Vol. 122 No. 9
I move:—
That a sum not exceeding £102,980 be granted to complete the sum necessary to defray the Charge which will come in course of payment during the year ending the 31st day of March, 1951, for the Salaries and Expenses of the Office of the Minister for Finance, including the Paymaster-General's Office.
The Minister for Finance is responsible for the supervision of the Government's administrative machine, both with a view to its continuing efficiency and the minimising of its cost. I think, therefore, I would be in order on this Estimate to ask what has happened the economy policy. Has it been abandoned, was it found impracticable or was it ever seriously intended? So far as the Book of Estimates shows the effort towards economy, there has been an all round increase in the size and the cost of the Civil Service.
Is wise expenditure not good economy?
I never denied that. It was the Minister for Finance who advocated a reduction of expenditure and announced that it was the policy of the Government now in office to carry through a campaign of retrenchment. What has happened? Is that not a reasonable question to ask when we find a Government that proclaimed its intention to reduce expenditure, to eliminate services and sections of services which involved expenditure, in the interests of economy and in the interest of reducing the total cost of Government to the taxpayer, presenting to the Dáil a Book of Estimates which shows a substantial increase in expenditure in the majority of Departments and which cannot show in respect of any single Department one item of reduction which could be described as an economy. We have more civil servants now than ever before in the history of this State; these civil servants are being paid more money than ever they were paid before. Deputy Captain Cowan may be right in suggesting that it is wise policy to increase the number of our civil servants or to increase their remuneration. He is entitled to that view. I am entitled to that view. The Minister for Finance who said that the cost of the Civil Service was too high——
I never said that.
—— and proclaimed his intention of reducing it——
I always said that the civil servants had their contracts with the State broken by the last Government.
The Minister for Finance——
Always said that.
——before and after he attained the dignity of that office announced his view that the cost of Government was excessively high, that the administrative machine was unduly elaborate and that he knew the secret of getting more efficient service at a lower cost.
I certainly never said anything about reducing the civil servants' salaries. I was always on the other line. I would like a quotation.
The Minister for Finance knows quite well that he is trying to lead me up a side avenue and divert the attention of Deputies from what is happening here. What has happened to the economy policy? The Minister for Finance, it is true, did not proclaim his intention to effect economies by reducing the civil servants'salaries.
You said the opposite a moment ago.
I am putting on record the fact that there are more civil servants than ever before paid more than ever before. What has happened to the economy policy? What has happened to the declared intention of the Minister for Finance to secure retrenchments? Have there been any economies? Have there been any retrenchments? Can the Minister point to a single Department where the total cost was reduced as a result of his intervention in the interests of economy?
There are three possible explanations of the failure of this economy campaign. Either the Minister was never serious when before or after the general election he was speaking about economy and retrenchments and the need of them. He was talking here possibly with his tongue in his cheek and having convinced some Deputies and some members of the public that he was serious in his desire and intention of securing economies and carrying out retrenchments he retired to the privacy of his office and there in the presence of his own cronies had a good laugh at the mugs who believed it.
Who are the mugs? Is it the Irish people who are mugs?
I would put the Deputy in that category.
When they had your people in they were mugs all right.
Some of them are entitled to be so described if they took at their face value the declarations of the Minister for Finance and of Deputy O'Leary too about the intentions of the Government to carry through a policy of economy and retrenchment.
You called them mugs.
Deputy O'Leary will have an opportunity in this debate to tell us his answer to the question: what happened the policy?
I would like the exMinister to say if the Irish people are mugs and have been mugs.
These interruptions are disorderly. Deputy Lemass should be allowed an opportunity of speaking.
If you want evidence of the fact that some are mugs it is to be found on the benches opposite.
That is one explanation. The Minister all the time was having a good laugh in private at those who believed in his intention to effect economies.
The other explanation is, of course, that he personally believed in the practicability of that policy but could not get the co-operation of his colleagues in carrying it through. I think that that is possibly the right explanation; that at some stage early in his ministerial career the Minister for Finance had to take a decision between honouring his personal pledges to the public and to this House and falling out with his colleagues, and deciding that his personal pledges did not matter as against the political need of keeping on good terms with certain ministerial colleagues who disagreed with his viewpoint.
It may be that the Minister, on his getting control of his Department and getting an opportunity of examining the matter, came honestly to the conclusion that he had previously been wrong; that there was neither scope for economy nor justification for it; that his denunciations of the alleged extravagance of his predecessors were unjustifiable; and that he has not now either the frankness or the humility to admit that much to the Dáil.
These are the three explanations. Which is the right one? Nobody will now seriously pretend that the economy policy is still alive. Certainly the type of economy that can increase the cost of Government administration by 20 per cent. in a couple of years is of little benefit to the taxpayers of the country.
Is the character of the expenditure not of relevancy? Does it not matter whether it is wise expenditure?
