Yesterday the Minister for Agriculture denounced the wearers of the black bowler hat of prudence.
Committee on Finance. - Motion No. 5—General (Resumed).
He promised to buy the Deputy one.
The Minister for Agriculture once wore the black bowler hat with distinction. Nowadays he rather fancies himself in the rather wide-brimmed black hat of the two-gun Republican. I hope he heard that when he was going through the door.
It is a great joke.
We have made a lot of Republicans in this country, and one of the principal converts is the Minister for Agriculture himself.
Deputy Aiken now on the Financial Resolution.
Actually we have converted the Minister for Agriculture from some of the desperate black bowler hat——
Hats are not relevant to this.
They were yesterday.
The Minister for Agriculture no longer likes the hat he used to wear. When he donned it in addressing this House on some of the extravagant Budgets that I produced myself, he castigated me for that alleged extravagance, the spending of £140 per family. Now he dons the wide brimmed hat and denounces us as men of mean spirit, afraid to borrow and afraid of the expenditure, on his calculation, of a couple of hundred pounds per family. At column 2251 of Volume 105 of Official Reports he wore the black bowler hat for the purpose of telling me in relation to a Budget of a mere £69,000,000: "This gentleman will be long dead and mouldering before the consequences of his action fall to be endured. This is a very comforting thought for the Minister for Finance, but it is scarcely a sound procedure for somebody who is concerned with the welfare of his country." It was not a sound procedure then, for somebody who was concerned with the welfare of his country to spend what the present Minister for Agriculture calculated to be £140 per family but it is a sound procedure to spend over £200 per family on his calculation now. I have no objection to the Minister for Agriculture donning the wide brimmed hat and careering around the country on a bull-dozer like some modern Don Quixote, but I think he should be prepared to meet the bill. He had the brazen impudence yesterday to talk about the "slush funds" of Fianna Fáil which were spent on the relief of unemployment and most of which went on land improvement. Indeed, one of the reasons for the change of Government was this interminable denunciation of Fianna Fáil because of the "slush funds" that they spent. "Slush funds", and everything else, amounted to £69,000,000 in our last year.
The slush funds now are £22,000,000 extra and the Fine Gael Government are not even going to pay. They are going to rap and call for drinks for the Labour Parties, for Clann na Talún and Clann na Poblachta, but they are going to leave somebody else to pay. It is very easy to act the big fellow, very easy to be a two-gun, wide-brim-hatted republican, to call for drinks for all and leave some other Government to foot the bill. I pointed out yesterday that it is quite easy for the Taoiseach and the Minister for Finance to carry on this game, even in an inflationary situation, to borrow as long as they can grab the various Government funds they have at their disposal. They have between £40,000,000 and £50,000,000 in the Post Office Savings Bank and various Government funds, and they can spend that even though the people would not be prepared to give them 1/- on loan. They showed what they are prepared to do by swiping out of the Reserve Fund of the Post Office Savings Bank a sum of £466,000. They also swiped certain sums out of the Widows' and Orphans' Fund and so on. If the Taoiseach is going to use the funds in the public Exchequer as Fine Gael slush funds to buy the Labour Party and others, at least he should take care to fill the Exchequer by the ordinary methods. It is not fair, having grabbed power behind the backs of the people, to spend the savings of the people in keeping that Government in office, in buying the Labour Party, Clann na Talún and Clann na Poblachta.
The Minister for Finance in his first Budget statement said there was great room for retrenchment. He pointed to the Department of External Affairs and said that Department should be greatly cut down. The expenditure on External Affairs has more than doubled; it has gone up by 150 per cent. instead of being decreased, as the Minister for Finance promised.
The Taoiseach is here, and I want to ask him does he recognise this document. His photograph is on it, and it is addressed to the electors of the South-East Dublin constituency. It contains the arguments which he was putting to the electors in order that he might be returned as a Deputy to represent their interests in this House.
That is where he headed the poll.
He headed the poll, I believe.
That is the constituency that Deputy MacEntee used to represent.
The Taoiseach headed the poll because Deputy MacEntee was alleged to be one of the spendthrift Party. The Taoiseach appealed to the electors in that constituency to throw out Deputy MacEntee, who was spending too much money, and put in Deputy Costello who would spend less. The plea was: "Put in Fine Gael and we shall spend £10,000,000 less." The outcome is that this year Fine Gael is spending £22,000,000 more and not £10,000,000 less.
What do you find in that?
We shall see what we will find in it. "The cost of government," he said, "is completely out of proportion to the national income and if a change does not result in this election it is certain to be increased." If Deputy MacEntee was not put out and Deputy Costello put at the top of the poll, he said, an increase was bound to occur. Deputy Costello went to the top of the poll but, instead of decreasing by £10,000,000, the cost of government has increased by £22,000,000. He said:—
"It must be the first task of the new Government vigorously to grapple with, and provide a solution for the problem of the soaring cost of living which is menacing the economic life of the State and the happiness of its people. In existing circumstances, therefore, the duty of the Government is to control expenditure and increase savings. Accordingly the expenditure of the State must be immediately curtailed."
He further said:—
"Inflationary borrowing by the Government from the Post Office Savings Bank should be minimised and any essential borrowings made directly from the public."
How does the performance tally with the promise? Was there ever in the history of this or any other country a Party going forward with a policy, stated in print, which departed so much from the promises which they made to the electors? It is no wonder that Deputy Costello went to the top of the poll. He went to the top of the poll because of the denunciations that were made of Fianna Fáil extravagance and because of the promises that the then Opposition groups, who now form the Government, would cut down expenditure by £10,000,000.
I want to concentrate a little more on the last statement I quoted from the present Taoiseach, namely:
"Inflationary borrowings by the Government from the Post Office Savings Bank should be minimised and any essential borrowings made directly from the public".
The Minister for Finance told us in his Budget statement that this year he proposes to borrow £34,000,000 or thereabouts. He indicated that he had at his disposal certain funds which could be called upon to take up a Government loan. I do not know what is in the kitty now, but there should be about £40,000,000 or £50,000,000 in the Post Office Savings Bank Fund. The Minister for Finance can take that money and invest it in the next Government loan. Does the Taoiseach say that in an inflationary situation that is the right thing to do? Certainly, he told the electors at Rathmines that it was a wrong thing to do. He is in the seat of Government at present because he said it was the wrong thing. He promised not to repeat that alleged offence and to reverse Fianna Fáil policy in that regard. This Government, no matter how far it has gone from the policy upon which it got the votes of the electors, can cock a snook at the electors for another couple of years.
They can, if the Minister for Finance and the Taoiseach wish, take every penny that is in the Post Office Savings Bank, plus Marshall Aid and plus other Government funds and spend it in relief of taxation. I want the Taoiseach to answer this question: what effect does he think that policy is likely to have in the inflationary situation announced by the Minister for Finance? Now we all know that the ground for this game of deficit financing, of taking funds that are required for ordinary Government purposes and getting money from the Post Office Savings Bank rather than ask the electors to subscribe any of it, has been very carefully prepared.
During the last two or three months, the Taoiseach has been going around the country from Cork to Donegal preparing the way for the same great new movement. He denounces the savings that the country has invested abroad and says they should be brought home. The only savings which the Government can take home directly are those invested in the Post Office Savings Bank funds under the control of the Minister for Finance and such other like funds—insurance funds and so on. The Minister for Finance can realise these funds. He can sell the British Government securities in which these funds are held at the moment and spend them in the relief of taxation. He can carry on that game for a couple of years until the funds are gone.
What I want the Taoiseach and some other members of the Government to discuss is, what is going to happen when those funds are realised by the Government for this purpose? The British Government securities, if realised by the Department of Finance, are going to pass into the hands of the Irish banks. When the Minister for Finance, or his agent, gets a cheque for £20,000,000 of British Government securities held by the Post Office Savings Bank, he will pass that cheque, drawn, say, on the Bank of Westminster, into the Bank of Ireland and he can draw £20,000,000 out on this side. In clearing it, British money will accrue to the Bank of Ireland to the same amount as the Minister got, and the Bank of Ireland will continue to hold it until there has been the various clearances spread out among all the other banks. The first effect of the Minister for Finance spending the Post Office Savings Bank funds in relief of taxation, or in avoiding taxation, is not going to diminish the total of Irish money held in British securities, but it is going to change the holding of British Government funds from the Department of Finance to the Irish commercial banks.
But there are secondary consequences and we had better face them. The Taoiseach himself, when he was Deputy Costello, and was asking the people of Rathmines to give him support to run the country properly, did advert to that. We can, by adding £30,000,000 or £40,000,000 of inflationary expenditure here per year—by borrowing in an inflationary situation —very quickly create a situation here in which we will have no external assets left. Last year, we had a visible trade deficit of £69,000,000. Our total of net investments was somewhere in the region of £200,000,000. If we can get rid of our external assets, and if we can stop tourism, as some of the members of the Government Party wanted to do, we will have to meet the deficit on our visible balance of trade by drawing on our net external assets, as we did in the last two or three years. Now, a lot of the Deputies here seem to want to reach that. No matter how we reach it, they want to reach it. They want to get rid of this nest egg which the nation has and which, if properly used and translated into good internal assets at home, would be of great benefit to the country.
I think it is a criminal policy for the Government to get rid of our external assets or to start off on such a policy for its own sake. Such a policy will result in getting rid of our external assets without our capital equipment here being built up to a similar extent. That is what is going to happen, and that is the trend if we are going to spend the money that is in the Post Office Savings Bank in order to avoid taxation.
The Minister for Agriculture said last night that Fianna Fáil had not dug a drain since 1932. The Minister for Lands said that the farmers were not availing themselves of the Lands Improvement Vote. In the year 1946-47 —the last year for which the Appropriation Accounts are available—there was over £400,000 spent on the Lands Improvement Vote, and every penny of that was got out of taxation. We did not borrow it. In the year 1947-48—I do not know how much of it was spent —but in the Budget of May, 1947, we set out to spend £670,000 on farm improvements and farm buildings. There are to be added to that sums for farm improvement and for farm housing, and a sum of about £70,000-odd that was being spent by the Department of Agriculture in the administration of these schemes. But this year we are proposing to borrow every penny that is being spent on farm improvement. Not only are we going to borrow it for the purchase of the big bulldozers, but we are actually going to borrow for the payment of the civil servants who are to administer the scheme.
Yesterday the Minister for Agriculture said that the Government would not recoil from borrowing in order to save the lives of children suffering from tuberculosis or in order to improve the land, but the Government are prepared to recoil from imposing taxation, no matter how many lives are involved or how many acres of land remain undrained. They will not recoil from borrowing, but they will recoil from paying their way in an inflationary situation. They did recoil from spending the money which Fianna Fáil had set aside for farm improvements in the first two years of their administration. They recoiled from spending it because it would mean that, under the rules of the game which they laid down themselves, they would have to tax to meet the bill. For two years they left the land undrained which could have been improved under the Land Improvement Vote for which Fianna Fáil were prepared to ask the present generation to pay. Now, the Minister for Agriculture is riding round the country on bulldozers in imagination spending all the money he can beg, borrow or steal and vowing that every acre of land will be drained within a few years. A good deal of land could have been drained in the couple of years of this Administration's reign if they had only continued the farm improvements scheme which Fianna Fáil were carrying out.
The Minister for Finance has kept out of this House for the last couple of days although he is responsible for this particular motion. I am glad, however, that the Taoiseach has come in, and I trust that he will intervene in this debate and explain to the country, because it is not yet clear, why the Government has suddenly thrown the black bowler hat of prudence on to the manure heap and donned this new wide-brimmed spending hat of the Minister for Agriculture. After all, if it is right to borrow in an inflationary situation, it should have been right when Fianna Fáil was in office. But we were denounced then for borrowing for such projects as Bord na Móna, the Electricity Supply Board and telephone development. The quotation was given yesterday by Deputy Derrig, and appears in the Irish Press to-day. If it was a madcap policy on the part of Fianna Fáil to spend £69,000,000 all told, why is it not a madcap policy for the present Administration to spend a vastly greater sum to-day?
The campaign which was indulged in that time by the Taoiseach, by the Minister for External Affairs and other Ministers had its effect. The people thought that Government expenditure would be reduced by £10,000,000, as was promised by the Taiseach, that the cost of living would be reduced by 30 per cent., as promised by the Minister for External Affairs, that the excess corporation tax would be reintroduced and used for the subsidising of the cost of living, as promised by the Labour Party. All these things had their effect. It is all very well for Parties to throw away every principle for which they stood before the electorate, but at least the electorate are entitled to the courtesy of some little explanation. The Minister for External Affairs should intervene and explain why his particular pet tax has not been imposed by the present Government. Why have the Government not taxed tourists as the Minister for External Affairs advocated in this House? Does the Minister for External Affairs still call tourists spivs?
When did the Minister for External Affairs call tourists spivs?
The Clann na Poblachta leaflets called them that. The Minister for External Affairs on his first or second appearance in this House denounced tourists for coming in here and eating our food, and advocated a landing tax on them.
Does the Deputy know that in most other countries in the world there is a landing tax on visitors?
Does the Minister still maintain that there should be a landing tax on tourists here? Surely he does not deny that he advocated it in this House.
Will the Deputy quote what the Minister for External Affairs said?
I will quote it in a few minutes. That is a trick which the members of the Front Bench opposite are constantly adopting. They will deny by implication statements they made in order to secure the votes of the people. The Minister for External Affairs has put one of my colleagues to the trouble of going out to get the actual quotation. If I had not some colleague here who was kind enough to go and get it, the Minister might get away with it by creating the impression that he really did not advocate a landing tax on tourists. Does the Minister for External Affairs now advocate a landing tax on tourists? In his first interruption, he said that most countries in Europe have a landing tax. Is that some indication that the Minister still has in mind the imposition of a landing tax on tourists?
Are politicians not entitled to change their views?
Of course they are. Politicians are entitled to change their views if they are intellectually convinced that they were in the wrong.
I remember the Deputy recommending that military service pensions should be abolished.
That is right. We can discuss that if Deputy Cowan wants it.
There was a change of view.
Politicians are entitled to change their views and, indeed, are in duty bound to change their views if they are convinced that some attitude which they adopted in the past was wrong.
This philosophy does not seem to be relevant.
I want the Minister for External Affairs to answer the question, whether he has changed his views. His interjection to-day would seem to indicate that he has still in mind the imposition of a tax on tourists. If he has, does he realise that we are depending to the extent of at least two-thirds of our deficit on visible trade on the balancing effect of the expenditure of tourists here? If we can kill the tourist trade by a landing tax or otherwise, we can get rid of our external assets very much quicker. We can, in fact, get rid of them on the present balance of our visible trade inside three years. Will the Taoiseach, if he intervenes in this debate, make some comment on the Budget speech in relation to the borrowings by the Minister for Finance? Will he still say, as he said in his appeal to the electors of Rathmines, that inflationary borrowings by the Government from the Post Office Savings Bank should be minimised and any essential borrowings made from the public? The Minister for Finance, once upon a time, said that if there were any good purpose for which Irish money is required the Government should print it. Does the Taoiseach stand over that particular statement? Does he consider that that is a policy that should be put into operation?
We had all this from the Deputy last night.
It does not matter. Better listen to it and learn it.
I am not proposing that we should print money to bring the King over and plant him in the Phoenix Park but I would point out that the Minister for Finance said that if there were a good purpose for which Irish money was required it could be printed. Seeing that the Minister for External Affairs is here and that he might escape me later, I shall now quote from one of the speeches which he made in this House.
The Minister for External Affairs is waiting here. I hope the Deputy will read it in full.
I will read it in full. That is another type of lawyer's trick. I am not a lawyer but I recognise the ability of lawyers to change their minds——
The ability or inability of lawyers does not arise on the matter which is before the House.
——and then to attempt to justify it to the public. The public are ordinary men like myself.
Do not insult the public.
I am not going to insult the public by asking them to stand for having the King in the Phoenix Park.
Would the Deputy talk like that to the dwellers of Dundalk?
Perhaps Deputy O'Higgins would expect the dwellers of Dundalk to come up to salute the King in the Park?
Deputy Aiken must come back to this Budget at once.
I shall, if Deputy O'Higgins will cease interrupting me.
You have a royal bias.
In Volume 108, column 1445 of the Official Report, the Minister for External Affairs is reported as follows:—
"There are other methods of raising taxation."
Go on, read it. Do not skip bits of it.
He continued:—
"One of the reasons for the increased cost of living, certainly in our cities, is the influx of tourists, of foreigners, who, quite naturally, come in here because they can buy more food and various luxury articles. Why not tax the tourist traffic? Why not have a purchase tax on luxury articles?"
Read on.
"Why not tax the exports taken away by these tourists?"
Go ahead, do not stop.
"I suggest that if a purchase tax were put on luxury articles, it would yield a return more than enough to meet adequate food subsidies."
That spoiled it.
Now, will the Deputy apologise? Now, will the Deputy withdraw what he said?
Deputy Aiken can add to that.
Mr. Boland
The Deputy ought to read it again. The Minister for External Affairs must have not heard it.
The Minister for External Affairs need not think I am a witness in a box and that he can browbeat me. We are here on equal terms on the floor of this House. The Minister for External Affairs advocated a tax on tourists in order to spend the money in food subsidies. Instead of taxing tourists they have reduced the food subsidies available to the Irish people. They have let the cost of living go up instead of reducing it by 30 per cent., as the Minister for External Affairs advocated. We all heard him. A standard speech was made by the Minister for External Affairs all round the country —(1) that we must immediately reduce the cost of living by 30 per cent., and (2) the various allegations of corruption that he made about Fianna Fáil. I do not know which leg of his speech was the more effective.
On a point of order. I take it that if Deputy Aiken is entitled to go into certain allegations of corruption made during the last general election, I shall be entitled to reply to his statement and go into them too?
I did not understand Deputy Aiken to be making any specific charges.
We shall be delighted to hear the Minister for External Affairs on that matter.
That is what we have been asking the Minister to do for the past two years.
I think that was done fairly effectively a few months ago in this House.
You ran away from them and the Minister for Justice covered you up.
The Minister for External Affairs not alone made these charges of personal corruption against the representatives of Fianna Fáil but he never had the courtesy to withdraw them.
I cannot allow that to be discussed on the Financial Motion. It has no relevance whatsoever. Deputy Aiken repeated several times in my presence last night references to charges of corruption. They have no relevance whatsoever to the business before the House. The Deputy should pass on and deal with the Financial Motion.
Let us come back, then, to what the Minister for Finance said in relation to printing money whenever there was a good purpose. I say this from myself: in an inflationary situation I would prefer to see the Minister for Finance printing than grabbing the Government funds to the extent to which he is doing it. I think it would be healthier if he openly inflated by printing notes rather than by this particular method because the results will be exactly the same. The results of this seizure of Government funds—that is what it amounts to—to finance the ordinary Budget, rather than to face the political consequences of taxation, will be exactly the same as if the Minister for Finance got a printing machine to turn out the notes and scatter them around. I want to warn the ordinary folk of this country who depend for the livelihood of themselves and their families on a weekly wage or a monthly cheque that inflation, in the long run—and usually in the short run—affects the workers and salary earners much more gravely than it affects the owners of property. When an inflationary movement is touched off, money goes down in value but the value of property goes up.
Deputy Aiken said that several times last night.
I said it once last night.
I heard him say it several times last night. He is now travelling along the same road again. I warn him that the Chair is taking cognisance of these things and that it will not permit repetition.
I shall conclude in a very short time. This policy which the Government have adopted of using the Exchequer funds of this State as slush funds for their political Parties—to keep the Labour Party and all the other Parties sweet—is disastrous. It is particularly disastrous that the Government are prepared to spend not only the taxes they get from the people, but they are prepared to use all the savings of the people that they have in the various funds for these purposes.
We all know the Minister for Finance started off in 1948 on a policy of retrenchment; we all know he stated then that wages and salaries were as high as the country could afford; we know his resolution to effect retrenchment was broken by the Tánaiste, who demanded for his own particular union a greatly enhanced salary increase; we know that was followed by other people who felt that if political pressure could be brought on the Government, through the Tánaiste, to do something for his group, they could bring pressure on the Government to do something for them. The total effect of it was to drive up the actual cost of government by £22,000,000 and, in order to avoid the political unpopularity of collecting the money, the Government now propose to borrow and spend the money and leave somebody else to pay for it. That is not only a cowardly policy, but it is a disastrous policy for this country. In a few years, with the doubling of the payments out of the Central Fund for interest and sinking fund, we will be paying for those purposes as much as was spent in toto for all purposes by Fianna Fáil in its last year of office.
This debate is following, to a large extent, the debate we had on the Budget last year and, in fact, for a number of years. I expressed the view last year that, in the peculiar circumstances in which the inter-Party Government was formed, it was necessary for the Minister for Finance to consolidate the position, and that in order to strike a sound psychological note, this Government should give the impression and create the feeling amongst the people that it was capable of handling efficiently the finances and the resources of the nation. This Government had considerable leeway to make up. Pensions, which were entirely inadequate, salaries and wages, which were also inadequate, had to be increased, and there have been very substantial increases in the salaries paid to national teachers, to civil servants and other State officials, and in the pensions of pensioners paid out of State funds.
I think quite a number of people felt that the additional cost of these increases would result in an increase of taxation in the present Budget. There was a sigh of relief when no such increase was announced. The Budget gives one an opportunity of considering the whole financial position of the State. In a Budget discussion, we are, as it were, at the crossroads, and we can see the different paths or ways by which we can travel—whether we can travel forward in an orderly progressive manner, whether we are to remain where we are, or whether we are going to go backwards. I feel that, standing at that crossroads to-day, one can see clearly ahead the road of progress made possible by the provisions of this Budget and also made possible by expenditure that has been approved by this House—expenditure in public works, in land reclamation, in housing and in hospitals.
I think those persons who condemn, as it has been condemned here, the policy of the Government in borrowing a very substantial sum for necessary constructional works, must and should have regard to the past 28 years of our history. This country, during those 28 years, has to a large extent been starved of proper capital expenditure. There was a reason for that in the first four or five years of its existence as a State. There was a reason for it during the years of the emergency, when the Government then in power did not find it possible to indulge in large-scale capital expenditure. I think if we are honest in an examination of the whole problem, we must realise that both Governments that preceded the present Government ran into very substantial difficulties that contributed to this starvation of capital expenditure on building up the country.
