Valera
We will deal with that now. Some of the matters that you are going to apply your capital expenditure for are such things as hospitals, housing and so forth.
Healthier people.
Let him alone. They do not count.
Major de Valera
They will not increase production in the sense of giving you a return.
A healthy man would not be better at work than a tuberculosis patient?
Major de Valera
That is not the point. The point I am dealing with at the moment — and if we could deal with it without side-tracking all to the good—is the purely monetary question that there is a burden, no matter what laudable purpose it is for. We all agree that it is a very laudable purpose and we agree that this should be done. The only question I am dealing with is the method of raising the money for doing it. In this particular case it is the repayment of these moneys afterwards that is the question-mark. If we go on borrowing and borrowing, what effect will it have on the State and what effect will it have on the possibility of getting loans? I think it was Deputy O'Leary who said: "Wait for another war" or "What if another war comes?" Perhaps that is a point of view. Surely what that would mean, if it means anything, would be simply this, bank on an emergency, let us pile up the debt, then, when a crisis comes, we can wipe out the debt, and the people who are owed the money in this regard can go hang for it.
He means, if war comes, money could be raised then. That is his point.
How do you know what he means?
Major de Valera
If war came, money could be raised then! That brings us to this matter that we have been discussing in the past, called inflation.
You raised £7,000,000 in the emergency.
And paid it back.
You did not.
Out of taxation.
Not at all. A good deal of debt piled up.
Could we hear Deputy de Valera, without interruption?
Paid out of Sinn Fein funds.
He is beating the clock.
Major de Valera
If we had a load of debt already, I doubt if we would be in any better position than if we came into it clear. I do not want to complicate the argument by that. The essential point is that here, on top of a loan, and a loan that was not completely subscribed, the Minister is apparently going to seek further loans. It raises the two practical questions as to repayment and financing of these and the burden that future generations, if it goes that far, have to bear. It also raises the practical question for the Minister that this kind of thing cannot go on. A limit will automatically be called to it. Calling on your own credit, so to speak, floating loans ad lib., will ultimately bring its own risk in that the money will probably not be made available.
Getting back to the Minister's two years, even if there is a case for doing what the Minister has done up to this, the Minister is not prepared to say, obviously, that he will not go beyond this year and he is looking forward to easier years. This time in 1948, apparently, the Minister was looking forward to easier years. In March, 1948, the mood that was on him then was that he was looking forward to two difficult years and three easier years. Are the years in front of the Minister likely to be any easier is a question we could all ask and, if we do ask that question, quite apart from the amount of money that is in this Estimate, quite apart from the financing of it, are we doing the proper thing generally to meet that? A number of things will occur in detail on the Estimates but, generally, can the Minister bank on easier years?
Generally, can the Minister bank on easier years? What position is the Minister likely to be in in regard to his currency as a whole? We have had protestations about what is going to happen to money, about monetary policy and the desirability of doing this, that and the other, but the Minister has conformed to a very definite pattern which has been merely a general currency trend in the State since the time when he was Minister before. Are we going to face any further monetary difficulties such as further devaluation or anything of that nature, and if so has such a factor been taken into account in embarking on a system of financing by this series of loans projected into the future? I am simply asking that question because I have no means of being able to guess whether there are any changes. The Minister will have information if such factors have been taken into consideration in regard to the policy he is now embarking on in raising loans. In other words, there are questions of monetary stability. Have, for instance, the commitments that we may have to meet in regard to other State liabilities in the years 1952 and 1953 been taken into account? It would be interesting to have an answer to these questions.
Finally, have we taken into account in our estimate and in our allocation of expenditure the possible situation that may confront us in the five years that may lie ahead? There are two possible views in regard to that. A number of people are very apprehensive that the war which Deputy O'Leary spoke about may come. If their view is right, what preparation are we making in that regard? We talk about increasing production, but our essential production, from the point of view of enabling us to live under emergency conditions, has deteriorated since the Minister came into office: the production of food of a certain nature, particularly of grain, and I understand there is the question of sugar requirements. I understand that production of that nature has been on the down grade.
They are both up.
Major de Valera
The trend in regard to that is not one that would fit us for an emergency.
It is up.
Major de Valera
Take, for instance, the acreage under wheat.
The yield is far bigger than it was.
Major de Valera
That is a harvest matter.
We are getting more.
Major de Valera
I will get the figures by to-morrow. Another aspect of that is, what about the laying in of reserve stocks?
Of?
Major de Valera
Essential commodities. I shall deal with these matters on the particular Estimates. For example, during the last emergency storage for a number of items was a problem. Are we making any provision in regard to certain essential industries? These matters will come for discussion on the appropriate Estimates. They have already been referred to in other debates but we know from past experience that it is absolutely necessary that they should be attended to.
I have the feeling that the Deputy wants to get back to munitions.