Deputy Lehane does not realise that he is now arguing in favour of the point of view I expressed in 1947 and 1948 when this was an issue before the people. I did not tell the people that economies were possible. I did not tell them that they would benefit as a result of any indiscriminate application of a policy of retrenchment. I argued in favour of intelligent expenditure. It was the present Minister for Finance who said then that the burden of the cost of Government exceeded the capacity of the country to bear it. It was he who argued that irrespective of the purpose for which expenditure was necessary the most useful contribution that could be made to the national welfare was to bring down the cost of Government. He pledged himself to do it; he got himself elected on that undertaking; in the first speech he made as Minister he promised to fulfil that pledge, and subsequently he ran away from it. Why? It is a matter of no great interest but it would round off the records of the Dáil if the Minister would tell us now why and in precisely what circumstances he decided to jettison that policy and break his pledges.
Was it not sound policy to save £11,000,000 for new Government buildings?
Have they saved £11,000,000?
It is not being spent.
How much is being spent on Government buildings this year and how much has been spent since the present Government came into office?
How much?
I want to know; £3,000,000? £4,000,000?
Not at all.
Not far short of it and if the projects now in contemplation which include the proposal to acquire the Store Street building go through, the level of expenditure on Government buildings will be higher than in any year before.
Did you say up to £3,000,000?
Yes, on Government buildings of one kind or another.
Where do you get that figure?
In the Book of Estimates.
Up to £3,000,000 or £4,000,000?
On expenditure of one kind or another.
Do you include schools?
I mean buildings used by the Government. If you want my view, more are required.
£11,500,000 worth.
The Minister for Social Welfare will not disagree with the point of view that the efficiency of his Department would be substantially increased if they were located in a new building properly designed for their accommodation. I think that they would be better off in a new building than in a bus station. I am not one of those who argued that it was good policy to house Government Departments in converted tenements in various parts of the city. I became Minister for Industry and Commerce, as I have told the Dáil on previous occasions, to find my Department located in 14 different buildings and so organised that if I wanted to see any senior officer of my Department I had to give him 24 hours' notice of the fact so that he could arrange to leave the building in which he was working with somebody else in charge of it and travel over to meet me at a time convenient. There is a building in Kildare Street which represents my personal contribution to the increased efficiency of the Department of Industry and Commerce. I know, of course, that Deputies are making a dishonest sort of campaign on the strength of various plans that were made for the longterm development of Government buildings over a period of 50 years.
Let me express a point of view. Many a time in the past it was urged by Deputies that the Government should have available a pool of public works which could be drawn upon in times of trade depression in order to maintain employment and commercial activity. We agreed with that point of view. It is true that, in the greater part of our time, conditions were such that, if that pool of works had been prepared by our predecessors, we would probably have exhausted it; but we announced here during the war, at a period when works of that kind could not be proceeded with, that we were preparing plans for them, hoping to bring these plans to the point at which work on them could proceed whenever it was decided that it would be good policy to proceed with them. It is quite easy for Ministers and Deputies opposite, if they regard it as good politics, to take these plans and to say: "That is what the Fianna Fáil Government was going to do instead of building houses for the workers." They can say that, but they know it is not true.
The file says so—"It would inevitably postpone the housing of the working classes for many years."
I despair of establishing even a minimum standard of political honesty for the Minister for Finance.
It is on the files, and I can get the files.
Perhaps the Minister would give us all the files——
I have offered to put them in a White Paper.
——and not merely tendentious extracts from them.
I can publish the whole thing in a White Paper. Do you want it?
So far as the building programme of Fianna Fáil was concerned, it was published as a White Paper.
The £11,000,000 never came into it.
Deputies who want to understand the position can refer to that White Paper.
May I say that it is impossible to follow two people talking at the same time?
What has happened the economy policy? That is a simple question. I do not think it admits of a simple answer, and I do not think I will get a simple answer, but it is a question which more than Deputies here are going to ask. This Government came into office on a programme which had two main props: a reduction in the cost of living and a reduction in the cost of Government. After two and a half years, the record says that the cost of living is higher than ever it was in the history of this State.
That is untrue.
And substantially higher than ever it was at any period during the war.
That is entirely untrue.
The official cost-of-living index figure shows it to be so.
No, it does not.
The offical cost-of-living index figure previously reached its all-time high in October, 1947. That was the time at which the Fianna Fáil Government decided on a policy of food subsides which involved the taxation against which the Deputies opposite campaigned in the election.
When did you introduce the new index?
In October, 1947. The new index is based on October, 1947.
August, 1947.
August, 1947.
Why say October, 1947?
In August, 1947, the old index had reached the highest point ever and the new index is now at the highest point ever.
It is not.
Two and two make four, and therefore I am entitled to say that the official statistics support the argument that the cost of living is now higher than ever before in our history and higher than at any period during the war.
It is untrue.
It is the truth supported by official statistics.
They are untrue, both statements.
That is the Minister's technique. He hopes to confuse public opinion by interjecting stupid remarks of that kind, even though he knows that anybody who takes the precaution of studying the available data must know that I am right. Is it denied that the cost of Government is an all-time record?
It is.