The Minister for Finance proposes to borrow a substantial sum this year for capital works. That decision has been subjected to criticism. So far as I am concerned, I have no great love for borrowing; in fact, I am opposed to it in respect of some of the works that are set out as capital expenditure in the Budget, and I object to it because to some extent it means handing over control of the country to moneylenders. It puts a millstone around the neck of the nation. Borrowing money for housing has the result of unduly increasing the rents of houses. One of the problems that must face the Government and all of us, particularly in the cities, is the high rent that people are compelled to pay for houses built by local authorities on borrowed money. I have always advocated, and it was the policy of the Labour Party and the policy of the Clann na Poblachta Party, that the provision of money for essential public services, such as housing and afforestation, should be provided not by borrowing but by the creation of the credit necessary to carry out these works. That has been advocated here by the present Minister for Finance when he was in opposition during the debates on the Central Bank Bill. In my view that is a sound policy and a policy that ought to be adopted by the State. In order to do that a very simple step is necessary. Our Central Bank must be freed from certain statutory restrictions; it is popularly described as breaking the link with sterling. That has been advocated by many people for a number of years. I have always advocated it and I advocate it now. The important thing is that—and to some extent I think, perhaps, we have succeeded—we are creating by public discussion here on these problems an intelligent public interest in the problems themselves. Perhaps in the very near future the majority of the Deputies here and the majority of enlightened persons outside will see the necessity for taking this step and will press that it should be taken. To advocate that in the past ten years was tantamount to holding oneself up to ridicule as a crank and to being condemned as a person who simply wanted to print off banknotes and pay ordinary revenue expenditure with such notes, as Deputy Aiken has suggested was the intention.
That is only done to frighten the people.
I agree that that type of propaganda is done to frighten the people. But the people are getting a new and saner outlook in regard to these matters, and perhaps in the very near future we shall have the cranks, if that is the proper term to apply to those who advocate this policy, in a majority. Having expressed my own view in regard to the problem, I realise that the works which the Government intend to carry out are works that are essential. They cannot be paid for out of revenue. The country is not sufficiently enlightened yet to take the step of breaking the link with sterling and creating for ourselves the credit necessary for these works. Therefore, the only thing that can be done is to borrow. For that reason I support the policy of borrowing as set out in this Budget under the circumstances as they exist, and because of the state of the public mind in regard to these matters.
There are certain aspects, however, that worry me. Through the expenditure of this money which it is proposed to borrow, I can see a substantial resultant increase in employment in the rural areas. I can see workers employed on these schemes paid reasonable rates of wages which will enable them to buy the necessaries and essentials now lying in the factories and in the shops, and which they could not buy if that spending power was not made available to them through the medium of the works the Government intend to carry out. Indirectly, that must create further employment in our industries, in our factories and in the distributing trades generally. That is a welcome development. But these works cannot continue indefinitely. The building of houses will go on for a number of years. If the hospitals programme is pressed in the way I believe the Minister for Health wants to press it, the building of hospitals cannot go on further than five to ten years. The land reclamation scheme must be completed within a period of ten years. In some counties it will be completed in the next year or so. As I understand the policy of the Minister for Agriculture, the more land is reclaimed and the more productive it becomes, the more he will encourage the use of machinery. The use of machinery will not lead to an increase in employment; it may lead to a decrease in it. One of the problems we must consider therefore is, after this year where do we go? Will we spend another £30,000,000 or £40,000,000 next year? Will we spend another £30,000,000 or £40,000,000 the year after? If we stop spending these large sums how will that affect employment in the rural areas? That is a problem to which thinking Deputies and thinking people might apply their minds. If we would apply our minds to these problems rather than to indulging in the sort of oratory we have had here in regard to this Budget during the past week or so, it would be much better for the country.
We are part of a human organisation charged with the responsibility of running the country, in other words, of running the human beings who constitute the country. This is a human problem. Just as individuals develop, so does thought. Things that were considered impossible ten years ago are possible to-day. Ideas that were considered insane a few short years ago are considered now to be both sound and practicable. I have no use for the form of debate that goes back to the printed record of what persons said last year or a year or two before.
Once in a while they may have told the truth.
They may have.
It is of no value to the Deputy.
It seems to me to be a senseless waste of one's own time to read up speeches, tabulate and index them so as to have them ready to jump on at a moment's notice. I do not read even my own speeches and I could find great inspiration in them at times.
The Deputy is very kind to himself.
However, that is by the way. After all, on both sides of this House are men who were charged and are charged with the responsibility of running this country in the interests of the public and for the public good. I feel that their responsibility is to contribute their best, whether they are in office or out of office, towards that particular purpose. The problem that worries me in regard to the future of the country is one to which I should like to see Deputies applying their minds. The decisions taken by the Government will go a long way towards solving unemployment for the time being in the rural areas. To some extent, indirectly it will lead to more employment in the cities, but there is still a problem of unemployment in the cities with which the measures mentioned by the Minister for Finance to be put into operation this year will not deal. I tried to get the Minister for Agriculture to see that here yesterday. I failed, because I think the Minister was looking at one aspect of it and I was looking at another. No one in this House has more respect for the energies displayed by the Minister for Agriculture in his own sphere than I have, but, if I might give him a friendly word of advice, it would be to stick to agriculture and make a success of a problem which he understands better than any Deputy in this House. But we have the problem of unemployment in the cities. We see from day to day young boys of 16, 17, 18 and 19, some of them with a national school education, some of them with a secondary education, and when they are finished with that education, they remain idle at home and cannot find any work. Their parents cannot find any work for them. They have all the desires of youth of that age, and there is no opportunity for them to get work in the country. That is a serious problem, a problem that should be tackled and must be solved in the interests of the country.
I think the Minister for Finance or any other Minister will agree that the provisions made cannot directly or even indirectly solve that problem. If it does not solve the problem, we have still the emigrant ship. That unfortunately is still taking away from our shores the very finest of our young manhood and womanhood. If we look at the situation of the country as a whole, we see that the decisions taken in regard to afforestation are not sufficient but nevertheless we see a glimmer, as it were, that gives hope. In afforestation, public works and in housing, we see substantial progress. We see substantial progress in agriculture. I am dealing now with the Departments that have to do with employment but in the very important Department of Industry and Commerce the same effort is not being made to start the new industries which are necessary if we are to solve unemployment in the cities and larger towns. I have mentioned this before. I feel that the duties thrown on the Minister for Industry and Commerce are entirely beyond the capacity of one individual. I think that there must be an effort in that Department, by the division of work and the introduction of more Parliamentary Secretaries, to prepare a plan of new industrialisation that will keep industrial development in line with the other developments to which I refer. In the long run we shall always have a problem of unemployment unless a serious effort is made to build up our own industries.
There has been some reference here to the cost of living. Undoubtedly, the cost of living is too high. It is too high for the unfortunate person who has to live on a pension, too high for the wage-earner who is not in receipt of an adequate family wage. That, again, is a problem that requires serious thought and constructive effort. There is too much of a gap between what the producer gets for an article and what the consumer has to pay. It is our duty, and the duty of the Government, to see that that gap is narrowed and that the profits of those in the distributing trade, in between the producer and the consumer, are seriously curtailed. There is no other way, in my view, in which the cost of living can be reduced, and unless the Government tackle that problem they are not going to bring about a reduction in the cost of living. I did hope that the Minister might have found it possible to introduce certain additional family reliefs from income-tax in the Budget. That would have been welcomed. There was a general demand for it, but I can appreciate and understand that, with such a heavy bill before him, and also with the prospect of an increased bill next year when the social security scheme is in operation, the Minister must be careful again in regard to reliefs this year.
I thought the Minister was right last year in being conservative. In giving that feeling of contentment to the people, I felt that he was right last year, and I feel that he is right in his approach this year. I think he is right in making provision for the additional load which the social security scheme must impose next year. I hope and I believe that the Minister will be able next year to carry that additional load without any increase in taxation. I have hopes that he will do that, and faith in his ability to do it.
I only wish that we could all apply our minds seriously to our present problems and to our problems in the immediate future. I think the country expects us to do that. We were sent here to do that, and we will not do it if we are going to have a continuation of the type of discussion that, unfortunately, we have had on this Budget so far.
I did not intend to intervene in this debate, but I feel it necessary just to mention a few points. I think, in the first place, it is somewhat unfortunate that responsible Deputies should base arguments in this House on what originally are misquotations. Deputy Aiken, no doubt speaking with full authority as an ex-Minister for Finance and as one of the members of the Front Bench Opposition, made a long speech yesterday and to-day. His speech, in effect, was built on misquotations from the statement made by the Minister for Finance when introducing the Budget. He stated yesterday, and repeated it several times to-day, that the Minister for Finance had stated that there was inflation, that we were in an inflationary situation. I think it necessary, therefore, to intervene to draw the attention of the House to what the Minister for Finance did, in fact, say. He said, speaking at column 1645, Volume 120, No. 11:—
"Broadly speaking, the State investment programme can be carried through without causing inflation or restricting the amount of capital available for private enterprise, if output is expanded, if resources are withdrawn from consumption by increased savings, and any deficiency in the resources so set aside for investment is made good by external disinvestment in the form of imports of goods."
At column 1648, the Minister for Finance, dealing with the necessity for reviewing the policy of State investment continually, said:—
"In particular, State investment must not be allowed impinge upon productive capital investment or impose undue strain on the economy. So far no such undesirable consequences have manifested themselves, but, with the higher level of State investment planned for the current year, closer attention will be necessary to guard against their emergence."
I think that every Deputy who listened to Deputy Aiken's speech last night and to-day will agree that at every second sentence he based his argument on what was supposed to be the statement made by the Minister for Finance in his Budget speech, that there was inflation. Surely it is unworthy of Deputy Aiken, or of any responsible member of this House, to build a whole case, and a whole series of arguments, on a statement that was not made. Apart from being unworthy, it appears to be somewhat childish and foolish. For years we have heard talk of inflation. Inflation is a word which is used for the purpose of rather frightening public opinion.
Frightening the wage earners.
Frightening the wage earners and the people generally.
That does not affect Deputy Davin.
What is inflation? It is perfectly simple. Deputy Aiken was asked yesterday but he just evaded the question. Inflation is a situation wherein the prices of commodities are forced up because of a scarcity of supply and an abundant supply of money. In other words, there is the simple explanation which Deputy Aiken should have been able to give: "Too much money chasing too few goods". You had inflation during the war period when there was a scarcity of goods: when, because of a scarcity of goods, prices were forced up. Is there any inflation at the moment in this country except in regard to house property? There is no scarcity of ordinary commodities, save and except such seasonal scarcities as occur at all times, to an extent that forces up the prices of all commodities. There is inflation, if you like, in regard to the price of houses and house property; but the only way to remedy inflation in regard to house property is not to restrict money to build the houses that are necessary. That inflation will remain as long as there is an insufficient number of houses.
Furthermore, it seems to me that it is perfectly ridiculous to talk about the dangers of inflation in our economy as it is constructed at the moment, because in point of fact we have little or no control over the influx of money into this country, and therefore, you may reach a position at any time, through circumstances outside your control, where you will have too much money in circulation chasing too many goods suddenly. But that is a situation over which we have deprived ourselves of control, over which we have no control. Therefore, it seems to me ridiculous constantly to talk about inflation as if it were a matter which could be controlled in this House. The prices and supplies of a great many ranges of articles are determined not by ourselves but in another country.
Deputy Aiken thought he was being very clever in misquoting some remarks I made in this House in November, 1947, when criticising a Supplementary Budget which he had brought in, a Supplementary Budget which proposed to impose substantial additional taxation on commodities that were in general use by the population as a whole and, in particular, by that section of the population which was the worst off. I pointed out on that occasion that we did not consider the method used to impose additional taxation a proper one. Perhaps I might quote in full what I did say so as to end this particular misquotation for good and all, I hope. As reported in Volume 108, column 1445, of the Official Reports, I said in the course of a speech criticising the Supplementary Budget brought in by the then Minister for Finance:—
"There are other methods of raising taxation. One of the reasons for the increased cost of living, certainly in our cities, is the influx of tourists, of foreigners, who, quite naturally, come in here because they can buy more food and various luxury articles. Why not tax the tourist traffic? Why not have a purchase tax on luxury articles? Why not tax the exports taken away by these tourists? I suggest that, if a purchase tax were put on luxury articles, it would yield a return more than enough to meet adequate food subsidies."
These additional taxes were being imposed at a time when we were told there was not enough money to pay decent old age pensions, at a time when there was no money to build hospitals or sanatoria. I suggested that, if additional taxation was necessary, it should not be that section of the community that was the worst off which should have to pay it. At that period you had a tendency, if you like, towards inflation, because there was a scarcity of goods here owing to war conditions.
It seems to me that the Opposition —I see Deputy MacEntee is here and I hope he will deal with it—should in the first place make up their minds after due consideration as to what attitude they are going to take from now on. The Budget which they are criticising is a Budget that includes £34,000,000 for capital expenditure. Can we take it from the speeches made here that the Fianna Fáil Party advocate that we should cut down on housing? Do they advocate that we should not build houses or finance the building of houses? Do they advocate that we should stop the building of hospitals and santoria? Do they advocate that we should stop reafforestation in the country? Do they advocate that we should stop drainage, that we should stop electrical development, turf development, the building of schools and transport development?
It seems to me that the only logical sequence to their argument is that they must go out on a campaign to advocate that we stop these developments, and thereby cut out the capital development schemes which they are criticising. I think that they had better consider very carefully their future before embarking on that policy in the country, that they should realise that one of the worst evils from which we suffer economically is that the country is under-developed, that there has been an insufficient amount of money invested in this country. I think the lack of development, the lack of investment in this country, is to a great extent an indictment of the policies pursued in this country since we got control of our own affairs. There may be a great many circumstances which were responsible for that. But I would suggest to the Opposition that they should be the last to criticise capital development in the country, that, on the contrary, if they would be logical, if they are not reversing their policy from top to bottom as they did in certain other respects, their policy should be to criticise this Government for not carrying out sufficient capital developments, and for not investing sufficient in the resources and the future of the country.
Having listened last night and for a considerable portion of to-day to the speech of Deputy Aiken, I think it is fair to say that the bitterness which imbued members of the Party opposite after their removal from this side of the House is still very much alive, because Deputy Aiken's speech, in so far as it was a contribution to our deliberations here, consisted merely of the mouthings of a very angry man. I do not intend to follow that line in any detail, but, in so far as Deputy Aiken, speaking for Fianna Fáil, said that there was something new or novel in the policy contained in the financial statement we are discussing, I should like to remind the House and the Party opposite of what I think was the first statement made by the Taoiseach on the formation of this Government. The Taoiseach in a radio address on the 24th February, 1948, stated the Government's policy as follows:—
"In existing circumstances efforts must be concentrated on measures to increase the national income so as to provide, within the limits of our resources, for adequate health and social services; so as, within the shortest possible time, to increase agricultural and industrial production and thereby provide some hope of easing the pressing burden of the high cost of living."
It became the aim and the concern of this Government to see that that policy was put into effect. We are now discussing, to a certain extent, the progress that has been made during the past two years. It is fair to say that, to a large extent, the aim which was then announced by the Taoiseach has been achieved. During the past two years, agricultural output and industrial production have increased immeasurably. I note that we are one of the three countries in Western Europe who have increased industrial production by over 100 per cent. since 1938. All that has been achieved inside the past two years.
Oh, dear, dear!
All of us know, with regard to industrial production and the output of goods from our factories, that our production in 1948 was practically non-existent—the reason being that in those days any industrialist in this country had merely the home market in which to sell his articles. As a result of an excellent agreement between Great Britain and ourselves in June, 1948, an expanding market abroad has been found for our industrial goods.
You are making Deputy MacEntee mad.
He certainly is. I know something about it.
I am merely putting a smile on his face to wipe it off in a few minutes' time.
Acting-Chairman (Mr. O'Reilly)
Order. Deputy O'Higgins.
While that progress is being made I want to remind Deputies of two of the main problems which this Government hopes to tackle, namely, the problem of persistent unemployment in certain areas and the problem of emigration. It is clear, and it has been stated time and time again, that problems of that kind have existed in this country because of chronic under-investment in the country. That was recognised by the Minister for Finance on the formation of the Government and it has been stated time and time again by Ministers in the past two years. In this Budget, and in relation to the financial policy contained in the Minister's statement, an effort is being made to deal with the question of under-investment; an effort is being made to provide some means of increasing employment in this country and of increasing the amount of money that can be earned by our people so as to provide them with secure employment over a period of years at home. I should have expected that that policy would be welcomed by all Parties and by every Deputy in this House. Instead of that, in so far as we could understand Deputy Aiken, apparently the Fianna Fáil Party considers that that policy is wrong and dangerous and should not be supported. Apparently, they are quite happy and content with the situation which has existed in this country since 1932. It is well for people to remember that only since 1932 have the problems of casual employment and consistent emigration throughout the years existed. Apparently, they are content that that should continue and that the only concern of the Government should be to throw out from time to time each year sops by way of special employment grants and measures of that kind to alleviate local unemployment problems. I do not think that that view could possibly appeal to sensible people in the country. It would be better to try to get at the source of problems of that kind. In so far as the Minister's statement aims at solving problems in that way, it should have the support of Deputies on all sides of the House.
Having listened to the speeches made by members of the Opposition, it would be rather difficult to realise that those speeches are being made by the same Deputies in the same Party who only two years ago were criticising the present Minister for Finance and the Government as being concerned only with retrenchment and economising and as being determined under no circumstances to spend money on fruitful employment or fruitful schemes in this country. We all heard the propaganda which was spread throughout the country after February, 1948, to the effect that now that there was a Fine Gael Government in power everything would be cut down and money would not be available for anything. The speeches of the Opposition at that time ignored the statement by the Minister for Finance that as long as this Government was in power wasteful expenditure on mad schemes such as the flying of aircraft, manufactured outside this country and paid for with Irish money, to America and back, would be cut out and, in their place, money would be made available for production and for increasing the real wealth of the country. That policy was made clear two years ago by the Minister for Finance. We are seeing now, after two years, evidence that that policy is being put into operation, and, accordingly, we find a change in the tune being played by the Opposition.
I think that the course of conduct to be pursued by Fianna Fáil in the years that lie ahead is now becoming increasingly clear. I am naturally not very privy with the secrets of the Opposition, but I can well imagine in the last six months some conference being held by the leaders of the Opposition Party and those people saying to themselves: "If the Government's policy of investing money in Ireland is carried out, then that Government is going to remain a Government here for many years to come, and, accordingly, that policy must be prevented from becoming a success."
In that last six months, a very new and dangerous phase in Fianna Fáil propaganda has become apparent. In the last six months, speakers from Fianna Fáil, who ordinarily would not command any real attention in the country, have made themselves obvious and, like a lot of small-minded people, when they want to be mischievous they may, possibly, become extremely dangerous. They have taken to the hustings and we have a new story spread here within the past six months that there is something very dangerous in the economic condition of this country, that Ireland is ceasing to be a safe investment for Irish people and Irish money, and a suggestion has been spread by Fianna Fáil that the thrifty savers among our people would be better off investing their money in Britain or other countries rather than investing it here at home.
Who said that?
Quote one person who made that statement.
I will give you plenty of them. Not more than a fortnight ago we had one of the Deputies, sitting in this House at present, making a speech in which he appealed to the banks of this country to prevent the success of this Government's investment policy by holding fast to the deposits of its customers. At the same time, we see in the House a member of the Fianna Fáil Party, Deputy Briscoe, who is also a member of the Dublin Corporation. He can remember not so very long ago the concern caused to the corporation of the City of Dublin because of the refusal by the banks to make a necessary loan to the Dublin Corporation. That loan was made available as a result of direct intervention by the Government. I wonder had Deputy MacEntee that particular matter in his mind when he made the statement which was published in the Irish Press on Wednesday, 3rd May last? That statement is as follows:—
"The screw is to be put on the banks to do what Mr. McGilligan has admitted the public are not prepared to do. That is the explanation of the cold war which Coalition spokesmen have been waging on the Irish banks."
Here we have the desperate appeal of the desperate politician:—
"But the banks had a personal responsibility to their depositors, and it would appear from Mr. McGilligan's own statements that they had been impressing this point of view upon the Government. The banks, naturally, and because they had certain traditional standards of conduct in these matters, were apparently refusing to become the instruments whereby the cautious thrift of their customers was to be fully explored and exploited."
And then he goes on—a pat on the back from Deputy MacEntee:—
"Unless the banks stood firm and the people supported them, the State was heading for financial chaos."
What is that but a direct invitation to the banks—if they were to be blamed, as they were blamed by the Dublin Corporation: "Stand firm; do not give this Government any money to invest."
To squander.
Call it what you like.
That is what I call it —squander.
I wonder will Deputy MacEntee say that in his constituency when he finds houses being built in areas where they are necessary and where houses were never built before.
There are damn few houses going to be built with this money.
I can understand now that in Deputy MacEntee's view investing money in houses and hospitals is squandering. I hope, since Deputy MacEntee has used the word "squander" that when he speaks here—and he obviously is cooking his speech over there—he will define what item in the capital expenditure programme in this financial statement he believes will be squandering money. Will he regard houses, schools and hospitals and any of the other matters set out in that list as squandering?
We built 34 hospitals in a few years.
Here we have a man who was formerly a Minister for Finance in this country saying that unless the banks stood firm and the people supported them the State was heading for financial chaos.
And those are the banks that got £33,000,000 over a period of years from the people.
Deputy MacEntee's speech, and speeches made by other members of the Opposition Party within the past six months, are evidence of a deliberate intention on the part of the Opposition to wreck, in so far as they can, the confidence of the people of the country. I do not know whether Fianna Fáil hope to derive any political benefit from that kind of policy, but I would say to them that they should, after a number of years in public life, by now have recognised that they owe a duty first to the country and, secondly, to their own political ambitions. It would seem that they are out to wreck and are determined to wreck any investment policy this Government proposes to pursue. They are determined to wreck the desire of the Minister for Finance to get the people here to invest money in Irish housing. They are determined to prevent, in so far as they can, the carrying out of the hospitalisation programme and the other capital schemes referred to in the financial statement.