Major de Valera
No. I am talking about food.
Phosphorus.
Major de Valera
I will answer that.
Is it in order for members on the Government Benches to be keeping up a running commentary during a Deputy's speech?
No. Interruptions except on a point of order, are disorderly. The Chair has re peatedly said so.
Major de Valera
If the Minister wants an answer in regard to the phosphorus it is this: that little effort supplied the match industry here with material during the emergency period. It was originally projected as a defence expenditure.
Rubbish, it had to be destroyed.
Major de Valera
It actually per formed that duty.
What did it cost?
Major de Valera
We have here the Minister's mentality — let a thing drift and have no preparation. At the moment he can scoff and be cynical about it, but when the crisis comes what will happen? If a crisis is coming what preparations are we making for it? The Minister apparently is budgeting on easier years. Is he, in fact, going to get these easier years? If a crisis does not come are the three years ahead going to be easier years? The indications are that they will not be.
There are certain lessons that can be learned with regard to expenditure that can be usefully provided for. I do not propose to go into details because these would be more referable to the Vote for the Department of Industry and Commerce. But one matter is the production of fertilisers here, the organisation of what one may call a chemical industry that would be directly related to agriculture both from a peace time and an emergency point of view. Such a project would be productive and would be useful. So far, we have nothing of that sort being provided for. Therefore, it seems to me that the Minister, in this regard, is merely providing for increased administrative expenditure and for capital expenditure of the nature of housing and hospitals and similar matters, but that he is not prepared to carry the burden himself and is passing it on to the future. I have questioned the wisdom of doing that.
On top of that, one has another matter to consider if the Minister is dealing with the Estimates. There have been complaints since the Minister came into office about the incidence of rates and, to some extent, the increase in rates has been attributable to the Minister's policy. In regard to housing particularly, that is a serious matter, because it means that the cost of living of the citizens in regard to accommodation is going up on account of this increase. Therefore, in that particular matter there does not seem to be any change in the Minister's outlook.
Deputy Lemass to-night dealt with the question of our external assets. It would be interesting to hear from the Minister how, in effect, the floating of this loan and the raising of the moneys as the Minister has proposed for the present year will affect the position of our external assets. I think Deputy Lemass quoted the figures. There is in the region of £260,000,000 outside this State. I can hardly blame the Minister for this, but the Minister's colleague has been suggesting, if not saying, that this particular policy of the Minister will directly repatriate those sterling assets which he so much decries. I do not know if that is the Minister's view. But there are viewpoints in regard to these assets that might be considered. In view of the questions put to me and the cross-examination I have been subjected to, I should like to say that I am putting these points largely in the nature of questions for answer.
We are agreed that the development of the country is desirable and, in so far as it is necessary to develop and invest at home, bringing back our assets for that purpose can be a very desirable thing. In making these comments, there is no suggestion that that should not be done. Nevertheless, there is no harm in looking at the facts as they stand. Much as they have been decried, these assets have a certain amount of value, particularly so long as the trade balance remains adverse. These assets do, in fact, earn interest and dividends which go to close the adverse gap in the trade balance. To that extent they have a value and, in approaching this problem, one cannot simply say that they are completely undesirable. If one transfers them or alters them, it is only proper that that fact should be remembered.
The second point is this. Supposing a loan is raised out of current savings purely and that you apply it directly to the purchasing of goods or services abroad, say in England. You get the money here; it represents your current savings. The claim attaching to that you transfer to the Government and you get goods which you import. In other words you pay for these goods with current earnings. That transaction, if completed by itself, does not affect your external assets. But it can affect them in this way. Supposing you get the loan from a bank which draws on its investments in England, then it would affect them. But is that likely to occur? The point is that if you raise it out of current earnings at home and use it simply to bring in goods from abroad, you are not repatriating any assets from abroad, subject of course to qualifications of the nature I have mentioned.
Therefore, if a loan such as the Minister purports to raise is to be used to repatriate our assets abroad, it must draw upon them in such a way as to purchase the capital goods that you are going to bring into this country, thus decreasing the assets by that amount and getting here at home the value of the assets which you have used for purchasing machinery or goods which will be used for productive purposes. That would be desirable, I take it, if it could be done. But what is the Minister up against in that regard? It would, first of all, result in increased production, if properly directed, to decrease our dependence on outside and so decrease imports, which would tend to close the gap in the adverse trade balance and would offset the decrease in these assets and their earning power. But it can go further. If that increased production goes to the point where you are actually facilitating increased exports, it further reduces the adverse trade balance and, if it succeeds in completely closing the gap and bringing about a favourable balance, it will start to build up external assets again. That is all very well if you can do it, but the question is, can you? In floating a loan, how is the Minister going to get the money? How is he going to get his hands on the external assets? I move to report progress.