Was there any period in the history of the State at which the Book of Estimates showed on its face even the false total which is shown on the present book?
It is lower than yours.
If we ignore altogether the Minister's proposal to borrow for a substantial part of the cost of Government services and his device of subtracting the amount he proposes to borrow from the calculated cost of Government, even the figure left is the highest figure that ever appeared on the Book of Estimates as representing the cost of Government to be met out of taxation.
Although taxation is down.
Taxation is up by £10,000,000. We are not entitled to discuss the question of taxation now. I am discussing the cost of administration, and whether you get the money by taxation or by resort to the moneylenders, the fact of the matter is that the cost of administration is higher now than ever. That is the net result to date of the administration of the present Government, and the campaign of economy and retrenchment about which they were chuckling up their sleeves two years ago——
We are getting a whole lot more for our money.
We are getting the Minister for Industry and Commerce.
A whole lot more for our money.
A whole lot more civil servants.
And a few more Ministers.
And a few more ex-Ministers.
That is a historical process and it will go on—have no doubt about that.
The next matter I want to refer to is the apparent indifference of the Minister for Finance to the trade problem that will arise when Marshall Aid ceases in 1952. The Minister for Finance is responsible for the administration of Marshall Aid, for the allocation of available dollars for trade purposes. From time to time, he and other Ministers have issued apathetic warnings that difficulties may be anticipated in the future, but up to date they have given no indication of any serious thought on the problem, much less attempted to convey to the people of the country an outline of a national plan for dealing with that situation when it develops. We have had a few futile exhortations from the Minister for Industry and Commerce to industrialists to export to the United States. Some limited industrial exports to the United States may be possible, but not even the Minister for Industry and Commerce in his most optimistic moments can expect that they are likely to be developed before 1952 on a scale that will be of the least significance in relation to the trade problem that will emerge in that year after Marshall Aid ceases.
We have had other Ministers giving an indication of a belated realisation of the importance of the tourist trade in our national economy. There was a time when the tourist trade was their béte noir, when the policy of Deputies who are now Ministers was to kill that trade by taxing tourists. We are glad that they have realised the stupidity of that policy and have come, however belatedly, to recognise the potentialities of that trade as a means of redressing our balance of payments, but they are doing nothing else about it. If there is to be any serious effort to prepare now to cope with the situation which will become acute in two years' time we have seen no signs of it. If there is to be anything more than vague generalisations in ministerial speeches relating to this matter, there should be some evidence of constructive planning, some evidence that plans made are being carried into effect. Will the Minister for Industry and Commerce tell us why he got recently a resignation from the Tourist Board? More than Deputies on this side of the House are perturbed by the impossibility of getting action in addition to speeches from Government Departments during the past two years.
I take it the Deputy did not get some resignations during his time as Minister?
I certainly would not have got them on that ground. It seems to me that the Government is proceeding on the assumption that, after 1952, our plight will be such that somebody else will be induced, out of sympathy with us, to do something for us. I would like to feel—I am sure most Deputies would prefer to feel— that we were doing what lies in our own power to equip ourselves to stand on our own feet at that time.
That, perhaps, brings up wider aspects of policy than are open for discussion on this Vote. The Minister for Finance can plead that he has responsibility here only for the defence of the administration of the Department of Finance, but there will be another opportunity before the Dáil adjourns to bring that wider issue before the House.
It is, of course, I recognise, rather futile to be asking the Minister for Finance to express opinions upon these matters of general policy. This time last year we were discussing the Estimate for the Department of Finance and the general situation in which the Minister for Finance had to carry out his policy. The issue then was the possibility of the devaluation of sterling and Deputies on this side of the House were expressing apprehensions as to the possible consequences of that development and asking for assurances from the Minister for Finance that vigilance was being exercised, that precautions were being taken to protect the nation against these consequences. We had the Minister for Finance expressing his view that it was not going to happen at all. It happened eight weeks later. He was so completely wrong in his forecast of the trend of events last year that we can hardly expect him to be right now. When it did happen, and when the Minister had to take action here consequential on it, he offered to explain to the people of the country what it might mean in its effects upon trade and upon prices and he was again wrong, because every forecast he made in that broadcast talk after the announcement of the devalution of the Irish £ has been proved in the event to be wrong. He even misled some of his Cabinet colleagues. Notably he misled the Minister for Agriculture into making the most foolish statement of his career, and that is some achievement because the Minister for Agriculture has got many foolish statements to his discredit.
If the Government have any policy in this matter, should some opportunity not be created for outlining it to the House and to the public? They cannot hope to fool all the people all the time. They can, no doubt, hope, for a period, to jolly them along from day to day, distorting facts, making phony prophecies and expressing optimistic forecasts but, sooner or later, that process will have to stop. Sooner or later, they are going to be brought up against some hard reality that they cannot conjure out of existence with a few trite phrases.
We are going to have a new loan. According to reports current, it is to be a loan of £15,000,000, and to carry interest at the rate of 3½ per cent., a higher rate than the Government borrowed at previously. Then, presumably, interest charges upon advances to the Electricity Supply Board, the Turf Development Board and other organisations which draw on the Exchequer for their capital needs, will have to be increased also and the consequential effects upon the cost of their services will be noted.