In trying to wreck schemes of that kind by shaking the confidence of the people in them they are doing irreparable damage to Irish economy. One thing successive Irish Governments had achieved since 1922 was the creation amongst our people of a confidence in Ireland as a nation and as a country. Irish government since 1922 was beginning to establish a confidence in the people in our ability as an independent country to look after our people and provide employment and a livelihood for them. The old idea that anybody who had money, saved or otherwise obtained, should invest that money in some foreign concern was beginning to die out. I think it is unfortunate that speeches, such as the one made by Deputy MacEntee to which I have referred, are made in an effort to recreate that menial dependence on outside countries and on investment abroad. Deputy MacEntee was not alone in his little swan song to the Irish banks, because we had Deputy Lemass, the cockpit economist, speaking in Portumna on 13th April last——
What is a cockpit economist?
Ask Deputy Lemass.
He would not know.
You are the authority on cockpits.
I gave the wrong reference.
I am not surprised.
Speaking at Belturbet on 25th April last Deputy Lemass is reported as saying that the sum total of the Coalition's madcap policy was to create inevitably a few years hence a situation of trade depression, rising prices, widespread unemployment and a sharp reduction in the people's standard of living.
"This consequence",
he said,
"would emerge only gradually and the Government hope to get another election by then."
That is a statement made by a man who was a Minister for 16 years, a statement prophesying the consequences which would flow from an appeal to the people by the Government to invest in these capital schemes. The madcap policy of the Government would result in trade depression, rising prices, widespread unemployment, and so on. Nevertheless, I have no doubt that when the Minister for Finance announces the details of such loan as he may ask the people for, we will have hypocritical statements from the spokesmen of the Opposition informing the country that they support and will lend every assistance to the success of that loan. But for a long time before the loan is sought, their game is to ensure that the loan will not be successful.
Coming back again to Deputy MacEntee, I notice that in the last couple of weeks it has been Deputy MacEntee's view that the policy of this Government consists in putting our liberties as a country into pawn. That very remarkable statement was made by Deputy MacEntee at some meeting, not specified, in Dublin southeast on 3rd May last. Putting our liberties into pawn: that provides a very alarming headline in the Irish Press. An examination of the report underneath that headline indicates that, because the Irish Government is availing of a loan from the American Government, we are thereby giving to America some lien on Irish territory which may be used against Ireland or against the safety of our people in time of war or emergency. That is a truly alarming statement coming from Deputy MacEntee.
Is that what he said?
That is the interpretation.
"To do what the present Government is doing in regard to American loans is to court disaster, for it gives to an outside Power a lien on Irish territory which in time of war, or international crisis, may place our liberties in direct jeopardy."
That is very different from what you said.
I trust that Deputy Briscoe is satisfied. If it is Deputy MacEntee's considered opinion that such dire consequences will result from our joining in such assistance as America is giving to Western Europe, why did he remain silent here when this House decided to accept assistance from America? Why did his Party support that? Why did the Leader of his Party pay a tribute, with other responsible members in the House, to the generosity of the American people? I think Deputy MacEntee's constituents should ask him such questions as those, and I am certain that the questions will be asked, because, with regard to that, Deputy MacEntee is behaving very like his Leader and other members of his Party behaved in relation to the establishment of our position internationally as a republic not so very long ago. They gave to that measure support inside the House. They then sat back to find what profit they could obtain by beginning to be doubtful. I mention these matters, speeches made by Deputy MacEntee and others, because they seem to me to be symptomatic of the new line being adopted by the Opposition. It is a line which, in my view, is destructive, and will, in the long run, not prove to be a correct national line for a national Party to pursue.
We know also that the land reclamation project, now in operation throughout the country, is a type of investment in which there is a direct and apparent return in real wealth to the country. That type of investment is something which gives a return clearly discernible, if not to Deputies opposite, certainly to the individual farmers who are benefiting by the scheme.
Nevertheless, we find Deputy Lemass asking us in this debate was there any Deputy who would state that land reclamation increased the value of the land reclaimed. Frankly, I find it hard to understand that type of mentality because I would have thought that whatever divergence of opinion there may be about other matters between Parties here, certainly a project like the land reclamation scheme would have the complete support of all Parties in the country. Apparently Deputy Lemass means that this is something about which people should be doubtful. For his benefit I should like to assure him that when a landholder finds a field which grew nothing but weeds and dirt turned into fertile land under the land reclamation scheme, he at least is convinced that the capital value of his holding is increased and that he is certainly put in a position to produce more from that field than it had been producing before it was reclaimed. I should like to emphasise my own point of view that so long as investment is continued along lines like that there is a real return to the people of the country as a whole.
I also was interested to hear Deputy Aiken saying here to-day that the Government should carry on the Fianna Fáil policy of providing investments of a capital kind out of revenue each year. He took as an example farm buildings. He said with regard to schemes of that kind that Fianna Fáil had provided a sum of £250,000 or so in their last year of office and that the present Government should be content merely to provide sums of that amount each year out of revenue and under no circumstances borrow any large sum for large schemes. I feel that is a wrong approach and I do not think it is one that would appeal to sensible people. We know that if we had sufficient time and if a large number of our people had not already left the country we might perhaps solve the housing problem and problems such as the reclamation of land by doing a little bit each year, but I think the wiser course is to endeavour to make substantial progress within as short a space of time as possible to ensure that there will be a return in increased production or in better living conditions for the people. Deputy Aiken suggested that farm building schemes were dropped or abandoned by this Government when it came into office, but actually we know that they were only temporarily abandoned because the Government were more concerned with using cement for building houses for the people than in using cement to provide housing for animals.
In conclusion, I merely want to say to the Opposition that if they have, as Deputy MacEntee appears to have, the view that items of capital expenditure, for which a loan will be sought, are in some way a species of squandermania that they would assist the Government and certainly would assist the Minister by specifying which of the different schemes can be so regarded. If they think that to expend money on houses or on any of the other capital projects set out in the list is squandering money, they would be fulfilling a very useful purpose in this deliberative Assembly by stating which of the schemes can be so regarded. I know that my suggestion will not be adopted by any of the Opposition speakers who are yet to speak in this debate because I do not think that even the thick hide of Deputy Aiken could withstand the rebuffs he might get in his constituency if he branded expenditure on housing as squandering money. But perhaps that particular fear would not prevent Deputy MacEntee from so acting. I would suggest that if they have that view they should state it here. Generally I hope that the line taken in the speeches already made by Deputy MacEntee and others with regard to this country's financial and economic position will not be followed by other speakers of Fianna Fáil. I hope that some sense of responsibility will be felt by the majority of the Opposition Party, that they will recognise that they have a duty first and foremost to this country, that whatever cheap political advantage they might get out of embarrassing the Government or the Minister with regard to these schemes, must count as nothing if they shake the confidence of the Irish people in the Government here and in our own institutions. It seems to me that is the effect of the line which has so far been pursued by them. That is the effect of saying, as Deputy MacEntee has said, that the banks should have nothing to do with a policy of this kind and that we should look to the banks to safeguard the deposits of their customers. I think that is a most harmful line and one that may have very disastrous effects on the country generally. I hope that at some stage that line will be disowned, if not by the Leader of the Opposition, certainly by the majority of that Party.
The Deputy who has just sat down asked me if the Fianna Fáil Party regard expenditure on housing as squandering. The Deputy is a young man. Perhaps he does not remember what the housing position was when we came into office in 1932. Perhaps he does not remember that we passed the Housing (Miscellaneous and Financial Provisions) Act, of 1932, under which over 134,000 houses were built and reconstructed in this country very largely in the period between 1932 and the outbreak of war in 1939, and that, in so far as we provided grants in aid of the construction or reconstruction of those houses, and in so far as we provided annual grants to the local authorities to enable them to meet the capital charges upon those houses to the extent of £9,193,000, every penny piece of that money was raised out of revenue, and that not one penny piece of it was raised by borrowing. In addition to that, out of the Local Loans Fund we provided financial resources for the local authorities to the extent of almost £16,000,000 for houses and other purposes.
That is the Fianna Fáil record in regard to houses and it is an honest record; but what we are objecting to in this Budget and in the policy on which the Government are embarking is the fact that money which should be raised by this Government out of taxation in order to meet their obligations is not only not being raised in that way, but that they are creating a financial situation in this country which will make it impossible for the Government's successors, when they come into office within the next two years, to carry on, and that this is being done by the Government as part of a deliberate policy.
Do you think you will get back again?
Deputy O'Higgins said it was the duty of members and of responsible public men to protect the credit of the State. That is true, but, above all, it is the duty of the Government to protect that credit, and there is a responsibility on the Opposition to protect the people against the consequences of ill-government. It is the duty of the Opposition to point out the mistakes of the Government, to criticise the policy of the Government and, if possible, to save the people from the consequences of that policy. It is no part of the functions of the Opposition—indeed, it would be a grave dereliction of duty on the part of the Opposition—if it were merely to cover up the mistakes of the Government. Therefore, though a public man places himself in grave danger of being misrepresented when he criticises the financial policy of the Government and the relationship of the Government to the banks, and through the banks to the depositors in the banks, to the people who have their savings in the banks: though a public man, as I say, places himself in grave danger of being misrepresented, as I have been misrepresented in this House by Deputy O'Higgins, I hope that there will always be men to stand up and lift their voices to ensure that the banks will not be exploited in the interests of the Government in the manner in which they are being exploited now.
Were they exploited?
I thought Deputy O'Higgins had finished his speech. He should not interrupt.
I shall come back to that aspect of the Government's policy later on. I prefer now to turn to another statement of Deputy Thomas O'Higgins. Deputy Thomas O'Higgins must have been an ardent student of the policy of the late Adolf Hitler, because that deceased statesman had one motto for which he found invaluable use in all the political controversies in which he was engaged. The motto was a simple one: "The bigger the lie the more people are likely to believe it." It was, surely, in implementation of that principle that Deputy O'Higgins made the audacious statement with which he opened his speech, that the Government opposite had been responsible for the industrial development of this country.
I said the increase in production.
Industrial development was what the Deputy implied: that all the things that were being done now had been done since this Coalition Government took office. There is a Minister sitting in front of the Deputy now. Let us see what that Minister had to say some years ago about our policy for the economic development of this country. I am quoting from his speech, which will be found in Volume 51, column 454, on the Central Fund Bill for 1934. The present Minister for Finance, who was then Deputy McGilligan, sitting on the Opposition Benches and commenting on the Estimates for the year 1934-35, said:—
"Let us take one of the good schemes. The Minister for Industry and Commerce last night said: ‘Before you go to bed every night say "Wheat, beet and peat".' Provided you repeated that you would go to Grangegorman. I will give them another slogan. As well as saying ‘Wheat, beet and peat', add butter, bread and alcohol."
These were then the principal agricultural problems which were engaging the attention of the Government of that day, confronted and all as it was by the Blueshirt opposition. We were then endeavouring to develop our natural resources. That was the year in which, for instance, we had started the hand-won turf scheme; that was the year, for instance, in which we were bringing in a Bill to enable us to buy out the Belgians who then owned and were exploiting the Carlow sugar factory to this extent, that not merely did they get the beet for nothing, but they were paid £40,000 or £50,000 for turning it into sugar, and, on top of that, a handsome profit of about 20 per cent. per annum. Under that Bill, we were proposing to build three more sugar factories, having expropriated, or bought out, the Belgians for the sum of £400,000. To that extent we repatriated £400,000 worth of external assets against the opposition of the gentlemen who had implied that the encouragement of wheat, beet and peat would drive the people of this country into Grangegorman or similar institutions.
If the Deputy who has just spoken paid as much attention to the speeches of the present Minister for Finance and to the statistical data with which he supports them, would only turn to Table 6 he would see there a considerable number of assets which did not figure in the table of national assets in the year 1932. He will see the Local Loans Fund which now amounts to £18,594,146; he will see advances under the Turf Development Act of £3,107,557; and if he will turn to the debates on the various Bills which authorised the Government to proceed with the development and exploitation of our peat resources he will see what his present leaders had to say about this policy of turf development. If he goes down the list further he will see taken into account here a sum of £804,000 invested in the Industrial Credit Company. That was the amount originally invested in that company. Everybody knows that the shares in that company at present are worth three times what they are entered at here. But, when the company was under discussion in this House, the present Minister for Agriculture, referring to these 800,000 shares which are now valued for about £2,500,000 said— he was then of course a big village merchant—"I would give them away with a bar of soap." I wonder would the Minister for Finance give the shares in the Industrial Credit Company at present away with a bar of soap? Then he will find shares in Irish Shipping, shares in the Irish Insurance Company and shares in Aer Línte, Teoranta. These were the things that were done when Deputy O'Higgins was a band boy or a bugle-blower in the Blueshirts. He comes along here and he suggests to the Irish people, who know our record and know theirs, that the economic development of this country began with the advent of the Coalition Government to office.
Deputy Cowan gave us a very rambling dissertation which did not seem to have very much point in it, except that he did not like people to be guided by experience, because he said he did not like going back and examining what had been done in the past. Prudent men who are embarking upon a new and strange road like to see what has happened in the past, like to be fortified by past experience and, if necessary, to have their courage stimulated by the fact that men have done before them what had been regarded as impossible. Deputy Cowan, however, said one very pertinent thing. He said this Budget had brought the country to the crossroads. I seldom agree with the Deputy, but I must say that I wholeheartedly agree with that statement. This Budget undoubtedly has brought the country to the crossroads.
Hitherto, the Governments of this State, our predecessors to some extent, not less than ourselves, had certain standards of financial rectitude which they tried to live up to. The Cumann na nGaedheal Government may have been too hide-bound, too conservative. They were tired men who had gone through a great period of disillusionment and they were content to be over-cautious and over-prudent. We were a much more enterprising Government. The industries which were established under our auspices, the achievements which we had built up, even in industrial insurance—look at the Insurance Company of Ireland—the shipping company, the sugar beet factory, the Turf Development Board and, more significant than anything else, the extraordinary developments in electricity supply which have been experienced since we took office, the rural electrification scheme, the turf-burning stations, were all of them carried through by us against the criticism and the opposition of the gentlemen who now, like cuckoos in the nest, are trying to claim credit for them.
These were the things which were done by us. It is upon the foundations laid by us that the things which now receive so much advertisement in the newspapers are based. But, though these things were done by us, they were done after prudent investigation. They were done with a full consciousness that they were to some extent, perhaps, speculative investments and that, therefore, if we were going to undertake them, we were going to say to the Irish people that in our time and during our period of office the people would have to pay for them. There is not a share in any one of these industrial companies that was not paid for out of revenue. The investment in the sugar company and the investment in the Industrial Credit Company were, on the balance, paid for out of revenue and the proof of that is to be found in the table circulated with the Budget of 1938 which showed that, despite the fact that the public debt had expanded in the period from 1932 to 1938, the value of the assets acquired for the State exceeded the increase in the public debt by no less than £10,000,000. That is what gives this little country economic stability, that is what enabled it to carry through during the world war. It was that attempt to make this country not merely self-sufficient and self-supporting, but also self-respecting by paying its way as it went, that gave to our people the moral stamina and the confidence which enabled them to win through the perilous years of the world war from 1939 to 1945.
Let us consider what is the new road that we are being asked to embark upon. The Government propose this year to spend £107,000,000. If that £107,000,000 were to be spent on purposes which were clearly reproductive or essential, which had some real social objective and not a political aim, none of us would question it. But, on whomever it is going to be spent or on whatever it is going to be spent, there is one thing made clear by the Budget statement of the Minister and that is, that that £107,000,000 is going to be taken this year out of the earnings and savings of our people. I concede that a large part of that expenditure is, by reason of the social organisations which we have built up, unavoidable. We concede that a large part of it is going to be expended for purposes that are eminently meritorious, but we must not forget that what the Government spends is secured by denying the right of the people who have earned or saved that money to spend it for themselves. This £107,000,000 that we are going to spend this year is coming out of the earnings and savings of our people— out of their blood and sweat and toil and thrift and tears.
The Deputy is quoting Churchill.
It may be easy for Deputy Davin to laugh. He does not save much, perhaps, and he is secure.
And you are secure.
That is not the position of the ten-acre farmer west of the Shannon about whom the Minister for Agriculture was so voluble a few years ago. People who live in sheltered occupations ought not to jibe and jeer when somebody is speaking in defence of their less fortunate brethren. Let me impress upon the Deputies of this House that this money is going to be wrung out of the toil and thrift and tears of our people.
Who is paying for the £500 a year?
One hundred and seven million pounds is no small sum. It is no wonder that those who had the hardihood to try to defend this Budget find for it such justification as they can by pointing to the enormity of the burden with which it saddles the nation, and referring to it with a hollow and empty pride as a "record-breaking" Budget. It is a record-breaking Budget—it is more than that —it is a heart-breaking, back-breaking, bank-breaking and nation-breaking Budget. It is a Budget which fastens on future years the burdens and responsibilities for the extravagance of this year. It is a Budget of confusion and a Budget of despair. It reflects the confusion of a Government torn by internal factions, who would have been unable to reconcile their differences if it had not been for the fact that the majority of its members are prepared to swallow every public declaration they had previously made regarding the financial policy to be pursued by the State in the interests of the nation.
It is a Budget, as I have said, of despair. It is a Budget which has been introduced by men who have no faith in the people—who are afraid to face the people and ask them to shoulder the burdens of taxation that the expenditure which the Government proposes would properly justify. It is a Budget introduced by men who have no hope in their political future and by men who have no trust in their own integrity and no confidence in the country. The gigantic borrowings about which the Minister has been so doleful, and some of his more ardent supporters in this House so glib, upon which this Budget is based, would only be undertaken by men who, if they were rational and sane, felt confident they would never be called upon to repay them—at least not in money of the same purchasing power as their borrowings have. This Budget is sinister and significant. It is a Budget which, in my honest belief, looks to the future depreciation of the currency and further devaluations to rid the younger generations of this country of the incubus with which it proposes to saddle them. It is a declaration of war upon the thrifty and prudent. After this Budget, and the one or two more modelled upon it that will come after it, if this Government, which, God forbid, survives——
That is what you are afraid of.
——what man can say what his present savings, whether they be now in the joint stock banks, in Government securities, in the Post Office Savings Bank or in savings certificates will be worth?
Those who try to defend this Budget talk very lightly about passing the burdens on to the future and making posterity pay. It is not posterity who will pay. It is the present taxpayers, ourselves and our children, our young men and young women who all through our lives and theirs will pay for the cynical improvidence of this Government. They are, in fact, paying for it already.
In this year's Estimate the amount required for service of the public debt is going to be £5,128,000—or £1,869,000 more than was required for the same purpose in the last year of the Fianna Fáil Administration. On the Minister's admission in reply to a question which I put to him, that figure of £1,869,000 represents almost the total yield in present circumstances from 1/6 in the £ on the income-tax. It is somewhat less than that, but as we deal with shillings and sixpences when we talk about income-tax, it is nearer 1/6 than it is to 1/-. That additional sum of £1,869,000 is now being paid and will continue to be paid for the lifetime of one generation. Next year if this Government is in office more will be added to it and still more in the following year. There is only one hope, and that is that the jolt which this Budget has given to the people will make certain that this coalition will break up as rapidly and as unexpectedly as it came into existence.
And get Basil Brooke and yourself to carry on.
Let us put this Budget in its proper perspective by quoting some reflections on previous Budgets of much less magnitude and giving a few figures. In 1933, which is a significant year, the total provision for the Supply and Central Fund Services and for capital issues outside the Budget was £32,446,000. In that year also I may say that the Fianna Fáil Government had to provide, and did provide, over £550,000 for the repayment of moneys that had been borrowed by its predecessors. Now, 1933, as I have said, was a significant year. It was the first year of the economic war. It was the year that witnessed the birth of the Blueshirts, and here is what the present Minister for Finance, then Deputy McGilligan, had to say about the financial provisions of that year. I quote from Volume 46, column 1015:—
"I find that from the old Estimate of 1932-33 there have been deducted payments amounting to about £2,300,000. From Vote 16 there is a deduction of £1,231,000, the payment for the pensions of R.I.C. and other people. From Vote 8, Local Loans, there is subtracted the sum of £600,000—Local Loans payments heretofore paid out of the Exchequer of this country across the water."
The Estimates to which Deputy McGilligan then referred were the Estimates that had been prepared by himself and his colleagues in the Cumann na nGaedheal Government, which was put out of office in 1932. Proceeding from this, the then plain Deputy McGilligan, and I am referring to his position then as a plain Deputy on this side of the House, went on to say, in column 1022:—
"I do not think people have yet got it into their heads that this year we have had the full benefit, not merely of the retention of the land annuities, but of the pension moneys and other sums withheld."
"I wonder," conjectured our present Minister for Finance, with that chaste and polished turn of phrase which so often distinguishes him—"I wonder," he said, "is anybody going to be very happy after we have looted all we can from those two accounts this year.' Then came this piteous complaint from the Minister, whose present policy is to hit the British in their pride and prestige through their pockets. "We have," complained Deputy McGilligan, "in fact, distributed to the people of the country all that has been taken from the British."
When Deputy McGilligan spoke these words, complaining bitterly that we had given to the Irish people what he and his colleagues had previously taken off them to hand over to the British Government, the total expenditure of this Government for all purposes above and below the line for the year 1933-34 was £32,446,000, and this year, under the Government that was pledged to reduce—under the Party which was returned pledged to reduce —expenditure, it is going to be £107,000,000.
I have some other equally "fruity" declarations by Deputy McGilligan, as he then was, available for quotation here, if necessary, but time is pressing and, tempting as it may be to refresh his memory about them, I had better pass on.
As I have said, 1933 marked the beginning of the struggle to retain the land annuities and secure the abrogation of the Secret Financial Agreement with Great Britain. I should say 1938-39 is an equally significant year, because it marked the victorious close of that struggle; it marked also the period when the Blueshirts were defeated and the ports were recovered.
