The Budget which the Minister for Finance introduced yesterday is a cruel Budget. It is also a Budget which contains wholly unnecessary taxation. Therefore, it is an unjust Budget.
So many topics arise out of the speech made yesterday by the Minister for Finance, in introducing his Budget proposals, which urgently call to be dealt with that it is difficult for anybody like me, speaking here to-day, to select the particular topics in the order of priority of their urgency. I propose therefore, instead of trying to deal with all these problems, to deal merely with three or four of the outstanding features of the Minister's Budget and to leave over for early and urgent consideration in other places and at other times the other matters which will expose the economic fall aries of the Minister's statement yesterday and further demonstrate the ijustice and inequality of the present Budget proposals.
In the course of a recent speech, the Taoiseach declared that was his intention and that of his Government to balance the Budget by hook or by crook. In the light of the Minister's proposals and in the ligt of the disclosures which, very shortly, I shall make to the House and to the country, that phrase used by the Taoiseach—"by hook or by crook"—takes on a new and very significant meaning—a meaning which I at once agree was not attached to it by the Taoiseach when he used it. The country has not yet even recovered from the impact of the first shock of these Budget proposals. It will, therefore, receive a new and a startling shock when it is demonstrated that the proposals contained in the Minister's Budget statement yesterday contained proposals for the unnecessary collection of from £9,000,000 to £10,000,000 concealed taxation. The Minister gave his figures yesterday. I propose now, quite calmly and in detail, to justify the statement I have made that there are in the Budget proposals which will, in effect, result in raising from the already over-burdened taxpayers of this country a sum of from £9,000,000 to £10,000,000 unnecessary taxation. To justify that figure, I will give six items.
In the very few hours which we have had in which to study the Minister's speech on the Budget proposals, since the debate on his Budget speech ended last night, we have been enabled to pick out, from the details of his speech and of his taxation, items which amount, in all, to at least £9,000,000 or £10,000,000 of wholly unnecessary taxation. Not merely, therefore, will the people of this country have to face the burden of the colossal taxation that was indicated yesterday by the Minister in his Budget speech, but they will have the added horror of knowing that those proposals are extracting from the pockets of the taxpayers from £9,000,000 to £10,000,000 taxation which is wholly unnecessary to balance the Budget this year. May I remark, in passing, that figure of £9,000,000 to £10,000,000 is not without its own significance?
Deputies will recall that the figure which is given in the "Table Explanatory of Current Budget, 1952" for capital services is £9,277,000. Is it not legitimate then to suggest when it is demonstrated, as it will be demonstrated, that this Budget proposes to raise from £9,000,000 to £10,000,000 of taxation which is not required for the purpose of balancing the current Budget, that what has really been attempted here in these Budget proposals is covertly and in a hidden manner to finance the capital services which the Minister pretended yesterday he will finance in the way in which they were financed by the inter-Party Government—that is, by borrowing? He intends by the covert and concealed methods to which I have adverted, to provide the finances for these capital services out of current taxation. He is doing that in a covert and concealed fashion because he has not the courage to come openly to the people and say, as he and his colleagues have been saying for the last ten months, and for two years before that, that he and they did not believe in the system of financing capital expenditure by the inter-Party Government, and that when he and they got into office again they would finance it out of revenue, and not by means of borrowing, as was done under the régime of the inter-Party Government.
The first item to which I will call the attention of the Deputies is an item of £2,000,000 of unnecessary taxation. That item entails over-taxation to the extent of nearly £2,000,000 through the medium of the operations referred to by the Minister in his speech yesterday in relation to food subsidies. In the "Table Explanatory of Current Budget, 1952", circulated by the Government, Item 5 on the expenditure side contains a deduction for what is described as a saving on food subsidies amounting to £6.668 million. In fact, when the proper calculation is made the amount of such savings represents a sum of £8.58 million. That calculation, and the figure to which I have referred, is arrived at in the following Manner; in his Budget speech yesterday the Minister for Finance stated that the estimated cost of food subsidies for a full year on pre-war Budget levels represents a sum of £15,250,000 or £15.25 million. At page 45 of his speech he stated: "On existing rations and at present prices, food subsidies reduce weekly expenditure per person on rationed foods by approximately 2/-." He then goes on to state that these subsidies, amounting to the sum of 2/- per week, have been cut by 1/6 per week or, in other words, that the subsidies are being reduced to one-fourth of their present level. That reduction will only take place three months hence. For the first three months of the present financial year, therefore, the cost of the subsidies will be at the full rate and will accordingly in the first quarter of this financial year amount to one-fourth of £15.25 million, namely £3.81 million. I repeat: for the first three months of the present financial year food subsidies will cost the Exchequer £3.81 million because the reduction in food subsidies will not take effect until July of this year.