The Government's borrowing programme is almost certain to cause a continuing rise in interest rates against it. When we were discussing here in the past the wisdom of borrowing for public services which previously were met out of the tax revenue, the public consequences of that policy upon the capital development programme behind which the Government were sheltering were emphasised from these benches and discounted by the Minister for Finance.
There will be other effects from that spendthrift policy into which the Minister for Finance was driven by the refusal of his colleagues to co-operate with him, if in fact they were asked to co-operate, in economies, and in retrenchments. There might be, probably would be, amongst the public a desire to co-operate with the Government in making possible a programme of national investment, provided they were satisfied that some reasonable supervision over wasteful administration in various Departments was being exercised and that the money was to be expended for productive purposes. Once the Government proclaimed its intention of borrowing to meet political difficulties, of borrowing to meet the increased cost of services because it had not the courage to tax for them, then, inevitably, the public view of the soundness of its policy and, in particular, of its financial policy, changed considerably.
We have had evidence in the course of the present year that other Ministers are leaving behind, or will leave behind them when they quit office, difficult problems for their successors to handle, complicated situations which will have to be painfully disentangled, but I am quite sure that the record of history will be that no Minister will have left behind him quite so many problems of quite the same magnitude as those which the Minister for Finance is creating and creating deliberately and cynically, knowing that he is doing it, but preferring to leave these problems rather than risk any political disagreement with people who have come into a coalition with him and whose support for that coalition is necessary to keep him in office.
Like you left Córas Iompair Eireann.
Mind you, I should not say much about that now. It has not shown an improvement under the new board, has it?
It is very difficult to reply to a speech of the type to which we have just listened and to which, I may say, we are accustomed from the ex-Minister. He has described the policy as being that of stupid men. I think he also argued that it was dishonest trickery on the part of the present Government. That is all right, you know, for the street corners but I must say I thought the Deputy would have developed a little bit more responsibility by this time. It is very difficult to answer that type of vulgarity. It is abuse and he can continue at it as long as he likes. It all stems from the attitude he has displayed so often in this House of a certain amount of arrogance—that when he speaks let no dog bark; that, after all his experience, what he says should be accepted as being fully informed and as being the last word on the subject which human wisdom can possibly expect. That was all right when the Deputy was standing over here and could prevent a disclosure of what was on the file and what would have given him away. Some of these files have been opened since and they have not enhanced the Deputy's reputation.
I am asked where I made my economies. I would point out that I am not carrying on some of the very glaring follies of the Deputy. For one thing, we have not made a purchase of Argentine wheat since we came into office. Certainly, there has been nothing like the magnificence of the expenditure of Córas Iompair Éireann, founded on bankruptey but simply going ahead. I often feel that it is wrong to blame the directors of Córas Iompair Eireann for the policy they tried to develop. When the members of Córas Iompair Eireann went to that building they must have thought that their type of megalomania was only in the halfpenny place. I take very definite credit for having stopped that type of thing. That was the mood then but there is a much more sober mood here at the moment. We are going to spend money wisely.
With regard to the cost of the Civil Service, I have been accustomed for two years to hear quotations from speeches of mine read out on the fact that I always stood for remaking the contract that there was with the Civil Service and which the last Government had so shamefully broken. These quotations were read out at different times by, I think, nearly every one of the ex-Ministers. They said that I said that if we were to double the salaries it would not be too much. Of course, the criticism is that we have not doubled the salaries and that, therefore, I am not doing as much as I am alleged to have promised when in opposition. I made a certain contract with the civil servants at the end of 1948 and I consider that it was a good arrangement. It was not entered into in any great spirit of haggling. An arrangement had been made which enabled them to approach me on the basis that there was something like a contract made by my predecessors in office. I honoured that. When I came to Dáil Eireann with that particular arrangement Deputy Aiken said that under that arrangement the civil servants had been given too much. I suppose that is the view of the Opposition. I do not think it was too much. I have never been able to understand the attitude of the previous Government towards civil servants as a whole.
Deputy Lemass said something about dishonesty and trickery in our approach to the people. Perhaps it might be relevant here to remind Deputy Lemass of a speech made by his Leader, Deputy de Valera, in Ennis on one famous occasion. In that speech he made a long appeal to the civil servants and he announced that whereas at one time he thought that the bonus system was bad and evil he had come to the conclusion, having observed the working of the system from the inside, that it was a really good system. He then appealed to them to hang on to the bonus system. He said that it would be their safeguard when there would be an increase in the cost of living. At the time the cost of living was going down and so long as the cost of living was going down the bonus system was going against the civil servants. Deputy de Valera reminded them that the cost of living was going to rise and he said that the bonus system would then be their safeguard. Well, the cost of living did rise and, automatically, the contract was broken. A Wages (Standstill) Order was put into operation. The lives of these people have undoubtedly been very greatly distorted for the six or seven years during which that situation lasted. To start off with, I thought it was an illegal performance and I described it in this House as immoral. The Government took hold of the people who were nearest to them and who were most easily coerced—people who had no method of defending themselves or of explaining their attitude except the futile one of approach through letters. It was a highly disgraceful performance.