What have the Blueshirts to do with his Budget?
Nothing whatever.
Deputy MacEntee is at the moment wearing a blue shirt.
He should make some effort to be constructive.
I am referring to the particular significance of the year 1938-39—I said I was going to refer to significant years. In that year the Treaty of 1921 was finally undone, except for Partition; we had got back the ports and secured independence and liberty of international action in this part of Ireland. In that year, a happy and fateful year, as I think I might describe it, Government expenditure for all purposes above and below the line was £44,656,000. In that year the expenditure was abnormal, for we had to raise the Financial Agreement Loan of £10,000,000 to give effect to the Financial Agreement under which Great Britain relinquished all claims — the claims which the secret Financial Agreement of 1923 gave her on this country. Therefore, the total amount which might have been chargeable in the ordinary way for expenditure above and below the line was, in fact, not the £44,000,000 I have referred to, but £34,656,000.
Here, in this present year, an expenditure of £107,000,000 is envisaged, and we are to borrow over £12,000,000 of that, not for the Electricity Supply Board, not for turf development, not for aviation development, but for housing grants, for arterial drainage, for employment schemes, urban and rural, down even to petty figures like £11,000 and £14,000 for other purposes.
It may be enlightening to Deputies who were not here when that historic Budget was introduced to recall what some of the luminaries of the present Coalition Government had to say about borrowing, not £30,000,000, not even £3,000,000, but only £300,000, 1 per cent. of the amount that is to be borrowed by this Government this year, for the purpose of defraying one-half the cost of modernising the defences of Cobh, Berehaven, and Lough Swilly, the other half of that £300,000 being defrayed out of revenue.
The present Tánaiste was then a private Deputy, keeping his eye on the people's halfpennies like a miser watching his gold. He did not believe in spending anything in that year to defend the ports. This country and her people and their liberties to his mind were not worth £600,000, so he delivered himself in these terms in the Budget debate in 1938-39. The reference is Volume 71, columns 1371 to 1375. I do not propose to read the whole five columns, but this is the burden of what the present Tánaiste, when he was Leader of the then Labour Party, said:—
"In this debate the provision of a sum of £600,000 for armaments has been referred to, and we must bear in mind that that sum of £600,000 is for armaments...."
Later on he said:—
"... apparently we are now to embark on a policy of defending the ports. Now, I want to raise the question here as to the wisdom of embarking on a policy of that kind, which is eminently suitable to Britain and which meets Britain's imperial needs and her shipping needs."
Then he went on to say:—
"I was pointing out ... that it was very questionable whether a scheme of defending the ports, situated as they are, was one that suited Irish interests.... We are going to defend these ports now ... I question whether that is good policy from an Irish point of view.... I am afraid that the defences of these forts, situated where they are, are going to be of much more use to Britain than they are to this country. I ask the question here on this Budget discussion: What are we going to defend these particular forts for? ... what purpose is achieved in defending these Irish forts? What purpose is gained by starting off immediately to take over and defend these forts...?"
Not only was the Tánaiste the watchdog for the taxpayer, but apparently he was also a military genius of the first order. He was also a prophet. In that year there would be no war, but if there was a war, why spend money on the forts, he asked, for the benefit of Great Britain. That was his plaint and his policy then. All I can say now in relation to this Budget for £107,000,000 is that he is making good his policy because, despite the fact that they propose to spend £107,000,000 in this coming year, they are spending nothing on the nation's defence. The £600,000 mentality in relation to the Irish people and Irish freedom is now the dominating element in the Government. Any money they have to spend they are going to spend trying to buy votes and in securing political kudos for themselves.
When the last Fianna Fáil Budget of 1947 was introduced the White Paper on receipts and expenditure indicated that the total amount required for the Central Fund and Supply Services for that year was £60,534,000, to which was to be added £7,211,000 for capital and other issues. This is how the then Leader of the Opposition, the present Minister for Education, opened his speech at columns 2262 and 2263 of Volume 105 of Official Reports:—
"The Minister proposes to put his hand to the extent of £5,374,000 deeper into the taxpayers' pockets during the coming year than he did last year, and last year he had an all-high record of £47,040,000. We are now at the apex of the third great failure of Fianna Fáil in power.... Fianna Fáil came into power in 1932."
Listen to this, you Republicans:—
"Instead of taking advantage of the mutual co-operation that was established between Great Britain, Canada and other countries in the Commonwealth ... we had six years of frustration and futility."
Six years which ended with the abrogation of the defence provisions of the Treaty, with getting back the Treaty ports, with enacting the Constitution of 1937, under which this State functions, these were regarded by the then Leader of the principal Opposition Party, the then Commonwealth Party, as six years of frustration and futility. Then Deputy Mulcahy, as he then was, went on to say:—
"The people are to be asked to pay upwards of £5,000,000 more than they paid last year. For what?"
"For what?" he asked, and pat came the answer from Deputy Morrissey, the present Minister for Industry and Commerce: "For glass-houses and moss." Now, the House will recognise that this masterly sneer was directed to the fact that the Budget, against which Deputy Mulcahy was inveighing, provided a sum of £100,000 for the cultivation of glass-house products and the extension of poultry keeping in the Gaeltacht. They are talking now about this Party being opposed to economic development. It is a pity that Deputy Tom O'Higgins was not in the House then, so that he might rise up in ire and denounce Deputy Morrissey for sneering at glass-houses and moss in the year 1947-48.
The moss, of course, had reference to the fact that my colleague, Deputy Aiken, then Minister for Finance, mentioned in his Budget that Bord na Móna had started a new enterprise to provide turf-moss litter in which at the present moment—we heard somebody talking about exports —a substantial export trade is being developed, helping, amongst other things, to earn the dollars we so urgently require in order to redress, if we can, the adverse balance of payment upon which the Minister for Finance dilated at such great length in his Budget statement.
Finally, in that year of 1947-48, the then Leader of the Opposition, the present Minister for Education, let me remind you, having torn his passion to tatters about a Budget of £60,500,000, wound up with this passage, which I now recommend to his earnest study:—
"...if our people do not wake up and realise that if they are the people who must carry on the business of the country, they must get back their spending and must bring about a situation in which this grasping, grasping hand of the Government will be stayed, because it is doing nothing to increase their production and is piling up our debt."
This year's Budget proposes to do exactly that to the extent of an additional £30,000,000. It is very little wonder then, in view of his statement on the Budget of 1947-48, that the Minister for Education, who used to sport himself airing his financial expertise, has been steadily and dumbfoundedly silent in the debate upon this Budget.
In the debate on that same Budget, in which by the way substantial increases in allowances and exemptions from income-tax were granted to persons with small incomes, the present Leader of the Labour Party, who supports this Budget, Deputy Martin O'Sullivan, complained that, contrary to what they thought would be the position, income-tax reliefs on the personal side were not much greater. Now substantial income-tax reliefs had been given in that Budget of 1947-48, but Deputy Martin O'Sullivan was not satisfied with them. He wanted more. The Deputy, if he questions the accuracy of my quotation, will find it at column 247 of the debate. I think he should now go and read it and let him rub his eyes and marvel at his silence on this occasion about income-tax relief. On that occasion too, of course, the Labour Party were vocal in the same strain. Now, in the historic words of the Minister for Agriculture, they are as mute as mice.
We have nothing to growl about now.
Even if the House has heard it before from Deputy Aiken, I think I should not omit this particular gem from Deputy Dillon:—
"Take the average ten-acre farmer west of the Shannon."
He did not declaim it like that and I do not propose to imitate him; I merely propose to retail to the House what the eloquent Minister thought then:—
"Of how many of them could it be said that their weekly income is £3 per week? We are blessed with a Minister for Finance who glories in the fact that for the next 12 months he is going to spend on their behalf £140 in respect of each household consisting of a man, his wife and four children."
This year, the sum to be spent by the Minister and his colleagues will be £250 in respect of each household, but it will not be spent for the benefit of the 10-acre farmer west of the Shannon, nor any part of it. Nothing for glass-houses, nothing for tomato growing, nothing for increased poultry keeping. So far as anything is to be done for the Gaeltacht, it is going to be done out of borrowed moneys for which this generation is going to pay for the rest of our lives, and for which future generations will be paying for the greater part of the lives of our children. Of course we do not care about our children. We have no regard for posterity. We do not give two hoots for the future or for all the sacrifices which were necessary to bring the country to its present position. The policy of the Government is: "Eat, drink and be merry for to-morrow we die," and assuredly to-morrow they will die.
"Is it argued now,"
Deputy Dillon went on to ask,
"that any individual, community or State can go on for ever spending more than it earns and postponing until the Greek kalends the question of repayment and get away with it? If my memory serves me well, somebody once approached Adam Smith with that dilemma and said: ‘Can you tell me, sir, if people go on spending more than they are earning and if they never take any action to try to repay their debts, must not a State ultimately go bankrupt?' Adam Smith's reply was: ‘Well, sir, it takes a long time and a great deal to bankrupt a country,' and this gentleman will be long dead"
— this gentleman was my esteemed colleague, the then Minister for Finance —
"and mouldering before the consequences of his actions fall to be endured. That is a very comforting thought for any Minister for Finance, but it is scarcely a sound procedure for somebody who is concerned for the welfare of this country."
Very sound and very sage reflections indeed, and very appropriate to the present Budget.
Now, having heard the one-time principal performers of the long Opposition — the Opposition of 1932 to 1948 — express their views on the Budgets of earlier years, perhaps it would be a helpful thing if we were to collate these figures and set this year's proposals in their right perspective. Here are the figures which I have given and I will set them out seriatim with here and there a comment which I think would be appropriate. In 1932-33 the total governmental expenditure for all purposes was £32,446,000. In 1938-39 the figure was £44,456,000. That included, as I have said, £10,000,000 which was raised in that year and readily subscribed by the people in order to buy off, if you like, the claims which the British asserted they had on this country by reason of the secret Financial Agreement which was signed in 1923. In 1947-48, the last year of the Fianna Fáil Administration, the figure was £66,976,000. Two years later, under this Budget, it is estimated that it will be £107,000,000.
When the majority of the members of the present Government went before the electorate in 1948 they pledged themselves to cut all State expenditure drastically, just as they promised to reduce taxation and to bring down the cost of living. How have they kept their word? So far as State expenditure is concerned they have inflated it to the enormous figure of £107,000,000. Thus they have driven it up until they are spending 177 per cent. of the amount spent in 1947-48, 240 per cent. of the 1938-39 expenditure, and no less than 330 per cent. of the 1933-34 expenditure. Now, quite clearly — and this is the significance of these figures — the situation is getting out of hand. The Minister for Finance now has given up his struggle in despair and is flapping around like a wounded seagull crying "inflation, inflation", while his colleagues in the divided Government, led by the Minister for External Affairs and the Tánaiste, only laugh at him.
The Minister for Finance is very conscious of what is happening. In the debate on the Vote on Account in March last, when asked whether an inflationary situation existed, he answered — the reference is column 2522, Volume 119:—
"If I am asked I will say, the signs having been read for me, that there is inflation still around and it is a matter to be carefully guarded against. It has been there——"
and mark the significance of this date —
—"since February, 1948, but I do not think that there have been any signs of inflation breaking out in prices which, of course, is where inflation is to be apprehended. Capital development having gone on while inflationary prices were around, we will still continue while trying to read the signs correctly as they appear and we will attempt to close off and relax pressure if it should appear to be dangerous."
Now mark this. The Fianna Fáil Government towards the end of the year 1947-48 saw that, for reasons over which it had no control, an inflationary spiral was likely to develop. We realised that if it did develop, the worst consequences of that inflation would fall on the worker. The Government, therefore, decided that in order to protect the workers and, if possible, to prevent a situation arising in which wages could not keep pace with prices, to take some steps to try to stabilise the cost of living, to try to draw off unnecessary inflationary purchasing power and to utilise the proceeds for subsidising the staple foods of the people — tea, bread, butter and sugar. That was in 1947-48. Upon that issue the Fianna Fáil Government was defeated at the election in 1948. Here now is the Minister for Finance admitting last March that, as a consequence of the reversal of the policy which was then embarked upon by the present Government, there had been inflationary prices around at least since February, 1948. Now, those of us who listened to the Minister's speech and who have seen the Minister flapping around here like a wounded gull, crying "inflation, inflation", may think there is an element of poetic justice in that spectacle which may have tempted the unthinking to find some amusement in the Minister's plight.
But, there is a very serious side to this matter also. In its report for the year ending March 31st, 1949, now more than a year ago, when the situation was much less grave than it is to-day, the Central Bank had this to say about it. First of all, it issued the warning that:—
"The inflationary factors on which we have commented in previous reports continued to operate during the year."
And then it went on to say and this is very ad rem to what we are talking about:—
"The course of Budget development has reached a point where, it is greatly to be hoped, measures of restraint will be accepted as a matter of urgency. In particular, the scope and scale of State capital projects raise questions which have a vital bearing on Irish monetary stability. The avoidance of inflation and the methods adopted to finance these projects is a consideration of high importance."
These are grave words. They are the words of men who are expert in these matters, of men who have made a life study of these matters. The governor of the Central Bank is a recognised authority the wide world over. He was, first of all, Secretary to the Department of Finance; he was chairman of the Currency Commission before the Central Bank was established, and he has been a close, acute, and intelligent student of these financial and economic problems for now, I suppose, as far as I know him, at least 27 years. Against him, on the other side, telling us that there is no sign of inflation in this country, stands the Minister for External Affairs, a political will-o'-the-wisp, one who takes up one position to-day and abandons it to-morrow, who could not in the busy hours of his profession and in the long days he spends publicising himself and in his flights from and to this country, have devoted any time to the serious study of this question. The governor and directors of the Central Bank state very definitely:—
"The inflationary factors on which we have commented in previous reports continued to operate.... The course of budget development has reached a point where it is greatly to be hoped measures of restraint will be accepted as a matter of urgency. In particular, the scope and scale of State capital projects raise questions which have a vital bearing on Irish monetary stability. The avoidance of inflation and the methods adopted to finance these projects is a consideration of high importance."
Despite these measured words, the Minister for External Affairs gets up here and, speaking as though he were speaking ex cathedra, and that we were supposed to accept his deliverance as the infallible inspired word, tells us that there is no inflation.
Now, these are very grave words. They were written in respect of the year which closed on the 31st March, 1949. How much graver would they be if the position, when they were written, was as it is to-day? For the year to which they apply, State expenditure charged against revenue was £71,943,000. This year, on the basis of the figures given in the White Paper, it ought to be, if there were even a pretence at honest budgeting, about £82,000,000. Now, in the light of these figures and in the light of this balanced and restrained statement which is contained in the Report of the Central Bank, is it any wonder that the Minister for Finance, whose particular duty it is to be concerned in these matters, should have devoted so large a part of his Budget speech to emphatic warnings against the danger of inflation?
Here, Sir, I should like to do something unusual. I would like to pay tribute to the Minister for his speech which, even if he does not appreciate the source from which it comes, is certainly well deserved. I have been sitting in this House now since 1927. During that time I have listened to debates on no less than 23 Budgets, and I can sincerely say that I have never listened to a better speech against a Budget than that which the Minister himself delivered on this day week. The tragedy, however, of it is, from the point of view of the people of this country, that, so far as the majority of his colleagues and apparently of those who habitually support him are concerned, it fell on deaf ears.
So far as those who sit with him in the Government are concerned I do not think he had any reason to expect that it would be otherwise. They refused to listen to his arguments against them when the profligate proposals on which this Budget is based were before them in the Cabinet. Why should he now expect the Tánaiste, the Minister for External Affairs, the Minister for Posts and Telegraphs and the rest of them to listen to him now? Moreover, there was not any need for him to address his homily about the risks and evils of inflation to the Opposition on this side of the House. We, at least, are at one with him in regard to them. We fought them before the war, during the war and after the war, and we resisted all the urgings of the present Minister for Finance himself and of his allies to embark on a course which would surely have culminated in an inflationary wave that would have washed away the people's savings during the period from 1939 until we went out of office. Despite, however, the unscrupulous pressure of the Minister, we refused to print paper money and to spend it recklessly, as they are now doing, and to swamp the country with purchasing power which could not be profitably or usefully employed.
The Minister when he was here on these benches in opposition helped to sow the seed and he is now reaping the whirlwind. The remedy, if he fears inflation, is, however, in his own hands, and it is a simple one: let him break with the inflationists, whose price is that of keeping him in office, and not travel along a road that he is reluctant to follow. Let him defy, if he dare, the Minister for External Affairs and the rest of them. If he cannot regain his self-respect after all he has undergone at their hands, let him at least by quitting it honourably do something to restore the prestige and the power of the office which he holds. His predecessors would have done that in like circumstances.
The Minister for Finance is certainly in a very unenviable position. He has admitted that the Minister for External Affairs and himself "do not talk the same financial language"— the expression is the Minister's own. But will the House and the country consider what a light that throws on the manner in which the financial affairs of this State are handled by this Government? Speech is the common medium of discussion in cabinet or council. But, when people do not talk the same language, there can be no interchange of ideas, no sifting of argument between them at all. Yet the Minister has defended that anomalous position which exists between him and one of his principal colleagues in the Coalition in words which for weakness have never been equalled in this House.
The Minister finds himself periodically in a position in which the Minister for External Affairs speaks with greater force and, apparently, with greater authority in expressing the financial policy of the Government than the Minister for Finance does. In a statement which, to my mind, throws over the doctrine of the collective responsibility of the Government, which is one of the fundamental principles of our Constitution, here is what the Minister for Finance had to say for himself in an effort to defend that completely indefensible position. I am quoting from his speech on the Vote on Account and the reference is Volume 119, column 2521, of the Official Reports:—
"I have my own difficulties regarding the intimate association which is forced upon me with financial houses, but I do not find myself embarrassed to the point of confusion by anything which has been said either here or outside during the past six months."
The reference quite obviously is to statements on financial matters made by the Minister for External Affairs.
"It is good for people who run financial institutions to know that there are other viewpoints than those which I express and even I am not expressing myself with the fullest of freedom when I approach them. One gets into intimate association with such institutions, and there has to be a certain approach. I do not find myself weakened entirely but rather I find myself strengthened by some of the things——"
That is a Minister of State speaking. It is the Minister for Finance who, under our Constitution and under our law, has special responsibility for financial policy. Deputy Lemass interrupted the Minister to ask him:—
"Which of you is speaking for the Government?"
The Minister for Finance replied:—
"That is not for me to say, but I think that I would be accepted."
Deputy Lemass then interjected:—
"But the Minister for External Affairs speaks."
The Minister for Finance came back with:—
"I expressed a point of view which is known to the Government and appreciated by the Government and by a number of people outside the Government and in association with them."
Mark that very cautious definition of the position which the Minister for Finance occupies in this Government which proposes to spend £107,000,000 of the people's money this year:—
"I expressed a point of view which is known to the Government and appreciated by the Government and by a number of people outside the Government and in association with them."
The Minister for Finance is grateful, apparently, to the Minister for External Affairs, because that Minister has spared him the humiliation of embarrassing him "to the point of confusion". The Minister for Finance does not find himself "weakened entirely" by the pronouncements of the Minister for External Affairs. Though knocked down by the latter again and again, he still has the strength to stagger to his political feet and be grateful to his antagonist in the Government who has kicked him all over the political platforms of this country, that he has not been "embarrassed to the point of confusion". He does not find himself "weakened entirely" and, while refusing to commit himself on the question as to whether he or his opponent speaks for the Government on financial matters, says, very diffidently, even almost timidly:—
"It is not for me to say, but I think that I would be accepted."
When pressed for a specific answer to this most important question, he even retreated from that position and fell back, as I said, on this highly equivocal statement:—
"I expressed a point of view which is known to the Government and appreciated by the Government and by a number of people outside the Government and in association with them."
What is to be read into that statement except that in relation to financial matters the Minister for Finance is not permitted to and does not speak for the Government? He is a Minister faineant. He holds his office on sufferance and will be permitted to hold it only so long as he is well behaved and does not embarrass the Minister for External Affairs. It is written that “a house divided against itself shall fall” and this Coalition will be no exception to that rule. Sooner or later it will come down. The only danger is that, before that happens, it will have done irretrievable damage to the finances of the State.
To the Fianna Fáil Party.
That does not matter. It is the country which matters.
It is time you thought of that.
You ought to think of it.
Do not be "squawking" over there.
I was saying that the danger that is to be feared is that before this Government leaves office it will have done great damage to the finances of this State. I would say that this would seem to be one of the ends that the several factions in the Government have in view in adopting and pursuing their present policy. They cannot, because they are a Coalition of splinter Parties, reconcile in a reasonable and prudent way the conflicting aims and policies that divide them.
Because of this they cannot govern the country economically or administer its concerns successfully, so they have determined to create such a mess that those who may have the ill-luck to succeed them will not be able to do any better than them. It would seem, I think, that this is now the one aim and the sole hope of this discredited Government.
One thing this Budget and the pronouncements of the several Ministers who have spoken on financial matters prove is that Coalitions breed confusion. One other thing it proves is that in a Coalition it is the active, forcible, unscrupulous minority that dominates the whole. The Budget speech of the Minister for Finance demonstrates the truth of my assertion beyond question. In his references to inflation I believe he spoke his mind and, I feel certain, the minds of his colleagues of the Fine Gael Party. He certainly expressed the views of the Opposition. Thus, with the members of Fianna Fáil, Fine Gael and the more sensible and well-informed members of other Parties, there are at least 100 Deputies in this House who, to put it at its very lowest, are full of apprehension as to what will be the ultimate consequences to the people and the State of the financial policy which the Budget embodies. Over 100 Deputies are apprehensive and alarmed at the inflationary consequences of the Budget and yet, because of the political situation in this House, because of the existence of this Coalition, they are unable to stay the Government in its course. The reason is quite simple. There is a simple political explanation for it. The Coalition must hang together. The Government must be kept in office at any price and whatsoever the consequences to the country may be, because to allow the Government to go out of office might mean political extinction for the Deputies who burned their boats when they agreed to support it.