We must, therefore, calculate what the cost will be for the Exchequer in accordance with the Minister's proposals for the remaining three-fourths of the year. That, of course, will be one-fourth of three-fourths of £15.25 million. For the benefit of Deputies may I repeat that once more so that it will be quite clear: the full cost of food subsidies to the Exchequer if they had not been altered in the way the Minister now proposes to alter them would be £15.25 million, and one-fourth of three-fourths of that sum of £15.25 million must be calculated because the full cost of the subsidies will not be in operation for the last nine months of the present financial year? As the food subsidies have been reduced by one-quarter it is necessary to take one-fourth of three-fourths of £15.25 million to find out the precise cost under the Minister's proposals of the reduction in food subsidies, and that figure amounts to a sum of £2.86 million.
Add these two figures together—the sum of £3.81 million, which is the cost for the first three months at the full rate of subsidy, and £2.86 million, which is the cost for the remaining nine months of the financial year at the reduced rate of subsidy—and the figure arrived at is £6.7 million. That sum, therefore, represents the actual cost of food subsidies for the year 1952-53 at the full rate for the first quarter and one-fourth of the full rate for the remaining three-quarters of the current financial year. To get the savings, the real savings, it is necessary then to deduct from the full cost — £15.25 million—that sum of £6.67 million, and that deduction leaves a sum of £8.58 million—that is, in fact, £1.9 million or approximately £2,000,000 more than the saving which is set out at Item 5 of the "Table Explanatory of Current Budget, 1952." Therefore, instead of that figure of £6,668,000 which appears in that table as being the savings on food subsidies the figure of £8.58 million should have been set out and, deducting one from the other, should have shown a saving on the Minister's proposal in relation to food subsidies of £2,000,000.
I might remark in passing that it is again not without significance that the precise figure, or almost the precise figure, which I have demonstrated as being the actual cost of food subsidies, corresponds almost identically with the figure set out in item 5 as being the savings on subsidy. £6.67 million is the cost of subsidy this year; £6.68 million is the amount set out as savings. Is that a pure coincidence? However that may be, in that summary I have given I have demonstrated that there is £2,000,000 included in the Minister's proposals under this heading of over-taxation. I think that it is no mere coincidence.
The second item of over-taxation to which I wish to refer arises from the fact that the Minister's Budget statement contained no provision for a deduction for reserve stocks which are provided for in the Estimates and which, according to the Minister's own statement yesterday in his Budget speech at page 31, amounted to £1.8 million. Deputies will remember that that figure of £1.8 million was given in last year's Budget estimate to provide reserve stocks, over and above the normal supply, and that the normal supplies of stocks required for governmental purposes at various Government Departments were provided for and were met out of current taxation. On page 29 of the Minister's speech yesterday, he stated that expenditure on these stocks amounted to almost £1,000,000 less than was provided for because of the difficulty in securing supplies. I do not think it has ever been denied, nor can it be now denied, that there was and that there is necessity for making provision for such reserve stocks and that, in fact, provision is made in this year's Book of Estimates for such reserve stocks over and above the normal stocks. Particularly may we assume that to be so when it is known from the Minister's statement that it was not possible to purchase £1,000,000 worth of stocks for the provision of which money was laid aside last year. Therefore we know that such a provision is included in the sum of £94,871,623 provided in the Book of Estimates for the coming financial year and that it is not included in the figure for capital services which is Item 3 in the "Table Explanatory of the current Budget 1952" of £9,277,000.
The Minister, in his statement yesterday admitted that the moneys necessary to finance these reserve stocks are properly chargeable to capital and not to revenue. Accordingly, as there has been no indication of a change of policy in this matter in the Budget statement or in any other statement, we can legitimately assume that the provision for such reserve stocks to be found scattered through the Book of Estimates—for Local Government, Health, Army, the Board of Works and various other Government services—will in this year amount to not less than the figure we provided for in last year's Book of Estimates, a sum of £1.8 million. That is, as I have said, admittedly an item of capital expenditure to be financed, not out of current revenue but out of capital expenditure. In regard to that £1.8 million included in the Estimates, what the Minister is doing is raising that £1.8 million, which should be raised in the manner appropriate to capital expenditure, by means of revenue. Therefore, that gives a second item of over-taxation in this figure of £1.8 million.