If my information is correct I understand that certain members of the Church addressed the Government, through some of its members, and pointed out that they did not see how the matter could be justified on moral grounds. However, the immoral attitude was persisted in. It was left to us to try and make some rectification in the matter. We made an arrangement with the Civil Service which I think was good for both sides, and, in addition, we have now established the machinery of arbitration. Civil servants ought never again be put in the completely abject position in which they found themselves under the last Government.
I have no excuse to make with regard to the cost of the Civil Service in so far as it means that civil servants are getting increased emoluments. We have done our best to make their pay bear a better relationship to the increased cost of living than ever before. In so far as there has been an increase in the strength of the Civil Service, I regret it. I have been making endeavours to get the numbers of civil servants reduced. I think it would have been possible to do so by going out in a ruthless way and simply insisting on the numbers being cut down, but it might not have been economy in the end. Overtime rates certainly do not make for economy. Unless the work could be collapsed there would not be much sense in artificially and arbitrarily reducing the numbers in the Civil Service. It is rather a long process, I have discovered, to get the numbers of those who are in the Civil Service, whether established or unestablished, reduced. In addition, there is the human aspect of the matter. Even if I found that in some magical way work could be so completely reduced that it would be possible to get rid of 2,000 civil servants, I do not think the Government would stand for the immediate dispersal of 2,000 civil servants. I think their attitude would be to let those who are in occupation of certain posts remain on, even if they should be redundant and allow, instead, the ordinary process of wastage and nonrecruitment to bring about the reduction. I think that is the course humanity would dictate and that that is the course we would follow if work could be reduced. It is very difficult to get it reduced because certain habits have grown up and because there is a certain system. It may well be that at a later period I will approach the Public Accounts Committee and ask them to make a change in their methods so as not to impose on Ministers or Parliamentary Secretaries the same degree of responsibility as is at present demanded to the Comptroller and Auditor-General, through the Public Accounts Committee. I will make that case on the basis that I believe we can get all the necessary safeguards in order to ensure there will be protection of the public with regard to the expenditure of the money taken from them. At the same time, I think we would cut out certain matters which have grown up in connection with Civil Service work and which, I think, involve the duplication of effort here and there which is really not of great value.
That matter has been examined and is being examined. Certain inspections are going on with a view to striving towards a reduction in the numcrical strength of the Civil Service. I may say that if I have not achieved what I wanted to achieve it is certainly not for want of trying. So far as apologising is concerned, I take some pride in having been able to restore something like the old time association between moneys paid and the purchasing power of moneys, and that I have not carried on the programme of the last Government.
I am in favour of cutting Government expenditure but not in the Civil Service. We felt that waste could be eliminated and we have eliminated that waste. Deputies on the Opposition side of the House may preach as long as they like any propaganda with regard to the cost of Government. If one were to emphasise a particular thing, the thing, I suppose, of all things, that beat the Fianna Fáil Party out of Government and put us into Government was the taxation imposed in 1947. The taxes that most definitely annoyed the people of the country were the tax on beer and the tax on tobacco. We remitted those. Deputies over there can talk until they are black in the face, they will never be able to persuade the people that we did not reduce those taxes. We took them away. It meant, speaking from the angle of the Department of Finance, a loss of £7,000,000 in revenue—£6,000,000 to £7,000,000. In addition to that, the rate of income-tax was reduced. That looked as if it would mean a loss of £1,000,000. In any event, individuals throughout the country know that the income-tax rate has been reduced.
Owing to the buoyancy of the revenue, the fact that there is more money around and that people are earning more, there was no actual loss but the tax reduction was effective all the same. There were other reductions effected. I calculated that if we had not decided to increase the pay in the Civil Service, in the Guards and in the Army, and if we did not make certain other alleviations to people getting money from Government sources, the remission of taxation that could have been given would have amounted to £11,000,000. We gave between £7,000,000 and £8,000,000 in the remission of taxation, and we switched £3,000,000 to other purposes.
I do not mind how long Deputies may talk about various items in the Book of Estimates, and I do not mind the references to the dishonest device of borrowing; the one thing they cannot succeed in doing—they are really in this connection trying to achieve the impossible in their propaganda—is to convince the people that taxation has not been lowered. I say it has been, and all the gamecock crowing by Deputy Lemass will not affect that issue at all. The people are aware of the facts. The man who drinks, the man who smokes, and the man who pays income-tax, is aware of the facts. When you say those three things, you have covered a very numerous section of the community. Every individual in that category knows about the reduction of taxation, and they all appreciate it.
