Leaving out that hypothesis, does the Deputy believe that in six or seven years' time we shall be in a position in which £60,000,000 will be required for the service of debt? The Deputy is anxious about the national debt charges. The debt charges as a percentage of national income have not risen and it is easier to bear these charges when the national income is rising. The national income is rising and, if for no other purpose, that would mean that we would be able to bear a greater charge by way of national debt service than was possible in previous years.
A lot of phrases were used with regard to the cost of living. It has been stated several times that the cost of living is up. The cost of living is not up. The cost-of-living index figure which most people go by has not risen. There may have been a variation of a point up or down in two years, but that figure has been stable since February, 1948. There is no getting away from that. That has been the case, although we have very definitely increased the amount of money put into the hands of the people with which to buy consumer goods. We have allowed wages to increase so far as they are under our control. We have sanctioned increases for civil servants, Guards, teachers and the people under the control of the Central Government. Those have all been raised, notwithstanding that there might have been a severe impact on the whole national situation here causing a great increase in the cost of living. But we took the view that goods in this country were also on the increase, that there would be in circulation not merely more money, which we knew would happen, but more goods to meet the pressure of that money. That is the situation which has evolved. It is a fact that the cost-of-living index figure has not risen and there is no reason why it should.
Deputy Aiken, I think it was, stated that if we were going to loose this year a new stream of purchasing power for goods in short supply the effect would be serious. Deputy Lemass followed on the same line. I should like to mention this to indicate the confusion of thought there is. The argument that there is bound to be an increase in the cost of living depends upon two propositions: that there will be more money in the hands of the people to buy goods and you have either to lessen the stock of goods or do something to lessen the supplies in proportion to the money put out. Deputy Derrig, however, thought that it was possible for me to say that the cost-of-living index figure is static, but, shifting away from his colleagues, he said that there might be greater opportunities for spending and a larger number of things available which people wanted to buy, and then he made some calculation with regard to the cost of living. That is a peculiar way of arriving at a truth. There is a larger quantity of goods available for people to purchase and, in these circumstances, it is not wrong to enable a larger spending power to be put into the hands of the people and it does not add to the bad effects forecast.
Somebody also referred to a phrase I used, that the standard of living of the community had increased. I want to repeat that. I think that the standard of living of the people in this community has definitely increased. In the course of my speech last week, I indicated that the volume of agricultural production had now come close to pre-war standards. I indicated that industrial output and volume was 43 per cent. over the 1938 figure. I indicated with regard to exports that, in volume, we were still short by 10 per cent. of the 1938 figure. In other words, although agricultural production had reached its old time volume and industrial production had gone far beyond it, we were not exporting as much as before. Our imports show a 27 per cent. increase over 1938.
In view of the situation in which more goods, both agricultural and industrial, are produced at home than in 1938 and not the same volume of exports on the agricultural side particularly, and more goods being imported, quite clearly there are more goods at the disposal of the whole community and, as they have the money with which to purchase them, it is quite clear that the standard of living has advanced and I would say considerably advanced since 1938.
The main controversy in this debate has been with regard to our programme of borrowing. Various Deputies— Deputy M.J. O'Higgins started it and others followed on the same line—tried to get from Fianna Fáil a statement as to what part of the programme we have in mind they think undesirable. I am not speaking of it as being undesirable from an idealistic standpoint but as being undesirable in present circumstances. What did they even think was dangerous? I invite Deputies and anybody who wants to inquire into that matter to turn to the table at column 1632 of the Official Report of the 3rd of this month where, under a dozen heads, I set out the purposes for which we require this year a sum of £34,000,000. Housing, £14,000,000 odd; public health services, £1,000,000 odd; hospitals, about £500,000; agricultural development, £6,250,000; electricity development, £4,750,000; turf development, £1,500,000; telephone system, £2,250,000; transport, £1.86 millions; schools and other State buildings, £1,000,000 and a bit; afforestation, one-third of a million; and tourist, fisheries and mineral development, between them, £.2 millions. Which of these items should we drop? Which of them is a bad investment? Which of them is even an investment—thinking in terms of inflation still being around the corner— which any Deputy on the other side of the House would ask us to drop for fear of inflation? Deputies from this side of the House challenged Deputies on that side along the lines of that list and the Deputies on the other side were as dumb as they are at the present moment. They are all desirable activities. If there was money in hand, nobody could object to them.
Deputy Lemass is the only one who came down to a concrete detail about this. I refer to him because he came to two points of detail and I suppose he put forward the best case his particular group could put forward. He objects to part of the housing borrowing. In column 1791 of the Official Report of the 4th May, he is reported as saying:—
"In so far as the £14,000,000 which is to be spent on housing next year represents an investment in housing, we are agreeable to its being met by borrowing. Nine million pounds of that £14,000,000 will represent advances from the Local Loans Fund to local authorities."
I will read what the Deputy continued to say, but I would point out that he mixed the division between the money fed into the Local Loans Fund and elsewhere. He said:—
"The Local Loans Fund has always been fed by the proceeds of Government borrowing, and it is legitimate to continue on that course."