Having established so much, we can now come to consider what the continuance of this Government in office may involve. I wish to begin by reminding the House of what the Minister said in his financial statement of the 3rd instant, and which is reported at column 1640 of the Official Report under the heading of "Risks in State Investment":—
"Apart from increasing the burden on the taxpayer, an unduly rapid rate of increase in the State debt may have other undesirable consequences, which it must and will be the aim of the Government to avoid.... There is the further risk of a lowering of living standards if home production does not expand in such a manner as to compensate for the loss of the income derived from the external assets which are realised to finance domestic capital outlay...."
It is undeniable that the danger of a too rapid increase in the State debt exists to a very marked degree. The Minister for Finance, in his Budget speech on the 4th May, 1948 — the first Budget which he introduced — told the House that the State debt on the 31st March, 1948, was £104.8 million which was to be compared, he said, with £100.8 million on the 31st of March, 1947, and £37.6 million on the 31st March, 1932. I wonder would the Minister for Finance be so ready to institute comparisons between the public debt in the present year and the public debt in the year 1932 as he was when he introduced his first Budget. Then he went on to say:—
"We have been fortunate in not having been forced into debt to the same extent as other countries but £105,000,000 is a large total. The service of debt now requires an annual interest and sinking fund payment of over £4,500,000."
In his speech last Wednesday the Minister said that on the 31st March, 1949, the gross State debt was £116,000,000 but that on the 31st March of this year it stood at £157,000,000. At the end of this year, if the trend continues, we may be reasonably certain that it is likely to reach the £200,000,000 mark.
Then, in column 1642 of the Official Report of the 3rd May, 1950, the Minister returns to this theme and again warns his colleagues and supporters to
"bear in mind that the realisation of sterling assets and the use of counterpart moneys are methods of finance unrelated to current savings and, as such, may have inflationary tendencies. Recourse to such sources must, in present conditions, be cautious, and the greatest care will be taken by the Government in choosing the methods of financing its capital programme, to ensure that there will be no adverse consequences for the economy."
Once again the Minister for Finance is swinging the red light — very fruitlessly, I will admit — before his colleagues. Once again he is sounding the warning; and this time without any ambiguity and with for him, I think, terrific audacity he tells the Minister for External Affairs to his face that the course which the latter has coerced the Government to embark upon is a most dangerous one. It is true that he said that the Government is going to be cautious. It is only going to make a test. It is only going to try a reasonable dose of inflation to see how it works, to get the thrill of it and, when danger looms, it will be stopped. But once these inflationary tendencies of which the Minister has warned us are initiated in our economy the question we must answer is: will the Government be able to stop them before the whole disastrous cycle has run its course and the public confidence, public credit, public and private integrity have been undermined and overthrown? That is what inflation has done elsewhere and that is what it will do here. It is a dangerous practice like a drug — like morphia or opium. Once recourse is had to it no one can be certain that it will not become an overpowering and a destructive habit.
The Government, with the warning of the Minister for Finance before its mind, is deliberately embarking upon this course and to his credit be it said the Minister is doing his best, against odds, to warn his colleagues and those who support him of the dangers that attend it.
I think I have perhaps kept the House much longer than I intended. There are many more things I could say in relation to this Budget, but we shall have an opportunity of saying them again. There is, however, just one final quotation that I will give from the Minister's Budget speech before I sit down. Having stressed the dangers of inflation in the manner I have recounted, he said:
"The expansion in consumption generated by increases in money incomes would deplete the resources available for investment and have inflationary consequences."
I hope that Deputy Dunne and Deputy Cowan and Deputy Davin, who is often so vocal, have meditated upon the significance of that statement; I hope they have gathered its implication. If a statement like that had been made by any Minister for Finance in a Fianna Fáil Government, they would have said: "That implies a standstill Order; it implies more, it implies a restriction on the people's consumption," and you would have the Tánaiste and Deputy Davin and, presumably, Deputy Dunne going up and down the hustings through the country saying: "This policy of the Fianna Fáil Government is a standstill and starve policy," and yet that is the policy enunciated by the Minister for Finance, the policy for which Deputy Dunne and the members of both Labour Parties stand to-day.
In connection with this Budget, the Fianna Fáil Party have been accused of having become more conservative than the most conservative Party in the world, and of having tried to jeopardise the reconstruction programme, a great deal of which we left the Government to carry out. I think it is just as well to emphasise over and over again that we in Fianna Fáil have had experience of borrowing. All we now ask is that we should receive some indication of what the Government's plan is, instead of statements that they are going to borrow vast amounts in the future, accompanied by warnings suggesting that borrowing itself is bad, but without any clear indication as to what the future fiscal and monetary policy of the Government is to be.
If the Government are going to alter their previous policy, it surely is essential to give us certain fundamental facts and not give us a statement of what they would like to do and a statement of the dangers attending on what they would like to do. What we would like is an indication of a real plan, a plan which the people can follow. Going down to the country during the week-ends, I am amazed by the anxieties expressed by practically every single person who has money to invest and money saved, whether he be a small and thrifty farmer or a merchant in a town. They are all anxious to interpret the Budget statement of the Minister for Finance, all anxious to understand what it means, all anxious to have far more information placed at their disposal than has yet been made available by the Minister.
I put some of these questions in the hope that, if enough of us speak, we may get some definite replies from the Minister. If the Minister is going to borrow very largely for development in connection with companies founded by the State, he should be able to give us some idea of what deficit position is likely to be created over a period of five or ten years, and at what point does he expect to be making interest on the capital invested. He told us that after a long period of judicious handling on the part of Fianna Fáil these companies now yield an interest of 3 per cent.
I did not say that.
The Minister indicated there was an interest of 3 per cent. coming from certain firms.
There was £850,000 out of £900,000 to the Electricity Supply Board; the rest produced £80,000.
We ask the Minister what the prospects of these companies are, to what extent the investment is going to be a dead-weight debt and over what period, and when he thinks the interest will fructify as a result of capital expenditure. It is a perfectly reasonable question to ask, if the Government decides to indulge in borrowing on an enormous scale.
The next question is one relating to the level of private saving. We have had three different types of statement by the Minister. One was that the volume of saving capable of investment was £16,000,000 — that was issued by the Central Bank. Then there was another statement by the Minister that he believed there was a £70,000,000 total saving available for investment, and in his last Budget statement he referred to £54,000,000.
I said £51,000,000, but you are not comparing like with like.
So far as statistics are available, we find we have not up-to-date figures for current production, the rate of consumption and the rate of saving, whereas the British, faced with continual crises and near bankruptcy on two occasions, have stepped up the work of their statistics department. In this country we have had a change in the statistics department, which is now run directly by the Taoiseach, but apparently the staff is not available to give us all the information we need as to how much one should borrow and how long one can continue borrowing at a particular rate. That sort of thing is worrying the public; it is a source of great worry to businessmen many of whom supported the Government in the past 20 years, and no amount of froth talked by Clann na Poblachta or any other Party will dispel the fears of the people who want this additional information.
We hear warnings from the Minister that, as a result of borrowing from funds made available through national savings and similar sources, there may be inflation, but we have no idea of what the Minister's plans are in regard to the use of these funds. If, in all future receipts from the Savings Bank, he intends to place the money into long-term securities here, we have no idea of what the policy will be or the percentage figure suggested. We have no idea either what the percentage of liquidity of the Savings Bank Fund will be in the future. The Minister will borrow a certain proportion of it and he believes it is right to do so. We are in possession of information that the actual percentage of the Savings Bank Fund invested in British securities slightly increased during the Minister's term of office. Then we suddenly hear of a reversal of policy.
Those who believe in careful borrowing designed to increase the real income of the State — those who believe in that policy, the middle path policy, avoiding extreme conservatism on the one hand and the crazy kind of talk of Clann na Poblachta on the other hand, ask these questions. We do not believe they have been answered, because it is difficult for a Minister for Finance in a Coalition Government to give a final decisive answer on such matters. Then we had a statement from the Minister, accompanied by warnings, of the justification for borrowing for national reconstruction. In the last 20 years economic policy has changed considerably. To a very considerable degree the old orthodox economists have been proved right in regard to a country's borrowing. The only thing about which they were wrong was the fact that, using the machinery of State control, of consumption and demand, it is possible to alter a nation's economic life and offset to some degree depressions through action taken by the State. In that connection there are one or two economists who are accepted by nearly all thinkers on this matter as having the largest amount of truth between them. The Left Wing group may say they do not go far enough. The Right Wing group may say they go too far. But they are generally accepted. One of the fundamental principles in regard to borrowing is that, whatever one's borrowing policy is, one must leave a considerable margin in the event of an economic depression. Every single reputable economist, whose views are at least partly accepted by both the Right and the Left, has suggested that one should leave a considerable margin for borrowing in time of depression. The moment a depression starts, the symptoms of which are failure by the public to invest, an attempt to hoard money and a lack of demand for consumer goods, these economists state that at such a time the Government should enter into large-scale new schemes of national development for which the money must be raised by borrowing. In other words, these economists say that there must always be a holding-back when business is good, when export prices are high, and when opportunities for employment are at least fairly reasonable.
In this country, although there is very considerable emigration, agricultural prices are high. Industrial employment is at least high. Even if 30,000 people have left the country on balance, because of high agricultural prices the present Government is able to carry on without the excessive criticism that would undoubtedly otherwise meet them because of their muddling. I cannot see in the Minister's statement anything which indicates that he will place the country in a position to borrow still more money and invest still more money in State development, if and when an economic crisis should arise. That, as far as I know, is the ordinary viewpoint of every reputable economist, the principal one of whom was the late Lord Keynes. If the Minister can tell us something about that and tell us how the State, should such a crisis arise, can discourage too much investment in savings and encourage investment in new capital works, while pouring yet more money into production, I should like to hear it because it seems to me that if he progresses in the way he is progressing at the moment, by the time his programme shows its fullest effect, he will have exhausted every possibility of additional borrowing and he will not be able to apply the Keynesian formula should the time arise when cattle prices will not be so high and there will be a real world surplus food supply and we shall have to struggle in competition with other countries for exports and everything else. I would regard that as a reasonable and constructive statement. It may have been an omission on the part of the Minister. He may not have had time to deal with it. It is very important, when one is engaging on a five-year plan, that one should think five years ahead in connection with national reconstruction. The Minister has adverted to the fact that he may cancel schemes if he cannot raise enough money. That is a rather peculiar statement. We have had the example of Sir Stafford Cripps, the Chancellor of the Exchequer, having to cancel schemes of public works.
The British Government, losing a quarter of their entire world wealth, indulged in a wild programme of national development. We had the example of their having to draw in their horns and cancel certain works to the value of £200,000,000 in one year. Surely, it is not necessary for the Minister for Finance here, a country which had not to participate in the war and where the national debt has not increased through war expenditure, to introduce the kind of Budget in which he has to sound a warning note. Surely, he can think wisely and carefully and estimate the national income and the possibilities. It almost makes one believe that there is a lack of stability in the Government——
It is very hard not to with the sabotage that Fianna Fáil carries on.
——and a lack of certainty about the future. Many members of the Government Parties talk as though borrowing were something new and wonderful and as though they were doing something remarkable in relation to world economy as a whole. The world is strewn with bankrupt States, States now within the Communist orbit, who borrowed excessively and did not pay back the debt, who allowed inflation to arise, with the result that the poor, who were to be enriched by all sorts of development schemes, were left far poorer at the end. A more interesting example than the bankrupt countries is the case of New Zealand. Before the war New Zealand indulged in an economic campaign from the results of which they were only saved by the war and by the increase in agricultural prices. But that campaign led them to the very brink of bankruptcy simply because they tried to do too much too quickly and did not have regard to economic realities. They were saved by the war and at the end of the war they were able to discharge a large proportion of their public debt because, like ourselves, they had sold more to England than they bought. They were a debtor nation to Great Britain and they owed money to Great Britain on balance.
New Zealand is run by extremely intelligent men. Many of them are Irish in origin. So far as we know, it is a country run competently and honestly. Nevertheless, they slightly overbalanced the programme, not by very much but by quite enough to disturb profoundly their whole economy. They did that for the same kind of reasons that may arise if we continue having Budgets like this, in which the Minister for Finance announces a large borrowing programme and then proceeds to give a warning, without accompanying that warning with any statement to the House or to the country to enable them to decide what the position really is. We are not in the same position as New Zealand because we are a large creditor nation with an enormous cushion of credit on which to fall back. We in Fianna Fáil are making an honest effort in questioning this borrowing programme because we are fully aware that this cushion of credit exists and we are fully aware of the fact that it is very easy for a country to borrow for a long time without realising what the ultimate effect may be. New Zealand was a debtor nation and the blast struck there rather more quickly than it will be likely to strike us.
In regard again to Fianna Fáil's attitude towards borrowing, we carried out an enormous reconstruction programme in spite of limitations attendant upon our economy, namely, the economic war and the second world war. The miracle was that we were able to achieve so much, that we were able to build so many houses, carry out land improvement work, encourage the inauguration of new industries, give the farmer a secure market and do all the other things we did when for a large part of the time we fully accepted the fact that, because of our own policy and the action of the British Government, cattle prices would be low and there would be many adverse economic factors. We had to make certain sacrifices. The whole country was aware of the position. They supported us in two general elections after we first got into office and they continued to support us in our programme though it limited to some degree the amount we could borrow. When the war broke out there was a scarcity of materials. The whole situation was abnormal.
One of the interesting things about the present situation is the fact that the Minister for Finance is being driven to some degree by a Party whose advocates during the war said that in the middle of a world war we could change the currency, no matter what the disturbance to the community and no matter what were the difficulties when England was fighting with her back to the wall. In the middle of the war they suggested that we should raise large sums, using hazy vague phrases about using the nation's wealth, the national credit and all that sort of flummery to which we have listened for years and years from the Left Wing super-economists. They suggested we should do that at a time when there were no materials on which we could use that money, no materials for housing, when there were hardly enough ploughs to plough the land. We had these suggestions involving rank inflation, involving simply the use of the printing presses to no good purpose. That same Party consisted of people who advocated that we should ally ourselves with one side during the war. These are the people who are now encouraging the Minister to indulge in what may prove to be excessive borrowing.
No one knows what Fianna Fáil's borrowing programme would have been in a normal year because the first normal year we really had — and it was not quite normal — was 1947, a year in which agricultural prices were not determined by a political conflict with Great Britain but by the starvation of Great Britain, a year in which materials were coming in for industries, building and agriculture, and a year in which there was some relative degree of stability. It was the first normal year we have ever had. It was one of the first years in which people were actually coming back to this country. More came back in that year than left despite all the wild talk of Deputies in the Government Party that people were pouring out of the country. So we never had a normal borrowing policy. All we can say about it is that it would be something reasonable, it would be courageous and prudent, it would have full regard to all the adverse circumstances that might arise from excessive borrowing. The Government is not going to charge Fianna Fáil with being conservative-minded or being unwilling to borrow. As I have already said, we borrowed £35,000,000 in the 16 years we were in office. I am perfectly certain that we would probably have borrowed more than that if conditions had been entirely favourable to us.
Do you think that the old system in operation in 1938 can ever come back again?
I think I have already stated that I do not think the complete laissez faire system of economics will ever come back. I think it is possible, with our present currency system and credit system, for the State to assist in giving employment in times of crises and in good times and to assist in promoting schemes of national reconstruction. I do not believe in the old laissez faire policy.
As I have said, we did, of course, leave this Government a very heavy responsibility. We left them most of the plans for which they are now borrowing. Many of these plans were actually in operation. Some of them had been delayed by the effect of the war. There have been very few new plans produced to the public since that date. I think there have been only two new reconstruction plans involving the need of the expenditure of large sums of money since the Government came into office but, of course, when you have a Government of many Parties, each Party wants to implement its own particular idea and it may propose to expand a Fianna Fáil plan far more than Fianna Fáil was able to expand it during its term of office. So you get a demand for credit and for borrowing that may eventually prove excessive. It might be no harm to cite some of the plans which we left. They include rural electrification, Bord na Móna schemes, housing of the people, power stations for the people, poultry and egg schemes, arterial drainage schemes, schemes for the construction of roads, for the building of schools, land division, forestry, the building of hospitals, and so forth. All these things that I have said were left by Fianna Fáil.
"Left" is the word.
In the vast majority of them, work was proceeding in full blast even though it was delayed. It was delayed through the diversion created by the war, the fact that you could not get one-twentieth of the mechanical apparatus required to build hospitals or to put hospitals in working order.
Nonsense.
As I said, a great many of the schemes were in full operation. Some of them were delayed by the present Government. The doubling of the Bord na Móna schemes following the abolition of the hand-won turf scheme was delayed by the Government for a year and the Bill is not yet passed to permit Bord na Móna to extend its facilities. The farm buildings scheme, the provision of byres, etc., was delayed by the Minister for Agriculture for many months after the Government came into office. While I am talking about Government expenditure, we have heard a lot of abuse in regard to the Constellation aircraft which were to earn dollars for us. The sum of £850,000, the estimated loss in the first one or two years' operation, looks very small and miserable beside this vast Budget of £107,000,000 of the present Government. In fact, at the rate the Government are going they could quite easily have dropped into the hat the transatlantic air service. People would not notice that kind of trifling expenditure in a couple of years if they go on as they are going. We could have the transatlantic air service without any great disturbance of the present Government's financial plans. We could have more diversity of employment for our people and we could earn dollars while profiting by the great tradition earned by Aer Lingus of being the only air service that has never had a single death on its scheduled services since 1936. That was one thing that was worth exploiting — the splendid record of this service, the greatest that the world has ever seen in aviation. As I have said, £850,000 could have been dropped into the hat quite easily without much disturbance of our economy at the moment.
I do not know whether it is worthwhile dealing with the speeches of the Minister for Agriculture in great detail. I do not think the people will believe that we made them beggars for charity during our 16 years of office or that all that we did was to make them hold out their hands for relief grants. It was our Government that created the bulwark of good credit that is going to enable the present Government to borrow money at a reasonable rate. It was we who made the nation's credit so safe, by prudent saving and by national reconstruction, so that the members of the present Government could divide amongst themselves and attack each other while the national credit still remains high and the value of the various national loans remains unaffected on the Stock Exchange. It was Fianna Fáil did that. It was we who conferred the privilege on the present Government of being able possibly to gamble with the nation's credit for a few years without doing any serious harm. We did it by doing precisely the things which the Minister for Agriculture has condemned during the whole of his career in this House.
We did it, first of all, by making it possible for this country to get food safely during the world war by growing the hated wheat, by growing wheat in a field in which the Minister for Agriculture said he would not like to stand. I recall his phrase: "The growing of wheat is a rotten fraud, designed to fill the pockets of the profiteering millers of this country." We created a further bulwark of credit by establishing the turf industry and the sugar industry. I recall the Minister for Agriculture speaking in 1947 of wheat and beet, and saying that beet "would go up the spout, and God speed the day." In spite of what the Minister said, we established these three productions and we extended their production enormously. All that has been of help to the present Government in regard to the general credit position of the country. We built the cement industries. I could refer to many other things we did to improve the lives of the people and so leave this country one of the best-off countries in the world at the end of the world war. When the Minister for Agriculture talks about "creating beggars for charity," we know that is a ludicrous lie. There is not very much more need to talk about it because the people do not believe it.
We did something else during our 16 years in office which is going to help this Government. We smashed the extereme right and left wings of political and economic thought in this country by creating a great Party bloc on the middle of the road. We reduced to very small proportions, on the one hand, people with lunatic fringe conceptions of economy, and on the other hand people with the slavish belief in our dependence on Great Britain. We did all that for this Government, and we made it possible for them to borrow a good deal in the near future without difficulty. Having done these things, we left this country in a sound financial position, and having commenced the work of reconstruction we feel justified in asking for more information about the Government's idea of borrowing.
I now want to deal with some of the observations made by the Minister for Finance in his Budget speech. I should like to refer to what he said at pages 47 and 48 of the statement:
"An increase in domestic production would enable more current resources to be set aside for investment without any curtailment of consumption, but no increased allocation will take place unless savings increase, as this is the means by which resources are diverted from consumption to investment."
The clear implication behind that, as Deputy MacEntee has already said, is the suggestion of some kind of a voluntary standstill Order. We would like to have more information on that. The Minister gave us a very long oration on finance, but he did not tell us anything about workers' wages.
What did your Party do with workers' wages?
He avoided two most ticklish subjects for him. He avoided using the word "emigration" and he avoided using in any part of his speech any suggestion or talk about the level of workers' wages. He avoided these issues because they were ones on which perhaps he could not use the double method of warning of what might happen if certain changes took place. Let the Minister be honest and give us a few words as to what he thinks about the statement made by the Labour Party in their economic journal that "the output per worker had increased so largely and profits had increased so largely that the moment was ripe for a very considerable increase in wages". The Minister for Finance should inform us as to his opinion on the matter by giving advice and guidance to the trade union movement. There has been a voluntary standstill in wage demands in industry, where wages are not abnormally low in industries and where increases have recently been given either in 1946 under Fianna Fáil when the standstill Order ended, or since. The Minister ought to say more to us on that subject. He ought to relate that paragraph in his speech to the demand for wages, and tell us how far he thinks it may proceed and what is his general view.
Deputy McQuillan says that we have no right to talk about wages. So far as I know, in my constituency, the wages of agricultural workers very nearly trebled during the Fianna Fáil régime.
That does not say that they are yet good enough.
I come next to the question of external assets. The Minister's warnings are more intensified in that part of his speech in which he talks about the repatriation of external assets than, I think, in any other part of it. We have had a lot of dreary nonsense talked about external assets during the last ten years by a hazy group of economic thinkers in this country. Clann na Poblachta people get up on platforms all over the country and talk about external assets as if they were like an army that you could bring home from England and meet it at Holyhead with flags and music playing, as if external assets were a shameful thing to have, and as though they could be brought home quite easily by any Government and without the slightest sense of its national responsibility. During the war, we had from the same Party all sorts of suggestions that we should repatriate the whole of our sterling assets because, as they said, they were worthless and would be of no value because England had gone bankrupt — that they were not worth the paper they were written on. I think most people would agree with the Minister that there is not much use in repatriating money unless you can buy goods with it in the country in which it lies.