The Deputy says there was a time when I was keen on retrenchment. I was and still am. He started off by indicating three possible excuses or pleas that might be made for what he describes as my failure. He suggested I might be serious about two of them, but I was not serious about the third. I was quite serious and in relation to it I was beaten only by my colleagues. The Deputy suggested that I was aware that in that respect no economies could be made—I presume that was his point, that there were no economies there to be made. I was quite serious about it. I have indicated the position with regard to the beer and tobacco taxes. The Deputy raised a technical point, that it should not be done by Order, and he boasted that it was a short time before the 1948 Budget would be introduced and then we would see.
Again, speaking with his usual arrogance, he said there were only two or three channels for the purpose of obtaining revenue and these included beer, tobacco and income-tax. There was I faced with a loss of £7,000,000 in respect of beer and tobacco. We could not go back and resume taxation on beer and tobacco and, therefore, according to the Deputy, income-tax would have to swell. But we got along all right without increasing income-tax; in fact, there was a reduction.
The borrowing policy had not occurred to us.
I am talking now of the position up to last year and I am making it clear that there was a reduction in taxation. Later on I will deal with this year. Let the Deputy ponder on what I am saying. When he considers the position in 1948-49 and in 1949-50 I wonder what answer he will give to his people? The Deputy seemed very sure at the time I speak of that taxation would soar. Can he demonstrate that? I assert the contrary and I think the Deputy must admit that certain taxes were lowered. How, he could ask himself, were we to level up? I was not beaten. My colleagues were with me in agreeing to certain retrenchments which were wide enough to give us £11,000,000. We switched £3,000,000 or £4,000,000 of that and remitted the rest. I personally believe there are still further grounds for economies.
The Deputy referred to one other thing and there, too, we had a glimmer of what was meant in the old time argument, if he only had pursued it. He said that taxation was reaching a level which was beyond the capacity of the country to pay. The point is that the national income—and I am speaking now of real income—has grown. The capacity of the people to pay has definitely increased since 1948 and that is the answer to this apparent contradiction and this query as to where is the money coming from if it does not come out of taxation. The Deputy should remember that prosperity now and again is inclined to pay dividends. An increase in prosperity, an increased standard of living, has been found to pay dividends. That has been my experience as the individual for the time being associated with national finance.
The Deputy said that a sum of £3,000,000 or £4,000,000 is now being put into the erection of public buildings in excess of what was spent in 1948.
I did not say that. I said you had not stopped expenditure.
No.
I said that, in fact, you have spent in three years a sum of over £3,000,000 or £4,000,000.
Am I wrong in taking it that the Deputy said there is £3,000,000 or £4,000,000 extra being spent?
I did not use the word "extra."
You did.
I think the Deputy is on the wrong track.
I am not; I am being misrepresented.
If I recollect rightly, this was introduced into the argument as to the increased expenditure being effected under the present Government.
It was in reply to an interjection about over-expenditure.
The expenditure on public buildings was brought in as an example and it could only be brought in to help the Deputy's argument.
It arose out of one of the many interruptions to which I was subjected concerning this alleged £11,000,000.
The Deputy was made to say something about £3,000,000 or £4,000,000 as a result of Deputy McQuillan's interjection. Therefore, the Deputy is back on the argument about increasing expenditure on public buildings. It is not easy to pin the Deputy. Let us get back to the £11,500,000, which is a figure we can talk about. The last time I was speaking on this, I found there were three answers to the £11,500,000 project. One was that it was never meant. A second was that it was really only meant to provide against a period of unemployment so that there could be a scheme of public works. The third, for which I think Deputy Aiken was responsible, was that we had no great public buildings and it was time that we started building. Deputy Lemass has taken the second of these excuses and is back on that—that the Government at that time, in its wise foresight, decided to prepare a scheme of public buildings against a time of depression. The argument will not hold any water. On the file there is the statement which I read out and if Deputies repeat again that I am taking extracts from the file to suit my purposes, I offer to publish the whole file as a White Paper. Do Deputies want it?
Edited by whom ?
I will let you edit it. Let every word in the file go into it. It will be a voluminous document.
The file does not contain all of it.
On the file there is a warning given that if the plan was proceeded with it would postpone for a long period the housing of the working classes.
Who said that?
It is on the file.
The Minister is misrepresenting the situation. He ought to be ashamed.
I can get the file and read all this things.
It is typical of the Minister.
I know from the anger generated that the thing is going home. That was definitely recorded in the file.(Interruption). I must be allowed to speak. The Deputy should not generate more indignation than he can contain. It is on the file that this would inevitably mean a postponement of the housing of the working classes. That was on an carly document in the file. That would be round about 1933 or 1934.
Who put it on it ?
It was gone on with up to 1935,1936 and 1937. Is not that right? It was gone on with despite the warning that proceeding with that meant the postponement of the housing of the working classes. In face of that, how can it be said that this was a plan to provide against a period of depres sion? The file is full of statements that the building trade was fully occupied at the time. It was contradictory. You cannot have a scheme and say it was against a period of depression when in fact the builders were fully occupied at the time and when it was said that it meant the postponement of everything in connection with the housing of the working classes.