I pass to the third item, which amounts to a sum of £1,000,000. Again, I point out that in the "Table Explanatory of the Budget, 1952," Item 4, the provision for proposals in the Social Welfare (Insurance) Bill, 1951, is stated to be a sum of £3,000,000. In fact, as I shall show, that provision of £3,000,000 in the table exceeds by £1,000,000 the amount actually required for social services. Speaking on the Second Stage of the Social Welfare (Insurance) Bill, 1951, as reported in Volume 130, No. 5, column 642, the Minister for Social Welfare gave his estimate of the charge which would come in course of payment during the rest of this financial year, if and when the provisions for the Social Welfare (Insurance) Bill became law, at a figure of something under £2,000,000. These are his words:—
"These various features are estimated to have the effect of throwing a charge of something under £2,000,000 on the Exchequer over and above what is in the Estimates already, as compared with the charge on the Exchequer of £2,750,000 in a full year."
There, the Minister for Social Welfare stated that the expenditure relating to his proposals under the Social Welfare Insurance Bill for the remainder of the financial year, after the Bill had come into operation, would be something under £2,009,000. In the Table Explanatory of the Budget, that figure is given at £3,000,000 so that the inescapable conclusion is that taxation is being raised unnecessarily by a sum of £1,000,000, this being the difference between the £3,000,000 stated at Item 4 of the Table Explanatory of the current Budget as being the proposals for social welfare, and the sum of under £2,000,000 stated as being the sum necessary by the Minister in charge of the Bill. There is another £1,000,000 of over-taxation.
The fourth item consists of failure by the Minister for Finance to take any account in his calculations for taxation of the amount of money that would be required to be met by taxation for the traditional item known as over-estimation. That traditional item of ever-estimation is also sometimes spoken of as economies and consists of departmental savings. We estimate for that, and we think it is a conservative estimate, £2,000,000. That provision for over-estimation, or for normal savings, is the figure which, since the establishment of this State, has been taken into account by every Minister for Finance in connection with his Budget proposals and the framing of taxation necessary to meet the Budget proposals of each financial year.
Experience has demonstrated over the years that there has never been less than a saving of £2,000,000 each year on departmental expenditure. The Departments are simply not able to spend all the money that is voted to them by the Oireachtas year after year. However close the Estimates may be or the efforts of those people who are charged with criticising and cutting down the Estimate prepared by each Department year by year, there has been a saving or an economy or an over-estimation—call it what you will—of a sum of at least £2,000,000, and the Minister for Finance ought to have taken that by no means trifling figure of £2,000,000 into account when he was framing the Budget proposals which he announced yesterday and which have caused such an appalling shock to the people of this country.
There is not a word said about it. Even if he was not to take it into account expressly, and even if it was not there or that he did not think it would be there, at least we are entitled to make this comment: that in a figure of £94,871,623, which is the tot of the Estimates for Public Services for the forthcoming year, he ought to have said to himself and to the country that it was legitimate for him, on such a colossal figure, to say that he would cut those Estimates by the very small and trifling figure of 2 per cent. He would then reach the sum of £2,000,000 which I have conservatively estimated as being the savings that are almost certain to occur and that will certainly occur in the course of the coming financial year. That is another £2,000,000 of over-taxation.
I now come to the fifth item, an item that we have very conservatively, I think, estimated at over-taxation to the extent of £500,000. It consists of excess provision for interest on public debt. In the White Paper entitled "Estimates of Receipts and Expenditure for the year ending 31st March, 1953," prepared by the Government and presented to Dáil Éireann in accordance with the provisions of Article 28 of the Constitution, on page 4, Part III there is provision for the "Service of the Public Debt" which is charged on the Central Fund, and is one of the Central Fund services. For the year 1951-52 the figure provided for interest was £4,319,767. For this year the provision is £6,389,000, a sum which represents, by deduction of the two figures to which I have referred, an increase of £2,000,000 in regard to interest on the public debt over what was paid last year. No explanation has been given of that increased figure for interest on the public debt. We have had no loan. There is only hope of a loan. It cannot be explained or, if explicable, it can only be explained, in part, by the provision that must be made this year for a sum amounting, I think, to £600,000 for interest on the American Loan Fund. That increased figure of £2,000,000 is unexplained and inexplicable so far as we are concerned, except to the extent of the £600,000 for the Marshall Aid Fund. I think we are being unduly conservative when we say, in reference to that, that there is at least a sum of £500,000 of over-taxation under this head of interest on the public debt. That is, therefore, another £500,000 of over-taxation.
I now come to the sixth and last item which makes up the sum to which I referred at the outset of my remarks, and that is the fact that the Minister has made no provision—or if he has made any he has made inadequate provision—for the buoyancy of the revenue.