The people who hold these extreme views do not seem to move with the times. There has been a great change in the attitude of independent nations in regard to currency. One of the difficulties with us before the war was that ours was a relatively undeveloped nation. I ask Deputies to remember that at the moment you have three countries like Holland, Belgium and Luxembourg making a desperate effort to free their currency of national control, and so have a currency which would be effective as far as possible within the three countries.
You have the same kind of development in the case of the Economic Co-operation Administration, of which the Minister for External Affairs is a member. That body is begging everybody not to do anything to make the currency position more serious and not to tie up currency so that it cannot be freely available for use. It would appear that all this talk about currency is one of the things that needs revising in the light of present circumstances. At any rate, it is well that Deputies opposite should be reminded that the Minister for Finance now informs us that it is only the import of goods and services from abroad that can be of any value to us in the national reconstruction campaign, and that the mere repatriation of assets is of no use. The Minister's cold and acid comment on that was very enlightening. I should like to ask him some further questions because he is still vague on the matter. He made it clear that he is not going to interfere with the private savings of the people. From some of the talk of Labour and Clann na Poblachta Deputies you would imagine that if they got into office by themselves they would corral all the private investments which have been invested abroad.
You should not suggest that.
They may not suggest that deliberately, but when they talk about external assets they give the global figure for all external assets, including private savings. They gave that impression to a whole lot of people.
You give it.
Deputy McQuillan and Deputy Hickey ought to cease interrupting.
It is hard to put up with that type of misrepresentation.
The Minister has indicated that he takes a very favourable view, subject to an indefinite number of warnings, of the repatriation of external assets where a series of difficult conditions are observed. Unfortunately, when the Taoiseach made his speech to the Bankers' Institute he gave the impression to the public in general that he was lecturing the banks on the extent to which they favoured external investment, giving the impression that they must anticipate some action by the Government which would make them drastically change their policy, giving the impression that he did not regard the banks as being patriotic in their attitude towards investment policy generally. A great many people waited for the next step to be taken and we were all wondering what it was going to be. We read this tremendous attack on the banking policy in general implied by the Taoiseach's speech and we waited to hear what the policy would be. The next thing we heard was the Minister for Finance excusing the banks in the Seanad, saying that the banks must not be blamed for anything that happened; that all they have to do is to hold the people's money, and they must not be blamed if there were not sufficient investment schemes; that the banks may be all right, but they may be a little bit conservative. Therefore, again, I ask the Minister for Finance for a definite statement on his attitude towards the banks.
If the Minister is going to raise money, apart from making use of funds at his disposal, he has only two other ways of raising it. He can offer a loan to the public which they can invest in, or compel the banks to lend him their money. There is nothing to prevent him if he wants to. The public want to know what the Minister's policy is. The banks have adopted a policy whereby the money at call, money which can be handed across the counter, bears a certain percentage in respect to all the holdings of the bank. The percentage of money at call in this country is about the same as it is in Great Britain under a Socialist Government. It is a little bit more if you define money at call in one way, and a little bit less if you define it in another way. But, as compared with Socialist Great Britain, where you have one of the most rigidly authoritarian Governments in the world so far as the use of money is concerned, it is just about the same.
One of the ways the Minister can raise money is by altering the percentage of money at call. There is probably no objection to altering it slightly and it might be good for the country. We should like to hear what the Government's policy is. All we have is the Minister for Finance excusing the banks and the Taoiseach arriving and making a dramatic speech saying there was going to be a change in policy. All we want is a more precise statement in regard to the matter.
Do you believe we should take control of credit?
It may be difficult for the Government to raise money. It depends on many circumstances over which they have only limited control. I think they are very lucky in one way. I do not believe that it would be possible for the Minister for External Affairs to advocate a change in the system of currency, on the one hand, and the Minister for Finance to issue all sorts of salutary warnings about any change made on the other, without there being a considerable jolt to the national credit if it were not for the abnormal situation in which we live. I believe that if the same Ministers were to behave in this way in 1939 the value of the national loan would fall in the market and they would reduce their chances of raising money or being able to issue new national loans. But, of course, the situation, luckily for them, has changed and has made it possible for Ministers in the same Government to quarrel openly on financial matters. The situation now is that it is possible for these two Ministers to quarrel, because the rate of taxation in England is so high that it attracts investment here, because England is bound to purchase a considerable amount of goods from us and send an enormous number of tourists to this country, thus maintaining the economic turnover at a very high level because of the effect of the war upon them.
If England were able to write cheques in any currency in the world with which to buy food, if the level of British taxation were more reasonable, if there were not that very deep dispute among the English people as between the Conservative view of life and the Socialist view of life, I do not believe that Ministers of this Government could be talking the way they did for a day without having an effect on the national credit of the country. I think it is establishing a thoroughly bad precedent for the future, because you can make a case that there are always two sides to every question and, therefore, a case for a Government composed of Ministers of varying views, but, in my opinion, you can make no case for any variation in the views of Ministers in the Coalition on matters of finance. One of the principal reasons for the present financial position in France is the fact they have had Coalition Governments and had to bargain with each other on every possible matter.
Among other things, they have had always to bargain since the establishment of the Third Republic on the amount of taxation, on the amount to be raised by loan, on the percentage of borrowing, and on matters of economic importance. That is one of the reasons why the French Republic, glorious as it is in many ways, has been so shaken financially, because, having had to face two world wars, they have had, in addition, Government after Government whose Ministers quarrelled on matters of profound finance. I do implore of this Government, for the sake of the country, that all disagreements amongst them should cease on this matter. They can disagree about everything else, but they ought at least to have one sound view on finance and stick to it, because the day will come when such talk will have an effect on the national economy. That day will be when there is a surplus of food, when we are no longer in a seller's market and everything is more like what it was in 1939. Of course there may be another world war before that. All sorts of things may arise. The seller's market for food may quite possibly end within certain currency areas in the course of the next ten years. That alone would create a situation here in which Ministers of State should talk with one voice on matters of finance, particularly in relation to currency.
I should like also to ask the Minister for Finance to assure us that no pressure exercised by minority groups within the Government will induce him to take any action to separate the banking system of the Republic of Ireland and the Six-County area, to take any action which, by altering currency, the rate for borrowing, or the rate for issuing credit might result in separation and a further strengthening of the Border. I think a lot of very honest Republicans in the country have never thought out the full implications of the result of changing the value of the £. Although it might be a very good thing for the Twenty-Six Counties, and although we might argue that we cannot wait for the Six Counties, surely at this stage we can afford to wait on such matters unless we can be absolutely certain of the effect on our prosperity. Clann na Poblachta speakers who suggest that we should have an emerald green pound of our own devising should, I think, think twice.
It would inevitably involve a changing of money across the Border. I do not think anybody in this country wants that. I just mention it because I should like an assurance from the Minister that he will never be driven to the point where there will be a further strengthening in the Border through a change in our system of currency. We have a right, I think, to suggest that these new principles of borrowing deserve attention because of some of the people who give advice to the Minister for Finance and the Government. It is only fair to read a statement from the Leinster Leader dated 6th September, 1947, in which a speech which was made by the Minister for External Affairs at Carlow was reported:—
"Clann na Poblachta calls on the Government to put into immediate operation the following temporary remedies:—
1. 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.
2. 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.
3. Supply all agricultural producers with fertilisers free of charge to increase the production of the land.
4. Cease wasting shipping space and credits on imported luxury articles such as motor cars, wines, brandy, canned fruits, etc."
That kind of policy, involving a minimum expenditure of about £35,000,000 to £40,000,000 which would be required in addition to the £15,000,000 already being spent on subsidies, is crazy. The fact that the Leader of a Party in this House advocates it naturally gives us doubts in regard to the advice which the Minister for Finance receives from his Ministers of the Left Wing in regard to currency and economic matters. It would be much simpler not to give subsidies but to give free about one-third of the articles of food of common consumption to the people — like throwing bread in the circus in the old days — or to give out sugar, flour, bread or something of that kind free of charge to the people. That would bring down the net payable cost of food by 30 per cent. That suggestion was made seriously by a man who had all the facts at his command. He could easily ascertain the effect of subsidies on the public purse by reference to statistics. A great deal of what is supposed to be modern economic policy has a vague kind of character and has never yet been studied in regard to its full and final implication.
The Minister for Agriculture spoke of the land reclamation scheme and of the land rehabilitation scheme. I have not got the Official Report of his speech — I doubt if it is printed yet. However, in the hearing of many Deputies of this House he said, when talking about his new reclamation scheme, that not a drain had been dug for 15 years. That is an absolute untruth. The previous Government founded the farm improvements scheme and during their term, in spite of the war, turf cutting and every other difficulty, so far as I know about half a million acres were drained under a scheme that started in 1938, a year before the war began, with everybody cutting turf and so forth besides draining their land. It was a most successful scheme. So long as we have a breath in our body we in Fianna Fáil are not going to allow the Fianna Fáil farm improvements scheme to be talked down by the Minister for Agriculture. The present land rehabilitation scheme is an extension of that scheme, with the addition of free limestone and free phosphate, using the credit of the United States.
Do you agree that fertilisers should be given?
I think our duty in Fianna Fáil is to express the hope that every farmer will apply for that scheme and, if he finds any difficulty in its administration or method, he should tell the Minister for Agriculture what it is. We have heard criticism of the administration of the scheme, which has not been long in operation. The Minister can administer that scheme and advocate it in his flowery language without telling untruths and without saying that not a drain was dug for 15 years.
Proper English, you should say.
The Parliamentary Secretary to the Minister for Finance is sitting opposite now. Some of the figures the Minister for Finance gave were the figures for the expenditure on the three types of drainage. They are as follows — arterial drainage, £652,000; local authority drainage, £1,750,000 and £3,000,000 for the rehabilitation scheme. I seriously suggest that there is not nearly enough provision for arterial drainage and for the planning or carrying out of it. If we are going to borrow American money and if we succeed in spending that sum of £3,000,000 in any year on the scheme advocated by the Minister for Agriculture the only result would be to pour more and more water into the tributaries. Then we have a sum half the amount for the small tributaries now being cleaned by the county councils — one of the two or three new ideas of the present Government.
A good one.
The water from these tributaries is going to pour into the rivers on which the expenditure is to be £652,000.
That is the expenditure for the year. It may be three times as much next year.
I wish the Parliamentary Secretary could get these figures spun around. It looks to me as if they should be almost in reverse order if the drainage of the country is going to be carried out satisfactorily.
Lastly, I come to the question to which other speakers have, no doubt, referred, the question of emigration. I only want to relate emigration and unemployment in the small farm areas to an observation by the Minister for Agriculture who deprecated the minor relief grants given by the Fianna Fáil Government and still given by the present Government though to a very much lesser degree. He talked about the necessity of replacing that kind of dole money with national reconstruction schemes. So far as Longford is concerned, and north-west Longford in particular and other areas in my constituency where there are small boggy farms and the people have a hard way of living, a huge mileage of public roads can be repaired in the winter months when employment is most wanted. There is a huge mileage of bog roads which are in a state of disrepair owing to the conditions existing during the war.
So far as the Government are concerned, very little of the money they are spending is reaching those small farm areas, particularly in the winter months when the money is most needed. These are areas where for every household you have a farm just only big enough for one person, where emigration has been intensive in our time — though we reduced it, it rose again during the war. There are a whole lot of schemes which do not affect these areas or which have ended. For instance, there is the hand-won turf scheme. That meant a large amount of work for those people, an amount which no increase in agricultural production can possibly compensate them for. The ending of the hand-won turf scheme, employing 11,000 to 15,000 people altogether, had a tremendous effect on areas of this kind.
The land rehabilitation scheme may employ 12,000 people, but it is hardly in operation. It has not been in operation for more than a few months in Longford. It was not in operation for the first two winters of this Government's régime. In 1946 and 1947 the Fianna Fáil farm improvements scheme was in operation, employing 12,000 to 14,000 people every year. The Minister for Agriculture boasts about the employment that will be given under the land rehabilitation scheme. I am glad of that, but I may point out that we gave the same amount of employment under the farm improvements scheme. The land rehabilitation scheme is not in operation to any great degree in Longford, whereas the farm improvements scheme was until it was replaced by this other scheme. There is very little land to be divided in Longford.
There is in the next county to it.
In the course of the debate on the Land Bill we heard the Minister saying that he could produce 2,000 new holdings in the year. At this rate it would take 25 years to complete the relief of congestion. That does not affect the life of the people in those small areas such as we have in the County Longford very much. Again, there is no forestry in an area like Longford — there is very little land there planned for afforestation.
The road grants have been cut down by £2,000,000. There is far less road work. The schemes for maintaining boreens in good order were a very good method of giving employment and they are not to be regarded as dole work. The dole is being paid in Longford in large amounts in the winter, although the Parliamentary Secretary to the Minister for Industry and Commerce, Deputy Cosgrave, once said it was a criminal social evil to pay the dole, and the Minister for Industry and Commerce said that if he had his way he would put every man to work tomorrow.
The small farmers and labourers in Longford are still waiting for these promises to be implemented. They are not amused by the last observation of the Minister for Industry and Commerce, that if people were willing to work half as hard at home as they are abroad, fewer of them would have to go abroad. I invite the Fine Gael Party, accompanied by Clann na Poblachta and others, to go around the country repeating that statement at the next general election and justifying it, that emigration is being caused by people being unwilling to work hard enough in this country.
I have dealt with the value of the kind of grants we gave in large amounts for the repair of boreens. We would welcome an increase in the Vote and in its allocations.
There is an increase this year of £25,000 for rural improvements.
I am afraid that will not go very far. We should not allow this occasion to pass without reminding the people that we did do something about social services. When we heard Deputy O'Higgins talking about the increase given in the old age pensions by the present Government as an act of grace and virtue unparalleled in the history of the country, one would imagine that Fianna Fáil had thought about social services and then forgotten them. It is just as well to remind the people that the value of social services in our régime increased from £4,000,000 to £13,000,000; that we instituted widows' and orphans' pensions and children's allowances and that during the war, and before the Fianna Fáil Government left office the widows' and orphans' pensions were twice increased; unemployment assistance, old age pensions and national health insurance were increased, increased at the end of the Government's régime and without any cost to contributors but solely at the cost of the taxpayers.
I give the Government, with every goodwill in the world, the credit for the increase in the old age pensions. It does not worry my conscience in the least. I know all that we did during our 16 years in office and I can go to sleep quietly at night without having on my conscience that we did not happen to increase the old age pensions by 2/6. I know what we did for these social services during our régime.
Yesterday evening the House was treated to a very fine address by the Minister for Agriculture, Deputy Dillon. For one and a half hours he painted himself as the Pharisee and we were the publicans.
This is not a mission now.
It is the opening of a mission. The Minister even went so far as to tell us there was no need for any man to be idle in this country, that every man who was idle could be in gainful employment. The Parliamentary Secretary who is now saying "hear, hear" could not give me a small grant to relieve unemployment in Swords. Here you have one Minister speaking with one voice in this inter-Party Government and another Minister speaking in another voice.
Naturally.
I hope the 64,000 unemployed will read the statement by the Minister for Agriculture and that they will forthwith make application for employment, and if they are let down by the Minister I am sure they will think of the Parliamentary Secretary who is dealing with relief schemes. Last night we were the publicans. With the Parties now making up the inter-Party Government we always were the people responsible for emigration, responsible for mass unemployment. According to the gentlemen now forming the Government, that is what we were. We hear nothing now about the wonderful Emigration Commission that was set up; we hear little about emigration or the emigrant ship.
Prior to the last general election we heard many people here expressing themselves loudly on the subject of unemployment and emigration. The Tánaiste had a plan in his pocket. Everybody would be employed. Everybody would have a decent living. There would be no poverty. His solution, when he took up the reins of office, was to set up the Emigration Commission. I wonder when will we have the report of that commission. I wonder when will we have any relief for unemployment other than what the Minister for Agriculture told us last night, that everybody who wanted work could get it from him. I know that the Minister's supporters sitting behind him last night were ashamed and I knew by their sour faces that they were disgusted at the nonsensical way in which he expressed himself. He told us that no land had been drained in this country. He spoke of all the wonderful works that were being carried out now. That was not his attitude when he was on this side of the House, criticising every scheme for national development that was introduced by Fianna Fáil. He criticised beet, wheat, peat and all the rest of them.
The tillage farmers in my constituency do not know where they stand. Last year I raised the question of barley on several occasions in an effort to get a market for our farmers' barley. I see that the Minister for Agriculture is now importing barley from Iraq. What about the cost of living now and the 30 per cent. reduction with potatoes at 3/- a stone? Will Deputy McQuillan tell us about that?
Suppose the Deputy addresses me now.
Tillage farmers in County Dublin do not know where they stand because of the present policy of the Minister for Agriculture. We never had so much unemployment in my constituency. Even the tomato industry, which was initiated by Fianna Fáil and which it was hoped would develop as a national industry, has been sabotaged by the Government. On each occasion when I raised that matter I was misrepresented by the Minister and he was supported in that misrepresentation by the Clann na Talmhan, the Clann na Poblachta and the Labour Party. He trotted out some woman up in Dominick Street who wanted cheap tomatoes.
Was she a widow?
He is trotting out the barley from Iraq in the same way now. What is the policy of the Government?
To keep you over there.
I am dealing with one aspect of our economy. What is the Government's policy? What answer will the Minister for Finance give to our farmers and farm labourers, the few that have not been squeezed out? It is very little use having enormous schemes unless one follows them up. I approve of any scheme that is of benefit to our people. I have heard a good deal about the land reclamation scheme.
Are you against that?
And the land rehabilitation scheme. All these schemes were initiated by us. The present Government is merely carrying them a little further. One would think, listening to the Minister for Agriculture, that nobody ever thought of them except himself. What will the farmers do when these schemes are finished? What prospects have they? Will they carry on the one economy until we reach the position, as the poet, Goldsmith, puts it, where "Ill fares the land where wealth accumulates and silent beasts decay!"?
Did Goldsmith really say that?
It is a case of the land now for the bullocks and the road for the people. We want a sounder economy than that. We must keep our people in the rural areas and not drive them into the towns. The present Government, in spite of themselves, had to adopt a number of schemes and works that had been initiated by Fianna Fáil.
Do you object to that?
The year you came in you dislocated the turf scheme and you ran the people out of the country.
I did no such thing. I assure the Deputy I did not.
The Government. Then the Government went back again. At one time it was suggested by those who now constitute the Government that tourists should be taxed because they were coming in here eating our food. That was the kind of hypocrisy we had. The Tánaiste was scarcely two months in office when he learnt quite a lot. He learnt so much about the tourist industry that, when he went down to open Butlin's Camp, he said that industry was worth over £30,000,000 to the country. It is amazing how people's minds change when they change from one side of the House to the other.
There is no doubt at all about that.
Deputy McQuillan's Party wanted to tax them. The most foul misrepresentation was carried on against our Party when we were trying to do something constructive and worthwhile, but we succeeded in spite of the foul misrepresentation by the then Opposition. Every Minister since has praised the tourist traffic.
With reference to housing, I am very happy to state that in my constituency any houses built by the local authority to date have been planned by the Party here. If the Parliamentary Secretary doubts my statement I have the proof here.
I do not believe the Deputy would tell a lie.
Notwithstanding that, I must give the Parliamentary Secretary and the Ministers their due. They are genuises at propaganda. As a matter of fact, that is about the only thing in which they shine any way well. We have heard a lot about the housing drive. I can only deal with my own area. In two years of the inter-Party Government they have succeeded in acquiring in County Dublin only 137 sites and in building only 20 houses.
Would the Deputy tell us that on the Estimate for Local Government? It does not seem to be relevant to this resolution.
Did you not help us to open 200 houses the other day?
Two hundred houses for which I was responsible for getting the sites. They were there before you came in at all.
The sites only?
The sites, the planning and the building were carried on before the Deputy came into public life.
Were they idle for the past two years?
This is a Budget for the entire State, not for County Dublin in particular.
I am dealing with the housing position and I want to deal with the national aspect of that problem. No matter how anxious a number of our people were to be housed, they find themselves, as a result of unemployment and various other things unable to pay even the differential rents.
I have given the Deputy a wide margin of latitude but I cannot allow him to proceed on these lines. He is dealing merely with the question of administration which should be raised on the Estimate for the Department concerned.
I want to raise another point which is of national importance. It was raised in a general way but perhaps I had better not refer to it now.
The taxes on beer and tobacco would be in order.
Strange to say, I am not a bit interested because I have given up all these little things. I could not afford them now.
Even though we took the taxes off them?
This is a great waste of time.
Let us hear something about the Financial Resolutions.
I do not see anything in the Financial Resolutions regarding the implementation of the inter-Party promises in regard to old age pensioners. I heard a lot of crowing about the miserable 2/6d. they gave them. I thought they were going to work miracles.
We should be ashamed of what we are giving them and you should be ashamed of talking about them.
As a matter of fact I thought they would be getting a lot more.
So they should.
The Deputy is a member of the Government Party and he should be able to bring pressure to bear on the inter-Party Government to give them more.
We had to give it to Córas Iompair Éireann which you bankrupted.
What would you suggest?
I am only reminding the inter-Party Government of their promises. It is always well to keep people informed lest they forget their promises. The bidding was so high that I was expecting that in their third Budget I would hear something worth while with reference to the old age pensioners. Before the election, the bidding was £1 5s. per week by the Labour Party and £1 6s. by Clann na Poblachta. I cannot remember what the Fine Gael or Clann na Talmhan bidding was.
Notwithstanding the fact that we were told that the cost of living was to be brought down and that various other laudable steps were to be taken, we now find that the cost of living is going up and there is not one word of protest from the archangels of the Labour Party. Of course, the Clann na Poblachta Party have forgotten completely about the promise of the 30 per cent. reduction in the cost of living. They have forgotten about the free books for primary schools and about free university education.
And you have forgotten that you walked up the gangway there in 1947 to refuse to give £500,000 to provide increases for old age pensioners.