I am told now that it was to be a plan scaled out over ten years or so. I do not think that occurs in the file. I have reviewed the file many times. I will review it again to see if that phrase occurs. I do not remember it. I do remember that the analogy which was taken was the Stormont building in Belfast. I am certain it is recorded on the file that Stormont was built inside three years. I think the area which was going to be devastated by this scheme ran to over 70 acres in the heart of Dublin.
There is not one of you who believes it.
Publish it and let them explain.
I think the best thing to do is to publish the whole file. There was an £11,500,000 project for the devastation of the heart of Dublin and it certainly was not put forward as a scheme against times of depression.
There was also a warning held out against raising a public loan for this scheme. This was a scheme for which there was going to be a loan. The cost was not going to be taken out of taxation in a number of years—there was to be a loan. That scheme, it was stated, could only be described as a scheme for the palatial housing of civil servants, and the warning was given that it would be quite impossible to get money from the public for such a scheme considering the depressed condition of the country. That is one thing we are not going on with.
Now you have a bus station instead.
That is not £11,500,000; it is only £1,000,000. I notice it is still being called a bus station.
That is what it looks like.
The last argument about that was that it was a restaurant and cinema which happened to have a place for buses at the bottom.
I do not think that is relevant.
It was brought in and surely I might be allowed to go into it.
This is not a suitable occasion for the discussion of that.
All I will say is that is typical of the projects that proceeded from the grand building which the Deputy got erected to house his dreams in Kildare Street. It is typical of what came from that place. An £800,000 building was erected by a company that was in the position that it was not able to pay its debts and had to put its cheques into the safe and could not release them.
Not in my time. That happened since.
That, in any event, was the period in which an £800,000 building, which we now understand was not really to be a bus station but a cinema and restaurant and, generally, a money maker and revenue earner, was proceeded with. There is one other argument which I thought I had countered sufficiently so that I need not refer to it again. Apparently, however, it is necessary to say a word about it. When Deputies on the other side of the House speak about tourists it is suggested that I spoke of their stupidity in connection with tourists.
Worse than stupidity.
The Deputy is not in good humour this morning.
It is very hard to be in good humour when listening to the Minister.
What is worse than stupidity? I would say it was the Deputy's own attitude in the days when there was an antagonistic attitude to tourist development. I notice that Deputy Lemass used a phrase which might have given a glimmer of hope with regard to this matter. It was a little bit of a clue. It was a time when some people were objecting to tourists.
They wanted to put a tax on them.
Maybe it would have been a good idea at the time.
If you had not become a Minister you would still be using the argument.
That is not this time. There was a time when I spoke somewhat enthusiastically and warmly against tourists. These were days when we had very scanty supplies of foodstuffs here. So far as I remember, I generally introduced my argument against tourists into the context of what I referred to as the Government's treatment of civil servants. I asked over and over again questions as to what it would cost to give civil servants their old emoluments based on the then cost-of-living figure.
It was the sterling assets, the waste paper.
The Deputy is in better humour than his chief. I will come back to the sterling assets. I certainly produced this argument in this context: "Why do you not pay civil servants what you owe them ?" The answer was that it would cost £1,000,000. I was asked to think of all the inflationary difficulties there would be if civil servants were given £1,000,000 to spend. I remember my answer to that being——
You argued against tourist development.
That sort of assumed anger does not go down any longer in this House. We all know where we are with the Deputy. We know what the vehemence and the pretence to be angry means. I argued against the attitude of the Government towards civil servants and I was told it was really on the ground of inflationary difficulties. I asked: "Why is £1,000,000 in the hands of tourists not inflationary when spent here and why will £1,000,000 in the hands of civil servants be inflationary ?"
I was led by the development of that argument to object to their coming here. It was a right and proper objection in those days. We had very limited supplies and were severely rationed, with nothing over and above. We had experienced inflation and signs of worse inflation, and in those circumstances the Government of the day had set out to encourage a lot of people across the Border to come down here to go into competition for the limited amount of food stuffs and other articles, including wearing apparel, that we had here. That was the suggestion round Ireland at the time, and in those circumstances the encouragement of a big tourist traffic was just lunacy.
There was a lot of lunatics in Europe, so.
We did our best to gather some of them in here under the Deputy's auspices. I was against that idea of bringing people in to consume our food, and that was sound policy in those days. The situation has definitely changed.
It has not, so far as any proposal to help Cóbh is concerned.
We gave more help to Cóbh in two years than the Party opposite did in 16 years.
Nothing at all.
The Deputy knows that we are on the way to doing it.
Colonel Pozzi made you do it.
I come back to the tourists. It was a wrong policy with regard to tourists, up to even two years ago. We have a good policy now with regard to that.
What is the policy now?
Encourage them to come in here; not make speeches about it.
Is anything else to be done? Why is the Tourist Board resigning? Is it not because they can get nothing done?
The Minister should be allowed to make his speech.
Interruptions only give Deputy Lemass an opportunity to pretend to be angry.
Would the Minister appoint Deputy Lemass in charge of the Tourist Board.