Whether he means by that statement that as that has always been done he does not object to continuing it or whether he means that he knows these moneys are properly borrowed and fed into the housing system, I do not know. However, he mixed the division afterwards and he said he would raise a question mark about the expenditure from the Transition Development Fund. He then made the point that borrowing for ordinary housing grants cannot be justified on any ground. His attempted defence of that particular point of view was that these housing grants are subsidies for rents. What is the difference, would the Deputy tell me, between the money that goes to the local authority from the Local Loans Fund, the money that goes from the Transition Development Fund and the money originally borne on the Vote for the Department of Local Government as a housing grant? If one takes a £1,500 house, the direct State subvention at the moment is £779. Part of that is money that goes in direct grant. Part of it is money that goes from the Transition Development Fund and part in the extra subsidy given in the change in the rate of interest. I can see no difference in principle in that respect, and I should like the Deputy to correct me in the matter.
I can see no difference between the money via the Local Loans Fund as subventions to houses and the money that is given to a private person for a grant which that person passes on to the builder when the house is built. If one of these is to be condemned the others are too. Deputy Lemass says that as far as the Local Loans Fund is concerned, it was a habit and that, whether it was a good habit or not, we should continue it. I think it is a good system. We are adding on now these other grants. The grant via the Transition Development Fund will be wound up. The special housing grant stands at present at £275 and that may be continued hereafter. I am still at a loss to know what point of difference is made between the two. Even with those subventions, the rents charged in many cases are not even economic. I ask for a correction on this matter. We are anxious to have people understand what this borrowing programme is and we are anxious to find out if anything is wrong with it. That was Deputy Lemass' chief point of dispute with us in this whole matter. He disputes the amount of money that is being paid in regard to the housing grants. Out of the sum of £12,000,000 carried in this Book of Estimates, it comes to £1,635,000. If I add the £50,000 grant to the local authorities under the Act of 1948, let us call it £1,750,000 out of a sum of £12,000,00.
The second point is in regard to the land rehabilitation scheme. I must say that I did not find it easy to follow his argument. He said:—
"I have no objection in principle to the State borrowing to meet expenditure which can reasonably be expected to result in an expansion of national production and, consequently, in State revenue."
He then asked if Deputies believed that expenditure under the land rehabilitation scheme is adding to the capital value of the land benefited or to the productive capacity of the land in direct relationship to the total expenditure. When Deputies answered "yes", he stopped on that line and then he asked: "Why should we borrow for the administrative expenses involved in the scheme?" I do not know whether that was his chief point but one point he picked out for criticism was that of administrative expenses.
Let us look at this. A sum of £3,100,000 is provided for the land rehabilitation scheme. The full amount in the Book of Estimates is a sum of £320,000—it is roughly 10 per cent. He asks: "Why should we borrow for the administrative expenses involved in the scheme?" The Deputy has a phrase here that may contain his argument: "Are civil servants who are administering it a capital investment...?" If he is saying that some of these people were civil servants, then we can say to him that the number who were not specially recruited for this scheme would be about 50. The £320,000 covers a personnel of 300 people. If the land rehabilitation scheme is a proper one for borrowing, I think the Deputy would agree that those people who were specially recruited to carry out that scheme should properly have their salaries borne out of borrowed money also. We are then down to a fifth of the £320,000. If the civil servants who are now occupied, I think in a fulltime way, on the land rehabilitation project, were not so occupied, they would, presumably, be redundant. There would be vacancies in the Civil Service and we would be rid of so many officials and so much expenditure. Certain officials might be rendered redundant. But is it worth all this quarrelling about one-fifth of £320,000, if that is all that is between us? Reference has been made here to what are the moneys that are properly borrowed moneys and what type of expenditure should be met out of taxation. I do not know whether Deputy Lemass has any figure in mind. I was tempted to ask either himself or his colleagues when they were applying all these wild adjectives to this borrowing programme if they could tell me in money terms to what they are objecting. So far as Deputy Lemass is concerned, he passes everything in what he calls "under the line" expenditure. This the sum shown, he says, would be £19.6 million. Actually it is about £21,000,000.
Deputy Lemass passes all that. His distinction is that these are quite normal productive schemes fit for borrowing. He mentions £12,000,000 and perhaps he will tell me how much of the £12,000,000 does he think is improperly borrowed? I have not got a figure from him. If I take the two headings he gave me, I arrive at a calculation of nearly £700,000 and some sum for the expenses of the land rehabilitation scheme. Let us put it at £2,000,000. That is the sum total of Deputy Lemass's objection to this scheme—£2,000,000—and because in a £34,000,000 figure £2,000,000 is questioned—and not very accurately questioned either—just because there is £2,000,000 open to question—we are told that this whole idea is profligate and wreckless, that normal employment will be disturbed, that we will have a welling up of unemployment and poverty with eventual bankruptcy of the State. All that talk arises from a calculation of £2,000,000 out of a total borrowing of £34,000,000.
When we come to what Deputies opposite thought was a proper borrowing scheme, we have the famous old scheme for the erection of Oireachtas buildings and a new Parliament House at an estimated cost of £11,500,000. The proposal then was to devastate 55 acres in the heart of the city, to knock down houses that serve a useful purpose, to destroy a couple of churches and a hospital, knock a whole lot of business firms out of their premises—and yet that was considered a proper scheme for borrowing.