That statement is wrong. At the time we set up the Department of Social Welfare and Public Health, Deputy Dr. Ryan, the then Minister, gave an increase to the old age pensioners and he did not ask the ordinary insured person to contribute towards providing that increase, as you people did when you gave them 2/6.
Why did you not tell the old age pensioners about it?
The old age pensioners know how they stand now.
We should be all fighting to give them more.
We do not hear anything about extra road grants either. We know that last year they were cut down. Of course, we are back to the same old policy of getting somebody else to bear the brunt of all these things. We had Deputy Dunne raising the question of road grants in Dublin. He wanted £80,000. Of course, it was not heard of at all last year when he voted along with the other members of the Labour Party.
I do not like interfering with the Deputy but he is travelling along the road of administration consistently.
I am dealing with the question of road grants. I am sorry if I am causing you any embarrassment.
The Deputy is not embarrassing me but I should like to hear him say something about the Financial Resolutions before the House.
I want more grants to be given for the improvement of roads, quite a number of which are in a very bad way.
How much would you want?
If the Parliamentary Secretary wants an amusement centre, I will try some evening, when I have time, to book a seat for him in some cinema or music hall. If we are to face up to our responsibilities and have good roads for our own people and for tourists, it is necessary that we should spend more money on their improvement. If the roads were improved it is quite likely that a number of fatal accidents could be avoided. Road improvement is important from the national point of view. I feel that the maintenance of our trunk roads, and even of our second-class roads, should be a national charge, and that we should have heard something about that in the Budget statement. The ratepayers cannot bear any further taxation for the upkeep of the roads. When I refer to a serious matter like this, the Parliamentary Secretary seems to find amusement in it.
I only asked the Deputy how much would he require.
The problem, as I say, is a very serious one, and if this Government does not face up to it, then possibly some other Government will have to clean up the dirty mess which they will find after a few years in office of this inter-Party Government. I wonder could the Minister for Agriculture explain his statement that employment would be provided for everybody in view of the fact that we have 20,000 fewer people working on the land to-day than we had two years ago. Another important matter is the building of schools. It is work that I should like to see expedited. I know that a certain amount of money has been allocated for the purpose.
On a point of order, was not this matter fully dealt with in the recent debate on the Estimate for the Department of Education?
I am talking about the allocation of the money.
The matter does not really arise on the Financial Resolution which deals with taxation policy: on how to collect money and not how to spend it.
Anything will do to kill and waste time.
Did not the Minister for Agriculture spend quite a considerable time in explaining how money was to be spent on hospitals and housing?
If certain Deputies say certain things in the course of a debate, that does not necessarily bring those matters within the rules of order.
The Minister was dealing with the question of capital expenditure.
Deputy Burke is really travelling outside the scope of the motion. He is dealing with administration. I have given him a good deal of latitude, and he should now relate what he has to say to the Financial Resolution.
Very well. I am just wondering whether the members of the inter-Party Government are going to face up, in a serious way, to their financial responsibilities, or whether they are going to carry on in the same happy go lucky way that they have been doing for the last few years by borrowing. Deputy Hickey states that I am wasting the time of the House. I can assure him that I am not. Whenever I get up to speak I do so in order that I may deal with problems that intimately concern the welfare of the people I represent. When we were the Government, the members of the inter-Party Government criticised us on the grounds that the taxation we levied was too high. Deputy T.F. O'Higgins to-day said that we were trying to sabotage the national interests of the country. We never associated ourselves with anything of the kind, and never will. We are anxious that this country should progress, irrespective of what Party is in power. We are concerned with broad national principles and so we do not approve of the shilly-shally policy of the present Government. We do not think that they are facing up to their responsibilities. They are doing the popular thing by borrowing. They are afraid to displease anybody by imposing taxation. There is the American Loan and other loans which will have to be repaid. We have been told that the national debt was so much, and that now it is three times as high.
How much would that be?
It is £157,000,000.
The national debt is a grand thing to laugh at.
The famous wizards criticised us when we were the Government for the high taxation which, they said, we imposed under our Budgets. They said we were spending too much money. At that time the Minister for Agriculture could state what taxation was costing each family. He will not tell us what the figure is now, or the number of people which this Government have driven out of the country, or the number who are idle in the country. Will he tell us now that taxation is costing £240 per family?
I want to tell the Deputy that I have been exercising my patience to the utmost with him.
Very well.
The two principal lines of objection to this Budget, as I gather from the speeches from the Opposition Benches, are: (a) that the bill is too high, and (b) that the Government ought not to borrow the money which it proposes to borrow. Nobody has told us where savings are to be made. Deputy Burke was on rather thin ice when talking about old age pensions. He appreciates as well as anybody else that if you are going to pay out money you must get it in. The other objection was to making posterity pay for money borrowed this year. If you come down from the realms of high finance in which Deputy Burke indulged and try to make a realistic approach to this question, I think we all recognise that credit is the lubricant of commerce and industrial development. While we know that there are fundamental differences between national economics and the economics of the private individual, there are also parallels, and I think I am not saying anything unfair when I say that one of these parallels is the utilisation of credit.
Many statesmen in this country have boasted with justification that the credit of this country is very high. If the credit is there, it seems a reasonable thing that we should use it when the necessity is there for its use. The same thing applies to the private individual who is a credit-worthy man. If I put it this way, I think it would make the matter fairly clear.
The Irish people as a whole are very conservative with regard to money. We know that it is the highest ambition of most Irish farmers to put by a tidy deposit in the bank on which they get 1 per cent. Some of them are sufficiently progressive to venture into the Post Office Savings Bank and get 2½ per cent. You will find an odd one investing in our own gilt-edged securities backed by the State, our own national loans. It is certainly a very odd one who will invest in industrial securities, equities as they are called. That is the tradition here and in that way we are very different from the people in England and in America who are more inclined to take risks financially. The same conservatism seems to be very evident in the Fianna Fáil Party who are criticising this Budget. The Minister for Finance is relying upon the fine credit of this State and he is going forward, with the backing of the Parties supporting the inter-Party Government, to utilise that high credit.
To come down again to matters with which we are more familiar because we are more in touch with them, we know that there would be very little industrial development and very few factories started by private individuals if they had to adopt the policy enunciated here by Deputy de Valera, that is, "pay as you go". Deputy de Valera on a few occasions, as far as I can remember from reading the debates, used that phrase "pay as you go". We know very well that we would have hardly any industrial development or progress if that policy were adhered to. An industrialist, if he wants to get a factory going, gets a few credit-worthy people together and puts the project before them. They want so many pounds and a loan is floated, just the same as a national loan is floated. There is a prospectus prepared and an invitation to the public to subscribe capital. The company then works on borrowed money. It is just as reasonable and as logical for the State to do the same thing to supply immediate needs. Nobody will deny that there are immediate and pressing needs to be met. Housing, of course, is one, and is probably the most urgent. All Parties in the House are in agreement on that point, that there are pressing needs and there is a necessity for the immediate spending of money.
Let us take the homely example of a farmer who has money in the bank and has a very bad house and a low standard of living. Nobody will say that that man was foolish if he built himself a comfortable house and utilised some of the money in the bank or, even if he had not money in the bank, if he could get credit and built himself a proper house in which to live. Nobody would say that that was a wrong thing to do, even if he mortgaged the future. We all appreciate in our ordinary lives that there will be very little progress if we are not prepared to take risks about the future and utilise the credit we have got and if we adopted the policy of "pay as you go." I do not know how many hundreds, perhaps thousands of families in this city are buying out their houses on the instalment system. If these people were to "pay as you go", it would mean that they would not have a house.
We have been told that our external assets are in the region of £400,000,000. If that money is available as a credit backing, is it not sensible that it ought to be used, particularly when we come to consider that that kind of backing was devalued not so long ago? I think even the most sanguine of us would not regard it as a gilt-edged security. There is no certainty that there will not be a further devaluation. I think a prudent individual who has a deposit in a bank, if he heard that the bank was getting shaky, would certainly draw his money out and invest it in something solid and real; he would resort to capital investment. If it is sensible and prudent for the private individual to do that, I suggest that it is equally sensible and prudent for the Minister for Finance, as custodian of the State's money, to do it. There is, in fact, a greater obligation on the Minister, because it is not his own money he has charge of, but the money of the people.
Reading the debates over the week-end and thinking over the matter, I feel that there is no honesty in the Opposition's arguments in connection with this Budget. It may be that the arguments they are using now are the arguments which the Minister for Finance used when in opposition. That does not add one iota to the validity of the arguments. I did not trouble my head going back on the debates to see what the Minister for Finance said in 1946. But, whatever he said, apparently the then Government said he was talking nonsense. Now, in 1950, we have the spectacle of the Opposition coming along and talking the same nonsense with regard to this Budget.
With regard to the height to which expenditure is rising, we must recognise that we are dealing now with pounds of less value than they were some years ago. Apart altogether from the question of the positive act of devaluation, as we know a gradual devaluation of the pound has been going on for many years. It has been going on for years. War normally brings that sort of devaluation and, of course, wars always bring inflation. The Government of a country involved in war recognises that the money must not matter. We have had the example in the last war and the war before of the printing presses being turned on to print sufficient money.
We should consider, in the discussion of this Budget, the reception which it has received from the people down the country. The Opposition condemned the Government for its extravagance in the past year. It will be recalled that in 1948 they condemned the Government for its policy of retrenchment. They said that the Minister for Finance was a tight-fisted Minister who would not spend any money at all. He was very wrong, of course, at that time, according to the Opposition. Then, when he began to spend money, he was equally wrong in their eyes. Recognising the principle that the Government and the Ministers are servants of the people, it is well for us to examine how this Budget has been received by the people down the country. I think I can say that its reception was good and that the people are well pleased that there have been no new taxes. That, I think, is something that has not been sufficiently emphasised in this debate. One man discussed the matter with me. He said he thought that the bill was very high. He said that taxation had gone to the dogs. I asked him to tell me what taxes had been increased and he said he did not know but that somebody had told him that there had been increases. Probably he had been reading the Irish Press or, mind you, the Irish Independent, which had what I considered a particularly silly editorial on the Budget the day after the Minister for Finance delivered his statement in this House. I can quite understand the Irish Press coming out with strong criticism of the Budget. It makes no bones about the fact that it is a Party organ and that it has taken a certain political stand. It gives its views and I suppose the leader writer believes what he is writing. Perhaps this is not the place to criticise either paper but I think it is fair to say, in passing, that I have no complaint in regard to the Irish Press whereas, as I have said, I considered the editorial on the Budget published in the Irish Independent a very silly production in view of the political background of the paper.
The House is somewhat indebted to Deputy MacEntee. I listened to his speech for a long time with considerable interest. I must say that I thought it most entertaining. While he gave simile after simile in the most extravagant language the thought struck me that probably he will be highly amused when he reads the report of his speech and pictures himself delivering it. At any rate, those of us who listened to him were highly entertained.
This Budget is divided into two parts. The part which most people wish to deal with or are inclined to deal with is that which is called in the White Paper the "State Capital Budget". It means a Budget empowering the Minister to borrow some £30,000,000. That is a very considerable sum of money. I have met quite a few of the people down the country during the week-end and they seemed to be shocked at the amount of money which it was proposed to borrow. Many of them ask how that money will be employed; how many years it will take to employ it and, if it is all employed within the coming financial year, whether more money will have to be borrowed again. Some of those people had some experience of borrowing after the last world war. Strange to say, a number of the people were the older workers in County Meath who, like the farmers, with the intensive borrowing that took place during and after the first world war got badly burned. Therefore, they look on it and I look on it and the Fianna Fáil Party looks on it, and I am sure quite a number of members on the opposite benches, too, look on it as a very serious step and one that should be considered with the greatest care. Even if a few extra days have to be devoted to the consideration of this matter I do not think that some of the Deputies opposite should shout across the floor of the House that it is sabotage. Such statements, coming even from members of the Government, indicate that there is a certain dread of public opinion — I am not saying that there is—amongst members of the Government. I must say that it strikes one outside and, in fact, it strikes myself that there is a certain dread and a certain fear. I believe that that statement is quite correct. I believe that there should be dread and that there should be fear because the step the Government proposes to take is a very dangerous and a very serious step. It is true that we could have a couple of years' luxury and a couple of years' good living. We could increase the standard of living, and, above all, we could increase the cost of living. Even the Minister contemplated the dangers of an increase in the cost of living through borrowing. I think we will all admit that borrowing tends to increase the cost of living. Therefore, it is a serious matter and it should be given full discussion.
There is not very much use in members of the Government saying that Fianna Fáil is afraid that they will get this credit and that Fianna Fáil or the members on these benches are going to do all they can to prevent the Government getting that money. That would be a very bad thing to happen. Suppose that could be done and that an effort was made to do it, it would be a very serious thing for this country. Suppose the Government cannot get the money, even if Fianna Fáil or others did not prevent them, would it not be a desperately serious thing for this country? Would it not mean that, although the nation is creditworthy and possesses sound foreign assets, the country could not get a loan?
I have heard people on and off talking about looking for loans, speaking about the advantages that would accrue from getting loans, but I always heard them saying that such a matter should be considered very carefully and seriously. How are we going to pay back this loan? That is the important thing. The Minister for Agriculture has not the slightest doubt that, with the huge increase in agricultural production, there will be no trouble in doing it. Who will put up the money to repay this loan? The British people — nobody else to do it. We may do a little ourselves with the home industries that we established — Guinness's brewery and Jacob's biscuit factory — but there we stop. We are depending entirely on exporting live stock. I do not know whether we can export any butter or not; I do not know how the egg position stands. That is what we are depending on and that is how we are going to pay back this loan. The most serious part of it is, how are we going to pay it back? There is not much use in people whispering and jibing. We have as much interest in this thing as the Government Party.
Do I understand you to say that the English people would pay for the cost of the loan — the British people?
How are you to get it unless from them?
Are you serious in that?
Have you any other market now? Did not the Minister for Agriculture destroy any markets we got abroad for live stock? Have you any other markets? You can set about it and take in one another's washing, which is not a profitable business. We have to depend on exports to meet the interest and the principal, and our exports are now to the British market.
And the labour and the slavery of the Irish people will pay that.
Is that not correct? The labourers can get paid only out of the income that comes into the country. Why try to deceive anybody? Is that not Deputy Hickey's trouble? Is that not the reason he wants to change the whole banking system? I do not see any other way unless you print money.
We should have control of it.
Is that not the same thing? It is, of course, a difficult proposition and one I would not be expert enough to go into. At the same time, it is a dangerous thing. I believe if you study the thing and trace the misfortunes of many Coalition Governments throughout Europe and the world since the war — and even some of them before the war — you will find it was through tampering with currency that they brought about their downfall.
Not at all.
This matter should get very serious consideration. There is not very much use in the Government Party shouting across at Fianna Fáil that any criticism that is made about this Budget is sabotage. That expression has been used here several times and I think that in itself is a misfortune and a bad omen. We are here in opposition and under the ordinary rules of democracy it is our business to oppose and criticise everything done by the Government, and the more we oppose and criticise the better the Government will get on.
That is a new definition of democracy.
Perhaps it is, but it is a most sensible one, I think. It is the business of the Opposition to criticise and it is bad for the community to have such expressions as sabotage thrown across the House. In listening to the different speeches I noticed that the members of the Labour Party were the only ones who had a really hearty welcome for this system. In Volume 120, column 1864, Deputy M. O'Sullivan said:
"The issue or rather the challenge which this Budget provokes is whether we shall have a departure on the lines of the capital works indicated in the Budget or a continuation of the position based on the policy of, as Deputy de Valera indicated, pay-as-you-go with the disastrous results which were featured in administration in the last 25 years in this country. I suggest that raises a serious social issue and, so far as Deputies of the Labour Party are concerned, we regard the adoption of this policy as part and parcel of our own creed."
That is all to the good. Borrow money if you are sure of being able to utilise it economically and if you are certain that you will be able to pay it back. I would like the Minister to tell us by what means this money will be paid back. How are we going to get the income to pay it back?
What happened here after the first world war? The United States of America had been sending their tourists all over Europe up to 1921. They had spent huge amounts of dollars in France and Germany viewing the battlefields and other things. After 1921 or around that period they got tired of that, and what happened then? Europe had no money to buy anything from America and America started to take in her own washing. The people there started to gamble on the stock exchange — there was nothing else to do — and there was a complete collapse. The result of that collapse was that the agricultural industry was the hardest hit and the agricultural workers were reduced to misery. The banks lent money ad lib. It was a less orderly way than the way we are attempting to do it. Not alone did the banks lend money to farmers but they lent it to business people and others. Even the business people became the agents of the banks and they lent money to the farmers, such as took place in Kerry.
All over Ireland.
Quite so. What was the result of that hectic, mad borrowing? There was a total collapse in the agricultural industry. We were in power for four or five or six years before people began to get re-established. Even to-day there are farmers still struggling along under that burden; there are many farmers to-day still paying back to the banks. The men who suffered just as much as the farmers are the men who worked with them and earned their wages. Therefore, borrowing is a very serious thing for people situated as we are, and I thoroughly agree with the Leader of the Opposition and with other members of the Party that the people of a small country like this, if they possibly can do it, should pay as they go along. We have done that. We did it through very difficult times and we succeeded. We built houses, divided land and there is not a road in this country, in any county, that was not improved. Thousands of pounds were spent and it was the taxpayers' money. Why cannot that be done now? What is the necessity at this stage of going forth on such a dangerous expedition as is now proposed? I should like the Minister for Finance to tell us in what way he thinks this money can be paid back.
Mr. Maguire
In my experience over the years of this House it is the usual thing, when the Budget comes along, to begin by saying that the amount asked for is in excess of what was asked for in the previous year. Comparisons follow and then the Budget is passed in spite of all the criticism of it. The wheels go around until the following year, when the Budget is again introduced, invariably with increased expenditure and a larger amount of money being sought. I must say that I have lost belief in the criticism that takes place each successive year of the amount of money which the Government propose to collect. It is pretty obvious to any person with a knowledge of modern requirements that there must be increased expenditure and that that increased expenditure on the part of Government Departments must mean an increase in the amount of money in the Budget.
For 12 months of the year, we make representations to the Government which involve increased expenditure, for such things as old age pensions and I.R.A. pensions, and we argue strongly and forcefully that the salaries fixed a few years ago are now inadequate because of the increased cost of living. That argument is irrefutable. We press for reforms and for amelioration of the conditions of these people and we ask for better housing conditions, for more money for forestry, for land reclamation and for land division, and, when these are conceded, we come back and blame the Government who have listened to us and have yielded to our reasoning and say: "You are an outrageous Government. You are burdening the country beyond its capacity to pay and you should not be in office." That is the attitude adopted by the Opposition in this House, an Opposition consisting of different Parties from time to time, since I came into it. It is not logical and it is really not good national service that this sort of argument and waste of time should go on.
With regard to borrowing, nationally or individually, it may be very excellent business. Little progress can be made — slow progress, at best — if people will never venture to borrow or increase their business. Borrowed money may be very helpful to the individual and there is scarcely a businessman who has not had to look for financial help from time to time. No big business, no matter how successful, can carry on without financial assistance in the form of borrowing. No nation has ever carried on without borrowing and the wealthiest nations in the world have huge national debts, amounting in some cases to so many millions as to be not understandable by the average mind. Yet these countries seem to carry on and to make progress and I have no doubt that the productivity of these countries is to some extent the result of the extent of their borrowing.
Borrowing is useful where the moneys borrowed are put into productive business and personally I have no hesitation in approving of borrowing in the case of the improvement of the land of the country in respect of the proposals of this Government. I consider that the money expended in improving agricultural land is the soundest investment the State could embark on and I consider that the money involved in this Budget for the relief of congestion is one of the soundest and most practicable propositions the country can invest in. I consider the building of houses essential, but, in relation to all these undertakings, there must still be the query which is to be asked in relation to the land rehabilitation project sponsored by the Minister for Agriculture: is it going to give results which will prove best in the end? I am afraid that, with the best intentions in the world, the Minister's enthusiasm and theoretical rather than practical knowledge of the problem may lead him to spend money without getting the best results.
There is no doubt that the civil servants preparing the scheme, advised by expert men, will give the best possible advice, but the drainage is as variable as the soil of each county is different. A specific depth of drain in one set of soils cannot be held to be practical for another set of soils, but, with the exercise of due care, I think the plan itself is generally good. I should say that, for the purpose of securing the best results, not merely should we have a theoretical scheme of drainage on which a huge sum will be spent and of which this borrowing is part, but the Minister should see to it that science is brought into play as to the methods most suitable and most adapted to the variety of soils which drainage on a standard basis will not remedy. The position is similar in relation to the relief of congestion. The Minister for Lands got very nearly unanimous support for most of the proposals he brought in, showing that there is a unanimous acceptance of the fact that congestion is a national disgrace and calls for remedy almost without regard to cost. If, in these circumstances, the Budget shows increases, I personally am in favour of them. If it has the effect of bringing about an improvement in the soil and in the productivity of the soil and improvement of the condition of the congests in the west and south of Ireland, then the Budget is entitled to recommendation to the community.
On the question of housing, there is nothing very new in the problem, nor is there in the problem of relieving congestion, because previous Governments tackled it, although it is now proposed to tackle it in a major way under the recent Land Bill. In regard to housing, however, I suggest very strongly to the Government that, however great our anxiety to improve the health of the community by the provision of better housing conditions, we must remember that we are spending money belonging to the nation and I should like those responsible in the Government to check on what number of people are employed in the City of Dublin on the building of houses. Have they considered that an end must come to that form of employment when sufficient houses are built to house the number of people who can afford to pay the rent for them?
When that stage is reached, is there a plan for alternative employment? To-day, thousands of people are engaged in building. They are earning good wages. More are flocking to the city to participate in the wages that are being paid in this building drive. They are building houses for themselves. As the demand increases, more will come to the city. An end must come to the building scheme. Building will have reached saturation point, at the present rate of production, in the next three to five years. Where will employment be found for these men then? Are any of the Departments planning in advance so that, when the housing boom is over, the people engaged in building now will find employment in some other useful occupation? There is no plan behind it. You are building recklessly and the reckless, unorganised building will react on the nation. The nation's money will be lost in it.