I would resign, too.
He wants a lot of talk about tourists.
There is no better comedian than the Minister for Finance.
I believe that. I thought the Deputy said he was a better comedian than I.
No.
He reveals his emotions better than I do.
And your trap of gigglers behind you.
What does the fat boy say?
Surely the plans in regard to tourists are not a matter entirely of making speeches. Deputy Lemass thinks that the whole thing is perfect if one talks about tourists. That is not what we believe in.
I am told here again that the usual resort is had now to the device of borrowing for the capital and other services. I am sorry I have not the quotations from Deputy Lemass which I read before, the one where he talked about the chances here for great development—when he thought the present Government had a policy of austerity and was trying to have recorded everywhere the magnificent schemes for which Fianna Fáil had made plans, all requiring capital moneys because they were capital development and covering all the landand he added a few in, like merchant shipping and defence. These were plans for great schemes, only requiring courageous, adventurous, enterprising people and we were to be denied that because of this small amount, what he called himself a pretty subterfuge avoiding a chance offered to us of putting this country on the high road to success. Let him read that speech and relate it to what he calls more recently the device of borrowing. I have challenged Deputies right through the whole Estimates—in the Seanad I put it in as vigorous a way as I could-and I asked not merely people in the House but economists and others outside to show to us any single scheme not suitable for the idea of borrowing. I asked if they would take this in detail and go down through the total of £12,113,000 and pick out any heading or sub-head on which they could say it was wrong to borrow. Deputy Lemass later said any such items he could find would not be more than £1,000,000 and when we got down to an analysis of that £1,000,000, I think his argument disappeared. He has a point of view but he cannot hold his point of view so strongly as to believe that anyone who does not agree is either stupid or malicious or else is being dishonest. We think that again on this occasion, and if Deputy Lemass examines that £12,000,000 in detail I will stand over the sub-heads and over any amount under each sub-head.
I am told that I erred grievously last year with regard to devaluation. The matter of my Estimate came under discussion last year and the question of devaluation was thought of so little importance that it came in at the end of a rather lengthly debate, on the point as to why I did not pay certain solicitors' costs in a certain famous case. It was tagged in at the end of that, when Deputy Little said a few words about devaluation. Deputy Lemass says to-day that I was entirely wrong, that I said it was not going to happen. I did not say that at all. I do not find it recorded here.
I will read it.
Read it.
It says:—
"But that is a matter which is a considerable way off in the future, thank goodness. . . ."
That is transferred into being a statement that it was not going to happen.
It happened eight weeks later.
The Deputy's phrase was that I said it was not going to happen. But what he now quotes is that it was a matter which was a considerable way off in the future.
I quoted the Minister as saying it was not going to happen for a long time.
You did not.
I did. I had the book in my hands, but gave my own interpretation of it.
Why did you not read out what was there? At that time I first of all referred to Deputy Little —as given in column 902 on 21st June, 1949—who had spoken, to use Deputy Little's own phrase, about the difficulty we would have in getting out of the strait-jacket of sterling. I asked in an interjection who put us into it. It is given in column 902 as follows:—
"Mr. Little: . . . All these things would seem to suggest that the country is entitled to a statement from the Minister as to his attitude and how he is going to get out of——
Mr. McGilligan: Out of what?
Mr. Little: ——the strait-jacket of being attached to sterling.
Mr. McGilligan: Who put me into it.
Mr. Little: We did not put you into it.
Mr. McGilligan: Who did?"
Then he got off on to the war, that it could not be changed until after the war. Later I referred to that, and said, as given in column 917, in relation to the Central Bank, that there was a bit of a strait-jacket there. After an interruption by Deputy Aiken, I said:—
"Is the situation as bad as that? I thought Deputy Little might have given some advice and made known how near this danger of devaluation was to us and what he would do in order to minimise the danger if it came nearer. I do not know how near the danger is. I have read the comments made and I know the matter has been the subject of comment among various international gatherings. I know that there has been a definite attitude, so far as England is concerned, that she will not allow sterling to be devalued. There are certain forces which, in times to come, may make it necessary to allow sterling to be devalued, and then there may be a revaluation of currencies—possibly, our own included. But that is a matter which is a considerable way off in the future, thank goodness, and I do not think I should be questioned as to my attitude in a whole variety of circumstances that might arise."
Deputy Little, I said, was entitled to ask if we were watchful. I said that there was watchfulness here. What I have quoted now is given here as if I said devaluation was going to happen. I never said that, of course. The Deputy also said that protective action should be taken. One of these days he will change from his present mood and tell us what protection could have been taken from June until the date in September when devaluation occurred. You cannot change Currency Acts in that time.
Even if there were a warning of more devaluation a year hence, I doubt if we could get rid of the shackles of the Central Bank Act in that time. Those are circumstances which have to be changed over a number of years and, if there is protective action that might be taken, the Deputy might address me some day on that. Finally, I am told my forecast was wrong. I made no forecast. I expressed certain views and gave certain indications as to why the views were mine. That is all I said on the matter.