There are loans and facilities provided for building houses in the city. What loans are available to the small farmer if he is unable to build his own house? Are not these the people that you are trying to drive out of the country and doing it successfully? The economic unit, the small farmer who works his holding with the help of his family, is the backbone that maintains the cities and towns. Consider the migration that is taking place from rural areas. You will not build a boreen to the farmer's house to enable him and his family to walk in a clean way in wet weather from his home to the county road. These are the people who are maintaining you, on whom you must fall back. He gets only the ordinary grant, which is very little, while substantial grants are made available to the man in the town to encourage him to go ahead with a destructive scheme that will react on the nation. There is no alternative employment being provided for the occupants of those houses when the building scheme is over. There is no organised plan. It is wrong from the point of view of the Government. It is ruinous for the nation.
I am sick and tired listening to the unreasoned arguments from the Opposition. The same points are trotted out: You are ruining the country; the amount of money you are taking in taxation is ruinous and is bound to react unfavourably. As long as industry is good and money is in circulation, the revenue will be provided.
If possible, a way must be found to develop industry that will maintain the backbone of this country, that is, the small farmer. We must try to utilise the experience, knowledge and intelligence of the small farmers of the West of Ireland by giving them an opportunity to improve the standard of living of their families, by increasing the size of their holdings. The knowledge that these people possess is a national treasure. I suggest that, if the matter were submitted to actuaries and accountants, they would say that on the income from a farm of nine acres, the valuation of which is £4 or £5, it would be quite impossible to rear the families of 11 or 15 that have been brought up in such circumstances. These people have done the impossible. Give these people a chance. They are people with a plan of their own. Give them an opportunity and try to keep their sons and daughters in this country. Then you will have a national asset and you need never mind about borrowing. You can borrow on the strength and capacity of such people. Divert the energy that is at present devoted to reckless building of houses in the City of Dublin, which is heavily overloaded, to the country towns, the bogs and the plains. Give facilities and encouragement to the people there to remain there. Then your debts will be paid and the demand on the nation for further borrowing can be reduced accordingly.
This is the third time that the Minister has come before the House with a Budget. On each occasion he has told us that there is a deficit. This year, the deficit is £7,186,000. We must regard the finances of the nation in the same way as a householder would regard his domestic finances. Each year we must budget for the amount of money we will spend and decide whether we can afford to spend that money or not. If we have not sufficient money to meet our commitments, we must borrow. That is what has happened to the Minister for Finance this year. He has failed to run the country on the amount of money he asked the people for 12 months ago. He has come to the House this year with an increased Budget, with a deficit of over £7,000,000. He has asked for an increased sum of money to run the country and he has not the moral courage to tell the people that the sum provided for does not represent the amount it will cost him to govern the country. He resorts to another method, the method of borrowing. During past years, under both Governments, there were certain capital items for which it was legitimate to borrow. Housing should not be regarded as one of those.
I have stated already — and I agree with Deputy Maguire — that housing is the biggest industry, particularly in Dublin. If it continues as it has been proceeding for the past three years, eventually four-fifths of the population will be in Dublin. They are building down to the sea and into the country. For whom are those houses being built? They are being built for the very people who came to Dublin five or six years ago. When all the people are in the capital, where will employment be found for them? That is what has been happening. It has been happening for the past five years, it is still continuing and it is getting the support of the Government.
The Minister is borrowing for the purpose of land reclamation. Why is he borrowing for the reclamation of land? Why did the previous Government not borrow for the same purpose? From 1941, under Fianna Fáil administration, a sum of money was devoted each year for the reclamation of land— £400,000. What was spent on reclamation in this country since, although you had the land rehabilitation scheme? Was as much spent on the drainage and reclamation of land as was spent under the Fianna Fáil Government? No. Why all the talk about it, then? Why was the £198,000 which was given by way of subsidy for the purchase of fertilisers withdrawn?
Who got the subsidy afterwards?
Who is getting it now? That money is not going to the farmers of this country; it has gone back into the Exchequer and if that money were made available to farmers the deficit would be still higher. What about the wheat that was grown in this country during the war period? In 1946 we grew 642,597 acres of wheat; in 1947, 579,646; in 1948, 518,400; and in 1949, 547,700. Because we had not our own requirements we had to purchase wheat in 1949 amounting to 1,704,260 cwts. at a cost of £2,221,522.
How much was bought from the Argentine?
Over £3,000,000 worth.
Deputy Lemass did that.
You purchased it last year.
The Chair did not.
If Deputy O'Higgins wants the correct figures I will give them. I will give what we purchased from the Argentine and Australia. Last year if the acreage of 1947 had been maintained we would have saved $14,017,000 or in sterling between £5,000,000 and £6,000,000.
How much was purchased from the Argentine?
You purchased wheat from the Argentine last year and from Australia. Would you like to know the amount that was grown in this country?
The Deputy was going to give the information to the House.
I will give it, all you want, and some of it you will not relish. The Argentine wheat seems to have got into your "nuts" and you cannot get rid of it.
Acting-Chairman
Deputy Walsh must not make his statement by way of question and answer.
I did not introduce the questions. A hundred thousand tons of wheat was imported from Australia at a cost of £3,000,000. Would that satisfy Deputy O'Higgins?
I was interested in the Argentine.
The produce which cost £3,000,000 was produce which the Irish farmer could have produced. Is that good policy? We could have produced it here at home. Why has the policy in this country changed? Why have our people been placed in the position of knowing that in the event of war they would not have enough bread? There is no change from the Fine Gael policy. Speeches were made by the Minister for Agriculture recently regarding the plough. He said he hoped to live to see the day when the ordinary plough would be in the museum. That is the policy our Minister wants to pursue.
What does the Deputy suggest is wrong with that statement about the plough? Did he not say he would substitute something else for it.
Yes, the rotary plough. I would like to see a rotary plough going into a two-acre field in County Galway.
Acting-Chairman
We are not discussing the Agricultural Estimate but the Budget.
Some Deputies said that we have the same criticisms year after year. What people are looking for is something new in the way of relief of taxation. Deputy Timoney stated that he met a gentleman down the country this year after the Budget had been published and he inquired what he thought of it. The gentleman said there was nothing wrong with it, no new taxes but neither were there any new reliefs. Let me quote the two last Budgets which were introduced by Fianna Fáil and we might find something in them which would please him had he been questioned in the same way as Deputy Timoney questioned him.
In 1946 one of the items in the Budget was £3,000,000 for the relief of distress in Europe, and out of that £1,350,000 was spent. If we added that on to the present Minister for Finance's Budget it would increase the deficit a little further. We also had capital items in that Budget of 1946. Provision was made to borrow for forestry, airports, defence works and employment and emergency schemes but although they were borrowing they were giving relief. It did not affect the Budget as the Government had the moral courage to tax if taxation were required and to reduce if there was a case for reduction. They reduced the price of sugar by a penny a pound in 1946. What has happened since 1948? Sugar is still rationed and if you want any outside the ration you pay 3½d. a lb. more for it. That is the fulfilment of the promises to reduce the cost of living.
Why does the Deputy not give 1947?
I will come to 1947 in a few moments, if you will permit me, but we have some nice reading in 1946. The price of turf was reduced in 1946 by 10/- a ton. That helped and helped considerably a certain section of this country, the poorer section. The reduction of a penny on sugar also helped the poorer sections of the people. Not only were they helped but in order to prove that this Party when it was the Government did not legislate for one section they also reduced income-tax by 1/- in the £.
It is amazing you were beaten, is it not?
We were beaten in 1948 through deception and trickery. When you went on the hustings and told the people you would reduce taxation ——
Acting-Chairman
The Deputy must address the Chair.
Through you I will address Deputy O'Higgins and tell him that, through deception and trickery, the Irish people were fooled when they were told that this Government would reduce taxation by £10,000,000. Have you done that? What is the Budget this year? Will you go back to the people now and tell them that you are reducing taxation by £10,000,000? The Clann na Poblachta Party told the people they would reduce the cost of living by 30 per cent. Have you done that? Would you not be afraid now to go before the people and continue the deception and the trickery? If the Government has any conscience you should go out now and tell the people the truth.
Mr. Murphy
Examine your own conscience.
We have nothing to examine. We have told the truth, and we are not ashamed of what we have done.
Acting-Chairman
Deputies must allow Deputy Walsh to make his speech without interruption. It would be better if the Deputy addressed the Chair.
Mr. Murphy
He is inviting interruption.
If they want to interrupt me they can have all they want of it. (Interruptions).
Acting-Chairman
The Chair will have to take serious notice if Deputies do not allow Deputy Walsh to continue without interruption.
Hydrocarbon oil was reduced by 6d. per gallon. Grants were increased to Irish-speaking children in the Gaeltacht. These were some of the reliefs given in 1946. What reliefs have we this year? We have none. There are no reliefs, but the people will be burdened with the payment of interest and sinking fund on money that will be spent on doubtful propositions.
Are houses doubtful?
If you continue the policy of building in Dublin—it seems to be the biggest industry you have— and if you build down to the sea on one side and down to Naas on the other side, you will put the entire population into Dublin. For whom are the houses being built in Dublin to-day? For the people who came up here five and six years ago to build houses for those who came up five and six years before them. Bring them up in relays and continue your housing policy, and where will you find employment for them when you have built down to the sea and Naas? In 1947 we also had a Budget.
Mr. Murphy
That was your last Budget.
And we also had reliefs in 1947. How does that Budget compare now with the present one?
You should have stayed away from the drink and the fags in 1947.
Let us make a comparison.
Mr. Murphy
Talk about the old age pensions.
Acting-Chairman
Deputy Walsh, please.
We increased the price of milk which meant an extra £1,250,000, but we did not have to borrow in order to pay that £1,250,000. We gave the farmers 1/4 per gallon in the winter months and 1/2 in the summer months. In addition to that, we provided a market for farmers' butter. There is no market to-day for that butter. We did not have to borrow in order to pay an increased price for milk.
There were two Budgets though. There was a Supplementary Budget.
There was, to reduce and stabilise the price of flour and other foodstuffs.
There were two Budgets, and you are over there now.
As a result of the deception and the trickery we are over here.
The trickery of Deputy Aiken.
And if it were not for that deception and trickery, the Minister for Finance would have the moral courage now to increase taxation this year and not resort to borrowing. That is the easy way out. I suppose posterity will never know the reason. History will hardly publish the reason why he had to resort to borrowing in the year 1950. But the people of the present day know and I hope they will be given an opportunity of saying what they think of this new financial juggling.
Hear, hear!
I hope so, and I hope it will come soon.
You will be over there for another little bit yet.
I hope it will come soon. In 1947 there were reliefs, too, to other sections. In 1946 there was a reduction of 1/- in income-tax. In 1947 income-tax was again reduced. The then Minister for Finance gave certain reliefs to the lowly-paid people and the wage earners; he increased the allowance from £120 to £140, in the case of a single man, and from £220 to £260 in the case of a married man. That was a further relief. A sum of £100,000 was made available for the tomato growing experiment and for the building of poultry houses. There was no resort to borrowing for that purpose. Why? All this money came out of taxation then. The present Minister has not got the courage to go to the people and tell them the Budget will be increased this year for the purpose of doing these things.
What did the people say in 1947?
They said nothing at the time until the deception and the trickery started. I wonder what the people who fell for the trickery and the deception, mostly in the City of Dublin, think now when they have to pay 2/6 a stone for potatoes.
And are being housed.
Acting-Chairman
There must be no further interruptions.
The housewife is paying 2/6 a stone for potatoes in this agricultural country. Can any Minister stand over that? We are importing over £7,000,000 worth of wheat.
Do you remember when we could not get an egg?
Acting-Chairman
The Parliamentary Secretary will have an opportunity of speaking and he should not interrupt the Deputy.
Thousands of pounds have been spent by way of propaganda. Yet our exports of eggs have gone down in the last three months below the corresponding figure last year. It looks to me as if there is exploitation there too.
In 1947 the national debt was £101,000,000. To-day the national debt is £157,000,000. Is it good policy for the country to increase our national debt? We have to pay interest on it. We shall have to pay interest on it for the next 30 or 40 years. Possibly, some Government may come along at some future date, when conditions are more normal than they are at the moment, and say: "These moneys were borrowed under abnormal conditions. The people who borrowed them were foolish. They should not have been borrowed. However, we must make some recompense to the people. They are unable to pay the interest and sinking fund charges and we may have to extend the period." That may happen. Somebody will have to pay. Surely nobody ever conceived of our borrowing money under Marshall Aid in order to purchase wheat; yet, that is being done. Should that be a capital item considering the amount of land we have? At one time we had over 600,000 acres of wheat growing. Was it necessary to go to America to borrow dollars to buy wheat when our farmers are waiting for an opportunity to produce it? Was it necessary to go to Formosa to buy sugar when our farmers could produce it? Does the Government, particularly those representing Labour, stand over a policy such as that? Will the Labour members stand over the decrease in employment on the land? Employment has been going down rapidly in the past three years. You have the Taoiseach's answer to a question a couple of weeks ago, stating that there were over 452,500 people employed on the land. These figures include casuals, permanents and members of the family.
In 1946, you had 519,634 people working on the land. That shows a reduction in the number employed on the land of over 67,000 people. Why, if this country is making the progress we are told it is making under the inter-Party Government, has a reduction taken place to such an extent? Why have we so much emigration? Last year we sent out 23,000 people while the last year that Fianna Fáil was in office, 7,000 came in after making all allowance for those who went out. Yet we have 62,000 unemployed. When I mentioned that figure some time ago, I was told by the Minister for Industry and Commerce that it was 10,000 fewer than the number during the Fianna Fáil period. If we make a little calculation, and if we add the 7,000 who came back in 1947 to the 23,000 who went out last year, if you like to put it that way, we find that there is a difference of 30,000 as between the two years, or to put it another way, if we take the 62,000 unemployed plus the 23,000 who emigrated, we get a total of 85,000 people who could not find work here. If we take the 70,000 that were there in the last year of the Fianna Fáil régime and subtract the 7,000 who came in, we get approximately 63,000, showing a difference of 20,000 in the number of people who could not get work in this country. You cannot have it both ways. We know that there is less production on the land and fewer people working on it. We have more machinery but are we getting more produce from the land than you got under Fianna Fáil? I submit that you are not, although the figures for the Fianna Fáil period are based on the returns for 1946 and 1947, which were the two worst harvests in years. There were practically no fertilisers at that time, but I know that we got higher yields during the war than we are getting to-day, although the farmers are now getting ample supplies of fertilisers. That is just another theoretical myth that will be exploded in time.
We have a lot of theoretical experts in this House and we know where they would bring this country if they had their way. I would like to see one of them placed on a farm of 50 acres. He would die of starvation. These people would not be able to till a cabbage plot. Of course some of the ranchers coming from the Midlands and around there would be all right if they had the tail of a bullock but the tail of a bullock does not feed people. We want to get back to the Fianna Fáil tillage policy for the country; we want to get a policy of guaranteed prices and a guaranteed market. What crops have we got a guaranteed price for now? We have them only for two crops, beet and wheat.
A Deputy
Peas.
Deputy McQuillan does not grow a lot of peas.
I said no such thing.
I thought the Deputy mentioned peas.
Acting-Chairman
The Deputy might now come back to the Budget.
That is what I am dealing with.
Acting-Chairman
I think the Deputy is going into the realms of the Department of Agriculture.
It is going to get £15,000,000 under this Budget.
Acting-Chairman
So long as the Deputy keeps to the spending of that money, he will be in order.
I think I have a perfect right to comment on how we are spending that money. I submit that the policy which the Minister has enunciated all over the country is not the best policy for the country and consequently, I believe this House should object to his getting any money to spend on behalf of agriculture. As I have already stated, the only two crops for which we have guaranteed prices are wheat and beet. We had the cultivation of wheat introduced by Fianna Fáil and the production of beet extended by Fianna Fáil. Fianna Fáil always gave their blessing to both crops. What has happened to the crops to which the Minister for Agriculture gave his blessing—potatoes, oats, barley and of course many other things? He does not know whether the dual purpose cow or the dual purpose hen would be best for the country. Deputy Rooney wants the dual purpose hen and the Minister for Agricuture wants our tillage policy to be sacrificed to a grazing policy.
As I have already pointed out, we have had that in operation for a couple of years and we have seen the results on employment in the country—the number of men employed on the land going down rapidly year by year. If that policy is pursued for two or three more years—with God's help it will not, because there will be a change— we will have nobody on the land. There are a couple of other points which I should like to make.
The old age pensioners.
I should like to discuss the old age pensioners, if the Chair will permit me, and the promises that were made to the old age pensioners in 1947 and 1948. How sadly disillusioned the old age pensioners must be! The means test was to be abolished and the pension was to be increased to 25/- or 26/- a week. None of these things has materialised. The old age pensioners were made the dupes of Clann na Poblachta, Fine Gael and Labour, who never fulfilled their promises.
We are only two years in office.
If you are much longer in office, the old age pensioners will get nothing. I mentioned already that one of the promises made to the people in 1948 was to bring about a reduction in the cost of living. No provision has been made in the Budget to reduce it. Instead of having the cost of living reduced by way of subsidies, the subsidies already provided for that purpose have been reduced. The Minister for External Affairs, apparently, did not agree with that policy when he spoke in Carlow in 1947. I quote from Volume 119, column 2323, in which there appears the report of the debate on the Vote on Account on the 22nd March, 1950. This is what the Minister for External Affairs stated at Carlow in 1947:—
"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."
On a point of order, I thought that nothing was reported in the Official Report except what was stated in the Dáil. Deputy Walsh would have us believe that what the present Minister for External Affairs said in Carlow in 1947 appears in the Official Report.
This statement appears in the official record and it is a quotation from a report of a speech made in Carlow by the Minister for External affairs on the 6th September, 1947. It has not been contradicted. At any rate, as we have plenty of time, I shall read the quotation again. This is it:—
"It was his intention to provide subsidies on all food produced——"
What is the quotation?
The quotation is from a statement made by the Minister for External Affairs in Carlow and recorded in the Official Report.
Acting-Chairman
You should say that you are repeating the Minister's statement.
This is the Minister's statement which I quoted in the House on a previous occasion. It is contained in the Official Report. I am reading it again because I believe that a good thing can never be repeated too often. This is it:—
"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 average family wage, having regard to the present cost of living and modern requirements."
In this year's Budget provision is being made for a reduction in food subsidies to the extent of over £3,000,000.
Where is that £3,000,000? I wish I had it.
The Minister is looking for it.
Where is it?
Where are the subsidies that the Minister has taken away?
£3,000,000?
The Minister has taken away food subsidies.
I have.
Subsidies amounting to £3,700,000.
Some of us must be asleep.
The Minister was not asleep when he was presenting the Budget. This reduction in the subsidies should be sufficient to bring about a reduction in the cost of living by 30 per cent., the figure given by the Minister for External Affairs. What attempt has been made by the Minister and the Parties supporting the inter-Party Government to reduce the cost of living by 30 per cent.? I do not think the people have yet been given any indication of an attempt being made by the Clann na Poblachta people to reduce the cost of living. Neither have I heard anyone, representing Fine Gael, standing up in this House or on a platform outside telling the people that taxation is going to be reduced by £10,000,000. But they were very vocal about that in 1948 when they were on the hustings telling the people what they were going to do. Would it not be time for them to go to the people now and tell the people that they have been failures and have been unable to carry out promises so lavishly made in 1948? Will they have the decency to do that, because they have been utter failures? The people are beginning to realise it. If the Parliamentary Secretary to the Minister for Finance would care to come to Kilkenny I will not be ashamed to introduce him there if he is prepared to tell the people how he misled the people of Galway in 1948.
Will you stand with me?
That is what it amounts to. I am giving the facts. I want now to refer to the new policy enunciated throughout the country by the Minister for Agriculture, a policy which I suppose is about to be put into operation for the same purpose as many other proposals in the Budget— that is the Minister's policy to reduce the price of milk to the creameries. The Minister for Finance, of course, would be able to make another saving if the people were foolish enough to take what the Minister for Agriculture has said at its face value, but the people have had enough of the Minister for Agriculture and his promises. The Minister for Agriculture has said that no inspector dare open a farmer's gate now, but yet the Minister himself has issued a threat from his office in Dublin to the dairy farmers of the country to the effect that if they do not agree with his suggestion that milk be sold to the creameries at 1/- per gallon, he will give them no guarantee that they will get even 1/- a gallon next year. In effect, that is what the Minister for Agriculture threatened the dairy farmers with. I suppose it would be true to say that the majority of those on creamery committees down south might be in favour of the Fine Gael Party because, generally speaking, people in the non-tillage areas do to a certain extent support Fine Gael, but luckily enough on this occasion they have had the courage of their convictions.
Acting-Chairman
How does that arise on the Financial Resolution?
In this way, that if that suggestion were carried out it would have the effect of reducing the butter subsidy, and in that way would bring relief to the Minister for Finance. I take it that the Minister for Agriculture made that suggestion to the dairy farmers for the purpose of making a saving of £1,000,000 for the Minister for Finance. That is why I am referring to it. It was another of those methods by which the Budget deficit could be reduced. Luckily enough, the farmers of the country were not foolish enough to accept the word of the Minister for Agriculture on this occasion. They thought the matter out for themselves and decided that they have been foolish long enough in believing that the Minister for Agriculture has their welfare at heart. Consequently, they have refused to agree to the price of 1/- per gallon for milk to the creameries.
I should like to know whether any provision is going to be made by the Department of Agriculture as regards a fixed price for farmers' butter. The Minister for Finance must know that in many parts of the country where there are no creameries, farmers have to sell fresh butter. Is there going to be any subsidy for it in the same way that there is a subsidy for creamery butter? The people in the country are anxious to get information about these things.
Deputy Timoney seems to have the idea that everybody likes the Budget. Everybody does not like it. Everybody does not believe either in the policy enshrined in the Budget of borrowing to meet recurring expenditure. The sooner the people are told about these things the better it will be for them and for the Government. I move to report progress.
Progress reported; Committee to sit again.